statement of accounts 2021-22 (unaudited)

STATEMENT

OF ACCOUNTS

2021-22

(UNAUDITED)

CONTENTS

East Riding of Yorkshire Council 1 Statement of Accounts 2021-22

Copies of this and previous years’ accounts are available for viewing, along with other information on the Council’s

services, on our website at www.eastriding.gov.uk or from East Riding of Yorkshire Council, County Hall, Beverley, East

Riding of Yorkshire, HU17 9BA.

http://www.eastriding.gov.uk/

NARRATIVE REPORT


1. ABOUT THE COUNCIL

East Riding of Yorkshire Council is a large rural unitary authority with a population of 343,201. It is the fifth largest

unitary council by area in England and Wales, covering 930 square miles, with a coastline stretching for 53 miles from

Bempton to Spurn Point. The Office for National Statistics has classified the East Riding as being approximately 93%

rural by area.

Many residents enjoy a good quality of life, benefiting from strong and supportive communities, low unemployment, low

crime, good educational attainment and life expectancy. It is ranked amongst the least socially deprived areas in England,

but it also faces significant challenges, some of which include;

• Pockets of deprivation in places such as Bridlington, Goole and south-east Holderness.

• Around half of the population live in rural areas and sometimes isolated communities which can provide additional

challenges such as increased costs in service delivery, rural transport and access to services.

• An ageing and growing population of older people and the rising costs of commissioning care from private providers.

• A 48 kilometre coastline of soft glacial till (clay, pebbles and sand), particularly vulnerable to coastal erosion. The

coastline is eroding at an average rate of 1.5-2.5 metres per year, with some locations which are not defended

experiencing individual cliff losses of 20 metres or more.

• The area’s propensity to both flooding and coastal erosion due to our complex geography, combined with increasing

impacts of extreme weather events, poses a substantial risk to the local infrastructure and the economy. The

biggest natural risk to business growth in parts of the Humber Region is flooding, and this risk is likely to increase

in the future as a result of factors such as new development and climate change.

• The UK’s exit from the European Union presents challenges and opportunities for the Council, our partners, our

communities and local businesses, such as changes to legislation and impacts on public sector funding and the local

economy. The Council will endeavour to respond positively to such challenges, working closely with its partners

across a range of sectors.

• The COVID-19 pandemic has continued to have a significant impact on the way in which we live and work during

2021-22 for our residents, communities and businesses.

The Council’s Business Plan sets out the Council’s vision and priorities for addressing some of these key challenges,

together with progress made in the previous year and supports the wider ambitions set out in the Community Plan for

the area. The five-year plan 2020-25 (updated for 2022) also contains important headline information on how the

Council will use our resources effectively to achieve our priorities through sound financial planning.

NARRATIVE REPORT


OUR PRIORITIES

The Council priorities show how we will achieve the vision of

Your East Riding... where everyone matters.

Details of the key actions the Council planned to take to deliver the corporate priorities can be found in the Council’s

Business Plan at https://www.eastriding.gov.uk/council/plans-and-policies/council-business-plan/.

https://www.eastriding.gov.uk/council/plans-and-policies/council-business-plan/

NARRATIVE REPORT


2. OPERATIONAL PERFORMANCE

It is a priority for the Council to ensure that performance is monitored and managed effectively.

To make sure that Elected Members and Officers are able to make informed decisions that will drive service

improvement, the corporate performance framework is an outcome-based framework that has the flexibility to adapt

to emerging priorities.

The resulting outcome-based framework measures activities identified in the Council’s key corporate strategies, so

providing an assessment of the impact that the Council is making. It is intended that all strategically important activity

across the organisation will be captured and aligned with the Council’s new vision and priorities.

NARRATIVE REPORT


The key corporate strategies are:

• Capital Strategy 2021-2031

• Strategy and Vision for Adults Social Care and Support in the East Riding of Yorkshire 2019-2022

• Children and Young People’s Strategic Plan 2017-2020*

• Economic Strategy 2018-2022

• Joint Health and Wellbeing Strategy 2019-2022

• East Riding Local Plan 2012-2029**

* The successor Strategy (Strategy for Children and Families 2022-26) is currently under development

**The successor Strategy (East Riding Local Plan) is being updated with pre-submission late 2022 and submission

2023

Each strategy is broken down to its strategic aims and within each strategic aim segment are outcome measures which

drive the results of each tier of performance (these are being developed for the new Adults Social Care Strategy).

Current performance measures and monitoring processes ensure that progress in this area is effectively managed.

The framework is represented by a performance ‘wheel’ which provides a graphical visualisation of hierarchical data

underpinning the corporate strategies, showing performance and status through colour, using a ‘Red/Amber/Green’

(RAG) performance rating scheme.

Performance, as measured at the end of Quarter 4 2021/22, shows that, four of the six key strategies are performing

above (shown as ‘Green’ in the inner circle of segments below) or within their set tolerance targets (shown as ‘Amber’).

At the end of Quarter 4, there were 55 measures which were achieving or exceeding their milestone target, 19 measures

that were within their agreed tolerance and 18 measures that had not achieved their milestone target. No data is

available as yet for 5 measures. The remaining 13 measures are associated with the SEND Strategy which has currently

been suspended.

NARRATIVE REPORT


A detailed report on Quarter 4 performance will be reported to the Council’s Cabinet on 5 July 2022 and will be

accessible on the Council’s website at: https://www.eastriding.gov.uk/council/committees/the-cabinet

This is the final report of the current iteration of the Corporate Performance Framework. A new member-led

framework is in the process of being developed and agreed, and reporting will commence later in 2022.

3. FINANCIAL PERFORMANCE

GENERAL FUND

The 2021-22 financial position of the General Fund revenue budget outturn as reported to management is set out in

the table below.

The Council's General Fund budget outturn position for 2021-22 is an overall underspend of £15.0m, which is largely

one-off in nature and predominately relates to two main factors. Throughout 2021-22, the Council has experienced

ongoing challenges in the recruitment and retention of staff, leading to underspends on staffing budgets across the

organisation. Furthermore, specific and temporary budget provision made to address the financial impact of COVID-

19 on the Council’s income and expenditure budgets has not been required in full.

The Council has delivered £10.4m (98%) of savings measures approved when the budget was set by the Council in

February 2021.

The General Fund outturn position reported to management showed a balanced position because the underspend of

£15.0m was transferred to the Efficiency Fund reserve in accordance with a previous Cabinet position.

The Council’s outturn position demonstrates that strong financial management has been maintained during this

unprecedented year, despite the considerable challenges faced.

The Expenditure and Funding Analysis on page 39 analyses the movement from the outturn reported to management

(as shown in the previous table) to the Comprehensive Income and Expenditure Statement on page 21.

CORE FUNDING AND BUSINESS RATES RETENTION

The Council’s actual business rates demand on the collection fund for 2021-22 was £53.2m. Business rates top-up grant

of £14.5m and section 31 grants of £8.9m were also receivable from Government to compensate for policy decisions

made that affected the Council’s retainable business rate income in 2021-22 prior to measures taken by the Government

to support businesses through the business rates system in relation to the pandemic.

Full year

budget Outturn Variance

£m £m £m

Chief Executive 0.3 0.3 0.0

Corporate Resources 31.6 30.6 -1.0

Adults, Health & Customer Services 113.3 104.9 -8.4

Children, Families & Schools (exc Schools) 59.6 59.6 0.0

Communities & Environment 39.3 34.8 -4.5

Planning & Economic Regeneration 36.3 34.4 -1.9

Total services excluding schools and HRA 280.4 264.6 -15.8

Other items

Levies & charges 3.2 3.1 -0.1

Community Hub and Emergency Food Grant Scheme 0.1 -0.6 -0.7

Capital Financing and Interest Receivable 23.8 21.8 -2.0

Pay Award 2.2 0.0 -2.2

Use of (-) / contributions to (+) reserves -34.5 -3.6 30.9

Total other items -5.2 20.7 25.9

TOTAL REQUIREMENTS 275.2 285.3 10.1

TOTAL RESOURCES -275.2 -285.3 -10.1

BUDGET SURPLUS (-) / DEFICIT 0.0 0.0 0.0

https://www.eastriding.gov.uk/council/committees/the-cabinet

NARRATIVE REPORT


In a continued response to the pandemic, business rates discounts were expanded so that no businesses in the retail,

leisure and hospitality sectors were liable to pay any business rates from 1 April 2021 to 30 June 2021, followed by 66%

relief from 1 July 2021 to 31 March 2022. These discounts amount to over £16m. This means that the Council has not

collected the amount of business rates it originally expected to because these businesses have not been required to pay

full business rates in 2021-22. £8.6m of additional grant was received to offset the Council’s share of additional business

rate relief awarded.

As part of the Spending Review published in November 2020 it was announced that the Government would compensate

local authorities for 75% of irrecoverable losses in council tax and business rates income expected in 2020-21 (the ‘local

tax income guarantee’).

The local tax income guarantee compensation for business rates was calculated as £0.5m and was transferred to

earmarked reserves. This has been brought into the 2021-22 revenue budget to offset the charge for the 2020-21

collection deficit.

Since February 2016, the Government has been undertaking a review of the current system of business rates retention,

alongside a fair funding review which will fundamentally change how the local government finance settlement is

distributed across local government. It was confirmed in the December 2020 spending round that the government

would again delay the planned reset of retained business rates growth due to the COVID-19 pandemic and it will,

therefore, no longer take place in 2021-22.

When the fair funding review is finally implemented, the “system” will be reset so that individual local authorities only

retain the amount of business rates that the new funding formula determines they need (within the overall available

funding) and retained business rates growth could be reduced to zero. The review will not increase the overall funding

nationally, it will merely determine how the funding is distributed.

Despite the delays the government still intends to implement its Local Government Fair Funding Review, but the

outcome and timing of implementation has yet to be determined.

COUNCIL TAX

The Government allowed increases to council tax of up to 5% for 2021-22, including a core council tax increase of up

to 2% and an adult social care precept of up to 3%. The social care precept was introduced by the Government in

recognition of the challenges faced by local authorities with adult social care responsibilities. The Council increased its

council tax for 2021-22 by 3.49%. The council tax charge on a band D equivalent property was £1,554.76. The Council’s

council tax requirement was set at £182.4m in 2021-22.

The local tax income guarantee compensation (see business rates section above) for council tax was calculated as £0.7m

and was transferred to earmarked reserves. This has been brought into the 2021-22 revenue budget to offset the

charge for the 2020-21 collection deficit.

SCHOOLS

The ring-fenced Schools Budget, funded by the Dedicated Schools Grant (DSG), overspent by £5.8m against budget and

this has been funded from schools earmarked reserves. As at 31 March 2022, local authority-maintained schools totalled

108 (2020-21 108). During the year there were no conversions to academies. Further details on schools are disclosed

in notes 7 and 49.

HOUSING REVENUE ACCOUNT

The Council owns and manages 11,379 domestic houses and flats and holds an interest in 75 shared ownership

properties. The housing revenue account records all revenue expenditure and income relating to the provision of

council dwellings and related services. The account is ring-fenced, meaning that tenant rents cannot be used to subsidise

other Council services. The HRA business plan sets out the long-term strategy for managing the Council’s housing

stock. Further details are disclosed on page 108.

For 2021-22, the HRA overspent by £0.1m against budget and this has been funded from the HRA general reserve.

Budget pressures have been managed and largely offset by underspends elsewhere within the HRA budget. Overall,

HRA reserves stand at £42.414m (2020-21 £58.360m) which include general reserves and reserves earmarked for debt

repayment and investment in new stock and repairs.

CAPITAL

NARRATIVE REPORT


The Council successfully delivered its planned capital programme during 2021-22 amounting to investment of £111.0m.

This represents the delivery of a capital programme of a similar size in value to that delivered in recent years. Through

the delivery of its extensive capital programme, the Council continues to play a key role in supporting our residents,

the local economy and businesses across the East Riding.

The outturn spend was £1.1m (1.0%) less than planned, the majority of which is due to timing of the planned spend

which will now take place in future years, rather than a reduction to the capital programme.

Key areas of investment in 2021-22 included:

• During 2021-22 over £1m worth of school condition improvements were delivered through 133 schemes, including

planned projects for new boilers, and lighting and roof replacements.

• Alongside the ongoing condition improvements across the school estate, a further £1.8m was invested in four major

projects:

- £0.850m at Boyton Primary School to replace two mobile classrooms and provide an additional classroom and

entrance.

- £0.455m for a refurbishment of Kirk Ella Primary Schools' South Block,

- £0.25m for a new classroom at Driffield Northfield Infant School and

- £0.250m for a nursery extension at Cottingham Westfield Primary.

• Continued investment in major flood alleviation schemes including completion of the £11m Hessle Foreshore Tidal

Defence Scheme which reduces the risk of flooding to over 4,000 properties. A series of smaller, but no less valuable

flood schemes, have been completed in some of the more rural villages of the East Riding including at Langtoft,

Middleton-on-the-Wolds and Patrington Haven. Fifteen feasibility studies are ongoing to inform the delivery of the

next six-year programme for capital investment in Flood and Coastal Erosion Risk Management (2021-27).

• Construction work is now complete on the third and final phase of the Brough Relief Road, after £6.5m of external

funding was secured. Now complete, the scheme is expected to generate significant economic growth for Brough

by unlocking 85 hectares of employment land and 17,200 square metres of commercial space, creating up to 600

new jobs, and opening up new land for around 550 houses and new space for the local community.

• Work is now complete on the East Riding to Hull cycle scheme. Working with Hull City Council, £0.560m of

funding was secured to provide 12.65km of improved continuous, safe cycle routes from large residential areas into

Hull. Works included reallocating road space by widening existing cycle lanes and making them mandatory, where

possible, with light segregation, infill the existing gaps in cycle provision and improving safety at junctions,

encouraging more people to access the city centre by cycle.

• £0.750m of improvements were delivered through our Local Cycling and Walking Infrastructure Plans (LCWIPs),

which provide sustainable transport infrastructure within the 14 main settlement areas in the East Riding. Schemes

include new pedestrian crossing facilities, dropped tactile crossings, new footway links, street lighting in pedestrian

areas, and new cycle links. All of these schemes offer safer and improved spaces to encourage active travel in the

region.

• In addition to a programme of major highways maintenance works across our 2,200 mile carriageway network,

which include a £1.3m contract using recycled materials, the Council has delivered a £3m pothole prevention

initiative adding £2m to the Surface Dressing programme and further £1m on preventative treatments. It has also

continued with a £2m programme of drainage repairs and worked with neighbouring authorities to deliver a further

£1.5m of works on the A614 near Goole. Refurbishment of our bridge stock included major planned works on

Boothferry Bridge and stabilisation work on Kexby Bridge.

• Work continues to replace the old Hilderthorpe Road Car Park in Bridlington with retail units that will be occupied

by businesses including Lidl and B&M with additional 1,400 square foot pod building, all with associated parking.

• The £5.3m Beverley Business Centre scheme has been completed with the official opening and launch event taking

place on the 8th July. The business centre has 29 units available to rent with only four units currently unoccupied.

Feedback from service users has been very positive.

• The £9.2m new RaisE Business Centre scheme is located within the Goole 36 Enterprise Zone and provides 3,200

square metres of commercial floor space made up of grade-A office and workshop accommodation. This space,

which formally opened on 27th May, is available to let to small and medium sized enterprises (SMEs). A number of

units have already been let with a number of large businesses making enquiries about availability. Siemens have

already confirmed that they will take full occupancy of the second floor.

• Work continues on the £9.5m Appleton Court development which will create a new independent living facility that

provides affordable rented housing with 24-hour onsite care and support (known as Extra Care Housing). It will

provide 44 apartments designed to be adaptable and accessible including level access showers, rise and fall kitchen

units and open plan living. All flats have access to outside space via a terrace or balcony.

• Over £16.5m has been invested in the Council's existing housing stock. This ensures:

- compliance with the Decent Home’s Standard,

- a continuation of investment in thermal works including external wall insulation and air source heat pumps

to reduce the Council’s carbon footprint and

- maintenance and improvement of fire safety across the housing portfolio.

NARRATIVE REPORT


The programme for 2021-22 of £111.1m was funded by loans of £21.7m, capital grants and contributions of £49.4m,

capital receipts of £13.1m, and revenue and reserves of £26.8m.

SUMMARY OF PENSION FUND ACTIVITY FOR 2021-22

At 31 March 2022, the Fund was valued at £6262.6m representing an increase in the Fund value of £513.4m from

31 March 2021. The Fund generated a return of 9% for the year to 31 March 2022 compared to the strategic benchmark

return of 5.9%. Over the three years to 31 March 2022 the Fund returned 6.8% per annum, compared to the strategic

benchmark return of 5.9% per annum and the long-term investment objective of 5.5% per annum. These returns were

due to the strength of the recovery of global economies and investment markets from the impact of the COVID-19

pandemic. This was mainly due to the huge amount of monetary and fiscal stimulus provided by central governments

and the rapid rollout of the vaccine programme.

Alternatives was the strongest performer, with private equity and other alternatives producing particularly high returns.

Private equity investments continued to benefit from the support provided to economies, and other investments

including aircraft and shipping leasing bounced back from a difficult 2020-21 as travel restrictions were lifted. Equities

performed well, with the UK market leading the way. Towards the end of the year concerns were growing on inflation

and on the impact of the Russian invasion of Ukraine. Energy and other sectors more resilient to these issues form a

bigger proportion of the UK market than is the case overseas. Bonds performed satisfactorily in 2021 but ended the

year with a negative return due to rising interest rates and inflation.

During the year, the Fund paid out £188.4m of benefits to scheme members.

At 31 March 2022, the number of employers in the Fund was 325 (31 March 2021: 316). There were 17 new Scheme

Employers joining the Fund during 2021-22 with 8 existing Scheme Employers ceasing their membership of the Fund.

The Fund continues to be managed in a cost-effective manner with total pension administration, investment management,

and oversight and governance costs equating to just 0.13% (2021: 0.14%) of funds under management.

The average pension payment is £4,864.71 per annum, equivalent to a weekly payment of £93.30.

Further details are disclosed from page 123.

4. COUNCIL WORKFORCE

The Authority employs 6288 contracted members of staff (excluding schools). This equates to 5171.66 whole time

equivalents.

Key statistics include:

• 40.5% of the workforce have part time contracts

• 64.3% of the workforce are female

• Turnover is currently 12.71%

• 27.48% of the workforce is over 55

• 5.77%of the workforce is under 25

• 5.37% of the workforce consider themselves to have a disability

• 71.99% of employees reported their ethnicity as White.

During this financial year, support for our most valuable asset, our people, has continued through the roll out of the

People Strategy.

People Strategy

Planning for the future. Whilst providing services to our residents and businesses, we need to make sure that we

plan our approaches to ensure we have a suitable workforce to meet emerging and predicted future needs. This means:

• Workforce plans at strategic and service levels to support organisational plans

• Our culture will support our aspirations to be an agile organisation

• Staff will be engaged in developing future approaches

• Changes will be managed effectively

Attracting a modern workforce – Doing all that we can to attract people with the right values to work at the

Council. Main areas of focus are:

NARRATIVE REPORT


• A fair and attractive pay and reward strategy will be in place

• Our practices will maximise opportunities to recruit and retain the best staff

• Equality, Diversity & Inclusion will be embedded in everything we do.

Developing our workforce- Encouraging development at all levels of the organisation to promote effective leadership,

skills development, succession planning and positive performance. This includes:

• Attractive, relevant and accessible learning & development

• Leaders at all levels supported to develop their approach

• Mechanisms to promote positive performance

Providing a modern workplace – building the Council’s reputation as a modern workplace in all that we do. Key

elements are:

• The organisation will be designed in a way to promote modern practices

• The Council’s health & wellbeing offer, based on a clear understanding of the issues affecting our employees, will

respond to current and emerging needs

The Council has focused on the future and its ambition of having a Modern Workforce in a Modern Workplace. Much

work has been undertaken to further develop the Council’s Equality, Diversity and Inclusion agenda including gathering

information on our workforce profile, developing reporting, engaging staff in forums on a number of topical issues,

developing carers’ support, promoting a healthy workplace culture, increasing workforce diversity including in

recruitment, supporting the emergence of employee networks, improving EDI training for employees and Members and

improving the use of equality analysis across the Council.

The wellbeing of our staff has been placed at the forefront of our future ways of working, with the development of a

Workforce Wellbeing hub on the intranet and introduction of the new Performance Review and Check-in process. A

new Employee Assistance Programme provider has been procured alongside the promotion of the Council’s Health &

Wellbeing Champions and work is underway on the development of a Workforce Wellbeing policy.

5. RISK MANAGEMENT

Risk management is an integral part of our planning and decision-making framework.

During 2021-22, the Council undertook an internal strategic risk management review which assessed all risk structures,

reports and processes. The purpose of the review was to ensure that the Council is in the best possible position to

respond to risk and that all components of the risk management framework are aligned with best practice. The review

has resulted in an in-depth assessment of each of the strategic risks being faced by the Council in relation to future

service provision, to ensure that effective controls and assurances are in place to effectively manage, adapt and respond

to them.

Additional recommendations which will be implemented from Q1 2022-23 include an E-Learning module on risk

management, comprehensive service-level risk registers, appointing risk coordinators in each service area and regular

risk coordinator meetings with the risk team in order to share best practice and collaboratively review risks.

The Council will continue to regularly review its strategic risks as part of the ongoing risk management cycle, enabling

continuous improvement and organisational resilience. These most significant current risks include:

Risk Key Controls & Assurance

Failure to manage the threats (or opportunities) to market

sustainability caused by changes in demand for social care

• Routine (annual) reviews of homecare & residential

procurement arrangements as part of a contract

management plan and framework

• Weekly provider call with all providers to ensure

strengthened partnerships and regular

communication to identify key threats

• Think 2021 Demand and capacity Modelling –

ensures clear actions are in place to identify

commissioning threats

• Additional capacity - commissioning team dedicated

to proactively identifying market risks

• Quarterly joint commissioning meetings to drive

horizon scanning activity

NARRATIVE REPORT


• Consultation activity with providers following the

end of void payments to strengthen partnerships and

support vulnerable providers

• Early warning indicators established to monitor key

areas of high risk

• Protecting the vulnerable task group

• Annual risk awareness self-assessment tool

• Bi-monthly Commissioning Board

• CQC Inspection reports published

• Financial monitoring of larger national providers

• Daily occupancy data from NHS care home

occupancy tracker

• Joint safeguarding/ Quality Development Monitoring

Officers (QDMO) work to identify soft intelligence

concerning quality issues and QDMO monitoring

reports on providers

• Monitoring of. funding panel requests for increases

to individual care fees/packages

• New Ways of Working – working group

• Annual review of workforce strategy action plan &

position

• Development of new adult services structure

• Improved health & wellbeing offer

• Improved carers support offer- digital platform to

improve self-service support and befriending

• Adult Services daily monitoring of team staffing levels

which feeds SITREP to service managers & strategic

managers with sickness, vacancy,

• ASC workforce data set annually submitted to Skills

for care

• Workforce support - ERYC & Intensive care Society

(ICS) level support to maintain resilience

Failure to strategically plan, manage and deliver critical adult social

care services due to long term funding uncertainty and increasing

inequalities

• Improved Better Care Fund (IBCF) delivery plan

objectives & supporting work streams

• Budget scrutiny reviews

• Corporate financial planning process and

accountancy meetings

• Performance monitoring and benchmarking activity

overseen locally, regionally, and nationally

• Annual risk awareness self-assessment tool

• Participation in regional Association of Directors of

Adult Social Services (ADASS) including finance and

performance subgroups which include benchmarking

activity.

• Analysis of NHS digital published comparisons from

annual mandatory finance and activity returns

• Transformation project/lMPOWER diagnostic

period

• Think 2021 Demand and Capacity Modelling -

ensures clear actions are in place to identify

increased demand and implement early intervention

measures:

o iHomefirst mobilisation

o Discharge to Assess (02A) practice

implementation

o Short Term Offer (STO) development

enabling functioning system with effective

Community Wellbeing Team (CWT)

interface

o iCWT position to improve knowledge &

lessons learnt from historical pressures.

o local area coordination model

development

• Review of formal partnership arrangements (S75

Mental Health) and continuing health care teams) in

progress: with progress and outcomes monitored by

the Health and Social care Executive Board

NARRATIVE REPORT


• DoLS (Deprivation of Liberty Safeguards) and Liberty

Protection Safeguards Planning

• Your Life Your Way preventative community

controls

• Maximising Independence Interventions

• Adult Safeguarding Board and its sub-group/strategic

priorities

• Annual Risk awareness self-assessment tool

• Routine monthly activity monitoring and reporting to

Executive Director of Adult Services – covering

incoming contracts, time to action, outcome of contacts, level of unresolved work

• Potential volumes modelling from historic data

Failure to facilitate resilience and recovery in the local economy • East Riding Economic Strategy 2018-2022

• Annual reports (June 2019, June 2020, Mid-term

review February 2021, final reporting 2022)

• Performance indicators (reported on quarterly,

linked to the Council Business Plan and 'Growing the

Economy' corporate priority)

• Periodic reports to Overview and Scrutiny

Committee

• Economic Recovery Plan- reported to CMT/

Environment and Regeneration Overview and

Scrutiny on a 6 monthly basis

• External Funding Strategy 2014-2020 (under review)

• East Riding local Plan 2012-2029

o Submission local Plan consultation

expected Winter 2022

o Joint Minerals local Plan 2016-2033

o Joint Waste Plan 2004-2013 (under review

with Hull City Council)

o Strategic flood risk assessments o East Riding Housing Strategy

o Local Plan viability study

o Employment land review

• Visit Hull and East Yorkshire Tourism Strategy 2019-

2024

• Enterprise Zones

• Freeport Zone

• Levelling up agenda

• European Social Fund (ESF)

• Funding for COVID-19 recovery support

• No limits Project

• Goole Town Deal

• ERYC COVID-19 business support

• East Riding Rural Strategy

• Climate Change Strategy

• local Flood Risk ManagementStrategy2015-2027

The LEP-led local industrial strategies, which have been

included in previous updates, have been abandoned. The

newly formed Hull land East Yorkshire local Enterprise

Partnership has produced a draft Economic Growth and

Workforce Wellbeing Strategy 2021-2026. ED&C

coordinated a council-wide officer response to the

strategy, and we are awaiting publication of the final

version

Failure to ensure appropriate emergency plans, procedures and

processes are in place, resulting in an ineffective council response to

an emergency

• Council's emergency management arrangements

(emergency plans) based on the consequences

identified in the Humber LRF Community Risk

Register and Humber LRF Risk Assessment and

associated capability gap analysis.

• Council business continuity plans. Reviewed at least

every 3 years unless the risk landscape changes and

requires immediate review work.

• Council and multi-agency staff training programme

• Council and multi-agency exercise programme

NARRATIVE REPORT


• Emergency Planning & Business Continuity- Policy &

Strategy.

• Town and Parish Council community emergency

plans and links with Voluntary Sector emergency

plans.

• Intelligence indicators support the monitoring of-

standards. Target to achieve 90% of standards.

• Close multi agency working through the 'Humber

local Resilience Forum, the local Health Resilience

Partnership and through the joint arrangement with

Humber local authorities.

• Generic and incident specific multi-agency

emergency plans-e.g., emergency procedures

manual, flooding, animal disease, oil pollution

• Corporate emergency planning working group to

monitor and review arrangements

Failure to recruit and retain an appropriately diverse, skilled, and

engaged workforce to meet service needs

• Deployment of Business Partners to support

directorates with their workforce planning

challenges

• Development of workforce planning process to enable workforce plans to be in place for each

service

• Implementation of EDRs and 1 to ls to set out service

expectations, to build performance, support

wellbeing, promote learning and understand future

changes

• Improved performance management policies and

support mechanism (replacing EDRs)

• Strategic thematic approach to learning and

development opportunities

• A developed and embedded leadership &

management training offer

• Comprehensive workforce wellbeing offer

(Occupational Health, Employee Assistance

Programme, Live Well Work Well etc) and

communications. Wellbeing action plans in place at

corporate level and for directorate

• Plans in place to promote healthy workplace culture,

including review of bullying and harassment policies,

training etc pilot of personal reviews and check-ins is

underway

• Staff have access to appropriate qualifications,

training and development opportunities to meet

identified need, ensure compliance with professional

standards including induction. mandatory training

and CPD

• Support being promoted to our employees who are

carers to minimise potential further impact on care system. Additional strategic resourcing post

established in Business Management and

Commissioning to develop solutions for the wider

social care sector

• EDI action plan in place and task group being

established - to develop understanding of EDI issues

and implement suitable responses- e.g.,1 EDI forums,

employee networks, equalities information

• People Strategy developed and being promoted

• Corporate visions and values, and our commitment

in place and underpin our approach

• Development of total reward package including

review of job evaluation scheme

• Quarterly workforce management information

reports to help services understand and respond to

their challenges

• Corporate recruitment advice, support provided to

address specific issues - e.g. targeted advertising,

NARRATIVE REPORT


creative recruitment solutions, financial incentives

etc

The Council’s Annual Governance Statement provides assurance on the effectiveness of the Council’s systems of

governance including internal control and risk management during 2021-22 and can be found on the Council’s website:

www.eastriding.gov.uk.

6. OUTLOOK

Financial Outlook

As the Council and the local community continue to recover from the impact of the pandemic, it is clear that our

challenges have become more complex and consequential financial pressures have become more acute. Key financial

challenges for the Council looking forward include:

• High inflation - the UK has seen an increase in Consumer Price Index (CPI) inflation for the past 12 months to

March 2022 when CPI was recorded at 7%, and it has since risen further to 9.4% in June 2022. This rapid rise in

inflation has brought about a cost of living crisis in the UK. This is forecast to place significant pressure on council

budgets due to rising costs of staffing, transport, goods and services, as well as the additional costs of rising demand

for council services in response to the crisis.

• Workforce recruitment and retention – during May 2022, it was reported that the number of job vacancies in the

UK exceeded unemployed people for the first time. At the same time, movement between jobs reached a record

high, predominantly driven by resignations. This has significantly increased competition in the employment market.

The impact is being felt acutely by the Council as we are experiencing exceptionally high levels of staff turnover

and upwards pressure on pay to remain competitive as an employer, which is further exacerbated by the high

levels of inflation described above.

• Adult Social Care Reform - in September 2021, the Government set out its new plan for adult social care reform

in England. In October 2023, the Government will introduce a £86,000 cap on the amount anyone in England will

need to spend on their personal care over their lifetime. This will place additional staffing and training demands on

the Council to deliver services to the high number of additional customers whose care will be publicly funded,

whilst we continues to grapple with ongoing growth in the demand for Adult’s and Children’s social care and the

recruitment and retention challenges within both the Council and the wider care sector.

• Ongoing funding uncertainty - the Government has yet to determine a firm proposal for local government fair

funding reform which presents challenges for the Council’s financial planning beyond the short-term.

To address these challenges, we have adapted our financial strategy. It retains an underpinning theme of resilience, as

this will be critical to navigating the risks and uncertainties we face. The themes of digital, agile, commercial, and value

for money in the previous strategy have been brought together within a business change programme designed to address

the variety of challenges to be addressed over the medium term and ensure that the Council evolves to meet the

changing needs of the communities which we serve. These themes are described below:

Resilience

Financial resilience for local authorities means remaining viable, stable and effective. Financial resilience has become a

significant issue in local government in recent years, and a lack of financial resilience can have very serious consequences

for a local authority.

The financial strategy and plan aim to provide resilience in the following ways:

• Service delivery

By directing revenue resources to ensure that they provide the means to sustain and deliver the Council’s services

whilst reflecting the priorities identified in the business plan.

• Investment

http://www.eastriding.gov.uk/

NARRATIVE REPORT


By providing the means to invest both in service delivery and in the maintenance and improvement of public assets

and infrastructure across the East Riding.

• Risk management

By ensuring that the Council has sufficient reserves to manage financial risk and uncertainty.

Providing this resilience underpins the Council’s business plan and financial strategy, as it is essential to ensure that the

Council remains fit for purpose both now and in the future.

To support our resilience, the Cabinet approved strategic investment of the Council’s 2021-22 General Fund budget

underspend to help address our future challenges as follows:

• £7.0m to manage forecast pressures on the 2022-23 General Fund revenue budget which have arisen due to high

levels of inflation since the budget was set. These pressures include inflation on energy and fuel costs, and the

potential for a higher staff pay award than originally forecast due to high levels of household inflation.

• £2.0m to provide additional funding towards priorities for capital investment, including the development and

delivery of the Special Educational Needs and Disability (SEND) Strategy to assist in addressing the shortfall in

suitable complex needs residential provision in the East Riding.

• £1.6m to support the continued delivery of the Adult Social Care Change Programme. This represents delayed

spend on the previously approved delivery programme due to diversion of activity to the COVID-19 response.

• £4.4m to allow funding decisions to be taken during 2022-23 which will enable the Council to provide targeted

support to the local community in response to the cost of living crisis and other emerging priorities.

Business Change

The Council is committed to a fundamental programme of business change covering the entirety of its operation. The

aim is to change business processes to improve the customer experience and make the Council more efficient in its

operation.

The ongoing pandemic has amplified the need for this approach, with customers increasingly interacting with the Council

in different ways and presenting with different needs. The entire working environment is shifting, with technology

developing at pace and with the full potential of agile working becoming truly apparent during the pandemic. The

advances in technology are now combining to allow our vision of a digital-first Council to be finally realised.

This approach is embedded in our new People Strategy, Digital Strategy and Commercial Framework. Through it, we

will ensure that the services we provide are effective and sustainable while minimising the cost to taxpayers and the

public purse. The following elements will underpin our approach:

• Commercial Opportunity

By maximising existing commercial operations and identifying new commercial opportunities we can generate

additional income to help to deliver improvement and efficiency while retaining strong public service values.

• Agile Working

By embracing a culture of agile working, where staff operate in the location and a way that is most beneficial to the

organisation, we can transform the way we operate.

• Digital Approaches

By developing a strategy based around Digital Pace, Digital Customer and Digital Organisation, we can transform

the region and the lives of residents, while also generating long term savings for the Council. Our ambition is for

the East Riding to become a well-connected region, a place of innovation and inclusion, and a place where the

benefits of digital investment are harnessed, maximized and shared across residents, businesses and partners,

facilitating economic growth.

• Business Change

By threading a culture of business change through the entirety of the Council’s business plan and financial strategy

we can ensure focus is on innovation and improvement.

• Organisation Re-design

https://www.eastriding.gov.uk/council/governance-and-spending/budgets-and-spending/council-budget/

https://www.eastriding.gov.uk/council/governance-and-spending/budgets-and-spending/council-budget/

NARRATIVE REPORT


The Council is developing a Total Pay and Reward Strategy which will encompass all aspects of pay and reward and

will include a system of performance management and a programme of organisational analysis. This will ensure that

our organisational design is lean, effective and efficient, offering value for money services to the residents and in

which services are delivered within a framework of effective performance management where outputs are

measured, and appropriate development interventions are quickly identified to support improved outcomes.

For 2022-23, a combination of the increase to council tax of 3.99% and a one-off surplus on the Collection Fund (due

to higher council tax collection rates than forecast during the pandemic) has enabled the Council to set a balanced

budget. However, it is important to note that the Council’s current four-year financial plan projects a budget gap of

£9.875m by 2025-26. The projected budget gap is based on the assumption that council tax increase of 2.99% per annum

will be applied in later years, current funding levels for social care continue and there are no reductions to the local

government finance settlement. It is important to note that there remains a high degree of uncertainty over funding for

local government after 2022-23.

The Council’s response will continue to be developed and refined as the economy changes and its effects become

clearer, and the financial impacts will be managed through the Council’s medium-term financial planning process.

The Capital Strategy sets out the Council’s priorities for investment in its asset base, and the subsequent levels of

investment required to keep the asset base sustainable in the future. The level of need for future investment in the

Council’s assets far outweighs the available resources. One way to bridge some of this gap is to competitively bid for

grants which the Council would otherwise not receive. The Capital Strategy therefore provides a coordinated approach

to investment in assets and shapes all capital funding proposals including the submission of bids for competitive grants

which ultimately lead to investment in the asset base. All projects, irrespective of their funding source, seeking capital

funding are directed through the Council’s approved capital appraisal process. New investment has focused on 'Invest

to Save', economic regeneration and investment in key infrastructure to ensure the continued delivery of key services

to the public.

Due to a number of industry and political related factors, the Royal Institute of Chartered Surveyors (RCIS) has forecast

that tender price inflation on construction projects could rise significantly over the next five years. This could have a

substantial impact on the current capital programme and will be carefully managed through the Capital Board.

A number of new capital projects have been identified and a capital appraisal round will take place during 2022-23.

Alongside this, a review of the capital programme will be taken to ensure that the current capital programme is affordable

and still meets the Council’s corporate priorities.

Despite the continued reductions in Government funding and future investment being constrained, the current capital

programme remains substantial in value. The overall capital programme for 2022-23 and future years totals £555m. Key

financial investment within the Council’s capital programme includes:

• £212m on the remodelling, replacement and new builds for Council housing.

• £163m on Highway and Flooding schemes to improve and maintain the Council's infrastructure.

• £66m on improving existing council homes, for example kitchens and bathrooms, reroofing and window

replacement including improving energy efficiency.

• £39m on the rolling vehicle replacement programme.

• £16m on various leisure facilities across the East Riding including commuted sums.

• £15m on Prop Multi Service Centres, Energy Efficiency and Asset Rationalisation across the property estate.

• £14m on other housing inc. grants to the private sector, disabled facilities grants, bringing empty properties back

into use and accommodation for rough sleepers.

• £10m on schools in order to provide a safe and secure place for learning.

• £7m on the Bereavement Project, Lelly Fields, Preston.

• £6m on the Technology to improve the IT infrastructure for the residents of the East Riding.

• £4m on Economic Regeneration, including business centres and other projects in Bridlington, Goole.

• £2m on the Council's ongoing website development.

• £1m on Childcare facilities.

Sources of funding for the future capital programme are summarised in the following table:

NARRATIVE REPORT


2022/23 2023/24 2024/25 Later Total

£000 £000 £000 £000 £000

Sources of Funding

Grants & Contributions 59,092 44,749 43,024 50,332 197,197

Revenue & Reserves 36,940 30,681 29,466 30,973 128,060

Borrowing 24,750 44,301 64,812 67,247 201,110

Capital Receipts 9,529 6,746 5,011 7,849 29,135

130,311 126,477 142,313 156,401 555,502

NARRATIVE REPORT


THE ACCOUNTS

This statement of accounts summarises the financial performance of the Council for the year ended 31 March 2022.

The pension fund accounts for the year ended 31 March 2022 are included at pages 123 to 150.

The accounts consist of: -

The Auditor’s Report (page xx) sets out the independent auditor’s opinion on the financial statements including the

conclusion on arrangements for securing economy, efficiency and effectiveness in the use of resources.

The Statement of Responsibilities for the Statement of Accounts (page 19) identifies the officer who is

responsible for the proper administration of the Council’s financial affairs and sets out theirs and the Council’s

responsibilities in respect of the statement of accounts.

The Balance Sheet (page 20) sets out the financial position of the Council as at 31 March 2022. The balance sheet

shows the value of the assets and liabilities recognised by the Council at the balance sheet date.

The Comprehensive Income and Expenditure Statement (page 21) identifies the income and expenditure on

all services the Council provides except the pension fund (see below) and brings together all the recognised gains and

losses of the Council during the period 1 April 2021 to 31 March 2022.

The Movement in Reserves Statement (page 22) reconciles the outcome of the comprehensive income and

expenditure statement with the outcome on the general fund balance and details the movement on all other reserves

that the Council holds, both usable reserves (i.e. those that can be used to fund expenditure) and other reserves.

The Cash Flow Statement (page 23) shows the changes in cash and cash equivalents of the Council during the

reporting period.

The Housing Revenue Account (page 108) summarises the income and expenditure in respect of the provision of

local council housing accommodation.

The Collection Fund (page 120) shows the level of non-domestic rates and council tax that have been received by

the Council during the period and the distribution of these funds.

The Pension Fund Accounts (page 123) In addition to its local authority functions, the Council is the administering

authority for the East Riding Pension Fund (the pension fund) on behalf of X employers and X members. The pension

fund accounts show the operation of the pension fund administered by the Council for its employees, employees of

scheme employers and those of admitted bodies.

The accounting arrangements of local government and a large organisation such as the Council are complex. The

Council has prepared the accounts in accordance with International Financial Reporting Standards (IFRS) as required by

the Code of Practice on Local Authority Accounting in the United Kingdom 2021-22 (the Code). To help you

understand the accounts, the main statements are supported by explanatory notes and a glossary of terms and

abbreviations is provided from page 151.

STATEMENT OF RESPONSIBILITIES


1. THE COUNCIL’S RESPONSIBILITIES

The Council 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 Council, that officer is the Director of

Finance.

• manage its affairs to secure economic, efficient and effective use of resources and safeguard its assets.

• approve the statement of accounts.

2. THE RESPONSIBILITIES OF THE DIRECTOR OF FINANCE

The Director of Finance is responsible for the preparation of the Council’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 based on International Financial Reporting Standards (the Code).

In preparing this statement of accounts, the Director of Finance has:

• selected suitable accounting policies and then applied them consistently;

• made judgements and estimates that were reasonable and prudent;

• complied with the local authority code;

• kept proper accounting records which are up to date;

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

• assessed the Council’s ability to continue as a going concern, disclosing, as applicable, matters related to going

concern;

• used the going concern basis of accounting on the assumption that the functions of the Council will continue

in operational existence for the foreseeable future; and

• maintained such internal control as they determine is necessary to enable the preparation of financial

statements that are free from material misstatement, whether due to fraud or error.

3. CERTIFICATE

I hereby certify that the following statement of accounts give a true and fair view of the financial position of East

Riding of Yorkshire Council and East Riding of Yorkshire Pension Fund as at 31 March 2022 and its income and

expenditure for the financial year then ended.

The statement of accounts are currently unaudited and may be subject to change.

Julian Neilson

Section 151 Officer

29 July 2022

FINANCIAL STATEMENTS


BALANCE SHEET

The balance sheet shows the value as at the balance sheet date of the assets and liabilities recognised by the Council. The net assets of the Council (assets less liabilities) are matched by the reserves held by the Council. Reserves are reported in two categories. The first category of reserves is usable reserves, i.e. those reserves that the Council may use to provide services, subject to the need to maintain a prudent level of reserves and any statutory limitations on their use (for example the capital receipts reserve may only be used to fund capital expenditure or repay debt). The second category of reserve is unusable reserves, i.e. those that the council is not able to use to provide services. This category includes reserves that hold unrealised gains and losses (for example the revaluation reserve), where amounts would only become available to fund future capital expenditure 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’.

Julian Neilson Section 151 Officer 29 July 2022

31 March 2021 31 March 2022£000 £000

1,745,294 Property, plant & equipment 1,825,804976 Heritage assets 976

2,973 Intangible assets 2,90117,120 Long-term investments 17,0888,434 Long-term debtors 4,845

1,774,797 Total long-term assets 1,851,614

54 Assets held for sale 3604,065 Inventories 3,903

95,409 Short-term debtors 88,02595,170 Short-term investments 120,16359,257 Cash and cash equivalents 60,312

253,955 Total current assets 272,763

-33,207 Short-term borrowing -11,766-104,950 Short-term creditors -108,182-39,665 Revenue grants receipts in advance -65,435-20,668 Capital grants receipts in advance -18,969-5,030 Current provisions -4,861

-203,520 Total current liabilities -209,213

-336,402 Long-term borrowing -324,922-10,400 Deferred liabilities -9,095

-743 Long-term creditors -136-2,664 Long-term provisions -2,389

-228 Deferred credits -204-2,016 Revenue grants receipts in advance -2,100

0 Capital grants receipts in advance 0-612,922 Net pension liability -464,721-965,375 Total long-term liabilities -803,567

859,857 NET ASSETS 1,111,596

Financed by268,144 Usable reserves 241,433591,713 Unusable reserves 870,163

859,857 TOTAL RESERVES 1,111,596

Note

14a

23

21

22

44

38

24

24 / 26

24 / 26

38

25

27c

28

32



COMPREHENSIVE INCOME AND EXPENDITURE STATEMENT

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 or rents. Authorities raise taxation and rents to cover expenditure in accordance with statutory requirements and this may be different from/to the accounting cost. The taxation position is shown in the movement in reserves statement. The accounting (surplus)/deficit on the provision of services shown below can become a larger or smaller (surplus)/deficit in the movement in reserves statement when the adjustments between the accounting basis and the funding basis under regulations and transfers to/from earmarked reserves are applied to show the amount funded from the taxation position.

Gross Gross Net Gross Gross Net expenditure income expenditure expenditure income expenditure

£000 £000 £000 £000 £000 £000Service expenditure

519 -11 508 Chief Executive 395 -20 37541,695 -17,683 24,012 Corporate Resources 44,359 -13,235 31,125

257,948 -121,362 136,586 Adults, Health & Customer Services 258,568 -142,894 115,67466,564 -4,224 62,340 Children, Families and Schools (exc. schools) 72,413 -5,317 67,096

111,809 -62,028 49,781 Communities & Environment 113,700 -62,133 51,56773,155 -17,544 55,611 Planning & Economic Regeneration 75,945 -16,614 59,33130,790 -49,786 -18,996 Housing Revenue Account 26,342 -50,799 -24,457

205,595 -190,251 15,344 Children, Families and Schools (Schools Budget) 232,451 -198,991 33,460788,075 -462,889 325,186 Total continuing services - cost of services 824,173 -490,002 334,171

9,761 -1,017 8,744 Other Operating Expenditure 8,281 0 8,28161,045 -37,105 23,940 Financing and Investment Income and Expenditure 61,899 -36,583 25,31619,231 -380,327 -361,096 Taxation and Non-Specific Grant Income and Expenditure 762 -351,794 -351,032

878,112 -881,338 -3,226 Surplus (-) or deficit on the provision of services 895,115 -878,379 16,736-78,338 Surplus (-) /Deficit on Revaluation of Non-Current Assets -29,379-1,073 Impairment Loss taken to Revaluation Reserve 0

251,902 Remeasurement of the pension net defined benefit liability (asset) -239,095172,491 Other comprehensive income and expenditure -268,474169,265 Total comprehensive income and expenditure -251,738

27bMIRS

2020/21 Note 2021/22

Page 108

7a7b7c

3333



MOVEMENT IN RESERVES STATEMENT (MiRS)

This statement shows the movement from the start of the year to the end on the different reserves held by the Council, analysed into ‘usable reserves’ (i.e. those that can be applied to fund expenditure or reduce local taxation) and other ‘unusable’ reserves. The movement in reserves statement shows how the movements in year of the Council’s reserves are broken down between gains and losses incurred in accordance with generally accepted accounting practices and the statutory adjustments required to return to the amounts chargeable to council tax setting and dwellings rent-setting purposes for the year. The net increase /decrease line shows the statutory general fund balance and housing revenue account balance movements in the year following these adjustments.

General and earmarked balances consist of £34.500m general fund (£37.306m 2020-21) and £143.845m of earmarked general fund reserves (£149.715m 2020-21). A detailed analysis of the movements in earmarked reserves can be found in note 30.

The adjustments between accounting basis and funding basis under regulations are further analysed in note 5.

General & Housing Major Usable Capital grant Total Total Totalearmarked revenue repairs capital unapplied usable unusabl authority

balances account reserve receipts account reserve reserves reserves£000 £000 £000 £000 £000 £000 £000 £000

Balance at 31 March 2020 168,479 4,411 49,852 16,712 4,252 243,706 785,416 1,029,122Movement in reserves during 2020/21

Total comprehensive income and expenditure -10,693 13,919 0 0 0 3,226 -172,491 -169,265

Adjustments between accounting basis and 5funding basis under regulations 29,234 -12,933 3,111 -298 2,098 21,212 -21,212 0

Increase/decrease (-) in year 18,541 986 3,111 -298 2,098 24,438 -193,703 -169,265Balance at 31 March 2021 carried forward 187,020 5,397 52,963 16,414 6,350 268,144 591,713 859,857

Movement in reserves during 2021/22

Total comprehensive income and expenditure -37,091 20,355 0 0 0 -16,736 268,474 251,738

Adjustments between accounting basis and 5funding basis under regulations 28,416 -20,142 -16,159 -2,795 705 -9,976 9,976 0

Increase/decrease (-) in year -8,675 213 -16,159 -2,795 705 -26,712 278,450 251,738Balance at 31 March 2022 carried forward 178,345 5,610 36,804 13,619 7,055 241,433 870,163 1,111,596

28-3228-32

Note(s)

28-32

28-32



CASH FLOW STATEMENT

The cash flow statement shows the changes in cash and cash equivalents of the Council during the reporting period. The statement shows how the Council 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 Council are funded by way of taxation and grant income or from the recipients of services provided by the Council. Investing activities represent the extent to which cash outflows have been made for resources which are intended to contribute to the Council’s future service delivery.



t

1. ACCOUNTING POLICIES

I. GENERAL

The statement of accounts summarises the Council’s transactions for the 2021/22 financial year and its position

at the year-end of 31 March 2022. The Council is required to prepare an annual statement of accounts by the

Accounts and Audit Regulations (Amendment) 2021, which require that they be prepared in accordance with

proper accounting practices. The Accounts of East Riding of Yorkshire Council have been compiled in

accordance with the Code of Practice on Local Authority Accounting in the UK 2021-22 supported by

International Financial Reporting Standards.

The accounting convention adopted in the statement of accounts is principally historical cost, modified by the

revaluation of certain categories of property, plant and equipment and financial instruments.

Currently, along with many other nations globally, the United Kingdom is dealing with the consequences of

Coronavirus (COVID-19). The Council’s financial strategy for 2022-23 to 2025-26 continues to be the right

approach to meeting these challenges and navigating the uncertainty arising from these unprecedented times.

Within this context, the statement of accounts have been prepared on a going concern basis.

As permitted under the Code, the concept of materiality has been applied when determining appropriate

disclosures to be made in the financial statements. Information is classed as material if omitting, misstating, or

obscuring it could reasonably influence decisions of users of the financial statements.

II. PRIOR PERIOD ADJUSTMENTS, CHANGES IN ACCOUNTING POLICIES, ESTIMATES AND

ERRORS

Prior period adjustments may arise as a result of a material change in accounting policies or to correct a material

error.

Material errors discovered in prior period figures are corrected retrospectively by amending opening balances

and comparative amounts for the prior period i.e. as prior period adjustments. 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 Council’s financial position or

financial performance. Where a material change is required, 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 i.e. a prior period adjustment is made unless stated otherwise.

A change in accounting policy generally requires the disclosure of three balance sheets to reflect the impact on

the current period, the end of the preceding period and the impact on the opening balance sheet of the previous

period.

The nature and impact of any prior period adjustments required will be explained in a separate note to the

accounts.

Changes in accounting estimates are accounted for prospectively, i.e. in the current and future years affected

by the change, there is no prior period adjustment.

Changes to accounting standards adopted by CIPFA’s Code of Practice for 2021-22 include the following:

IFRS 3 ‘Business Combinations’ – Minor amendments to the definition of a business. This clarifies whether a

transaction should be accounted for an asset acquisition or a business combination.

Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS 7) has an impact on hedge accounting

if interest rates change. The amendment will not have an impact on the Council as it does not undertake these

transactions.

Interest Rate Benchmark Reform Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16) addresses

issues arising during the reform of benchmark interest rates if the existing interest rate is replaced by an

alternative one.

The changes have been considered and there is no impact to the Council’s Statement of Accounts.

In 2021/22 there are no prior period adjustments.

III. INTERESTS IN COMPANIES AND OTHER ENTITIES

The Council does not have material interests in companies and other entities that have the nature of

subsidiaries, associated companies, or jointly controlled entities. Group accounts have therefore not been

prepared. In the Council’s own single entity accounts, the interests in companies and other entities are

recorded as financial assets at fair value. Where the fair value cannot be measured reliably, cost has been used



as the best estimate of fair value (As they are held at cost there are no gains or losses to be recognised). Should

the Council be required to prepare group accounts, an entity will not be included if it is not material.

IV. ACCRUALS OF EXPENDITURE AND INCOME (CREDITORS AND DEBTORS)

The accounts of the Council are prepared on an accrual’s basis. This means that the sums due to or from the

Council during the year are included in the accounts, whether or not the cash has actually been received or

paid in the year in question. Accruals have been made for all known material revenue and capital debtors and

creditors for goods and services supplied by and to the Council during the year, including services provided by

employees.

V. SIGNIFICANT ITEMS

When items of income and expenditure 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 Council’s financial performance.

VI. REVENUE RECOGNITION

The revenue recognition policy covers the sale of goods (produced by the Council for the purpose of sale or

purchased for resale), the rendering of services, interest, royalties and dividends, non-exchange transactions

(i.e. council tax) and where previously a liability had been recognised (i.e. creditor) on satisfying the revenue

recognition criteria.

Revenue is recognised when (or as) the Council satisfies a performance obligation and is measured at the

transaction price of the consideration receivable (i.e. the amount to which the Council expects to be entitled

in exchange for transferring promised goods or services). However, if payment is on deferred terms, the

consideration receivable is recognised initially at the cash price equivalent. The difference between this amount

and the total payments received is recognised as interest revenue in the surplus or deficit on provision of

services. Short duration receivables with no stated interest rate are measured at original invoice amount where

the effect of discounting is immaterial. There is no difference between the delivery and payment dates for non-

contractual, non-exchange transactions, i.e. revenue relating to council tax and non-domestic rates, and

therefore these transactions are measured at their full amount receivable.

VII. TRADE AND OTHER RECEIVABLES AND PAYABLES

Trade and other receivables are not recognised when the Council becomes committed to supply the goods or

services but when the ordered goods or services have been delivered or rendered.

Trade and other payables are not recognised when the Council becomes committed to purchase the goods or

services but when the ordered goods or services have been delivered or rendered.

With the exception of financial instruments, they are recognised and measured in accordance with the revenue

recognition policy.

VIII. CASH AND CASH EQUIVALENTS

Cash includes all bank credit balances and overdrafts held by the Council as part of its normal cash management,

including all deposit accounts accessible without notice.

Cash equivalents 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. Cash equivalents include investments with

a fixed maturity of three months or less from the date of acquisition and fair value through profit or loss

financial assets such as cash placed in money market funds.

IX. SUPPORT SERVICE COSTS

The Code requires that the net cost of services within the Comprehensive Income and Expenditure Statement

(CIES) is presented based on how income and expenditure are reported internally to management rather than

the total cost principle described by the SERCoP. For this Council, corporate and support services operate

and are managed separately throughout the financial year and are, therefore, reported separately on the face

of the CIES and not apportioned.

X. INTEREST RECEIVABLE OR PAYABLE

The effective interest rate method is used to measure the carrying value of a financial asset or liability measured

at amortised cost, and to allocate associated interest income or expense to the relevant period. The effective



interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected

life of the financial instrument to equal the amount at initial recognition. The effective interest is adjusted to

the actual interest payment or receipt through the movement in reserves statement to ensure only actual

interest is charged to council tax.

For financial assets and liabilities carried at cost because the effective rate of interest is the same as the carrying

rate of interest, the carrying value is adjusted for accrued interest.

XI. GRANTS AND CONTRIBUTIONS

All revenue, revenue expenditure funded from capital under statute (REFCUS) and capital grants and

contributions with conditions attached are held as receipts in advance on the balance sheet. This is until such

time as the condition no longer applies, at which point the grant/contribution is recognised as income in the

comprehensive income & expenditure statement. Specific revenue and REFCUS grants and contributions are

accrued and credited to income within service revenue accounts when the conditions regarding their use are

met. Any income credited to service revenue accounts in excess of the expenditure they are intended to fund

are, subject to approval, appropriated to revenue grants and contributions unapplied earmarked reserves until

the expenditure is incurred. Revenue and REFCUS grants and contributions to cover general expenditure,

including revenue support grant, national nondomestic rate redistribution and unringfenced government grants,

are credited to taxation and non-specific grant income and expenditure at the foot of the comprehensive

income and expenditure statement.

General revenue grants and contributions are subject to the normal carry-forward processes attributable to

general fund balances.

Grants and contributions relating to the funding of non-current asset (capital) expenditure are credited to

taxation and non-specific grant income and expenditure at the foot of the comprehensive income and

expenditure statement when the conditions regarding their use are met. Both REFCUS and capital grants and

contributions are reversed out of the general fund balance in the movement in reserves statement to either

the capital adjustment account if the grant/contribution has been used to finance capital expenditure in the

year, or to the capital grants unapplied account reserve until it is applied to fund capital expenditure, at which

point it is transferred to the capital adjustment account.

XII. OPERATING LEASE CHARGES

Leases that do not meet the definition of finance leases (where the terms of the lease transfer substantially all

of the risks and rewards of ownership from the lessor to the lessee) are accounted for as operating leases.

Assets leased out under operating leases are held on the balance sheet and rentals are credited to the relevant

service line in the comprehensive income and expenditure statement on a straight-line basis. Assets leased

under operating leases do not appear on the Council’s balance sheet. Rentals payable are charged on a straight-

line basis over the term of the lease to the service receiving the benefit of the lease.

XIII. PRIVATE FINANCE INITIATIVE (PFI) AND SIMILAR ARRANGEMENTS

Private Finance Initiatives (PFI) and similar contracts are agreements to receive services, where the

responsibility for making available the non-current assets needed to provide the services passes to the PFI

contractor. As the Council is deemed to control the services that are provided under its PFI schemes, and as

ownership of the non-current assets will pass to the Council at the end of the contracts for no additional

charge, the Council carries the property, plant and equipment assets used in the contracts on the balance sheet.

The Council’s PFI (Bridlington schools) scheme has been accounted for in accordance with these requirements.

The original recognition of these property, plant and equipment was balanced by the recognition of a liability

for amounts due to the scheme operator to pay for the assets. For the Bridlington PFI scheme, the liability was

written down by an initial capital contribution of £0.910m.

Property, plant and equipment recognised on the balance sheet are revalued and depreciated in the same way

as property, plant and equipment owned by the Council.

The amounts payable to the Bridlington Schools Services Limited PFI operators each year as a unitary payment

are analysed into five elements:

• Fair value of the services received during the year – debited to the children, family and schools (schools’

budget) in the comprehensive income and expenditure statement cost of services.

• Finance cost – an interest charge of 9.24% on the outstanding balance sheet liability, debited to financing

and investment income and expenditure in the comprehensive income and expenditure statement.



• Contingent rent – increases in the amount to be paid for the property arising during the contract,

debited to financing and investment income and expenditure in the comprehensive income and

expenditure statement. There are no contingent rentals for this scheme.

• Payment towards liability – applied to write down the balance sheet liability towards the PFI operator

(the profile of write-downs is calculated using the same principles as for a finance lease).

• Lifecycle replacement costs – recognised as property, plant and equipment on the balance sheet.

XIV. DEBT REDEMPTION

Each year the Council sets aside sums to meet its credit liabilities, i.e. monies it owes from borrowings and

other methods it has used to finance capital spending. The sums set aside can include:

• A minimum revenue provision, including the principal element of finance lease-type arrangements.

• Commuted payments in respect of government grants on loan charges.

• Voluntary amounts set aside from revenue.

• Voluntary amounts set aside from usable capital receipts.

• Voluntary amounts set aside from the major repairs reserve

XV. EMPLOYEE BENEFITS

Employee benefits are accounted for in accordance with the Code’s interpretation of IAS 19 – Employee

Benefits. This standard covers both benefits payable during and after employment.

a) Benefits payable during employment

Liabilities for employees’ entitlements to ‘short term employee benefits’ i.e. wages, salaries, annual leave

and other employee benefits which are expected to be paid or settled wholly within 12 months of the

balance sheet date, are recognised as an expense in the year in which employees render service to the

Council. Annual leave is accrued at the wage and salary rates applicable in the following accounting year,

being the period in which the employee takes the benefit where these rates are available, otherwise the

accrual will be based on the prevailing rates. The accrual is charged to surplus or deficit on the provision

of services, but then reversed out through the movement in reserves statement to the accumulated

absences account (unusable reserve) so that annual leave benefits are charged to the financial year in which

the absence occurs.

The Council does not award long-term employee benefits i.e. those which are not expected to be paid or

settled within 12 months of the balance sheet date.

b) Termination benefits

Termination benefits are amounts payable as a result of a decision by the Council to terminate an officer’s

employment before the normal retirement date or an officer’s decision to accept voluntary redundancy in

exchange for those benefits. Such benefits are charged on an accruals basis to the relevant service in the

comprehensive income and expenditure statement from which the officer is being made redundant at the

earlier of when the Council can no longer withdraw the offer of those benefits or when the Council

recognises costs for a restructuring.

c) Post-employment benefits

The Council participates in three different pension schemes that meet the needs of employees in particular

services. Each of the schemes provides members with defined benefits related to pay and service. The

schemes are as follows:

• Teachers – this is an unfunded scheme administered by Capita Teachers’ Pensions on behalf of the

Department for Education (DfE).

• Public health employees transferred from the NHS – this scheme is administered on behalf of

the NHS by NHS Pensions.

• Other employees – subject to certain qualifying criteria, employees are eligible to join the funded

Local Government Pension Scheme. The pension costs charged to the Council’s accounts in respect of

these employees are calculated in accordance with IAS 19 – Employee Benefits.

The arrangements for the teachers’ and NHS schemes mean that liabilities for these benefits cannot be

identified specifically to the Council. The schemes are therefore accounted for as a defined contribution

scheme – no liability for future payments of benefits is recognised in the balance sheet and the service



revenue accounts in the comprehensive income and expenditure statement are charged with the employer’s

contributions payable to teachers’ and NHS pensions in the year.

d) The local government pension scheme

The local government scheme is accounted for as a defined benefits scheme:

The liabilities of the pension fund attributable to the Council are included in the balance sheet on an actuarial

basis using the projected unit method – i.e. an assessment of the future payments that will be made in

relation to retirement benefits earned to date by employees, based on assumptions about mortality

rates, employee turnover rates, etc, and projections of projected earnings for current employees.

• Liabilities are discounted to their value at current prices, using a discount rate of 2.4%, based on the

indicative rate of return on a high-quality corporate bond. The corporate bond yield curve is constructed

as follows:

o An approach to setting the discount rate has been adopted whereby a “Hymans Robertson”

corporate bond yield curve is constructed based on the constituents of the iBoxx AA corporate

bond index.

The assets of the fund attributable to the Council are included in the balance sheet at their fair value. The

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

Service cost comprising:

o 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.

o past service cost – the increase in liabilities as a result of a scheme amendment or curtailment 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 statements..

o net interest on the net defined benefit liability (asset), i.e. net interest expense for the Council – the

change during the period in the net defined benefit liability (asset) that arises from the passage of

time charged to the financing and investment income and expenditure line of the comprehensive

income and expenditure statement – this is calculated by applying the discount rate used to measure

the defined benefit obligation at the beginning of the period to the net defined liability (asset) at the

beginning of the period – taking into account any changes in the net defined benefit liability (asset)

during the period as a result of contribution and benefit payments.

Remeasurements comprising:

o return on fund assets – excluding amounts included in net interest on the net defined benefit liability

(asset) charged to the pensions reserve as other comprehensive income and expenditure.

o actuarial gains and losses – changes in the net pensions liability that arise because events have not

coincided with assumptions made at the last actuarial valuation or because the actuaries have updated

their assumptions – charged to the pensions reserve as other comprehensive income and

expenditure.

• Contributions paid to the 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 Council 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 transfers 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 on 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.

The Council 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

(including teachers) 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.



e) Long term disability benefits

Long term disability benefits are accounted for in accordance with the rebuttable presumption of

International Public Sector Accounting Standard 25 – Employee Benefits, in which all long-term disability

benefits are accounted for in the same way as defined benefit post-employment benefits rather than IAS 19

where they are presumed not to be subject to the same degree of uncertainty as the measurement of post-

employment benefits and are accounted for immediately when the obligation arises.

XVI. PROPERTY, PLANT AND EQUIPMENT

a) Recognition and valuation

All expenditure on the acquisition, construction or enhancement of property, plant and equipment assets

is capitalised on an accrual’s basis. Expenditure on the acquisition of, or expenditure which adds to, and

not merely maintains, the value of an existing asset, is capitalised and classified as a non-current asset,

provided that it yields benefits to the Council and the cost or fair value of the expenditure can be measured

reliably. Expenditure which 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.

The Council maintains a detailed asset register of all assets above de minimis levels that it owns or

recognises under finance leases and PFI type arrangements. De minimis levels for each class of asset are:

HRA and Non-HRA (operational and non-operational) dwellings, land and other buildings £10,000

Intangible assets £100,000

Vehicles, furniture, plant and equipment (operational and non-operational) £10,000

Infrastructure assets £0

Community assets – parks and open spaces £10,000

The basis of valuation and depreciation for each category of asset is included in Note 16 to the core financial

statements.

Assets included in the balance sheet at current value are revalued at least every five years, assets carried at

current value are revalued at the beginning of each year (Note 17F). Increases in valuations are credited to

the revaluation reserve, except where they arise from the reversal of an impairment or revaluation loss

previously charged to the surplus or deficit on the provision of services.

Revaluation gains are 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. This amount is transferred each year from the revaluation reserve to the capital adjustment

account. The revaluation reserve contains revaluation gains recognised since 1 April 2007 only, the date of

its formal implementation with an opening zero balance. Gains arising before that date are consolidated in

the capital adjustment account.

The Council does not capitalise borrowing costs where it is incurred during the period an asset is under

construction.

b) Impairment

Asset values are reviewed each year for any indication of impairment such as obsolescence or physical

damage to specific assets. Impairment loss – the difference between the carrying amount and estimated

recoverable amount - is firstly written off against any revaluation gains attributable to the relevant asset in

the revaluation reserve, with any excess charged to the service. Revaluation losses, which are the result of

a general fall in prices not specific to an asset, are treated in the same way as impairment losses.

The reversal of both impairments and revaluation losses made to services cannot exceed the carrying

amount that would have been determined (net of amortisation or depreciation) had no impairment or

revaluation loss been recognised for the asset in prior years. The reversal of an impairment loss is

recognised in the circumstance that the increase in value is mirrored by the reversal of the external event

that caused the original impairment to be recognised. This is not the case for a revaluation loss as it is

implicit that a revaluation gain reverses a previous revaluation loss. c) Charges to revenue

All services are charged with an annual provision for depreciation for property, plant and equipment used

in the provision of the service, and impairment/revaluation loss as described above. These charges are

reversed out in the movement in reserves statement, and therefore have a neutral impact on the amount

that is required from local taxation.



Assets are recognised into components for depreciation purposes when the component has a significant

cost compared to the total cost of the item and a different useful life to the remainder of the asset.

Significant cost is deemed to be 20% or more compared to the total asset, and the depreciable life is 20

years or more different to the remainder of the asset, or the depreciation method is different.

Enhancement expenditure requires de-recognition of the component replaced or refurbished, and the new

component reflected in the carrying amount, even where parts of an asset were not previously recognised

as a separate component.

Consideration for components takes place when an asset that has a carrying value of £500,000 or more is

revalued in the five-year rolling valuation programme. Consideration also takes place when an asset is

acquired at a cost of £200,000 or more, or on completion of construction or enhancement expenditure

totalling £200,000 or more which is at least equal to 20% of the carrying value of existing enhanced or

restored assets with a value of £200,000 or more.

Amounts set aside from revenue to finance capital expenditure or as transfers to other earmarked reserves

are disclosed separately in the movement in reserves statement as reconciling amounts not included in the

general fund balance.

XVII. DERECOGNITION OF NON-CURRENT ASSETS

With regard to the de-recognition proceeds, for the Housing Revenue Account, the Local Government Act

2003 (under various capital finance and accounting regulations), after calculating transaction costs and

compensating authorities for loss of income above what has been covered in the self-financing settlement,

allows HM Treasury and local authorities to receive the amounts they would have expected to receive had the

policy on Right to Buy (RTB) of council dwellings remained unchanged. Other non-RTB dwelling and land

disposals at market value require a percentage of these proceeds (75% for dwellings and 50% for land and other

assets, net of statutory deductions) to be paid over to central government to reduce the national debt,

(although if applicable to a Council, the use of the capital allowance calculation for this non-RTB category, will

reduce the pool-able amount to nil). The balance is credited to the usable capital receipts reserve along with

the proceeds from the sale of non-housing assets greater than £10,000. These can only be used to fund new

capital investment or set aside to reduce the Council’s underlying need to borrow (the capital financing

requirement). Capital receipts less than £10,000 are categorised as revenue receipts.

The carrying amount of an asset is derecognised on disposal or when no future economic benefits or service

potential is expected from its use or disposal. The amount by which de-recognition proceeds (capital receipts)

from an asset are more (gain) or less (loss) than the value at which the asset was included in the balance sheet

is credited or debited to the other operating expenditure line in the comprehensive income and expenditure

statement. The gain or loss is then reversed out as a reconciling item in the movement in reserves statement,

resulting in a neutral impact on the amount that is required from local taxation, other than related disposal

costs which are chargeable to revenue. Any revaluation gains in the revaluation reserve for the assets disposed

of are transferred to the capital adjustment account.

XVIII. REVENUE EXPENDITURE FUNDED FROM CAPITAL UNDER STATUTE (REFCUS)

REFCUS encompasses expenditure which, defined by regulation or by direction of the secretary of state, may

be included in the capital programme, but which does not result in the expenditure being carried on the balance

sheet as property, plant and equipment. The purpose of this is to enable the expenditure to be funded from

capital resources. Examples include grants, advances and financial assistance to others for expenditure of a

capital nature, and revenue items treated as capital for capital control purposes as a result of Government

directions e.g. redundancy costs.

The Code requires the expenditure to be charged to the relevant service in the comprehensive income and

expenditure statement, but statutory provision allows this to be funded by capital resources via a reconciling

item in the movement in reserves statement to ensure there is no impact on the amount that is required from

local taxation.

XIX. PROVISIONS

Provisions are required for any liabilities of uncertain timing or amount that have been incurred. In accordance

with the Code, provisions are made when the Council has a present obligation (either legal or constructive) as

a result of a past event; it is probable that a transfer of economic benefit will be required to settle it; and a

reliable estimate can be made of the financial obligation. If it becomes probable that a transfer of economic

benefit is no longer required to settle the obligation, the provision is reversed.



Provisions are charged as an expense to the appropriate service line in the comprehensive income and

expenditure statement in the year that the Council 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 and where it becomes less than probable that a

transfer of economic benefits will 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 income for the relevant service if it is virtually

certain that reimbursement will be received if the Council settles the obligation.

XX. RESERVES

Amounts set aside for purposes falling outside the definition of provisions are reserves. Transfers into and out

of reserves are shown in the movement in reserves statement and not within service expenditure in the surplus

or deficit on the provision of services. 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 appropriate reserve amount 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.

Reserves are an accumulation of previous years’ surpluses, deficits and transfers and are categorised as either

‘usable’ or ‘unusable’ and are detailed in the notes to the core financial statements.

Usable reserves are those the Council may use to fund either revenue or capital expenditure as prescribed.

None of the other reserves can be used to support revenue spending and are kept to manage the accounting

processes for non-current assets, financial instruments and retirement benefits.

XXI. SELF-INSURANCE

To obtain insurance in the most cost-effective manner, the Council has chosen to carry excesses in respect of

claims made under various insurance policies. The amounts set aside from the Council’s services to cover the

uninsured risks at 31 March 2022 are based on the potential total liability at that date. To comply with IAS 37

this amount is allocated between a provision for known liabilities and the self-insurance reserve for claims

‘incurred but not reported’.

XXII. CONTINGENT ASSETS AND LIABILITIES

Contingent liabilities are disclosed within the notes to the financial statements if there is a possible obligation

that may require a payment or transfer of economic benefits as a result of past events.

Contingent assets are not recognised in the financial statements but are disclosed within the notes if the inflow

of a receipt or economic benefit is probable.

XXIII. FINANCIAL ASSETS

The financial assets of the Council are classified based on a classification and measurement approach that

reflects the business model for holding the financial assets and their cashflow characteristics. There are three

main classes of financial assets measured at:

• amortised cost

• fair value through profit or loss (FVTPL), and

• fair value through other comprehensive income (FVTOCI)

The council’s business model is to hold investments to collect contractual cash flows. Financial assets are

therefore classified as amortised cost, except for those whose contractual payments are not solely payment of

principal and interest (i.e. where the cash flows do not take the form of a basic debt instrument)

Financial Assets Measured at Amortised Cost

Financial assets measured at amortised cost are recognised on the Balance Sheet when the council 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 (CIES) for interest receivable are



based on the carrying amount of the asset multiplied by the effective rate of interest the instrument. The

effective interest rate is the rate that exactly discounts estimated future cash flows over the life of the

instrument to the amount at which it was originally recognised. For most of the financial assets held by the

council, this means that the amount presented in the Balance Sheet is the outstanding principal receivable (plus

accrued interest) and interest credited to the CIES is the amount receivable for the year in the loan agreement.

However, the Council has taken the decision, for policy reasons, to make a number of loans 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

at a marginally higher effective rate of interest than the rate receivable from the loan recipients, 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 actual 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.

Any gains and losses that arise on de-recognition of assets are credited/debited to the financing and investment

income and expenditure line in the comprehensive income and expenditure statement surplus or deficit on the

provision of services.

Expected Credit Loss Model

The council recognises expected credit losses on all of its financial assets held at amortised cost, either on a

12-month or lifetime basis. The expected credit loss model also applies to lease receivables and contract assets.

Only lifetime losses are recognised for trade receivables (debtors) held by the council.

Impairment losses are calculated to reflect the expectation that the future cash flows might not take place

because the borrower could default on their obligations. Credit risk plays a crucial part in assessing losses.

Where risk has increased significantly since an instrument was initially recognised, losses are assessed on a

lifetime basis. Where risk has not increased significantly or remains low, losses are assessed on the basis of

12-month expected losses.

Financial Assets Measured at Fair Value through Profit or Loss

Financial assets that are measured at FVTPL are recognised on the Balance Sheet when the council becomes a

party to the contractual provisions of a financial instrument and are initially measured and carried at fair value.

Fair value gains and losses are recognised as they arise in the Surplus or Deficit on the Provision of Services.

The fair value measurements of the financial assets are based on the following techniques:

• instruments with quoted market prices – the market price

• other instruments with fixed and determinable payments – discounted cash flow analysis.

The inputs to the measurement techniques are categorised in accordance with the following three levels:

• Level 1 inputs – quoted prices (unadjusted) in active markets for identical assets that the council can

access at the measurement date.

• Level 2 inputs – inputs other than quoted prices included within Level 1 that are observable for the asset,

either directly or indirectly.

• Level 3 inputs – unobservable inputs for the asset.

Where fair value of an equity instrument cannot be measured reliably and the best estimate of fair value is cost,

it is carried at cost (less any impairment losses).

Any gains and losses that arise on the de-recognition of the asset are credited or debited to the Financing and

Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement.

Financial Assets Measured at Fair Value through Other Comprehensive Income

Financial assets that are measured at FVTOCI 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.

Fair value gains and losses are recognised as they arise in other comprehensive income.

XXIV. FINANCIAL LIABILITIES

Financial liabilities are recognised on the Balance Sheet when the council becomes a party to the contractual

provisions of a financial instrument and are initially measured at fair value and thereafter carried at their



amortised cost. Annual charges to the financing and investment income and expenditure line in the

comprehensive income and expenditure statement for interest payable are based on the carrying amount of

the liability, multiplied by the effective rate of interest for the instrument. For most of the borrowings that the

Council has, this means that the amount presented in the balance sheet is the outstanding principal repayable

(plus accrued interest); and interest charged to the comprehensive income and expenditure statement is the

amount payable for the year in the loan agreement.

Gains and losses on the repurchase or early settlement of borrowings are credited and debited to the financing

and investment income and expenditure line in the comprehensive income and expenditure statement in the

year of repurchase/settlement. However, where repurchase has taken place as part of a restructuring of the

loan portfolio that involves the modification or exchange of existing instruments, the premium or discount is

respectively deducted from or added to the amortised cost of the new or modified loan and the write-down

to the surplus or deficit on the provision of services is spread over the life of the loan by an adjustment to the

effective interest rate.

Where premiums and discounts have been charged to the comprehensive income and expenditure statement,

regulations allow the impact on the general fund balance to be spread over future years. The Council has a

policy of spreading a premium against the term of the new loan taken out, or 10 years for a discount received.

The reconciliation of amounts charged to the comprehensive income and expenditure statement to the net

charge required against the general fund balance is managed by a transfer to or from the financial instrument’s

adjustment account in the movement in reserves statement.

XXV. EVENTS AFTER THE REPORTING PERIOD

Where an event occurs after the balance sheet date, favourable or unfavourable, which provides evidence of

conditions that existed at the balance sheet date, the amounts recognised in the statement of accounts are

adjusted to reflect this. Where an event occurs after the balance sheet date that is indicative of conditions that

arose after the balance sheet date, the amounts recognised in the statement of accounts are not adjusted but

are disclosed as a separate note to the accounts.

Events after the reporting period are reflected up to the date when the statement of accounts are authorised

for issue, which is the date they are authenticated by the Section 151 officer by signing and dating them before

publishing.

XXVI. VALUE ADDED TAX

VAT is included in relevant income and expenditure, whether of a capital or revenue nature, only to the extent

that it is irrecoverable from HM Revenue & Customs.

XXVII. LOCAL TAXATION

The Council is a council tax and business rates billing authority collecting on behalf of other authorities as well

as itself. The collection on behalf of other authorities is treated as being on an agency basis, and thus only the

elements of council tax and business rates that relate to the Council’s own income and expenditure are included

in its main financial statements. The collection fund account covers all local taxation collected by the Council

on behalf of itself, other local authorities and the government.

XXVIII. ACCOUNTING FOR SCHOOLS

The Council has the following types of maintained schools under its control:

• Community

• Voluntary aided

• Voluntary controlled

• Trust/foundation

Income, expenditure, assets (excepting some non-current assets below), liabilities, reserves and cash flows of

maintained schools are recognised in the Council’s accounts.

Non-current assets are recognised in the balance sheet where the Council directly owns the assets or where

the school/governing body own the assets or have had rights to use the assets transferred to them.

Community schools are owned by the Council and are, therefore, recognised on the balance sheet.

All the Council’s voluntary aided and voluntary controlled schools are owned by religious bodies with no formal

rights to use the assets passed to the school or governing bodies. As a result, these schools are not recognised

on the balance sheet.



Where ownership of trust/foundation schools’ non-current assets is with a charitable trust/religious body, the

assets are not recognised on the Council’s balance sheet. Where ownership of the assets lies with the

school/governing body they are recognised on the Council’s balance sheet.

XXIX. ACCOUNTING STANDARDS THAT HAVE BEEN ISSUED BUT HAVE NOT YET BEEN

ADOPTED

Accounting standards that have been issued before 1 January 2022 but not yet adopted by the Code relate to:

IFRS 16 Leases

The new Standard replaces IAS 17 Leases and comes into effect 1 April 2024 (deferred from April 2022). The

new Standard changes the accounting for leases substantially. It eliminates a lessee’s classification for leases as

either operating leases or finance leases. Instead all leases are treated in a similar way to finance leases applying

IAS 17 meaning that the leases will be brought onto the balance sheet.

The Council currently has a rigorous procedure identifying operating leases and finance leases however the

effect of this new standard is not limited to arrangements that have the legal form of a lease. They apply to any

arrangement that meets the Code’s definition of a lease as a contract (or part of a contract) that conveys the

right to use an asset for a period of time. Work is being undertaken with service areas to identify such contracts

which will ensure the correct identification and accounting treatment.

The Council will be required to recognise all lease assets and liabilities on the balance sheet (except those

agreed to and unchanged before 1 April 2024, those that are considered as a short-term lease being 12 months

in duration or less, or leases that are considered to be low value).

IFRS 16 leases does not include service concession arrangements, and as such will not be included in the

application of the new standard.

XXX. SIGNIFICANT JUDGEMENTS IN APPLYING ACCOUNTING POLICIES

In applying the accounting policies set out above, the Council has had to make certain judgements about

complex transactions or those involving uncertainty about future events.

• The Council has to decide whether the leases it enters into should be treated as operating or finance leases,

and whether contractual arrangements it enters into have the substance of a lease. These judgements are

made on the professional opinion of the Council’s valuers, accountants and procuring officers using

flowchart assessments in the contract procedure rules based on criteria set out in IAS 17 Leases and IFRIC

4 Determining whether an arrangement contains a lease. The relevant accounting policy is applied based

on the outcome of the assessment.

• The Council is deemed to control the services provided under the Private Finance Initiative (PFI) agreement

for six schools and a library at Bridlington and also to control the residual value of the properties at the

end of the agreement. The accounting policies for PFI schemes and similar contracts have been applied to

the arrangement and the schools and library (with a net book value of £54.3m) are recognised as property,

plant and equipment on the Council’s balance sheet. This judgement was made by the Council’s accountants

and the special projects manager and independently assured by the accountancy firm Ernst & Young. In

2014/15 one of the schools covered by the PFI arrangement converted to an academy. The Council still

manages the PFI scheme on behalf of this academy, but all property, plant and equipment has been written

out of the balance sheet.

• The Council has to decide whether land and buildings owned by the Council are investment properties.

The Council’s valuers and accountants make judgements in accordance with the Codes adaptation of IAS

40 Investment Property. It has been determined that the Council does not have any investment property

as it does not hold land and/or buildings solely for rental income or capital appreciation purposes or both.

• The Council has to decide whether the Council’s exposure to possible losses is to be accounted for as a

provision or a contingent liability. These decisions are taken by a combination of the Council’s accountants,

solicitors and departmental officers based on their detailed knowledge of the circumstances, assessed using

a contingent liability decision tree.

• The Council has to decide whether there is a group relationship between the Council and other entities.

The accountants assess each relationship that exists between the Council and other entities that may result

in a group accounts relationship using a flowchart of decisions based on CIPFA group accounting guidance.

It has been determined that there are no significant relationships that require the production of group

accounts for 2021-22.

• The Council sometimes operates as an intermediary as part of its operational business function. This means

that the Council will facilitate transactions on behalf of other organisations. The Council's finance team



assesses these transactions in-line with the CIPFA accounting Code of Practice to determine a principal or

agent relationship. Where it is deemed that an agent relationship exists, the transactions will be excluded

in the Financial Statements with the exceptions that: cash collected or expenditure is incurred as by the

agent on behalf of the principal in which case there is a debtor or creditor position and the net cash position

is included in the financing activities in the cash flow; or where the Council receives payment for acting as

an agent in which case the any amount of commission received will be recognised as revenue.

Transactions that are deemed as a principal are kept in the Financial statements.

• All local Council maintained schools are considered to be entities controlled by the Council. A dispensation

in the Code allows the income, expenditure, assets and liabilities of these schools to be recognised within

the single entity statements rather than requiring preparation of group accounts. An accounting policy is

included at section XXVIII above.

There are several categories of maintained school:

• Community

• Voluntary Aided

• Voluntary Controlled

• Trust/Foundation

Income, expenditure, assets (excepting some non-current assets detailed further below), liabilities, reserves

and cash flows of maintained schools are required to be recognised in the Council’s single entity statements.

The Council’s financial statements report the balances and transactions for all maintained schools with the

exception of land and buildings owned by voluntary aided, voluntary controlled and foundation schools.

Non-Current Assets

In accordance with the Code, non-current assets are recognised in the balance sheet where the Council

directly owns the assets or where the school/governing body own the assets or have had rights to use the

assets transferred to them.

The Council completed an assessment of the schools to determine the arrangements in place and the

accounting treatment required:

Community schools are owned by the Council therefore the land and buildings are included in the balance

sheet.

Voluntary aided and voluntary controlled schools are owned by religious bodies with no formal rights to

use the assets passed to the school or governing bodies. As a result, these schools are not recognised on

the balance sheet.

Where ownership of trust/foundation schools’ non-current assets is with a charitable trust/religious body,

the assets are not recognised on the Council’s balance sheet. Where ownership of the assets lies with the

school/governing body they are recognised on the Council’s balance sheet. Three of the four local authority

maintained foundation schools are owned by religious bodies with no formal rights to use the assets passed

to the school or governing bodies. As a result, these schools are not recognised on the balance sheet.

Wold Newton Foundation School non-current assets are owned by the school governing body which is

controlled by the school and thus the Council. The assets are therefore included in the Council’s balance

sheet.

Disclosures relating to the Council’s interests in schools can be found at Note 48.

• When a school that is held on the Council’s balance sheet becomes an academy, any property, plant and

equipment except land is written out of the balance sheet with nil consideration on the date the school

coverts. Land is leased to the academy on a 125 year lease, however on conversion it is revalued to a

deminimis value (to show the Council’s remaining interest) and consequently written out of the balance sheet.

• Judgement is required to determine whether the Council can be reasonably assured that the conditions of grant

and contribution monies received have been met before recognising them as income in the comprehensive

income and expenditure statement. Where conditions require specified expenditure to have taken place, the

grant monies will not be recognised until this happens. Equally, where conditions specify that a grant or

contribution must be repaid in the event of non-expenditure, the income is not recognised until the expenditure

is incurred.



• The valuation and estates department is required to exercise professional judgement in determining the carrying

value of land and buildings on the Council’s balance sheet. The Council owns a large and diverse range of

property assets. Being a largely rural area, the commercial property market in the East Riding has always been

relatively subdued and it is considered that property prices in this area are generally less volatile than in other

more urbanised parts of the country.

• When a review for impairment is conducted, the recoverable amount is determined based on value in use

calculations prepared on the basis of the valuers’ assumptions and estimates.

• Judgement is required in determining the significant components of property, plant and equipment assets and

their related useful lives for accurate depreciation purposes. The Council’s quantity surveyors, valuers and

accountants work together to determine this. It has been judged that the useful lives of the Council’s council

dwellings as they currently stand provide a depreciation charge that is an accurate proxy for component

accounting purposes.

• The calculation of the Council’s net pension liability consists of a number of complex judgements. Professional

actuarial firm Hymans Robertson are contracted by the Council to calculate this net liability. The judgements

used by the firm as detailed in Note 27.

• £402.9m of the Pension Fund’s investments relate to property assets and unquoted level 3 investments. As

none of these investments are publicly listed, there is a degree of estimation involved in the valuations of these

assets.



ASSUMPTIONS MADE ABOUT THE FUTURE AND OTHER MAJOR SOURCES OF

ESTIMATION UNCERTAINTY

The statement of accounts contains estimated figures that are based on assumptions made by the Council about

the future or that are otherwise uncertain. Estimates are made taking into account historical experience,

current trends and other relevant factors. However, because balances cannot be determined with certainty,

actual results could be materially different from the assumptions and estimates.

The items in the Council’s balance sheet at 31 March 2022 for which there is a significant risk of material

adjustment in the forthcoming financial year are as follows:

a) Pensions Liability

Estimation of the net liability to pay pensions depends on a number of complex judgements relating to the

discount rate used, the rate at which salaries are projected to increase, changes in retirement ages, mortality

rates and expected returns on pension fund assets. Hymans Robertson as actuaries are contracted to

provide the Council with their professional opinion on the estimate of the net pension liability.

The effects on the net pension liability of changes in individual assumptions can be measured and a sensitivity

analysis is included in Pensions Note 27. During 2021-22, the Council’s actuary has advised that the net

pensions liability is £465m.

b) Accruals and provisions

The accounts of the Council are prepared on an accruals basis meaning that the sums due to or from the

Council during the year are included in the accounts, whether or not the cash has actually been received

or paid in the year in question. Accruals may be made on exact amounts where invoices, although not

received in time to be processed in the correct year, are received in time to inform the amount provided

for. Where it is known that amounts are due to or from the Council relating to the current year, but no

exact information is available to inform this, an estimate has to be made.

If the amount estimated is different to the eventual invoice amount, the value of debtor and creditor balances

included in the balance sheet will not have been correct and there will be a knock on effect of under or

over provision in the following years’ comprehensive income and expenditure statement as the balances

are written out. Many of the Council’s accruals are based on invoiced amounts.

A liability that becomes apparent in the financial year as a result of a past event and it is probable that an

outflow of resources embodying economic benefits or service potential will be required to settle the

obligation, and a reliable estimate can be made of the amount of the obligation, results in a provision being

made rather than an accrual. Provisions are different to accruals in that they are of uncertain timing or

amount as to when they will be discharged, but a charge is still made to the comprehensive income and

expenditure statement in the year. Depending on the certainty of the amount provided for, there is a risk

that it may be insufficient and further amounts may need to be charged when the actual payment is made.

Conversely, if the actual payment is less, the over provided amount is credited back to the comprehensive

income and expenditure statement in the year the liability is discharged.

The provisions total £4.9m at 31 March 2022. The best estimate amounts provided for are based on the

professional opinion of the officer best placed to make it.

If the outflow of resources is only possible rather than probable, then no estimated charge is made to the

accounts until the circumstances change, only narrative disclosure is made in the Contingent Liabilities Note

37. The estimates of contingent liability amounts are based on information from the insurance companies

involved, otherwise on the best estimate by the legal team of the maximum amount that could be payable.

c) Valuations and depreciation charges

Professional opinions of the values of land and buildings are made by the valuation and estates team and

estimates of the useful lives of property, plant and equipment are made by the relevant officers who have

knowledge of such issues based on their professional judgement e.g. useful lives of properties are provided

by in-house RICS qualified valuers in consultation with the Council's quantity surveyors based on the

Council's current maintenance and investment policies. The present pressure on public sector expenditure

could potentially have implications for the useful economic lives of the Council's property due to reduced

spending on repairs leading to a decline in the condition of its buildings. There is no evidence that the

estimated economic lives are being materially affected at this time, but this issue will be monitored.

These values and useful lives impact on the depreciation, impairment and revaluation charges that are made

to services for usage of the assets in question as well as the carrying value of the assets. Depreciation and

impairment charged totalled £49.4m and net revaluation losses charged were -£19.6m in 2021-22.



These charges do not impact on the general fund balance as they are reversed out under statutory mitigation

provisions.

d) Fair Value Measurements

The fair value of surplus assets cannot be measured based on quoted prices in active markets (i.e. Level 1

inputs), therefore fair value would be based on significant observable inputs (i.e. Level 2) or significant

unobservable inputs (i.e. Level 3).

Where possible, the inputs to these valuation techniques are based on observable data, but where this is

not possible the Council employs the expertise of the in-house RICS qualified valuers to identify the most

appropriate technique to determine fair value. These judgements typically include considerations such as

uncertainty and risk. Changes in the assumptions used could affect the fair value of the Council’s assets and

liabilities.

Information about the valuation techniques and inputs used in determining the fair value of the Council’s

assets and liabilities is disclosed in Notes 16 and 17.

NOTES TO THE MOVEMENT IN RESERVES


2. EXPENDITURE AND FUNDING ANALYSIS

The objective of the expenditure and funding analysis is to demonstrate to council tax and rent payers how the funding available to the Council (i.e. government grants, rents, council

tax and business rates) for the year has been used in providing services in comparison with those resources consumed or earned by authorities in accordance with generally accepted

accounting practices. The expenditure and funding analysis also shows how this expenditure is allocated for decision making purposes between the Council’s directorates . Income

and expenditure accounted for under generally accepted accounting practices is presented more fully in the Comprehensive Income and Expenditure Statement on page 21.

*The split of this balance between the general fund, earmarked reserves and the HRA can be found in the movement in reserves statement on page 22.

An analysis of the adjustments between the outturn reported to management, expenditure chargeable to the general fund and HRA and expenditure in the comprehensive income

and expenditure statement can be found in Note 3.



2020/21

Outturn

Reported to

Management

Difference between

Outturn and Net

Expenditure charged to

General Fund and HRA

Balances

Net Expenditure

Chargeable to the

General Fund and

HRA Balances

Adjustments

between Funding &

Accounting Basis

Net Expenditure

in CI&E

£000 £000 £000 £000 £000

Chief Executive 464 0 464 44 508

Corporate Resources 25,431 -371 25,060 -1,048 24,012

Adults, Health & Customer Services 113,485 -387 113,098 23,488 136,586

Children, Family & Schools (exc. Schools) 58,699 10 58,709 3,631 62,340

Communities & Environment 39,178 1,269 40,447 9,334 49,781

Planning & Economic Regeneration 35,754 -451 35,303 20,308 55,611

Local Authority Housing (HRA) -989 -27,483 -28,472 9,476 -18,996

Children, Family & Schools (Schools Budget) -989 -926 -1,915 17,259 15,344

Net Cost of Services 271,033 -28,339 242,694 82,492 325,186

Other Income & Expenditure -271,033 8,812 -262,221 -66,191 -328,412

Surplus (-) or Deficit on the Provision of Services 0 -19,527 -19,527 16,301 -3,226

Opening General Fund & HRA Balance at 31 March 2020 -172,890

Add Surplus on General Fund and HRA Balance in Year -19,528

Closing General Fund & HRA Balance at 31 March 2021 -192,417



3. ANALYSIS OF ADJUSTMENTS WITHIN THE EXPENDITURE AND FUNDING ANALYSIS

The tables below provide a reconciliation of the main adjustments required within the expenditure and funding analysis to arrive at the expenditure within the Comprehensive

Income and Expenditure Statement from the outturn reported to management.

a) Reconciliation between Outturn Reported to Management and Expenditure Chargeable to the General Fund and HRA

• HRA Presentational Differences – This consists of year end housing revenue account (HRA) transactions, including capital expenditure charged to the HRA, transfers

to the major repairs reserve and interest on loans under the Item 8 Debit and Credit determinations. These transactions are reported within the revenue outturn report

under ‘Local Authority Housing’ but are included within ‘Other Income and Expenditure’ under net expenditure chargeable to the general fund and HRA balances.

• Trading and Holding Accounts – Some trading and holding accounts are reported within the revenue outturn report under the specific directorate they operate

within. Within the comprehensive income and expenditure statement, they are all reported under financing and investment income which is part of other income and

expenditure within the expenditure and funding analysis.

• Use of Reserves in Outturn – The surplus or deficit reported within the revenue outturn report includes the use of reserves (general fund, HRA and earmarked). This

is not comparable to the surplus or deficit reported within the Comprehensive Income and Expenditure Statement, which shows the position before the funding from

reserves.

• Other Differences – Consists of other minor presentational differences, including PFI and Finance Lease adjustments and direct revenue financing which are presented

in different lines within the Outturn Report, compared to the Net Expenditure charged to the General Fund and HRA balances.

HRA Trading and Use of Adjustments from Outturn to arrive at Net HRA Trading and Use of

Presentational Holding Reserves Other Total Expenditure Charged to the General Fund and HRA Presentational Holding Reserves Other Total

Differences Accounts in Outturn Differences Adjustments Differences Accounts in Outturn Differences Adjustments

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

0 0 0 0 0 Chief Executive 0 0 0 0 0

0 0 0 -371 -371 Corporate Resources 0 0 0 127 127

0 -245 0 -142 -387 Adults, Health & Customer Services 0 -67 0 -177 -244

0 0 0 10 10 Children, Family & Schools (exc. Schools) 0 0 0 28 28

0 443 0 826 1,269 Communities & Environment 0 2,486 0 921 3,407

0 -396 0 -55 -451 Planning & Economic Regeneration 0 -216 0 -70 -286

-27,483 0 0 0 -27,483 Local Authority Housing (HRA) -29,137 0 0 0 -29,137

0 0 0 -927 -927 Children, Family & Schools (Schools Budget) 0 0 0 2,630 2,630

-27,483 -198 0 -659 -28,340 Net Cost of Services -29,137 2,203 0 3,459 -23,475

27,483 198 -19,160 292 8,813 Other Income and Expenditure 29,137 -2,203 18,528 -3,423 42,039

Difference between Outturn and General Fund

0 0 -19,160 -367 -19,527 Surplus or Deficit 0 0 18,528 36 18,564

2020/21 2021/22



b) Reconciliation between Expenditure Chargeable to the General Fund and HRA and Expenditure included within the Comprehensive Income and

Expenditure Statement

• Adjustments for Capital Purposes – include the charge to services for depreciation, impairment and revaluation losses. The addition of capital grants and contributions

applied from in-year income and removal of capital expenditure charged to the general Fund and HRA balance. Also, adjustments for disposals of non-current assets with

a transfer of income on disposal of assets and the amounts written off for those assets.

• Net Change for the Pensions Adjustments – includes the removal of the employer pension contributions made by the council as allowed by statute and the

replacement with current service costs and past service costs, alongside the net interest on the defined benefit liability charged within other income & expenditure.

• Other Differences – includes the addition of accumulated absences charges as required by IAS19 to services and adjustments involving the amount by which council tax

and NNDR income credited to the comprehensive income and expenditure statement is different from the amount calculated in accordance with statutory requirements.

A detailed breakdown of the main adjustments included within the above table can be found in Note 5.

Adjustments Net Change Adjustments from General Fund to arrive at the Comprehensive Adjustments Net Change for

for Capital for the Other Total Income & Expenditure Statement amounts for Capital the Pension Other Total

Purposes Adjustment Differences Adjustments Purposes Adjustment Differences Adjustments

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

0 34 10 44 Chief Executive 0 69 -2 67

1,640 -3,193 505 -1,048 Corporate Resources 826 -330 -147 349

16,422 5,954 1,112 23,488 Adults, Health & Customer Services -912 12,509 -582 11,016

-488 3,393 726 3,631 Children, Family & Schools (exc. Schools) 466 7,179 -200 7,445

3,772 4,583 979 9,334 Communities & Environment 4,035 9,552 -174 13,413

17,675 2,138 495 20,308 Planning & Economic Regeneration 20,896 4,500 -124 25,272

8,779 559 138 9,476 Local Authority Housing (HRA) 3,695 1,262 -64 4,893

7,106 7,889 2,264 17,259 Children, Family & Schools (Schools Budget) 6,643 16,748 1,661 25,052

54,906 21,357 6,229 82,492 Net Cost of Services 35,649 51,489 368 87,507

-96,201 10,677 19,333 -66,191 Other Income and Expenditure -77,985 16,235 -17,484 -79,234

Difference between General Fund Surplus or Deficit and

Comprehensive Income and Expenditure Statement Surplus or Deficit

2020/21 2021/22

67,724 -17,116 8,273-41,295 32,034 25,562 16,301 -42,336



4. SEGMENTAL INCOME

The following segmental analysis shows revenues from external customers included within the Net Expenditure

chargeable to the General Fund and HRA Balances in the Expenditure and Funding Analysis on page 39.

2020/21 2021/22

Restated

£000 £000

-11 Chief Executive -20

-1,293 Corporate Resources -1,295

-41,059 Adults, Health & Customer Services -51,613

-447 Children, Family & Schools (exc. Schools) -737

-5,916 Communities & Environment -9,161

-9,255 Planning & Economic Regeneration -11,900

-49,636 Local Authority Housing (HRA) -50,608

-2,756 Children, Family & Schools (Schools Budget) -5,422

-110,373 Revenues from External Customers -130,756



5. ADJUSTMENTS BETWEEN ACCOUNTING BASIS AND FUNDING BASIS UNDER REGULATIONS

This note details the adjustments that are made to the total comprehensive income and expenditure recognised by the Council in the year in accordance with proper

accounting practice to the resources that are specified by statutory provisions as being available to the Council to meet future capital and revenue expenditure.

Earmarked Capital

General Housing General Major Usable Grant Total

Fund Revenue Fund Repairs Capital Unapplied Usable Unusable

2021/22 Balance Account Reserves Reserve Receipts Account Reserve Reserves

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

Adjustments involving the Capital Adjustment Account

Charge for depreciation -39,486 -9,966 0 0 0 0 -49,452 49,452

Charge for impairment 0 0 0 0 0 0 0 0

Revaluation losses on Property, Plant and Equipment 8,664 10,909 0 0 0 0 19,573 -19,573

Reversal of past impairment and revaluation losses -5,402 -4,608 0 0 0 0 -10,011 10,011

Amortisation of intangible assets -867 -30 0 0 0 0 -897 897

Capital grants and contributions applied from in-year income 36,263 1,643 0 0 0 0 37,907 -37,907

Donated asset 0 0 0 0 0 0 0 0

Non-current asset written out in gain or loss on disposal/sale of 0

non-current assets -4,764 -4,788 0 0 0 0 -9,552 9,552

Revenue expenditure funded from capital under statute -9,332 0 0 0 0 0 -9,332 9,332

Grant funded revenue expenditure funded from capital understatute 8,215 0 0 0 0 0 8,215 -8,215

Provision for repayment of debt 12,983 0 0 0 0 0 12,983 -12,983

Contribution to provision for repayment of debt -2,658 0 0 0 2,658 0 0 0

Capital expenditure charged to General Fund and HRA balance 10,158 5,105 0 0 0 0 15,263 -15,263

Adjustments involving the Capital Receipts Reserve

Transfer of sale proceeds credited as part of disposal/sale of

non-current assets 4,121 7,023 0 0 -11,143 0 0 0

Usable Capital Receipts financing new capital expenditure 0 0 0 0 13,099 0 13,099 -13,099

Contribution from Capital Receipts Reserve towards administrative 0 0

costs of non-current asset disposals 0 -104 0 0 104 0 0 0

Contribution from Capital Receipts Reserve to finance the payments 0 0

to the Government Capital Receipt Pool -1,472 0 0 0 1,472 0 0 0

Deferred capital receipts received 0 0 0 0 -3,075 0 -3,075 3,075

New Finance Lease Out within year 0 0 0 0 0 0 0 0

Other Income 278 42 0 0 -320 0 0 0

Sub-total of adjustment to carry forward to next page 16,700 5,226 0 0 2,795 0 24,721 -24,721

Reversal of items debited or credited to the

Additions of items not debited or credited to the

Income and Expenditure Statement

Comprehensive Income and Expenditure Statement



Earmarked Capital



2021/22 Balance Account Reserves Reserve Receipts Account Reserve Reserves

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

Adjustment carried over from previous page 16,700 5,226 0 0 2,795 0 24,721 -24,721

Adjustments involving the Major Repairs Reserve

Additional transfer to MRR in excess of depreciation 0 0 0 0 0 0 0 0

Use of the Major Repairs Reserve to finance new capital expenditure 0 0 0 11,567 0 0 11,567 -11,567

Additional transfer to the MRR (to be credited with HRA depreciation) 0 6,412 0 -6,412 0 0 0 0

Repayment of Self-Financing Debt 0 0 0 21,000 0 0 21,000 -21,000


Adjustments involving the Capital Grants Unapplied Account Reserve

Capital grants and contributions unapplied credited to CI&ES 4,002 0 0 0 0 -4,002 0 0

Application of grants and contributions to capital financing 0 0 0 0 0 3,296 3,296 -3,296

Adjustments involving the Financial Instrument Adjustment Account

Replacing soft loan effective interest with actual interest 4 0 0 0 0 0 4 -4

Soft loan fair value adjustments 0 0 0 0 0 0 0 0

Adjustments involving the Pensions Reserve

Reversal of items relating to retirement benefits debited or credited to

the comprehensive income and expenditure account 32,667 726 0 0 0 0 33,393 -33,393

Employer's contributions payable to the East Riding Pension Fund -98,835 -2,281 0 0 0 0 -101,116 101,116

Adjustments involving the Collection Fund Adjustment Account

Amount by which council tax and non-domestic rating income credited

to the Comprehensive income and expenditure account is different from 17,944 0 0 0 0 0 17,944 -17,944

the amount calculated in accordance with statutory requirements -466 0 0 0 0 0 -466 466

Adjustments involving Deferred Capital Receipts

Deferred capital receipts received - transferred to Usable Capital Receipts 0 0 0 0 0 0 0 0

Adjustments involving the Accumulating Absences Account

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 -431 64 0 0 0 0 -367 367

Total adjustments between accounting basis and funding basis -28,416 20,142 0 16,159 2,795 -705 9,976 -9,976

under regulations

Transfer between reserves - Voluntary 0 0

Total Adjustments between accounting basis and funding -28,416 20,142 0 16,159 2,795 -705 9,976 -9,976



Earmarked Capital



2020/21 Comparatives Balance Account Reserves Reserve Receipts Account Reserve Reserves

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


Charge for depreciation -36,629 -9,354 0 0 0 0 -45,983 45,983

Charge for impairment -407 0 0 0 0 0 -407 407

Revaluation losses on Property, Plant and Equipment -15,369 -23,828 0 0 0 0 -39,197 39,197

Reversal of past impairment and revaluation losses 6,087 24,432 0 0 0 0 30,519 -30,519

Amortisation of intangible assets -808 -30 0 0 0 0 -838 838

Capital grants and contributions applied from in-year income 42,916 1,171 0 0 0 0 44,087 -44,087

Donated asset 0 0 0 0 0 0 0 0

Non-current asset written out in gain or loss on disposal/sale of

non-current assets -15,494 -2,155 0 0 0 0 -17,649 17,649

Revenue expenditure funded from capital under statute -7,338 0 0 0 0 0 -7,338 7,338

Grant funded revenue expenditure funded from capital understatute 6,421 0 0 0 0 0 6,421 -6,421

Provision for repayment of debt 10,747 0 0 0 0 0 10,747 -10,747

Contribution to provision for repayment of debt -941 0 0 0 941 0 0 0

Capital expenditure charged to General Fund and HRA balance 18,587 7,605 0 0 0 0 26,193 -26,193


Transfer of sale proceeds credited as part of disposal/sale of

non-current assets 14,707 3,539 0 0 -8,338 0 9,908 -9,908

Usable Capital Receipts financing new capital expenditure 0 0 0 0 6,892 0 6,892 -6,892

Contribution from Capital Receipts Reserve towards administrative

costs of non-current asset disposals 0 -44 0 0 44 0 0 0

Contribution from Capital Receipts Reserve to finance the payments

to the Government Capital Receipt Pool -1,152 0 0 0 1,152 0 0 0

Other Income 364 8 0 0 -372 0 0 0

Sub-total of adjustment to carry forward to next page 21,691 1,344 0 0 319 0 23,355 -23,355

Additions of items not debited or credited to the

Reversal of items debited or credited to the




Earmarked Capital



2020/21 Comparatives Balance Account Reserves Reserve Receipts Account Reserve Reserves

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

Adjustment carried over from previous page 21,691 1,344 0 0 319 0 23,355 -23,355


Additional transfer to MRR in excess of depreciation 0 3,111 0 -3,111 0 0 0 0

Use of the Major Repairs Reserve to finance new capital expenditure 0 0 0 9,383 0 0 9,383 -9,383


Adjustments involving the Capital Grants Unapplied Account Reserve

Capital grants and contributions unapplied credited to CI&ES 5,769 0 0 0 0 -5,769 0 0

Application of grants and contributions to capital financing 0 0 0 0 0 3,671 3,671 -3,671

Adjustments involving the Financial Instrument Adjustment Account

Replacing soft loan effective interest with actual interest 4 0 0 0 -1 0 3 -3


Reversal of items relating to retirement benefits debited or credited to

the comprehensive income and expenditure account -63,014 -1,481 0 0 0 0 -64,495 64,495

Employer's contributions payable to the East Riding Pension Fund 31,747 714 0 0 0 0 32,461 -32,461

Adjustments involving the Collection Fund Adjustment Account

Amount by which council tax and non-domestic rating income credited

to the Comprehensive income and expenditure account is different from

the amount calculated in accordance with statutory requirements -19,048 0 0 0 0 0 -19,048 19,048

Adjustments involving Deferred Capital Receipts

Finance lease statutory adjustment 0 0 0 0 0 0 0 0

Deferred capital receipts received - transferred to Usable Capital Receipts 0 0 0 0 -20 0 -20 20


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 -6,383 -138 0 0 0 0 -6,521 6,521

Adjustments between accounting basis and funding basis -29,234 12,933 0 -3,111 298 -2,098 -21,211 21,211

under regulations

Transfer between reserves - Voluntary 0 0 0 0 0 0 0 0

Total Adjustments between accounting basis and funding -29,234 12,933 0 -3,111 298 -2,098 -21,211 21,211

NOTES TO THE COMPREHENSIVE INCOME & EXPENDITURE STATEMENT


6. NATURE OF EXPENSES

The following is a subjective analysis of the surplus or deficit on the provision of services within the

comprehensive income and expenditure statement on page 21.

2020/21 2021/22

£000 £000

-118,042 Fees, charges and other service income -92,798

-1,044 Interest and investment income -694

-239,606 Income from council tax and non-domestic rates -242,884

-427,591 Government grants -444,088

-78,508 Other grants, reimbursements and contributions -70,558

0 Payments due from academies -2

-25,810 Interest income on plan assets -27,354

-890,601 Total Income -878,379

339,025 Employee benefit expenses 346,443

425,420 Other service expenses 445,399

55,908 Depreciation, amortisation and impairment 40,466

-8,286 Other capital charges 1,533

-546 Loss on disposal of fixed assets -1,487

12,020 Interest payments 11,529

19,231 Expenditure re council tax and non-domestic rates 762

8,510 Precepts and Levies 8,617

1,152 Payments to housing capital receipts pool 1,472

54 Payments to academies 2

34,887 Pension interest cost 40,380

887,375 Total Expenditure 895,115

-3,226 Surplus or Deficit on the Provision of Services 16,736



7. COMPREHENSIVE INCOME AND EXPENDITURE STATEMENT LINE NOTES

a) Other operating expenditure

*No schools converted to academy status during 2021-22 (Academies Act 2010)

b) Financing and Investment Income and Expenditure

*See Note 7a narrative.

2020/21 Note 2021/22

£000 £000

8,510 Precepts and levies 48 8,616

1,152 Amounts payable into the housing capital receipts pool 1,472

-372 Other income / expenditure -320

-645 Gains (-) and losses on disposal of non current assets 13 -1,487

99 Loss on transfer of schools assets to academies * 13 0

8,744 8,281

2020/21 Note 2021/22

£000 £000

9,077 Net interest on the net defined benefit liability (asset) 27b 13,026

11,934 Interest payable on PWLB borrowing 42 11,465

86 Other interest payable and similar charges 42 65

3,833 Deficit / (Surplus) of trading operations not allocated back to services 1,479

-1,044 Interest and investment income 42 -719

Payments relating to academy school conversions:

54 Balances paid to schools converting to academy status * 0

0 Balances received from schools converting to academy status * 0

23,940 25,316



c) Taxation and Non-Specific Grant Income and Expenditure



8. GOVERNMENT GRANTS, CONTRIBUTIONS AND DONATED ASSETS

The following specific grants and contributions were included in the Comprehensive Income and Expenditure

Statement. Non-specific grants are shown in Note 7c above. An analysis of grants and contributions still held as

liabilities on the Balance Sheet, as the conditions preventing them from being recognised are not yet met, is

shown at Note 26. The 2020-21 balances have been reclassified to ensure appropriate comparison with the

individual grants disclosed in 2021-22.

2020/21 2021/22

Restated

£000 £000

Department for Work and Pensions (DWP) Grants

for Benefits

-26,821 Rent Allowances -22,801

-20,175 HRA Rent Benefits -18,738

-281 DWP New Burdens Grant 0

Other Government Grants

-160,022 Dedicated Schools Grant -170,286

-11,191 Public Health Grant -11,300

-7,448 Pupil Premium Grant -7,458

-9,535 Improved Better Care Fund -6,908

-1,436 Bridlington Schools Private Finance Initiative -2,750

-2,932 Universal Infant Free School Meals Grant -2,674

-2,364 Sixth Form Grant -2,515

-1,540 PE & Sports Grant -1,903

-1,370 Adult Education Budget -1,594

-2,097 Yorkshire Coast Communities -1,221

-825 Apprenticeship Levy Digital Account -851

0 Holiday and Food (HAF) Programme -808

0 Domestic Abuse New Burdens Funding -573

-514 Bus Service Operator Department for Transport Grant -514

-691 Unaccompanied Asylum Seeking Children Grant -509

-438 Sport England - Active Withernsea -505

-353 Flexible Homelessness Support Grant -477

0 Youth Justice Board Grant -345

-4,547 Teachers' Pension Employer Contribution Grant -274

-1,526 Teachers Pay Grant -97

-9,960 Other Revenue Government Grant -886

Other Grants and Contributions

-38,247 Section 256 Clinical Commissioning Group (CCG) Contributions -49,011

-6,335 Contributions from other Local Authorities & Other Public Bodies -4,257

-134 Education Music Tuition & other Parental Contributions -209

-645 Other Education Grants -310

-3,056 Other Grants and Contributions -3,059

-314,483 Total Grants & Contributions credited to Cost of Services -312,833



9. PRINCIPAL COVID-19 GOVERNMENT GRANTS AND CONTRIBUTIONS

During 2021-22 additional government resources were received to assist the Council, residents and businesses

with the impact of COVID-19. Some of these grants are assessed as being through a principal relationship. This

means that the Council has had some discretion with how to use the funds including usage, distribution and

criteria for the recipients. Grants of this nature have been included within the Comprehensive Income and

Expenditure Statement and are shown in the table below. Other COVID-19 grant funding the Council has

received are of an agent relationship, which requires the transactions to be excluded from the accounts.

2020/21 2021/22

£000 £000

Department for Business, Energy and Industrial Strategy

12,195 Discretionary Grant fund 4,699

Department for Education

1,005 COVID-19 Catch Up Grant 1,117

0 COVID-19 Recovery Premium 388

0 COVID-19 - School Led Tutoring 275

0 COVID-19 National Testing Programme 237

0 COVID-19 Summer School Grant 115

0 COVID-19 FSM Additional Costs 60

0 COVID-19 Workforce Fund 38

0 COVID-19 National Tutoring Programme 9

635 2020/21 COVID-19 Grants 0

Department for Transport

179 Local Authority Bus Service Operators Restart Grant 78

79 Travel Demand Management Funding 46

191 2020/21 COVID-19 Grants 0

Department for Work and Pensions

0 Household Support Grant 2,062

0 COVID-19 Local Support Grant 971

879 COVID-19 Winter Grant Scheme 212

Department of Health and Social Care

165 Public Health - Contain Management Outbreak Fund 8,566

360 Adult Social Care Workforce Capacity Fund 2,787

2,383 Adult Social Care Infection Control Fund (Discretionary) 2,450

597 Public Health - Test and Trace Support Grant 851

0 Public Health - Practical Support Payments 596

0 Public Health - Targeted Community Testing 377

0 Adult Social Care Omicron Support Fund 361

503 Public Health - Community Testing 197

0 Protect & Vaccinate (additional to Homelessness Prevention & Rough Sleeping Initiative) 22

2 2020/21 COVID-19 Grants 0

Ministry of Housing, Communities & Local Government

531 2020/21 COVID-19 Grants 0

420 Clinically Extremely Vulnerable Funding 621

170 COVID-19 Business Grant Administration 619

261 Welcome Back Fund (renamed from Reopening High Streets Safely Fund) 398

5 COVID-19 Challenge Funding 3

Contributions

10,485 Clinical Commissioning Group (CCG) Funding - COVID-19 - Hospital Discharges 4,518

31,045 Total Grants & Contributions credited to Cost of Services 32,673



10. AUDIT FEES

This note discloses, in accordance with the Code, the fees payable to the auditors appointed under the Local

Audit and Accountability Act 2014 for work carried out relating to the 2021-22 year of account.

11. OPERATING LEASES

Council as lessor

The Council leases out property for the following purposes aligned with its statutory and discretionary

responsibilities and corporate objectives:

1) economic development purposes, e.g. business units which provide suitable, affordable accommodation for

new and small businesses in the area is a provision not met by the private sector and the grant funding was

received from European Government and Government Office to pay for their construction on this basis.

This supports the corporate priority Maximising our Potential, or

2) to retain estate management control over the assets for the benefit of the development of the East Riding

as an area – in line with the corporate priority Valuing our Environment, or

3) for the provision of community services, in partnership with third party organisations, such as sports facilities,

tourism services and community centres.

The Council has future minimum lease payments receivable under non-cancellable operating leases as set out

below. The Council leases out property but not vehicles, plant, furniture and equipment under operating leases.

Minimum lease payments do not include rents that are contingent on events taking place after the lease was

entered into, such as adjustments following rent reviews. In 2021-22, £0.499m contingent rentals were receivable

by the Council (2020-21 £0.463m).

2020/21 2021/22

£000 £000

117 External audit services 123

25 Fees for non audit work 49

17 Additional opinion work relating to previous years 17

2 Additional costs of non audit work relating to previous years 0

161 189

31 March 2021

£000 £000

Minimum lease rentals receivable:

1,862 Within one year 1,608

3,212 One to five years 2,966

9,507 After five years 10,769

14,581 15,343

31 March 2022



12. OFFICERS’ REMUNERATION

a) Officers’ remuneration by band (excluding Senior Officers)

Detailed below is the number of employees, in the accounting period to which the accounts relate, whose

remuneration, excluding employer’s pension contributions fell in each bracket of a scale in multiples of £5,000,

starting from £50,000. Senior Officers are not included in the analysis as their remuneration is disclosed

separately in Note 12b.

Individuals employed at Voluntary Aided and Foundation Schools are not employees of the Council, but of the

governing body of the school. However, for the Councils single entity financial statement purposes the

transactions relating to these schools are included in the Council’s Comprehensive Income and Expenditure

Statement. The number of employees at these schools remunerated above £50,000 is as follows:

Teachers Other Total Teachers Other Total

Employees Employees

Remuneration Band

74 69 143 £50,000 to £54,999 77 62 139

34 32 66 £55,000 to £59,999 36 54 90

27 14 41 £60,000 to £64,999 31 18 49

27 6 33 £65,000 to £69,999 27 6 33

11 5 16 £70,000 to £74,999 10 1 11

5 0 5 £75,000 to £79,999 6 1 7

5 0 5 £80,000 to £84,999 2 1 3

1 0 1 £85,000 to £89,999 5 1 6

0 2 2 £90,000 to £94,999 2 1 3

3 8 11 £95,000 to £99,999 2 0 2

3 2 5 £100,000 to £104,999 1 13 14

0 0 0 £105,000 to £109,999 2 1 3

0 1 1 £110,000 to £114,999 0 0 0

0 0 0 £115,000 to £119,999 0 1 1

190 139 329 201 160 361

2020/21 2021/22

Teachers Other Total Teachers Other Total

Employees Employees

Remuneration Band

1 0 1 £50,000 to £54,999 0 0 0

0 0 0 £55,000 to £59,999 1 0 1

1 0 1 £60,000 to £64,999 0 0 0

1 0 1 £65,000 to £69,999 2 0 2

0 0 0 £70,000 to £74,999 0 0 0

3 0 3 3 0 3

2020/21 2021/22



b) Senior Officers’ remuneration

Statutory regulations require the separate disclosure by name of individual remuneration details for senior local government employees earning over £150,000, and for all other

‘senior’ employees for each financial year by post title. Senior officers are individuals earning over £150,000 per year, or individuals whose salary is more than £50,000 per year

(pro-rata) and hold defined ‘senior’ positions.

The salary, fees and allowance figures are shown before the deduction of contributions made to the Pension Fund. All employees who are members of the Local Government

Pension Scheme or NHS Pension Scheme pay individual contributions deducted from salary.

The Executive Director of Adults, Health and Customer Services left on 6 September 2021. The interim Executive Director of Adult Social Services is contracted through an

agency, total payments of £88,000 have been made for the period 25 October 2021 to March 2022.

2021/22

Compensation Total Remuneration

Salary, Fees Expense for Loss of Benefits excluding Pension Employers' Total

& Allowances Allowances Employment in Kind Contributions Pension Remuneration

£000 £000 £000 £000 £000 £000 £000

Caroline Lacey 173 5 0 0 178 27 205

Planning and Economic Regeneration 143 5 0 0 148 0 148

Corporate Resources 129 5 0 0 134 20 154

Communities & Environment 129 5 0 0 134 20 154

Children, Family & Schools 134 5 0 0 139 20 159

Adults, Health and Customer Services 95 2 0 0 97 9 106

Director of:

Public Health 97 4 0 0 101 14 115

Finance 97 4 0 0 101 15 116

Total 997 35 0 0 1,032 125 1,157

Chief Executive

Executive Director of:



2020/21

Compensation Total Remuneration

Salary, Fees Expense for Loss of Benefits excluding Pension Employers' Total

& Allowances Allowances Employment in Kind Contributions Pension Remuneration

£000 £000 £000 £000 £000 £000 £000

Caroline Lacey 171 5 0 0 176 26 202

Executive Director of:

Planning and Economic Regeneration 140 5 0 0 145 0 145

Corporate Resources 127 5 0 0 132 19 151

Communities & Environment 127 5 0 0 132 19 151

Children, Family & Schools 132 5 0 0 137 20 157

Adults, Health and Customer Services 127 5 0 0 132 19 151

Director of:

Public Health 96 4 0 0 100 14 114

Finance 96 4 0 0 100 15 115

Total 1,016 38 0 0 1,054 132 1,186

Chief Executive



a) Exit Packages

The number of exit packages with total costs per band and total costs of the compulsory redundancies and other departures are set out in the table below. The total cost includes

exit packages that have been agreed, accrued for and charged to the Authority’s Comprehensive Income and Expenditure Statement in the current year. This includes pension

strain costs and compensation payments and includes exit packages relating to schools’ staff.

Number of Number of Total Number Number of Number of Total Number

Compulsory Other of Exit Total Cost of Compulsory Other of Exit Total Cost of

Redundancies Departures Packages Exit Packages Redundancies Departures Packages Exit

£000 Exit Package Cost Band £000

8 11 19 142 £0 to £20,000 10 18 28 167

1 5 6 167 £20,001 to £40,000 0 2 2 69

1 1 2 117 £40,001 to £80,000 0 0 0 0

2 0 2 188 £80,001 to £100,000 0 0 0 0

0 0 0 0 £100,001 to £150,000 0 0 0 0

12 17 29 614 Total 10 20 30 236

285 329 614 Total Cost (£000) 45 191 236

2020/21 2021/22



13. GAINS AND LOSSES ON THE DISPOSAL OF PROPERTY, PLANT AND

EQUIPMENT

The net gain on the disposal of property, plant and equipment during the year was £1.487m (2020-21 £0.461m

gain). This comprised a £1.869m gain for disposals from Assets Held for Sale (2020-21 £1.293m gain) and

£0.381m loss (2020-21 £0.733m loss) for the disposal of other property, plant and equipment.

Asset Held for Sale - The Council does not disclose, in the asset following tables the value of property for the

"Held for Sale" class of asset. This is because the overall value of this category of assets is not material to the

accounts. However, despite the category being immaterial in value at the end of the financial year, there was a

significant in year movement. Newly classified properties totalled £9.603m and £9.170m were sold in year. Most

of the material movement relates to the in-year classification, a significant increase in right to buy sales (£4,548m)

and the sale of Eastfield Farm (£3,340m).

NOTES TO THE BALANCE SHEET


14. MOVEMENT OF PROPERTY, PLANT AND EQUIPMENT

a) Movements of property, plant and equipment during the year are shown below. These are the values of

assets included in the Balance Sheet.

RR = Revaluation Reserve SDPS = Surplus or deficit on the Provision of Services

As well as the revaluation loss to SDPS shown in the above table, £0.073m was charged in relation to Assets

Held for Sale, giving a total revaluation loss charge of £10.011m.

Vehicles,

Other plant, Infra- Comm-

Council land and furniture and structur unity Surplus Assets under

Dwellings buildings equipment assets assets assets construction Total

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

Cost or Valuation

1 April 2021 476,752 839,594 43,139 566,496 355 6,595 34,362 1,967,293

Additions / Enhancement 15,362 10,990 5,418 28,276 0 0 40,833 100,879

Donated / Other Additions 0 0 0 0 0 0 0 0

Revaluation increases /

(decreases) to RR -106 14,356 0 0 0 4,714 0 18,964

Revaluation losses to SDPS -4,536 -5,402 0 0 0 0 0 -9,938

Revaluation loss

reversals to SDPS 10,847 8,457 0 0 0 269 0 19,573

Derecognition - Disposals -243 0 -346 0 0 0 0 -589

Derecognition - Academy

Transfers 0 0 0 0 0 0 0 0

Derecognition - Other 0 -14 -5,088 0 0 0 0 -5,102

Reclassification (to) / from

Held for Sale -4,621 0 0 0 0 -4,928 0 -9,549

Other movements 7,715 14,987 62 16,663 0 890 -40,317 0

At 31 March 2022 501,170 882,968 43,185 611,435 355 7,540 34,878 2,081,531

Depreciation and Impairment

1 April 2021 45 71,959 21,454 128,469 0 0 72 221,999

Charge for the year 9,473 19,644 6,051 14,270 0 14 0 49,452

Depreciation written out

to the RR -6,345 -4,006 0 0 0 -64 0 -10,415


to the SDPS 0 0 0 0 0 0 0 0

Impairment losses to RR 0 0 0 0 0 0 0 0

Impairment losses to SDPS 0 0 0 0 0 0 0 0

Impairment losses

reversed to SDPS 0 0 0 0 0 0 0 0

Derecognition - Disposals -4 0 -325 0 0 0 0 -329


Transfers 0 0 0 0 0 0 0 0

Derecognition - Other 0 0 -4,951 0 0 0 -29 -4,980


Held for Sale 0 0 0 0 0 0 0 0

Other movements 5 -54 0 29 0 50 -30 0

At 31 March 2022 3,174 87,543 22,229 142,768 0 0 13 255,727

Net Book Value

At 1 April 2021 476,707 767,635 21,685 438,027 355 6,595 34,290 1,745,294

At 31 March 2022 497,996 795,425 20,956 468,667 355 7,540 34,865 1,825,804

2021/22



2020/21 Movement of property, plant and equipment

RR = Revaluation Reserve SDPS = Surplus or deficit on the Provision of Services

As well as the revaluation loss to SDPS shown in the above table, £0.013m was charged in relation to Assets

Held for Sale, giving a total revaluation loss charge of £39.198m.

Vehicles,


Council land and furniture structure unity Surplus Assets under

Dwellings buildings and equipment assets assets assets construction Total

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

Cost or Valuation

1 April 2020 454,635 788,165 43,545 494,824 355 26,561 66,270 1,874,355

Additions / Enhancement 19,423 17,472 6,140 28,832 0 264 33,502 105,633

Donated / Other Additions 0 0 0 0 0 0 0 0


(decreases) to RR -6,773 26,650 0 0 0 341 0 20,218

Revaluation losses to SDPS -23,827 -14,961 0 0 0 -397 0 -39,185

Revaluation loss

reversals to SDPS 24,420 5,918 0 0 0 181 0 30,519

Derecognition - Disposals -351 -150 -507 0 0 0 0 -1,008


Transfers -99 0 0 0 0 0 -99

Derecognition - Other -136 -6,040 -796 0 0 0 -6,972


Held for Sale -1,574 -153 0 0 0 -14,441 0 -16,168

Other movements 10,799 16,888 1 43,636 0 -5,914 -65,410 0

At 31 March 2021 476,752 839,594 43,139 566,496 355 6,595 34,362 1,967,293


1 April 2020 8,751 92,982 22,528 115,090 0 0 2,698 242,049

Charge for the year 8,948 19,014 5,363 12,637 0 21 0 45,983


to the RR -17,596 -42,641 0 0 0 -31 0 -60,268


to the SDPS 0 0 0 0 0 0 0 0

Impairment losses to RR -59 1,132 0 0 0 0 0 1,073

Impairment losses to SDPS 0 407 0 0 0 0 0 407

Impairment losses

reversed to SDPS 0 0 0 0 0 0 0 0

Derecognition - Disposals 0 -7 -478 0 0 0 0 -485


Transfers 0 0 0 0 0 0 0 0

Derecognition - Other 0 -6 -5,959 -796 0 0 0 -6,761


Held for Sale 0 0 0 0 0 0 0 0

Other movements 1 1,078 0 1,538 0 10 -2,626 1

At 31 March 2021 45 71,959 21,454 128,469 0 0 72 221,999

Net Book Value

At 1 April 2020 445,884 695,184 21,017 379,734 355 26,561 63,572 1,632,307

At 31 March 2021 476,707 767,635 21,685 438,027 355 6,595 34,290 1,745,294

2020/21



b) The net values of property, plant and equipment at 31 March analysed by fund and nature of the asset are

shown below.

Vehicles,




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

General Fund 0 763,423 21,553 435,992 355 6,420 26,980 1,254,723

HRA 476,707 4,212 132 2,035 0 175 7,310 490,571

Total 476,707 767,635 21,685 438,027 355 6,595 34,290 1,745,294

31 March 2021

The Council does not have any investment properties as it does not hold property solely to earn rentals or for

capital appreciation purposes or both, which the Code, in adapting IAS 40 Investment Property, requires in order

to classify land and buildings under this category.

Vehicles,


Council land and furniture and structur unity Surplus Assets under

Dwellings building equipment assets assets assets construction Total

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

General Fund 0 791,148 20,841 465,802 355 7,302 24,360 1,309,808

HRA 497,996 4,277 115 2,865 238 10,505 515,996

Total 497,996 795,425 20,956 468,667 355 7,540 34,865 1,825,804

31 March 2022



c) Within the movement of property, plant and equipment are buildings, vehicles, plant and equipment

recognised under finance leases and Private Finance Initiative school and library assets as follows:

RR = Revaluation Reserve SDPS = Surplus or Deficit on the Provision of Services



RR = Revaluation Reserve SDPS = Surplus or Deficit on the Provision of Services

Finance Leased -

Other land and PFI Owned

buildings assets assets Total

£000 £000 £000 £000

Cost or Valuation

1 April 2020 389 58,862 1,815,104 1,874,355

Additions / Enhancement 156 339 105,138 105,633

Donated / Other Additions 0 0 0 0

Revaluation increases / (decreases) to RR 0 2,677 17,541 20,218

Revaluation losses to SDPS 0 0 -39,185 -39,185

Revaluation losses reversals to SDPS 0 0 30,519 30,519

Derecognition - Disposals 0 0 -1,008 -1,008

Derecognition - Academy Transfers 0 0 -99 -99

Derecognition - Other 0 0 -6,972 -6,972

Reclassification (to) / from Held for Sale 0 0 -16,168 -16,168

Other movements 0 0 0 0

At 31 March 2021 545 61,878 1,904,870 1,967,293


1 April 2020 42 7,882 234,125 242,049

Charge for the year 20 1,464 44,499 45,983

Depreciation written out to the RR 0 -2,114 -58,154 -60,268

Depreciation written out to the SDPS 0 0 0 0

Impairment losses to RR 0 0 1,073 1,073

Impairment losses to SDPS 0 0 407 407

Impairment losses reversed to SDPS 0 0 0 0

Derecognition - Disposals 0 0 -485 -485

Derecognition - Academy Transfers 0 0 0 0

Derecognition - Other 0 0 -6,761 -6,761

Reclassification (to) / from Held for Sale 0 0 0 0

Other movements 0 0 1 1

At 31 March 2021 62 7,232 214,705 221,999

Net Book Value

At 1 April 2020 347 50,980 1,580,979 1,632,307

At 31 March 2021 483 54,646 1,690,165 1,745,294

2020/21



15. DATES AND AMOUNTS OF VALUATIONS OF PROPERTY, PLANT AND

EQUIPMENT

2021/22 Vehicles,


Council land and furniture and structure unity Surplus Assets under

Dwellings buildings equipment assets assets assets construction Total

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

Year of revaluation:

2021/22 497,996 122,695 0 0 0 7,540 0 628,231

2020/21 0 304,747 0 0 0 0 0 304,747

2019/20 0 101,976 0 0 0 0 0 101,976

2018/19 0 84,328 0 0 0 0 0 84,328

2017/18 0 181,679 0 0 0 0 0 181,679

Valued at historical cost 0 0 20,956 468,667 355 0 34,865 524,843

Total 497,996 795,425 20,956 468,667 355 7,540 34,865 1,825,804

2020/21 Vehicles,




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

Year of revaluation:

2020/21 476,707 329,574 0 0 0 6,595 0 812,876

2019/20 0 128,482 0 0 0 0 0 128,482

2018/19 0 108,688 0 0 0 0 0 108,688

2017/18 0 172,519 0 0 0 0 0 172,519

2016/17 0 28,372 0 0 0 0 0 28,372

Valued at historical cost 0 0 21,685 438,027 355 0 34,290 494,357

Total 476,707 767,635 21,685 438,027 355 6,595 34,290 1,745,294



16. PROPERTY, PLANT AND EQUIPMENT VALUATION

A review has been carried out by the Council’s Valuation & Estates department across all categories of the

Council’s property assets. This is to ascertain whether there were any material differences in asset values at

31 March 2022 from those stated on the Balance Sheet, due to general economic/market factors or specific

impairment.

The assets have been reviewed using a wide range of information including independent research carried out by

local and national property agents.

In respect of Council Dwellings, the revaluation date was changed to 1 December 2022 from the beginning of the

financial year 1 April 2021, to help reduce any material differences to valuations at the year end.

The conclusions of the reviews, which also considered the impact of COVID-19 on its property portfolio, was that

no adjustments where required to the financial statements.

17. FAIR VALUE OF SURPLUS ASSETS

IFRS 13 Fair Value Measurement requires surplus assets to be valued at their “highest and best use from a market

participant’s perspective”.

a) Details of the Council's surplus assets and information about the fair value hierarchy are as follows:

b) Transfers between levels of the Fair Value Hierarchy

There have been no transfers between levels during the year.

c) Valuation Techniques used to determine Level 2

The fair values have primarily been arrived at by using the Comparative Valuation Method. This is the most

common valuation method and involves using evidence from the sale and marketing of appropriate comparable

properties to estimate the amount for which the asset should exchange on the valuation between a willing buyer

and willing seller in an arm’s length transaction, after proper marketing and where the parties had each acted

knowledgeably, prudently and without compulsion.

2021/22 Significant

Other significant unobservable

observable inputs Fair Value as at

(Level 2) (Level 3) 31 March 2022

Recurring fair value measurements £000 £000 £000

Redevelopment Properties 5,663 0 5,663

Other Property 1,877 0 1,877

Bridlington Regeneration Properties 0 0 0

7,540 0 7,540

2020/21 Significant

Other significant unobservable

observable inputs inputs Fair Value as at

(Level 2) (Level 3) 31 March 2021

Recurring fair value measurements using: £000 £000 £000

Redevelopment Properties 5,250 0 5,250

Other Property 1,174 0 1,174

Bridlington Regeneration Properties 171 0 171

6,595 0 6,595



Significant Observable Inputs – Level 2

The principal observable inputs are market information on current and recent sales and marketing of comparable

properties in the local area. This market information is derived from reliable sources including Land Registry

records and sales or agreed terms for the disposal of Council properties. These observable inputs are adjusted

as appropriate, for example to take account of the different physical size of the comparable in relation to the

subject property.

d) Highest and Best Use

In estimating the fair value of the Council’s surplus assets, the highest and best use of the assets is:

• Redevelopment Properties - the highest and best use is considered to be for redevelopment in a form that

would be in accordance with planning policy. Typically, this is for residential or industrial development.

• Other Property & Other Land - the highest and best use of these properties is considered to be for

continued use in their existing purpose.

• Bridlington Regeneration Properties - the highest and best use for these properties at the valuation date

is considered to be for continued use as mixed retail and residential premises.

e) Valuation Techniques

There has been no change in the valuation techniques used during the year for surplus assets.

f) Valuation Process for Surplus Assets

The fair value of the Council’s surplus assets is measured annually at each reporting date. All valuations are

carried out internally according with the methodologies and bases for estimation set out in the professional

standards of the Royal Institution of Chartered Surveyors. The Council’s valuation experts work closely with

finance officers reporting directly to the chief financial officer.

18. ASSETS RECOGNISED UNDER PFI AND SIMILAR ARRANGEMENTS

Bridlington Schools and Library PFI

On 20 December 2000, a contract was signed with Bridlington Schools Services Limited (BSSL) for the building

and refurbishment of six schools and a community library in Bridlington, and payments under this contract

commenced on 29 April 2003, after the building works were complete. The scheme is accounted for in a manner

that is consistent with the adaptation of IFRIC 12 Service Concession Arrangements contained in the

Government’s Financial Reporting Manual (FReM).

In accordance with IFRIC 12, the schools and the library are included on the Council’s Balance Sheet and a

corresponding liability recognised for the requirement to pay BSSL for the construction and enhancement work

they undertook. An amount equal to this is included in the Minimum Revenue Provision in the Movement in

Reserves Statement to recognise the annual repayment in the General Fund. The schools and library are

depreciated and revalued in the same way as all other assets on the Council’s Balance Sheet.

The payment for the facilities management services that BSSL provides, e.g. cleaning, grounds maintenance and

caretaking, are included in the Children, Family and Schools (Schools Budget) line of the Comprehensive Income

and Expenditure Statement Cost of Services, but the interest element of the contract payment is recognised in

Financing and Investment Income and Expenditure.

At 5 yearly intervals, the facilities management services are benchmarked or market tested to ensure value for

money is being achieved. The results of value testing exercises can result in an increase or decrease in the cost

of the service(s) to the Council. The next value testing exercise is due in 2023-24. Utility payments are adjusted

each year for indexation, and consumption reviewed against notional volumes, which may be adjusted if

consumption changes by more than plus or minus 5% and depending on the cause of the change in volume

following review. The Council has opted to include energy supplies to the PFI schools in its corporate contract.

This arrangement is considered more likely to result in competitive energy prices through the aggregation of

demand.

Utility prices are seeing a rapid increase due to supply and demand on the global wholesale market, due to this

delivered costs across both gas and electricity are seeing a considerable increase due to the unprecedented

market price movement. Service Charges are therefore seeing a greater increase than previously forecast. Service

charges are also affected by the Retail Price Index (RPI) increasing at a rate greater than forecast by the Office

for Budget Responsibility (OBR). The increase in RPI was 24.2 in the twelve months from February 2021 to

February 2022. The previous twelve-month period of February 2020 to February 2021 had a 4.0 increase.

At the present time both energy costs and RPI are forecast to increase further in 2022-23.



The PFI contract is an agreement to receive services, where the responsibility for making available the property,

plant and equipment assets needed to provide the services passes to the PFI contractor. The nature and standard

of the services provided are set out in the contract output specifications. The payment mechanism incentivises

the PFI contractor to perform these services and to ensure that the facilities are available for use.

The Project Agreement sets out the rights of the Council, the governing bodies, school staff, libraries staff,

registered pupils and visitors to use the project facilities. A “Core Time Specification” is included in the

Agreement setting out the Council’s user requirements. Third party use of the schools and the library is

encouraged but educational and community use is given priority in terms of access to facilities.

At the end of the concession period, the Council has the option to receive the assets at nil value. The Council

is also able to consider a number of other renewal and termination options on expiry or otherwise as set out in

the Project Agreement. There are provisions within the contract to ensure that BSSL maintains the assets in

accordance with their obligations. This includes an independent final survey before the expiry date of the

concession. The Lifecycle Programme is intended to ensure that the buildings and their components are

maintained and replaced in order that the schools and the library meet the criteria at all times as set out in the

contract output specifications.

The PFI contractor is entitled to receive income derived from “third-party” use of the project facilities outside

of core time up to an index linked amount set out in the Project Agreement. Any third party income generated

above this amount is shared equally between the PFI contractor and the Council.

In 2014-15 Quay Primary, one of the schools covered by the PFI agreement, converted to an academy. The

Council continues to manage the PFI agreement on behalf of the academy and therefore the liability still remains

with the Council. The receipts from Quay Primary during 2021-22 have been set against the revenue service

charges relating to the agreement.

An analysis of the movement in the values of assets recognised under the PFI scheme is included in Note 14c.

An analysis of the movement in the value of the liability for the scheme is shown below.

2020/21 2021/22

£000 £000

11,745 Opening liability 1 April 10,963

-782 Principal Repaid -1,171

10,963 Closing Liability 31 March 9,792

At the Balance Sheet date, the amount of payments (at Balance Sheet date prices) due to be made under the PFI

and scheme, separated into repayment of liability, interest and service charges, is as follows.

31 March 2021 31 March 2022

£000 £000

Principal Repayable:


6,218 In two to five years 6,675

3,574 In six to ten years 1,817

10,963 9,792

Interest Repayable:

1,030 Within one year 909


383 In six to ten years 108

4,154 3,124

Service Charges Payable:




25,443 24,774

Total Amount payable:




40,560 37,690



The principal liability payable within one year of £1.3m for the PFI contract is classified as a short term liability in

the Balance Sheet and is not included in the Deferred Liabilities disclosure Note 25 as this shows long term

liabilities only.

19. CAPITAL EXPENDITURE AND FINANCING

The following table illustrates capital expenditure analysed by asset type. All such expenditure is funded firstly

through the utilisation of external resources (e.g. grants and contributions) and, where these are insufficient, by

internal resources such as revenue and usable capital receipts.

20. CAPITAL COMMITMENTS

The Council has entered into a number of contracts for the construction or enhancement of Property, Plant and

Equipment. The values below represent the remaining value of the contracts that were signed in the financial

years up to and including 2021-22 and that will be discharged in 2022-23. The major commitments are:

2020/21 2021/22

£000 Note £000

477,957 Opening Capital Financing Requirement 484,311

Capital Investment

105,633 Property, Plant and Equipment 14a 100,879

777 Intangible Assets 824

7,338 Revenue Expenditure Funded from Capital Uunder Statute 9,332

Sources of Finance

-6,892 Capital Receipts 31 -13,099

-54,179 Government Grants and Other Contributions 36 -49,418

Sums set aside from revenue:

-11,528 Direct Revenue Contributions 36 -10,565

-24,048 Earmarked Reserves 36 -16,263

-10,747 Minimum Revenue Provision (MRP) 36 -33,984

484,311 Closing Capital Financing Requirement 472,017

6,354 Movement in Capital Financing Requirement -12,294

Explanation of Movements in Year

-4,693 Increase / Decrease (-) in Supported Borrowing -5,050

11,047 Increase in Unsupported Borrowing -7,245

6,354 increase in Capital Financing Requirement -12,295

Capital Commitments £000

Bereavement Project (Lelley Fields Crematorium) 6,843

Boothferry Bridge Renovation 1,226

Broadband Delivery Phase 3 1,508

Public Sector Decarbonisation Scheme 1,276

Affordable Housing - Former Wolfreton Upper School, Kirk Ella 3,259

Affordable Housing - Harland Gardens, Cottingham 1,075

Jocks Lodge Improvement Scheme 1,063



21. SHORT-TERM DEBTORS

31 March 2021

£000 £000 £000

Collection Fund

11,413 Council Tax 12,191

-3,544 Impairment allowance for Council Tax -3,892

4,938 Business Rates 3,576

-1,536 Impairment allowance for Business Rates -2,075 9,800

Other Debtors

39,513 Sundry debtors 50,656

16,271 Grant applied in advance 10,265

4,311 Payment in advance 4,240

15,787 Year-end accruals 5,585

7,697 HM Revenue and Customs 6,279

3,169 Housing benefits 3,018

-408 Impairment allowance for housing benefits -397

2,913 Housing rents 4,190

-2,410 Impairment allowance for housing rents -2,923

396 Car loans 303

-3,101 Impairment allowance of other debtors -2,991 78,225

95,409 88,025

31 March 2022



22. SHORT-TERM INVESTMENTS

23. LONG-TERM INVESTMENTS

24. SHORT-TERM CREDITORS & GRANT RECEIPTS IN ADVANCE

31 March 2021 31 March 2022

£000 £000

0 Certificates of deposit greater than 3 months 0

95,170 Fixed maturity greater than 3 months 120,163

95,170 120,163

31 March 2021 31 March 2022

£000 £000

16 Investments in equity instruments 16

17,104 Fixed maturities greater than 1 year 17,072

17,120 17,088



25. DEFERRED LIABILITIES

Deferred liabilities relate to the finance lease elements of the PFI arrangements (Note 18), finance leased

Property, Plant and Equipment, and Compulsory Purchase Order (CPO) monies held.

31 March 2021 31 March 2022

£000 £000

9,792 PFI service concession arrangement 8,492

544 CPO monies held 544

64 Finance lease outstanding obligation 59

10,400 9,095



26. GRANT AND CONTRIBUTION RECEIPTS IN ADVANCE

The Council has received a number of grants, contributions and donations that have yet to be recognised as

income as they have conditions attached to them that will require the monies to be returned to the provider if

not utilised for the specific purpose. The balances at the year-end are included in the Balance Sheet as follows.

CARF: COVID-19 Additional Relief Fund, iBCF: Improved Better Care Fund



27. PENSION ASSETS AND LIABILITIES

a) Scheme Details

As part of its terms and conditions of employment of its officers and other employees, the Council offers

retirement benefits. Although these will not actually be payable until employees retire, the Council has a

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

entitlement.

The Council participates in three pension schemes:

• The Local Government Pension Scheme (LGPS) - this is a funded defined benefits scheme, meaning

that the Council and its employees pay contributions into a fund, calculated at a level estimated to balance

the pensions liabilities with investment assets. East Riding of Yorkshire Council is an employer in the East

Riding Pension Fund which the Council administers on behalf of 264 schedule 2 employers and 61 Community

Admission Bodies.

• The Teachers’ Pension Scheme – this is an unfunded defined benefits scheme, meaning that there are no

investment assets built up to meet the pension liabilities, and cash has to be generated to meet actual pension

payments as they eventually fall due. This Scheme is administered by Teachers’ Pensions (under contract to

Capita Business Services Ltd) on behalf of the Department for Education and provides teachers with specified

benefits upon their retirement. The scheme is not the direct responsibility of the Council although it

contributes together with teachers towards the costs by making contributions based on a percentage of

members’ pensionable salaries.

The arrangements for the teachers’ scheme mean that liabilities for these benefits cannot be identified to the

Council. The scheme is therefore accounted for as if it were a defined contribution scheme – no liability for

future payments of benefits is recognised in the Balance Sheet and the Children’s and Education service

revenue account is charged with the employer’s contributions payable to Teachers’ Pensions in the year.

The Council has granted discretionary additional pensions to some of its former teachers for which it is

directly responsible, and under the IAS 19 guidelines these discretionary pensions are required to be treated

as a defined benefit scheme.

• The NHS Pension Scheme (NHSPS) – from the 1 April 2013, NHS staff transferred to the Council as

part of the transfer of responsibilities for delivering Public Health. The NHSPS is a defined public service

pension scheme, which operates on a pay as you go basis. The NHSPS is administered by the NHS Business

Service Authority. The scheme is not the responsibility of the Council although it contributes together with

public health staff towards the cost of making contributions based on a percentage of members’ pensionable

salaries.

The award of discretionary post-retirement benefits is an unfunded defined benefit arrangement under which

liabilities are recognised when awards are made. No investment assets are built up to meet these pension

liabilities and cash is generated to meet the actual pension payments as they are due.

b) IAS 19 Disclosure

Post employment benefits are accounted for in accordance with International Accounting Standard 19 (IAS 19).

The actuary – Hymans Robertson LLP – carried out an actuarial valuation of the East Riding Pension Fund as at

31 March 2019, and this was reported to the East Riding – Pension Fund in a report dated March 2020. The

valuation is made on a number of assumptions which fall in to two main categories:

• Demographic assumptions – try to forecast when benefits will become payable and what form they will take,

e.g. when members will retire (at their normal retirement age or earlier), how long they will live and whether

a dependants pension will be paid.

• Financial assumptions – try to anticipate the size of the benefits. For example, how large members’ final

salaries will be at retirement and how their pensions will increase over time. In addition, the financial

assumptions also help us to estimate how much all these benefits will cost the Fund in today’s money by

making an assumption about the return on the Fund’s investments in the future.

More details on the results of the Pension Fund valuation are shown in Pension Fund section of these accounts.

The Council is the administering authority for the East Riding Pension Fund, whose members are listed in the

Pension Fund Section of these accounts. The following notes relate solely to the East Riding of Yorkshire

Council’s share of the East Riding Pension Fund.



IAS 19 (Employee Benefits) is based on a simple principle – that an organisation should account for employment

and post-employment benefits when employees earn them and the council is committed to providing them, even

if the actual provision might be many years in the future. The IAS19 principles give a better reflection of the

economic reality of the relationship between an employer and their employees (and with pension funds) than

might be appreciated from cash flows. The following notes provide more information on the post – employment

benefits of the Council.

St Joseph’s Primary School, Goole, transferred out of the scheme in 2021-22.

Transactions Relating to Post-employment Benefits

The cost of retirement benefits is reported in the cost of services when they are earned by employees, rather

than when the benefits are eventually paid as pensions. The charge the Council makes against council tax is based

on the cash payable in the year, so the real cost of post-employment/retirement benefits, as determined by the

actuary, is reversed out of the General Fund and HRA via the Movement in Reserves Statement. The following

transactions have been made in the Comprehensive Income and Expenditure Statement and the General Fund

Balance via the Movement in Reserves Statement during the year.

Transactions within the Comprehensive Income and Expenditure Statement

Current service cost has increased in line with the actuaries forecast due to a decline in market conditions. This

amount differs from what the Council is paying in cash contributions which is based on certified rates from the

last formal valuation. In 2020-21, the Council prepaid three years of employer contributions for non- school

based staff, as agreed with the actuary, with the intention that the Council will receive a discount to recognise

that the Pension Fund has received an up-front payment of £65.611m. The employers’ contributions shown above

recognise one year of all employer contributions, whilst the table below (scheme assets) shows the impact of the

full three years contributions.

The remeasurement of the net defined liability reflects the change in market conditions since 31 March 2021. As

at the end of March 2022, the net discount rate is 2.70%, an increase of 0.7% compared to the previous year.

This has led to a decrease in the assessed value of obligations, as a lower value is placed on benefits paid in the

future.

2020/21 2021/22

£000 £000

55,326 Current service cost 88,272

92 Past service cost (including curtailments) 5

0 (Gain)/loss from settlements -187

55,418 Total Service Cost 88,090

Financing and Investment Income and Expenditure

-25,810 Interest income on plan assets -27,354

34,887 Interest cost on defined benefit obligation 40,380

9,077 Net interest on the net defined benefit liability (asset) 13,026

Total Post-employment Benefits charged to the Surplus or Deficit

64,495 on the Provision of Services 101,116

Remeasurement of the net defined benefit liability comprising

-177,424 -91,709

24,449 Actuarial (gains)/losses arising from changes in demographic assumptions -10,477

421,445 Actuarial (gains)/losses arising from changes in financial assumptions -143,325

-16,568 Other (if applicable) 6,416

251,902 Total remeasurements recognised in Other Comprehensive Income -239,095

316,397 -137,979

Movement in Reserves Statement

-64,495 -101,116

32,461 Employers' Contributions Payable to the Scheme 33,393

Return on plan assets (excluding the amount included in net interest expense)

Total Post-Employment Benefits charged to the Comprehensive Income and Expenditure

Statement

Reversal of net charges made to the Surplus or Deficit on the Provision of Services for

post employment benefits



c) Pension Assets and Liabilities Recognised in the Balance Sheet

The amount included in the Balance Sheet, arising from the Council’s obligation in respect of its defined benefit

plans, is as follows:

31 March 2021 31 March 2022

£000 £000

1,380,462 Fair value of plan assets (LGPS) 1,476,048

-1,966,788 Present value of defined benefit obligation (LGPS) -1,914,078

-26,596 Present value of unfunded liabilities (LGPS & Teachers) -26,691

-612,922 Net Pension Liability -464,721

The Council’s Balance Sheet includes a pension liability of £464.721m at 31 March 2022 (£612.922m 31 March

2021) and pension reserve of £484.830m as at 31 March 2022 (£656.202m at 31 March 2021). The pension

liability reflects the fair value of future pension liabilities that have been incurred less the assets that have already

been set aside to fund them. This liability has reduced by £148.201m since last year. This is principally the plan

obligation reducing by £52.615m and plan assets increasing by £95.586m. The plan obligation has decreased in

part due to the increase in the net discount rate.

The net pension liability includes the McCloud ruling regarding age discrimination, arising from public sector

pension scheme transition arrangements.

The net pension liability decreases the overall level of reserves, however, this does not represent an increase in

cash reserves and does not impact on council tax levels. Whilst the pension liability suggests a shortfall between

the forecast cost of future pensions and the current level of assets built up in the Pension Fund, these figures are

a snapshot at a point in time and the Pension Fund assets are subject to fluctuations in value depending on the

current state of the stock market. Therefore, this information needs to be considered with the long-term view

provided by the triennial actuarial valuation.

d) Reconciliation of the Movements in the Fair Value of the Scheme

Reconciliation of present value of the scheme assets (defined benefit obligation):

2020/21 2021/22

£000 £000

1,134,170 Opening fair value of scheme assets as at 1 April 1,380,462

25,810 Interest income 27,354

Remeasurement gain/(loss):

177,424 The return on plan assets 91,709

(excluding the amount included in net interest expense)

75,741 Contributions from employer 10,222

10,047 Contributions from employees 10,604

-42,428 Benefits paid -43,783

0 Effect of Settlements -191

-302 Other (if applicable) -329

1,380,462 Balance as at 31 March 1,476,048



Reconciliation of present value of the scheme liabilities (defined benefit obligation):

e) Local Government Pension Scheme assets

The Council’s assets consist of the following categories, further analysed by those that have a quoted market

price in an active market and those that do not.

The assets detailed below are at bid value as required under IAS19. As shown, 76.31% of the assets are quoted

in an active market and 23.69% are in unquoted markets.

By definition, the investments in unquoted markets are not publicly quoted and the valuation depends on

estimation techniques and non-marketable observable inputs. Therefore, there is a higher risk that the valuations

for £349.604m – 23.69% (unquoted markets) are either over or under stated. This is mitigated by the level of

assets in unquoted markets and the expertise of the actuary appointed to undertake the valuation.

The Council does not have any financial instruments held as scheme assets nor does it occupy or use any of the

property assets included above.

2020/21 2021/22

£000 £000

1,506,436 Opening fair value of scheme liabilities as at 1 April 1,993,384

55,326 Current Service Cost 88,272

34,887 Interest Cost 40,380

10,047 Contributions from scheme participants 10,604

Remeasurement gain/(loss):

24,449 Actuarial (gains)/losses arising from changes in demographic assumptions -10,477

421,445 Actuarial (gains)/losses arising from changes in financial assumptions -143,325

-16,870 Other (if applicable) 6,087

92 Past Service Cost 5

-42,428 Benefits paid -43,783

0 Effect of settlements -378

1,993,384 Balance as at 31 March 1,940,769

31 March 2021 Asset Type Quoted in an Unquoted 31 March 2022

£000 Active market £000

Equity Securities

167,305.2 Other 177,046.4 177,046.4

167,305.2 177,046.4 0.0 177,046.4

Debt Securities

118,823.2 Corporate Bonds (Non -Investment Grade) 4,657.5 63,149.6 67,807.1

42,697.9 UK Government 38,754.7 38,754.7

25,924.7 Other 23,266.0 23,266.0

187,445.8 66,678.2 63,149.6 129,827.8

Private Equity

78,718.8 All 42,326.6 65,505.4 107,832.0

Real Estate

160,484.1 UK Property 53,300.6 114,917.5 168,218.1

Investment Funds and Unit Trusts

563,288.0 Equities 593,577.0 593,577.0

58,517.0 Bonds 125,997.7 2,610.4 128,608.1

82,958.1 Infrastructure 34,723.0 65,855.0 100,578.0

43,405.5 Other 13,828.5 37,566.2 51,394.7

748,168.6 768,126.2 106,031.6 874,157.8

38,339.5 Cash and Cash Equivalents 18,965.9 18,965.9

1,380,462.0 1,126,443.9 349,604.1 1,476,048.0



f) Basis for Estimating Assets and Liabilities

Assets

The administering authority does not account for each employer’s assets separately. Instead, the Fund’s actuary

is required to apportion the assets of the whole Fund between the employers, at each triennial valuation.

This apportionment uses the income and expenditure figures provided for certain cash flows for each employer.

This process adjusts for transfers of liabilities between employers participating in the Fund but does make a

number of simplifying assumptions. The split is calculated using an actuarial technique known as “analysis of

surplus”.

The methodology adopted means that there will inevitably be some difference between the asset shares

calculated for individual employers and those that would have resulted had they participated in their own ring-

fenced section of the Fund.

The administering authority recognises the limitations in the process, but it considers that the Fund actuary’s

approach addresses the risks of employer cross-subsidisation to an acceptable degree.

Liabilities

IAS19 states that the discount rate used to place a value on the liabilities should be ‘determined by reference to

market yields on high quality corporate bonds at the reporting date’. In addition, ‘the currency and term of the

high quality corporate bonds used to set the discount rate shall be consistent with the currency and terms of the

liabilities’. To set the discount rate, a “Hymans Robertson” corporate bond yield curve was constructed based

on the constituents of the iBoxx AA corporate bond index. This approach to setting the discount rate as at 31

March 2022 follows the same principles to those adopted at 31 March 2021.

To improve accuracy, the actuary has determined that a separate discount rate should be calculated for individual

employers, dependent on their own weighted average duration. This Council has been classified as having a

weighted average duration between 17 and 23 years which is in the ‘medium’ discount rate category.

The main demographic assumption to which the valuation results are most sensitive is that relating to the

longevity of the Fund’s members. As a member of Club Vita, the baseline longevity assumptions that have been

adopted are a bespoke set of Vitacurves specifically tailored to fit the membership profile of the Fund. The

actuary has used the same demographic assumptions as used for the 2019 actuarial valuation. The changes to the

longevity assumptions used have resulted in a modest reduction in life expectancies. Other demographic

assumptions include assumptions for ill health retirements, family details, and commutation of pension. The

change in demographic assumptions has reduced the liabilities by £10.477m.

The recommended retail price index (RPI) inflation assumption is based on the use of a market implied inflation

curve over a range of maturities.

The pension increase assumption is set in line with the actuaries default consumer price index (CPI) assumption.

As a market in CPI linked bonds does not exist, the actuary estimates the long-term gap between the RPI and

CPI in order to derive a CPI assumption for accounting purposes. Our default assumed RPI-CPI gap will be 0.45%

p.a. (0.45% in 2021).

The salary increase assumption at the 2019 valuation has been set to RPI less 0.1% p.a. This has changed from

the previous valuation which assumed RPI less 0.8%. This reflected both short term pay constraints and the belief

that general economic growth and hence pay growth may be at a lower level than historically experienced for a

prolonged period of time. This assumption is made in respect of general level of salary increases (as a result of

inflation and other macroeconomic factors). There is a separate allowance for expected pay rises granted in the

future as a result of promotion.



The estimation of the defined benefit obligations is sensitive to the actuarial assumptions as set out in the table

above. The actuary has determined sensitivity analyses as detailed below:

Approximate Approximate

% increase to monetary

amount

% £000

0.1% decrease in Real Discount Rate 2 39,135

1 year increase in member life expectancy 4 77,631

0.1% increase in the Salary Increase Rate 0 3,653

0.1% increase in the Pension Increase Rate 2 35,170

Employer Liability

The costs of a pension arrangement require estimates regarding future experience. The assumptions used are

largely prescribed at any point and reflect market conditions at the reporting date. Changes in market conditions

that result in changes in the net discount rate can have a significant effect on the value of the liabilities reported.

A reduction in the net discount rate will increase the assessed value of liabilities as a higher value is placed on

benefits paid in the future. A rise in the net discount rate will have an opposite effect of similar magnitude.

The longevity assumptions (member life expectancy) are in line with the Club Vita analysis which was used by

the actuary at the formal funding valuation as at 31 March 2019. For sensitivity purposes, the actuary has

estimated that a one-year increase in life expectancy would approximately increase the Employer’s Defined

Benefit Obligation by around 3-5%. In practice, the actual cost of a one-year increase in life expectancy will

depend on the structure of the revised assumption (i.e. if improvements to survival rates predominantly apply at

younger or older ages).

The salary increase assumption has been set to be consistent with the most recent formal valuation which has

assumed the long term pay assumption of RPI -0.8%. The sensitivity analysis shows the impact of an additional

salary increase of 0.1% which would increase the employer liability by approximately 0%.

Pension increase assumptions are based on CPI which is calculating as RPI less 0.45% p.a. An additional 0.1%

increase in the pension rate would increase the employer liability by 2%.

The approach taken in preparing the sensitivity analysis shown is consistent with that adopted in the previous

year.

Asset and Liability Matching Strategy

The Fund does not have a formal Asset and Liability Matching Strategy, but it does select investments that are

expected to meet the payment of pension liabilities over the long term and this is set out in its Investment

Strategy.

The Fund’s primary long-term risk is that the Fund’s assets do not meet the cost of its pension liabilities, i.e. the

benefits payable to its members. Therefore, the aim of the Fund’s investment management is to achieve the long

term expected rate of return with an acceptable level of risk. The Fund achieves this through setting the strategic

asset allocation, typically on a triennial basis alongside the latest actuarial valuation, which is expected to achieve

the target rate of return over the long term. The Fund’s appetite for risk will vary depending on market

conditions and the types of investments available to it but will be commensurate with meeting the long-term

target investment rate of return.

31 March 2021 31 March 2022

% p.a % p.a

Mortality Assumptions:

Longevity at 65 for current pensioners:

21.0 years Men 20.8 years

23.7 years Women 23.5 years

Longevity at 65 for future pensioners:

22.2 years Men 22.0 years

25.5 years Women 25.3 years

2.9 Pensions increase rate (CPI) 3.20

3.8 Rate of increase in salaries 4.10

2.0 Rate for discounting scheme liabilities 2.70

Take-up of option to convert annual pension into lump sum

60.0% Pre April 2008 service 60.0%

80.0% Post April 2008 service 80.0%



The Fund has a dedicated strategic risk register which identifies the key risks inherent in the Pension Fund, an

estimate of the severity of each risk, and the risk controls that are in place to mitigate these risks. The risk

register is reviewed twice a year by the Pensions Committee and quarterly by the Pensions Board which considers

issues such as performance, regulation and compliance, and personnel.

The Pension Fund section of the accounts provides further details on the how risk is managed and the

investments in place.

Impact on the Council’s Cash flows

One of the main objectives of the scheme is to maintain a relatively stable employer contribution rate. The

Council’s contribution rate is determined by the actuary and is currently set at 15.3% of pensionable pay as a

result of the 31 March 2019 valuation. The rate was 15.3% in the previous valuation and will remain at 15.3%

until 31 March 2023. Past service deficit lump sums from 1 April 2020 will be £4.179m annually until

31 March 2023. In 2020-21 the Council prepaid three years of employer contributions for non-school based

staff, as agreed with the actuary, with the intention that the Council will receive a discount to recognise that the

Pension Fund has received an up-front payment of £65.611m. Staff that are based in schools but are part of the

LGPS have a different rate of 19.3% as per the 31 March 2019 valuation from 1 April 2020 to 31 March 2023 and

the rate includes a contribution to the past service deficit.

The latest triennial valuation was based on the Fund's position as at 31 March 2019 and the contribution rate

outcomes were implemented with effect from 1 April 2020. The next valuation will be based on the Fund's

position as at 31 March 2022 and the outcomes will be implemented with effect from 1 April 2023.

The scheme will take account of the national changes to the scheme under the Public Pensions Act 2013. Under

the Act, the Local Government Pension Scheme in England and Wales and the other main existing public service

schemes may not provide benefits in relation to service after 31 March 2014 (or service after 31 March 2015 for

other existing public service pension schemes in England and Wales). The Act provides the scheme regulations

to be made within a common framework to establish new career average revalued earnings schemes to pay

pensions and other benefits to certain public servants.

The total contributions expected which relate to the LGPS by the Council in the year to 31 March 2023 is

£35.007m of which £21.870m are prepaid. This excludes contributions deducted and paid across from employee

members of the scheme.

g) Pension Schemes Accounted for as a Defined Contribution Schemes

The Teachers Pension Scheme

The Council pays an employer’s contribution to the Department for Education in respect of teachers’ pension

costs based on a percentage of members’ pensionable salary. The Scheme provides teachers with specified

benefits upon their retirement. In addition, the Council is responsible for all pension payments relating to added

years awarded, together with the related increases.

The Scheme is an unfunded statutory public service pension scheme with the benefits underwritten by the

Government. The Scheme is financed by payments from the employer and from those current employees who

are members of the Scheme, who pay contributions at different rates which depend on their salaries. The Scheme

is a multi-employer scheme; therefore, the Council is not able to identify its share of the underlying financial

position and performance of the scheme with sufficient reliability for accounting purposes.

The Scheme Actuary completed an actuarial valuation of the Scheme as at 31 March 2016 (report issued March

2019). The actuary valuation recommended an increase to the employer’s contribution rate from 16.4% to 23.6%

effective from 1 September 2019 to 31 March 2023.

For the purposes of these accounts, the scheme is accounted for as a defined contribution scheme. As a

proportion of the total contributions into the Teachers’ Pension Scheme during 2021-22, the Council’s own

contributions equate to 23.71% (23.70% in 2020-21). In 2021-22, the Council paid £14.440m (£13.999m in 2020-

21) to the Teachers Pensions Agency. A balance of contributions of £1.219m is owed to the Teachers’ Pension

Agency as at 31 March 2022. The contributions expected to be paid in the next financial year are £14.633m.

The Council is responsible for the costs of any additional benefits awarded upon early retirement outside of the

teachers pension scheme. These are accounted for on a defined benefit basis and are included in the assets and

liabilities detailed above (amounts are shown separately for information below). The discretionary pensions

funded on an ongoing basis were awarded in previous years; no new benefits have been awarded in 2020-21 or

2021-22.



2020/21 2021/22

£000 £000

Teachers

13,999 Employer primary contributions 14,440

1,400 Discretionary pensions funded on an ongoing basis 1,329

The NHS Pension Scheme (NHSPS)

The Council pays an employer’s contribution to the Department of Health in respect of NHS staff pension costs,

based on a percentage of members’ pensionable salary. The Scheme provides NHS staff with specified benefits

upon their retirement.

The Scheme provides pensions to employees who have worked in the National Health Service. The Scheme is

an unfunded statutory public service pension scheme with the benefits underwritten by the Government. The

Scheme is financed by payments from the employer and from those current employees who are members of the

Scheme, who pay contributions at different rates based on pay and as specified in the regulations. The rate of

employer contributions is typically set following an actuarial valuation. The actuary valuation recommended an

increase to the employers’ contribution rate from 14.3% to 20.6% effective from 1 April 2019. A transitional

arrangement was put in place whereby employers continued to pay 14.38% and this arrangement has continued

in 2021-22 and will continue into 2022-23.

For the purposes of these accounts, the scheme is accounted for as a defined contribution scheme. As a

proportion of the total contributions into the NHSPS during 2021-22, the Council’s own contributions equate

to 14.38%. In 2021-222, the Council paid £48.080m to the NHSPS. There are contributions remaining payable

to the NHSPS of £0.008m as at 31 March 2022 which relate to 2021-22. The contributions expected to be paid

in the next financial year are £0.047m.

The Council is responsible for the costs of any additional benefits awarded upon early retirement outside of the

scheme and this would be funded from the Public Health ring fenced grant. There were no additional benefits

awarded in 2020-21 or 2021-22.

28. USABLE RESERVES

The Council keeps a number of reserves in the Balance Sheet. Some are required to be held for statutory

reasons, some have been set up voluntarily to earmark resources for future spending plans and others are needed

to comply with proper accounting practice.

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

a prudent level of reserves and any statutory limitations on their use, for example the Usable Capital Receipts

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

29. CAPITAL GRANTS UNAPPLIED ACCOUNT RESERVE

These reserves hold capital grants and contributions recognised through the Comprehensive Income and

Expenditure Statement as income, but which have not yet been applied to fund expenditure. When the

expenditure is eventually incurred, the relevant grant or contribution is transferred to the Capital Adjustment

Account. As these transactions are in advance of the actual expenditure, it may become apparent that the income

is to be used for revenue rather than capital purposes or vice versa, hence the transfer between revenue reserves

and the General Fund, also made within this account.

Balance Net Balance Net Balance

31 March 2020 in-year 31 March 2021 in-year 31 March 2022 of Movements

£000 £000 £000 £000 £000

Usable Reserves

17,690 19,615 General Fund 37,305 -2,807 34,498 MiRS page 22

4,411 986 Housing Revenue Account 5,397 213 5,610 MiRS page 22

4,252 2,098 Capital Grant Unapplied Account 6,350 705 7,055 Note 29

150,789 -1,074 Earmarked Reserves 149,715 -5,868 143,847 Note 30

16,717 -303 Usable Capital Receipts 16,414 -2,795 13,619 Note 31

49,852 3,111 Major Repairs Reserve 52,963 -16,159 36,804 HRA note 7c

243,711 24,433 268,144 -26,711 241,433

Further Detail



30. EARMARKED REVENUE RESERVES

Total Total

31 March Movement 31 March Movement 31 March

2020 in-year 2021 in-year Income Expenditure 2022

£000 £000 £000 £000 £000 £000 £000

9,714 -216 A164 Jocks Lodge Reserve 9,498 -1,315 0 -1,315 8,183

14,297 -7,902 Adult Services Reserve 6,395 -1,223 5,172 -6,395 5,172

2,188 166 Bridlington Schools PFI Reserve 2,354 -124 0 -124 2,230

5,131 12,674 Business Rates Reserve 17,805 -8,786 8,612 -17,397 9,019

343 -34 Culture & Customer Service Development & Renewal 309 498 498 0 807

12 1 Calibration Test Centre Reserve 13 29 29 0 42

14,602 8,229 Capital Investment Fund 22,831 4,012 5,126 -1,114 26,843

2,707 -154 Children's Services Reserve 2,553 1,695 3,445 -1,750 4,248

668 Council Tax Reserve 668 -668 0 -668 0

0 0 COVID-19 Collection Risk Reserve 0 2,596 2,596 0 2,596

3,829 0 Debt Management Reserve 3,829 0 0 0 3,829

370 -50 Development Control Reserve 320 170 170 0 490

1,000 Digital and Agile Investment Reserve 1,000 1,002 1,500 -498 2,002

34,784 -18,184 Economic Development & Bridlington Regeneration Reserve 16,600 219 1,764 -1,545 16,819

13,442 -2,237 Efficiency Fund 11,205 -2,880 256 -3,136 8,325

226 0 Election Reserve 226 374 374 0 600

97 17 Emergency Planning Reserve 114 0 0 0 114

101 7 Employment, Education & Skills 108 41 41 0 149

105 -89 Extended Schools Reserve 16 6 6 0 22

2,147 -15 Financial Systems Development and Replacement Reserve 2,132 -171 0 -171 1,961

3,117 3,065 Highways & Flooding Reserve 6,182 -1,387 0 -1,387 4,795

15 351 Home to School Transport Reserve 366 -245 0 -245 121

7,909 216 ICT Replacement & Investment Fund 8,125 -138 2,943 -3,081 7,987

6,189 855 Individual Schools Budget * 7,044 -5,397 5 -5,402 1,647

365 -193 Procurement and Supplies Reserve 172 0 0 0 172

2,873 1,385 Property Services Reserve 4,258 -845 325 -1,169 3,413

2,048 703 Public Health Reserve 2,751 7,125 7,172 -48 9,876

240 80 Refurbishment Reserve 320 80 80 0 400

28 0 Regional Growth Fund 28 0 0 0 28

4,598 -325 Revenue Grant and Contributions Unapplied Reserves 4,273 425 2,028 -1,603 4,698

254 0 Safety Camera Reserve 254 0 0 0 254

608 -139 School Improvement Reserve 469 -52 0 -52 417

9,226 -370 Self Insurance Reserve 8,856 127 127 0 8,983

1,195 -53 Service Development and Renewals Reserve 1,142 -217 800 -1,017 925

4,996 527 Vehicle Renewals Reserve 5,523 -880 0 -880 4,643

2,693 -1,159 Waste Management Reserve 1,534 -19 0 -19 1,515

340 102 Yorhub Reserve 442 80 80 0 522

150,789 -1,074 149,715 -5,868 43,147 -49,015 143,847

* Individual Schools Budget consists of:

12,766 4,749 Unspent schools' budget 17,515 -373 17,142

-3,258 85 Overspent schools' balances -3,173 -1,854 -5,027

-3,319 -3,980 Centrally managed services -7,299 -3,169 -10,468

6,189 854 7,043 -5,396 1,647



A164 Jocks Lodge Reserve - this reserve has been set up for the Council’s contribution to the A164 and

Jocks Lodge Junction Improvement Scheme. The Department for Transport will contribute over £40m to the

scheme.

Adult Services Reserve - this reserve has been created to assist the management of anticipated future

pressures resulting from the increasing cost and demand for adult social care.

Bridlington Schools PFI Reserve - the Bridlington PFI scheme is a 25 year contract due to finish in 2028. As

part of the scheme, unitary charge payments are paid to the PFI provider, offset by government grant and

contributions from schools.

Business Rates Reserve - this reserve is for managing the risk of fluctuations in the business rates yield and

includes compensation resources received from the Government to manage local tax losses for 2021-22.

Culture & Customer Services Development & Renewals Reserve - this reserve is used to fund service

development works such as site refurbishments and is also used to manage unplanned one-off pressures such as

income risk within Culture and Customer Services.

Calibration Test Centre Reserve - this reserve is used to manage any surplus or deficit made by the

Calibration Test Centre, which operates as a partnership between the four Humber Authorities, with East Riding

as the host partner. The CTC provides metrology and calibration services in the area. The partners plan to

build-up a sufficient balance to allow for renewal of specialist equipment should the need arise.

Capital Investment Fund - this reserve holds budgeted revenue funding of the capital programme which has

not yet been applied to schemes, either because the scheme spend has been reprofiled into later years or to

allow greater flexibility in funding future service investment.

Children’s Services Reserve - this reserve has been earmarked to fund areas of improvement following

service inspections, and to ensure that child protection services are sound. The reserve is also used to set aside

temporary funding for the troubled families programme approved by Cabinet and other temporary funding set

aside for Children’s Service’s budgets in future years.

Council Tax Reserve - this reserve is for managing the risk of fluctuations in the Council Tax yield and includes

compensation resources received from the Government to manage local tax losses for 2021-22.

COVID-19 Collection Risk Reserve - this reserve is to help manage the risk of unsupported council tax and

business rate income losses in 2021-22 and beyond. A long economic downturn could result in a prolonged

suppression of funding for council services from council tax and retained business rates, beyond the levels

assumed in the financial plan.

Debt Management Reserve - this reserve includes amounts set aside to cover unforeseen exceptional debt

write offs that were previously covered by a subjective bad debt provision and may not be provided for when

debts are objectively impaired. The benefit of such a reserve, should it be called upon, would be to prevent

significant variations between years. The reserve is also available to manage potential fluctuations in housing

benefit subsidy entitlement, debt management costs and fluctuations in interest receipts.

Development Control Reserve - this reserve is earmarked to fund future service developments, including

backscanning.

Digital and Agile Investment Reserve - this reserve is being used to fund schemes, including ICT and

property related, that have been subject to a robust business case and will change the way our teams work and

our services are delivered. In order to achieve the Council’s Digital and Agile ambitions, upfront investment is

required, though ultimately this investment should result in longer-term efficiencies which will be considered

through the financial planning process.

Economic Development & Bridlington Regeneration Reserve - the purpose of the reserve is to provide

match funding for regeneration projects and take advantage of economic development and regeneration

opportunities across the East Riding area including funding for approved capital projects for the regeneration of

Bridlington in accordance with the Area Action Plan.

Efficiency Fund - this reserve has been created from revenue budget underspends. It is used to mitigate the

impact of the pressures on the General Fund revenue budget, to provide funding for projects that are expected

to improve services and generate efficiency savings, and to support other one-off costs arising from savings

initiatives, such as redundancy costs.

Election Reserve - elections of councillors within the East Riding of Yorkshire Council and all the town and

parish councils within its area take place every four years. The costs of these elections are borne by the Council

although those costs that relate to town and parish councils are subsequently recharged to them. In order to

avoid a significant budget pressure every fourth year, it has been the election department’s practice to make

contributions to the Election Reserve when appropriate, which will then be used to cover these costs. In light



of legislative changes this reserve may also be required to cover any costs arising from additional elections or

local referendums.

Emergency Planning Reserve - this reserve holds planned savings made by Humber Emergency Planning

Service (HEPS) as a contingency for the HEPS function, as agreed by the Unitary Finance Officers for emergency

planning. HEPS is a joint arrangement between the four local authorities in the Humber region.

Employment, Education & Skills Reserve - this reserve contains the balance of specific funding which is for

use on the Employment, Education & Skills Service. The reserve is, in part, held to manage resources that are

received on an academic year basis but spent within financial years.

Extended Schools Reserve - this reserve holds balances ring-fenced to schools, relating to the support

services they are required to provide to the community under the Every Child Matters Agenda.

Financial Systems Development and Replacement Reserve - this reserve is to fund Finance service

developments including, the integration of the ledger with other systems, Procure to Pay, systems

implementation, enhancement, upgrades and other associated costs. The financial system is integral to the

financial standing of the Council and the effective stewardship of public funds.

Highways Maintenance and Flood Resilience Reserve - this reserve is used to manage the impact of

pressures on the highways budget, mainly to help address damage caused by a severe weather event or other

circumstances leading to significant disruption of the highway network such as flooding. The reserve is called

upon where the Council has incurred additional costs but not at a level to trigger emergency financial assistance

from Central Government. The creation and retention of a highway and flood reserve is in line with government

guidance advising that Councils should retain a contingency to cover such events.

Home to School Transport Reserve - the home to school transport budget is significantly affected each year

by the fluctuating number of school days in each financial year, which is dependent on the timing of the Easter

holidays. This reserve was created to reduce the impact of these fluctuations by allowing transfers to and from

the reserve, according to the actual number of school days in a financial year.

ICT Replacement and Investment Fund - this reserve has been established to ensure that the ICT

infrastructure is sustainable and will continue to meet the increased demands of the Council to deliver front line

services.

Individual Schools Budget Reserve - this reserve represents balances held by schools under delegated

schemes, committed to be spent on the education service. The reserve also includes any balance on those

centrally managed school budgets that are funded by the Dedicated Schools Grant.

Procurement and Supplies Reserve - this reserve was created to fund ongoing replacement of systems and

can also be used to offset against future downturns in trading, particularly related to academisation and other

service developments.

Property Services Reserve - savings are set-aside in this reserve to undertake specific major planned

maintenance schemes and for contributions to the replacement of buildings where significant investment is

planned as part of the capital programme. This enables the avoidance of future maintenance burdens, achievement

of value for money through the use of major contracts, and improvement in the condition and suitability of

Authority assets extending their potential life.

Public Health Reserve - the unused ring-fenced Public Health grant has been transferred to the Public Health

reserve to be used to manage and cushion the effect of Public Health pressures and commissioning changes in

future years.

Refurbishment Reserve - a proportion of rent income is set-aside for future maintenance of pitches and sites.

Regional Growth Fund - the reserve is earmarked to fund management costs relating to the Green Port

Growth, Regional Growth Fund grant.

Revenue Grants and Contributions Unapplied Reserve - this reserve is for grants and contributions

received with no condition attached as to their repayment, e.g. no condition to repay to the providing body if

not spent by a certain date, but whereas restriction has been placed upon the future use of the grant, either by

the awarding body or through an internal decision. The grants and contributions in this reserve will be

transferred to the Comprehensive Income and Expenditure Statement to match them to relevant expenditure

when it occurs in future financial years.

Safer Roads Humber Reserve - Safer Roads Humber is a joint arrangement between the four local authorities

in the Humber region, Humberside Police and Humberside Fire and Rescue Service. It is responsible for the

management and operation of safety cameras and speed awareness courses. The balance on the reserve

represents the Council’s share of the amount set-aside for the partnership being dissolved.



School Improvement Reserve - the reserve is used to support schools that are currently judged by Ofsted

to be satisfactory or require improvement, to attain a good or better Ofsted outcome within 3 years.

Self-Insurance Reserve - the Council self-funds a proportion of liability, property and motor claims. This

includes insurances delegated to schools.

Service Development and Renewals Reserve - this reserve is used to fund service development works and

unplanned pressures, including site refurbishment and plant and equipment costs within the Communities and

Environment Directorate.

Vehicle Renewals Reserve - this reserve is required to maintain the replacement and renewal of vehicles

which are critical to the delivery of the Council’s services and supports the vehicle maintenance unit’s budget

and enables them to stabilise the charges made to service users for the life of the vehicle.

Waste Management Reserve - this reserve is earmarked to address pressures on the waste management

budget, which is volatile and subject to external forces. Changes in the policy of accepting recyclable waste has

resulted in lower income from recyclates.

Yorhub Reserve - this reserve has been set up to hold the Council’s element of the YorHub partnership

balance. It is committed to fund set up costs of future frameworks, involving various procurement exercises and

framework initiatives on behalf of the partner authorities, including the re-procurement of the YORBuild and

YORCivils framework and the YORHub major contracts framework.



31. USABLE CAPITAL RECEIPTS

The Usable Capital Receipts Reserve holds the proceeds from the disposal of assets which are restricted by

statute from being used for anything other than to fund new capital expenditure or to be set aside to finance

historical capital expenditure. The balance on this reserve represents resources that have yet to be applied for

these purposes at the year end.

32. UNUSABLE RESERVES

Unusable reserves are those that the Council 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 statutory

adjustments required to reconcile balances to the amounts chargeable to council tax for the year, in order to

comply with legislation, which are shown in the Movement in Reserves Statement line ‘Adjustments between

accounting basis and funding basis under regulations’. The purpose of each reserve is explained in the individual

notes.



33. REVALUATION RESERVE

The Revaluation Reserve records increases in the valuation of any property, plant or equipment asset above its

historical cost since 1 April 2007, the date the Reserve was created. Accumulated gains arising before that date

are consolidated into the Capital Adjustment Account. The total balance on the Revaluation Reserve is the sum

of individual balances for each asset. Any subsequent reductions in the value of assets with a Revaluation Reserve

balance due to either impairment or revaluation losses, is reversed out of this account, and with any further

reduction in value below historical cost charged to the Comprehensive Income & Expenditure Statement.

Individual asset values in the Reserve are written out to the Capital Adjustment Account when the asset is sold

or scrapped.

34. COLLECTION FUND ADJUSTMENT ACCOUNT

The Collection Fund Adjustment account is specifically used to reconcile the differences arising from the

recognition of council tax and non-domestic rates income in the Comprehensive Income and Expenditure

Statement to those amounts required to be charged by statute to the General Fund. For example, the credit

balance on the Account shows that more tax has been collected on behalf of the authority and the precepting

bodies (and central government in England for non-domestic rates income) than an authority is permitted to

transfer out of the Collection Fund by 31 March.



35. 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 Council 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 Council makes employer’s contributions to the

Pension Fund, or eventually pays any pensions for which it is directly responsible. The debit balance on the

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

resources the Council has set aside to meet them. The statutory arrangements will ensure that funding will have

been set aside by the time the benefits fall to be paid.



36. 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 amortisation are charged to the

Comprehensive Income and Expenditure Statement (with reconciling amounts 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

Council as finance for the costs of acquisition, construction and enhancement (the minimum revenue provision).

The Account contains gains recognised on donated assets that have yet to be consumed by the Council and 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 5 provides details of the source of all the transactions

posted to the Account, apart from those involving the Revaluation Reserve.



37. CONTINGENT LIABILITIES

A contingent liability is a potential liability which depends on the occurrence or non-occurrence of one more

uncertain future events. The Council has identified the following contingent liabilities as at 31 March 2022.

(a) Business rate appeals

The Local Government Finance Act 2012 introduced a business rates retention scheme that enabled local

authorities to retain a proportion of the business rates generated in their area. The new arrangements for the

business rates came into effect on 1 April 2013. The Council as a Billing Council acts as agents on behalf of

Humberside Fire and Rescue Services (1%), Central Government (50%) and ourselves (49%). Under this scheme

the Council will assume their share of the liability for refunding ratepayers who have successfully appealed against

the rateable value of their properties.

The Council has estimated the total provision for appeals in the Collection Fund to be £7.2m and this Council’s

share of these appeals at 49% is £3.5m. Appeals received by the valuation office on or after 1 April 2017 relating

to the 2010 valuation list cannot be backdated before that date. The valuation office will continue to alter rating

assessments if new information comes to light indicating that a valuation is inaccurate – this can only be backdated

to 1 April 2015. As a result, it is possible that any business property could have a change to its historical liability.

This may mean that a business may have an increased, backdated charge, or that the Council may have to refund

a reduced liability which has been backdated. The timing, amount and probability of these changes will always be

unknown.

(b) Municipal Mutual Insurance (MMI)

In addition to the amounts paid to date and the closing provision for outstanding claims, there is a potential that

further payments could be required under this scheme. Administrators have indicated that this could amount to

a significant proportion of claims paid and outstanding. The amount levied by the administrators to date

represents 25% of claims paid. Currently, the value, timing and likelihood of further payments cannot be

predicted with any certainty.

(c) Public Liability Claim

The Council has received a public liability claim and the Council’s insurers, at the time, have informed the Council

that they are applying a full reservation of rights. As a consequence, there is potential for the Council to have an

unknown liability in relation to the claim. Investigations are currently underway and there is a significant

uncertainty over the outcome and any potential Council liability, therefore the value, timing and likelihood cannot

be predicted with any certainty.

(d) Major Infrastructure Schemes

Discussions are ongoing with a number of contractors on major capital schemes where there are disputes

between the certified payments on the ledger and the payment being claimed by the contractor. These disputes

are constantly under discussion and as such the timing and the amounts are uncertain, and the settlement amounts

are also unknown.



The following notes 38 to 42 comply with International Accounting Standard IAS 32 and International Financial Reporting Standards IFRS 7, 9 and 13 concerning financial

instruments.

38. CARRYING AMOUNT OF CATEGORIES OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES

The financial assets and liabilities disclosed in the Balance Sheet are made up of the following categories of financial instrument.

Total Total Note Total Total

Carrying Fair Carrying Fair

Long term Current Value Value Long term Current Value Value

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

Category of Financial Instrument

17104 0 17104 17104 Investments at amortised cost 17,072 0 17,072 17,072

16 16 16 Equities designated FVTOCI 16 0 16 16

17120 0 17120 17120 Total Included in Long-Term Investments 17,088 0 17,088 17,088

1,416 0 1,416 1,447 Soft loans 1,255 0 1,255 1,282

124 0 124 124 Finance lease receivable 124 0 124 124

6894 0 6894 6894 Other assets at amortised cost 3,466 0 3,466 3,466

8,434 0 8,434 8,465 Total Included in Long-Term Debtors 4,845 0 4,845 4,872

0 95,170 95,170 95,170 Investments at amortised cost 0 120,163 120,163 120,163

0 33,530 33,530 33,530 Investments at FVTPL 0 41,161 41,161 41,161

0 396 396 396 Soft loans 0 303 303 303

0 13 13 13 Finance lease receiveables 0 12 12 12

0 67,984 67,984 67,984 Other assets at amortised cost* 0 79,787 79,787 79,787

0 197,093 197,093 197,093 Total Included in Current Assets 0 241,426 241,426 241,426

-336,402 -33,207 -369,609 -388,883 Financial liabilities at amortised cost Page 20 -324,922 -11,766 -336,688 -354,861

-336,402 -33,207 -369,609 -388,883 Total Borrowings -324,922 -11,766 -336,688 -354,861

0 -1,183 -1,183 -1,183 PFI and Finance Lease Liabilities 0 -1,312 -1,312 -1,312

0 -24,031 -24,031 -24,031 Financial liabilities carried at contract amount 0 -44,041 -44,041 -44,401

0 -25,214 -25,214 -25,214 Total included in Current Liabilities 0 -45,353 -45,353 -45,713

-9,856 0 -9,856 -9,286 PFI and Finance Lease Liabilities -8,540 0 -8,540 -7,784

-9,856 0 -9,856 -9,286 Total included in Deferred Liabilites -8,540 0 -8,540 -7,784

-743 0 -743 -743 Financial liabilities carried at contract amounts -136 0 -136 -136

-743 0 -743 -743 Total included in Long Term Liabilities -136 0 -136 -136

-321,447 104,381 -217,066 -235,739 Total Financial Instruments -311,665 184,307 -127,358 -145,108

1,076,923 Non-financial Instrument Assets and Liabilities 1,238,954

859,857 Net Assets less Total Liabilities Page 20 1,111,596

*comparative balance amended due to presentation error in 2020-21accounts

31 March 2021 31 March 2022



Fair Value

Financial liabilities and financial assets taking the form of a basic lending arrangement are carried on the Balance

Sheet at amortised cost. Their fair value can be assessed by calculating the present value of cash flows that will

take place over the remaining terms of the instruments. Disclosure of fair value is not required where the

carrying amount is thought to be a reasonable approximation of fair value, such as when the interest rate remains

the same for the life of the instrument.

The carrying amount for Council House Mortgages is used as a materially accurate estimate of fair value. The

interest rate of the mortgages/loans is recalculated every six months in accordance with the Housing Act 1985

S438 Schedule 16. Similarly, prior to 9 January 2017 the loan rate for car loans to employees was reviewed

annually in line with the PWLB 5-year annuity rate on 1 April 2016 and presently, the fair value and carrying value

are not materially different. Car loans from 9 January 2017 were issued at a below market APR of Bank Rate +

1% qualifying as soft loans. However, as they are below the £30,000 de-minimis level, these are held at par.

Financial Assets Measured At Fair Value

Recurring fair value Input level in fair Valuation technique used As at As at

measurements value hierarchy to measure fair value 31 March 2021 31 March 2022

£000 £000

Investments in equity instruments

designated at fair value through other

comprehensive income Level 3 At cost, method described below 16 16

Investments in LVNAV money market

funds classified as fair value through

profit and loss Level 1

Unadjusted quoted prices in active

markets for identical financial

instruments 33,530 44,161

Total 33,546 44,177

Equity instruments that do not have a quoted market price

The Council has two investments in equity instruments where cost has been used as the best estimate of fair

value. These have been classified as equity instruments designated to fair value through other comprehensive

income, but as they are held at cost there are no gains or losses to be recognised:

• An investment of 1,693,380 ordinary shares issued, valued at £16,933.80 representing a 39% shareholding in

Correct Compliance Ltd a private limited company wholly owned by the four Humber Unitary Authorities.

The value of the Authorities fully paid up shares at 31 March 2022 is £16,145.40. The Council was granted

1,792,522 deferred shares (47% shareholding) recognised at nil value. The fair value of the shares cannot be

determined as they do not have a quoted market price in an active market; therefore, the ordinary shares

are carried at cost as a proxy for fair value. The company was set up in 1999 to protect the interests of the

Authorities when disposing of the Humberside International Airport Ltd. This was achieved through a

999 year head lease that required the ownership of the airport property and operational land to revert back

to the Authorities free of charge within the first 10 years if it ceased to be used and promoted as a civil

airport, and at market value within 10 to 50 years from the date of sale. The company has no trading function,

and no realisable value. The deferred shares are therefore recognised at nil value and the ordinary shares are

carried at cost which is deemed to be the best estimate of their fair value. The Council has no intention of

disposing of the shares in the near future.

• An investment of 1 ordinary share, representing a 100% shareholding in Nite Direct Limited, a private limited

company, is carried at a nominal value of £1. The company has a year-end date of 30 June. The audited

accounts as at 30 June 2021 showed a profit of £0.027m and net liabilities of £0.003m. Management accounts

at 31 March 2022 are currently showing a loss of £0.013m and net assets of -£0.016m. It is expected that

the company will break even and net assets will be nil at 30 June 2022. Therefore, the fair value of the shares

are deemed to be £1. The Council has no intention of disposing of the shares in the near future.

Transfers Between Levels Of The Fair Value Hierarchy

There were no transfers between input levels during the year.

Changes in Valuation Technique

There were no changes in valuation technique during the year.



Fair Values of Financial Assets and Liabilities Not Measured at Fair Value

The fair value of soft loans was determined by calculating the present value of all future cash receipts for each

loan using the prevailing market rate of interest for a similar instrument in an organisation with a similar credit

rating. Where no such comparison existed, a rate based on the council’s borrowing cost plus an allowance for

the risk that the loan will not be repaid, was used. The interest rate estimates used range from 1.1% to 6.88%.

The difference between the fair value and carrying amount represents the interest foregone from issuing the

loans at below the market rate of interest.

The fair value of Public Works Loan Board (PWLB) loans of £354.861m measures the economic effect of the

terms agreed with the PWLB compared with estimates of the terms that would be offered for market

transactions undertaken at the Balance Sheet date. The difference between the carrying amount and the fair value

measure the additional interest that the authority will pay over the remaining terms of the loans under the

agreements with the PWLB, against what would be paid if the loans were at prevailing market rates ranging

between 1.94% and 2.68%. The range of interest rates at 31 March 2022 for PWLB loans was between 1.29%

and 9.25%.

However, the authority has a continuing ability to borrow at concessionary rates from the PWLB rather than

from the markets. A supplementary measure of the additional interest that the authority will pay as a result of

its PWLB commitments for fixed rate loans is to compare the terms of these loans with the new borrowing rates

available from the PWLB. If a value is calculated on this basis, the carrying amount of £336.688m would be valued

at £348.419m. But, if the authority were to seek to realise the projected gain by repaying the loans to the PWLB,

the PWLB would raise a penalty charge for early redemption in addition to charging a premium for the additional

interest that will not now be paid. The exit price for the PWLB loans including the penalty charge would be

£388.983m.

The fair value of the Council’s PFI scheme of £9.792m measures the economic effect of the terms agreed with

the operator compared with estimates of the terms that would be offered for market transactions undertaken

at the Balance Sheet date. The difference between the carrying amount and the fair value measure the reduced

interest that the council will pay over the remaining terms of the PFI scheme under the agreement with the

operator, against what would be paid if an equivalent loan was taken out at the prevailing market rate on the

balance sheet date.



39. MOVEMENTS IN INVESTMENTS AND BORROWINGS

There has been no reclassification or derecognition of financial assets during the year.

40. DEFAULTS AND BREACHES

There have been no defaults of loans payable as at 31 March 2022.

41. COLLATERAL

(a) Collateral pledged

The Council has not pledged any financial assets as collateral for liabilities or contingent liabilities in 2021/22 as

this is not permitted under Section 13 of the Local Government Act 2003.

(b) Collateral held

Where the Council is permitted to sell or re-pledge collateral in the absence of default by the owner of the

collateral, the Code requires its fair value to be disclosed. At 31 March this was £16.468m (2020/21 £14.511m),

including £10.242m for Right-to-Buy discounts and £2.248m for housing grants which may or may not be

repayable depending on certain time-expiring conditions. The figures exclude collateral held for council tax and

non-domestic rates as required by the Code.

The Council holds collateral by way of security on property for Right-to-Buy discounts, Social Services Residential

Charges, legal charges for grants and loans, mortgages held by the Council, and general credit debts. The Council

chooses not to sell or re-pledge the collateral it holds on the basis of the vulnerability of many of the parties

concerned, the time-expiry of the discounts, loans and grants, and the considered opinion that the categories are

thought to be of such little commercial value that it is unlikely that they would be an attractive proposition for a

third party.

(c) Collateral obtained

The Council has not taken possession of any collateral during this accounting period.



42. FINANCIAL INSTRUMENT GAINS/LOSSES

The gains and losses recognised in the Comprehensive Income and Expenditure Statement in relation to financial

instruments are made up as follows:



43. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

The Council is a local authority as defined by the Local Government Act 1972, and primarily provides statutory

services to its population on a not-for-profit basis. As such, few financial instruments are used by way of

commercial business. However, the funding mechanism means that, during the year, the Council may hold

substantial assets and liabilities. The Council uses financial instruments to manage the risks arising from holding

assets and liabilities; it does not undertake financial instruments for trading or speculative purposes.

Instruments commonly used to hedge financial and treasury type risks include derivative securities, such as an

option, future or swap, of which the criteria and value are determined by those of an underlying asset. The

Council has not used any derivative financial instruments.

The Council has adopted the CIPFA Code of Practice for Treasury Management in Public Services. It maintains

and operates a Treasury Management Policy comprising an overview of the principles and practices to which the

activity will comply. Alongside this Policy, the Department for Communities and Local Government has issued

guidance under section 15(1) (a) of the Local Government Act 2003, to which local authorities must have regard.

Annually, the Council approves a Treasury Management Strategy for the forthcoming year. Taken together,

these documents form the structure for managing risk.

The main financial risks arising from the Council’s activities are credit risk, liquidity risk and interest rate risk.

The way these risks are managed is summarised below. Other risks include insurance risk, price risk and foreign

exchange risk, although the Council has limited exposure to those instruments.

(a) Credit risk

Credit risk is the probability that other parties might fail to pay amounts due to the Council. Appropriate credit

limits have been established by the Council for individual counterparties for treasury management purposes. As

a statutory service provider, the Council is not able to apply normal commercial principles to credit risk for all

its counterparties. The Council’s Treasury Management Policy specifies the following framework for credit limits:



The aggregate value of loans will not exceed £15 million at any one time. There was one such investment: a

£0.071m loan to Nite Direct Marketing Ltd. at 31 March 2022 (£0.103m at 31 March 2021).

The aggregate value of non-specified investments will not exceed £30 million at any one time. There were 4

such investments of between £2 million and £5 million, to different Local Authorities with durations over a year,

totalling £17 million in aggregate and maturing between January 2023 and September 2024 (£19 million at 31

March 2021).

The above table shows the maximum credit risk associated with an individual counterparty, rather than separate

investments. Investments with the Council’s own bank are permitted to exceed the institutional and portfolio

limits on an overnight basis when unexpected income is received.

Treasury credit risk has been managed dynamically during the year, responding to national and international

events in financial markets. Security of principal sums invested continues to be the prime objective. The Council

makes use of Low Volatility Net Asset Value (LVNAV) Money Market Funds which are instant access funds whose

objectives match those of the Council, being security of principal and diversification of investments.

If interest rates had been 0.5% higher throughout the year, based on the transactions undertaken in the year and

all other variables constant, the Surplus or Deficit on the Provision of Services in the Comprehensive Income

and Expenditure Statement would have benefited by £0.921m, comprising £0.921m additional interest income

on investments. There would be no additional interest charges as the borrowing portfolio is fixed, and no

additional borrowing has been taken in year. A 0.5% fall in interest rates would have resulted in a decrease to

interest rate receipts of £0.921m. There would be no material impact on the Balance Sheet and Other

Comprehensive Income and Expenditure since the carrying amount of the respective assets and liabilities is a

reasonable approximation of fair value.

Total credit risk associated with all investments, including accrued interest, is as follows:

Expected Credit Losses

The Council has assessed its short and long term investments at amortised cost, using average cumulative credit

loss rates published by the Moody’s credit rating agency for those with credit ratings. The total expected credit

loss calculated was below £10,000, therefore not material and no impairment allowances have been made.

All sundry debtors past due are assessed for expected credit loss and the level of impairment allowance has been

calculated with changes in loss allowances accounted for against Financing Investment Income and Expenditure

in the surplus or deficit on the provision of service. The approach taken is to individually assess those over

£10,000 and to do so collectively for the others to reflect the expectation that future cash flows might not take

place because the borrower could default on their obligations. Credit risk plays a crucial part in assessing losses.

Where risk has increased significantly since an instrument was initially recognised, losses are assessed on a lifetime

basis. Where risk has not increased significantly or remains low, losses are assessed on the basis of 12-month

expected losses. Debt over 6 years old are impaired at 100%.

Finance Lease receivables have been assessed and there was no evidence to suggest an impairment allowance is

required.



(b) Liquidity risk

Liquidity risk is the risk that the Council is not able to meet its financial obligations as they fall due or can do so

only at an excessive cost. The Council’s policy is to maintain sufficient funds in a liquid form at all times to ensure

that it can cover all fluctuations in cash flow and to meet its financial obligations. This is achieved by holding a

prudent level of assets in short-term wholesale funds together with undrawn, committed borrowing facilities.

Local authorities also have ready access to borrowing from the Public Works Loans Board. Refinancing risk is

managed by limiting the amount of borrowing that matures within any specified period.

The table below analyses the Balance Sheet by significant class of asset and liability into relevant maturity bands

based on the remaining period at the balance sheet date to the contractual maturity date. The figures are analysed

gross to better reflect the purpose of the disclosure, therefore there is no obvious link comparing net assets to

total equity unless the balance sheet figures are considered in the same manner.



(c) Interest Rate risk

The Council is exposed to movements in interest rates reflecting the mismatch between the dates on which

interest receivable on assets and interest payable on liabilities are next reset to market rates or, if earlier, the

dates on which the instruments mature. The Council manages this exposure by borrowing mainly at fixed rates

and on a principal repayment basis for longer dated liabilities, thus maintaining a stable charge to Financing and

Investment Income and Expenditure in the Comprehensive Income and Expenditure Statement.

The table below analyses the Balance Sheet by asset and liability class and summarises interest rate sensitivity

exposure as at 31 March 2022. Items are allocated to time bands by reference to the earlier of the next interest

rate repricing date and the maturity date.

Not more More No Note

than 3 3 - 12 1 -5 than 5 specific

At 31 March 2022 months months years years maturity Total

£000 £000 £000 £000 £000 £000

Assets

Property, plant & equipment 0 0 0 0 1,829,681 1,829,681

Cash & cash equivalents 54,403 0 0 0 5,909 60,312 44

Other assets 75,056 53,505 14,467 348 91,008 234,384

Total Assets 129,459 53,505 14,467 348 1,926,598 2,124,377 Page 20

Liabilities

Borrowing 0 11,766 73,176 251,746 0 336,688 38

Other liabilities 1,072 3,669 0 8,551 662,801 676,093

Usable reserves 0 47,602 0 0 193,831 241,433 28

Unusable reserves 0 0 0 -484,831 1,354,994 870,163 32

Total Liabilities 1,072 63,037 73,176 -224,534 2,211,626 2,124,377 Page 20

Interest Rate Surplus/(Gap) 128,387 -9,532 -58,709 224,882 -285,028 0

NOTES TO THE CASH FLOW STATEMENT


44. CASH AND CASH EQUIVALENTS

The balance of cash and cash equivalents is made up of the following elements:

The cash at bank for 2021-22 excludes balances which relate to an external partnership. The balance was adjusted for

2021-22 to take account of this.

45. ADJUSTMENT TO NET SURPLUS OR DEFICIT ON THE PROVISION OF

SERVICES FOR NON-CASH MOVEMENTS

2020/21 2021/22

£000 Note £000

-45,983 Depreciation 5 -49,452

-9,085 Impairment and downwards valuation 5 9,563

-838 Amortisation 5 -897

-45,638 Increase (-) / decrease in creditors -23,315

72,707 Increase / decrease (-) in debtors -29,849

529 Increase / decrease (-) in inventories -162

-32,034 Pension liability 5 -67,723

-17,649 Carrying amount of non-current assets (and those held for sale) sold 5 -9,552

1,324 Other non-cash items charged to the Surplus or Deficit 376

-76,667 -171,011Total non-cash movements in surplus or deficit on the provision of

services

46. ITEMS INCLUDED IN OPERATING ACTIVITIES AND ADJUSTMENT FOR

ITEMS INCLUDED IN THE NET SURPLUS OR DEFICIT ON THE PROVISION

OF SERVICES THAT ARE INVESTING AND FINANCING ACTIVITIES

2020/21 2021/22

£000 £000

0 Net Adjustment from the sale of short and long term investments 0

18,573 Proceeds from non current assets sold 11,360

44,086 Capital grants credited to surplus or deficit on the provision of services 41,203

62,659 Investing and Financing Activities included in net surplus or deficit on 52,563

the provision of services

-1,682 Interest received -763

11,572 Interest paid 11,497

9,890 Items included in operating activities 10,734

£000 £000

5,221 School bank balances 5,847

24 Petty cash imprest accounts 21

41 Cash floats 41

56,532 Cash equivalents 59,132

-2,561 Cash at bank -4,729

59,257 Cash and cash equivalents Page 20 60,312

2020/21 2021/22

NOTES TO THE CASH FLOW STATEMENT


47. RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES

2021/22

1st April

2021

Financing

Cash Flows Acquisition Other

31 March

2022

£000 £000 £000 £000 £000

Long Term Borrowings -336,402 11,480 0 0 -324,922

Short Term Borrowings -33,207 21,727 0 -286 -11,766

Lease Liabilities -64 5 0 0 -59

On balance Sheet PFI Liabilities -10,963 1,171 0 0 -9,792

Total Liabilities from financing activities -380,636 34,383 0 -286 -346,539

Non-cash Changes

2020/21

1st April

2020

Financing

Cash Flows Acquisition Other

31 March

2021

£000 £000 £000 £000 £000

Long Term Borrowings -369,298 32,896 0 0 -336,402

Short Term Borrowings -12,772 -20,123 0 -312 -33,207

Lease Liabilities -70 6 0 0 -64

On balance Sheet PFI Liabilities -11,745 782 0 0 -10,963

Total Liabilities from financing activities -393,885 13,561 0 -312 -380,636

Non-cash Changes

OTHER NOTES TO THE FINANCIAL STATEMENTS


48. RELATED PARTY TRANSACTIONS

The Council is required to disclose material transactions with related parties – bodies or individuals that have

the potential to control or influence the Council or to 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.

a) Central Government

UK Central government has significant influence over the general operations of the Council – it is responsible

for providing the statutory framework within which the Council operates, provides the majority of its funding in

the form of grants and prescribes the terms of many of the transactions that the Council has with other parties

(e.g. council tax bills, housing benefits). Grants received from government departments are set out in the analysis

Notes 7c, 8 and 26. Transactions outstanding at 31 March 2022 are shown in Note 24.

b) Members

Members of the Council have direct control over the Council’s financial and operating policies. Information on

Members’ remuneration is published on the Council’s website.

Many of the Council’s Councillors are Town and Parish Councillors and sit on Internal Drainage Boards.

However the Council has satisfied itself that all the transactions entered into have been concluded in accordance

with its procedures for preventing undue influence. Former Councillor Birmingham works for family owned care

homes which provide residential services to the Council. The contract was entered into in full compliance with

the Council’s Standing Orders and payments totalled £2.464m in 2021-22 (£2.164m for 2020-21). The Members’

Register of Interest is on the Council’s website (address shown on page 1).

c) Officers

Officers that might be in a position to influence significantly the policies of the Council are considered to be

members of the Corporate Management Team as disclosed in Note 12b. There were no declarable transactions

between any of these officers and the Council on a personal basis.

The interim Executive Director of Adult Social Services is contracted through an agency. Total payments of

£88,000 have been made to Gatenby Sanderson Limited for the period 25 October 2021 to 31 March 2022.

d) Pension Fund

The Director of Finance is Section 151 Officer for East Riding of Yorkshire Council and the East Riding Pension

Fund, as the Council is the administering authority for the Fund. Ten Members of the Council sit on the Pensions

Committee, which is responsible for the administration of the Pension Fund. Under legislation introduced in

2003-04, Councillors were entitled to join the Pension Scheme. The LGPS (Transitional Provisions, Savings and

Amendment) Regulations 2014 removed this entitlement for Councillors from the later of 1 April 2014 or the

end of their current term in office (or to age 75 if earlier). None of the members of the Pensions Committee

made contributions to the Fund during the financial year, because all contributions ceased after re-election in

May 2015. Councillors Rudd, Horton and Whittle were members of the Local Government Scheme during 2021-

22. As the benefits received by pensioners from the Fund are determined by statute, the officers or councillors

are unable to gain any advantage to the benefits they receive as pensioners from being advisors to the Fund or

members of the Committee.

As administering authority, the summarised accounts of the Pension Fund are included in these accounts from

page 123 including a list of admitted bodies many of which are subject to the same common control as the

Council by central government.

The key management personnel of the Pension Fund for 2021-22 were the Executive Director of Corporate

Resources and the Director of Finance. Details regarding the remuneration of the Executive Director of

Corporate Resources and the Director of Finance are included in Note 12b.

e) Assisted Organisations

A review has been undertaken and no entities have been identified as assisted organisations.



f) Group relationships

The Council is the major shareholder in Correct Compliance Limited, a company formed between this Council,

Kingston Upon Hull City Council, North Lincolnshire Council and North East Lincolnshire Council on the

disposal of their interest in Humberside Airport. The Chief Executive is a Director and the Secretary to this

company, which is an associate of the Council but is dormant and there were no transactions between the

Company and the Council during 2021-22 (2020-21 £nil).

The Council also owns Nite Direct Limited a wholly owned subsidiary of the Council. The directors of the

company are the Chief Executive, the Executive Director of Planning and Economic Regeneration, the Director

of Legal & Democratic Services and Councillor Evison (who replaced Councillor Aitken on 13 May 2021), During

the year 2021-22 the Council received £0.097m (2020-21 £0.054m) and paid out £0.180m (2020-21 £0.168m)

to the company. The Council granted a loan to the company of £0.300m, to be repaid over 10 years of which

£0.071m remains outstanding at the 31 March 2022.

Information in respect of material transactions with related parties, not disclosed elsewhere in this Statement of

Accounts, is presented below. For related parties the council considers amounts over £75k as material. Some

entities under this amount have been included as the transactions may be material to them.



Precepts

2021/22 and Other

Levies Payments Receipts Debtors Creditors

Levying & Precepting Bodies £000 £000 £000 £000 £000

Humberside Police & Crime Commissioner 28,532 1,358 267 8 2

Humberside Fire and Rescue Service 11,354 52 492 63 11

39,886

Town & Parish Councils 6,419 461 410 28 0

Internal Drainage Boards 1,667 4 2 1 0

North Eastern Inshore Fisheries

and Conservation Authority 289 40 131 74 2

Environment Agency -

Yorkshire & Severn Trent Region 206 327 10 2,602 2,808

Hull & Goole Port Health Authority 36 0 0 18 0

8,616

Payments Receipts Debtors Creditors

Other Organisations £000 £000 £000 £000

Anlaby Village Hall 2 0 0 0

Beverley Mutual Aid 12 0 0 0

Bishop Burton College 1,006 27 8 1

Bridlington U3A 5 1 1 0

Brough Manor Care Home 279 1 0 0

Civica 304 0 18 0

County Councils Network 22 0 0 0

Dunswell Academy 19 0 3 0

East Riding College - TEC Partnership 167 37 0 142

East Riding Voluntary Action Services (ERVAS) 275 1 0 20

East Yorkshire Community Transport 54 0 0 0

Friends of Old Goole 17 0 0 0

Glenfields Care Home 1,819 1 0 46

Goole High School Academy 114 60 8 0

Hessle Federation of Schools 323 15 46 0

Hull & East Yorkshire MIND - Heymind 208 28 4 0

Hull and East Yorkshire LEP 0 62 166 0

Hull University Teaching Hospitals NHS Trust 219 13 13 263

Humber Bridge Board 1 69 22 0

Humber Teaching NHS Foundation Trust 4,157 416 289 4,638

Local Government Association 101 0 0 0

Love Driffield and Wolds Food Bank 34 0 0 0

NHS East Riding of Yorkshire CCG 1,814 63,490 18,155 2,270

Pocklington School 10 27 6 0

Sirius Academy 118 12 13 0

Southern Holderness Resource Centre 80 1 0 0

Swanland Primary 136 126 6 0

SWAP 328 0 0 0

TCAT (the consortium academy trust) 325 909 253 0

The Green Team 27 0 0 0

The Old Vicarage Care Home Ltd 366 1 0 0

THE SMILE FOUNDATION 214 1 0 0

University of Hull 203 179 19 215

Yorkshire Water 30 132 147 2



49. DISCLOSURE OF DEPLOYMENT OF DEDICATED SCHOOLS GRANT

The Council's expenditure on schools is funded primarily by grant monies provided by the Department for

Education, the Dedicated Schools Grant (DSG). DSG is ringfenced and can only be applied to meet expenditure

properly included in the Schools Budget, as defined in the School and Early Years Finance (England) Regulations

2018. The Schools Budget includes elements for a range of educational services provided on a council-wide basis

and for the Individual Schools Budget (ISB), which is divided into a budget share for each maintained school.

Details of the use of DSG receivable for 2021-22 are as follows:

Due to overspends on the High Needs education budget, the actual carry forward reported on the Dedicated

Schools Grant note is a deficit of £10.468m. This relates purely to the balance of central expenditure (deficit of

£10.466m) less a shortfall in DSG of £0.002m. In June 2020, the Education and Skills Funding Agency changed the

operational guide for Schools Revenue Funding. As a consequence, a management plan must be produced for any

deficit value on the Dedicated Schools Grant. Previously a deficit recovery plan was required when deficits

exceeded 1% of the cash value of the overall Dedicated Schools Grant.

The deficit balance is subject to oversight by the Department for Education (DfE) through the submission of a

deficit recovery management plan by the Council which will include agreed measures to manage and clear the

deficit going forward

The ISB, as funded through DSG, underspent by of £2.228m in 2021-22 and has a cumulative carried forward

balance of £12.114m, which is reported separately under schools reserves.



50. DISCLOSURE OF INTERESTS IN SCHOOLS

All local authority maintained schools are considered to be entities controlled by the Council. Their income,

expenditure, assets (excepting some non-current assets), liabilities, reserves and cash flows are required to be

recognised in the Council’s single entity statements. The Council’s financial statements report the balances and

transactions for all maintained schools with the exception of non-current assets (land and buildings) owned by

Voluntary Aided, Voluntary Controlled and Foundation Schools. The Council’s accounting policies on accounting

for schools and the judgements made in applying the policy are on page 33. The Council completed an assessment

of all maintained schools to determine the arrangements in place and the accounting treatment required. The

categories of schools that were assessed are included in the table below:

The non-current assets of all Voluntary Aided and Controlled Schools and three of the Foundation Schools are

owned by religious bodies and are therefore not included on the Council’s balance sheet.

The table below shows the income and expenditure and the resulting surplus or deficit for each category of

school:

During 2021-22 no schools converted to academy status.



51. EVENTS AFTER THE REPORTING PERIOD

This note considers events that arise after the balance sheet date, which concerns conditions that did not exist

at that time and are of such materiality that their disclosure is required for the fair presentation of the final

statements. Events after the balance sheet date are reflected up to the date when the Statement of Accounts

was authorised by the Director of Finance as Section 151 Officer on 29 July 2022.

At the date of signing there has been no adjusting or non-adjusting events after the reporting period.



52. POOLED BUDGETS FOR HEALTH AND SOCIAL CARE

The Better Care Fund (BCF) is a programme spanning both the NHS and local government which seeks to join-

up health and care services, so that people can manage their own health and wellbeing and live independently in

their communities for as long as possible. This Council is a partner within the pooled budget hosted by the East

Riding of Yorkshire CCG (ERYCCG), which also includes the Vale of York CCG (VOYCCG).

The Section 75 arrangement allocates budgets across schemes including Community Services, Reablement and

Rehabilitation, Home and Residential Care, Avoidable Admissions and Social Care.

The performance of each of these schemes is monitored and reported to the Local Health & Wellbeing Board

and NHS England on a quarterly basis.

Details of the pooled income and expenditure are as follows:

2021/22 ERYCCG VoYCCG ERYC Total

£000 £000 £000 £000

Contributions to the Pooled Budget:

East Riding of Yorkshire Clinical Commissioning Group (ERYCCG) 15,261 0 7,622 22,883

Vale of York Clinical Commissioning Group (VoYCCG) 0 995 545 1,540

East Riding of Yorkshire Council (ERYC) 0 0 13,426 13,426

15,261 995 21,593 37,849

Spend from the Pooled Budget

2020/21 ERYCCG VoYCCG ERYC Total

£000 £000 £000 £000

Contributions to the Pooled Budget:

East Riding of Yorkshire Clinical Commissioning Group (ERYCCG) 14,474 0 7,248 21,722

Vale of York Clinical Commissioning Group (VoYCCG) 0 932 507 1,439

East Riding of Yorkshire Council (ERYC) 0 0 15,657 15,657

14,474 932 23,412 38,818

Spend from the Pooled Budget

HOUSING REVENUE ACCOUNT


HOUSING REVENUE ACCOUNT INCOME AND EXPENDITURE

STATEMENT

The HRA Income and Expenditure Statement shows the economic cost in the year of providing housing services

in accordance with generally accepted accounting practices, rather than the amount to be funded from rents and

government grants. Authorities charge rents to cover expenditure in accordance with the legislative framework;

this may be different from the accounting cost. The increase or decrease in the year, on the basis on which rents

are raised, is shown in the Movement on the Housing Revenue Account Statement.

2020/21 Note 2021/22

£000 £000

Expenditure

Supervision and management

7,497 General 7,055

2,945 Special 2,808

462 Rents, rates, taxes and other charges 598

10,281 Repairs and maintenance 11,305

170 Contribution to Supporting People - Transitional Protection 163

593 Increase in provision for bad / doubtful debts 610

-593 Revaluation loss on council dwellings 5c -6,312

1 Revaluation loss on non-dwellings 5c -61

8,948 Depreciation on council dwellings 5c 9,473

432 Depreciation on non-dwellings 5c 519

63 Debt management costs 77

30,799 Total Expenditure 26,235

Income

-47,402 Dwelling rents -48,431

-553 Non-dwelling rents -638

-350 Charges for services and facilities -279

-164 Contributions towards expenditure -164

-873 Contributions towards welfare warden service -806

-444 Photovoltaic cells income -450

-49,786 Total income -50,768

-18,987 Net Cost of HRA Services as included in the whole authority -24,533


Service share of Non Distributed Costs (NDC)

-12 Non-operational revaluation loss on Assets Held for Sale/Surplus 72

3 Non-operational depreciation on non-dwellings 3

-18,996 Net Expenditure of HRA Services -24,458

HRA share of the operating income and expenditure included in the whole

authority Comprehensive Income and Expenditure Statement

2,199 Gain on sale of HRA non current assets 4,892

-3,536 Usable capital receipts - sale proceeds 7b -7,023

208 Net interest on the net defined benefit liability (asset) 8 293

7,669 Interest payable on positive credit ceiling 7,814

-285 Interest receivable 6 -188

-8 Other Income (Right To Buy (RTB) Discounts repaid) 7b -42

-1,170 Capital grants and contributions relating to fixed assets 7a -1,643

-13,919 Surplus (-) / deficit for the Year on HRA services -20,355

NOTES TO THE HOUSING REVENUE ACCOUNT


MOVEMENT ON THE HOUSING REVENUE ACCOUNT STATEMENT

2020/21 Note 2021/22

£000 £000

4,408 Balance at 1 April brought forward 5,397

Movement in reserves during 2021/22

13,919 Surplus / deficit (-) on HRA Income and Expenditure Statement 20,355

Adjustments between accounting basis and funding basis under

-12,930 the legislative framework 2 -20,142

989 Net Increase / (Decrease) before Transfers to / from Reserves 213

0 Transfers to / (from) Earmarked Reserves 0

989 Increase / (decrease) in year on the HRA 213

5,397 Balance at 31 March carried forward 5,610

1. HOUSING REVENUE ACCOUNT RECONCILIATION

The increase in year on the Statutory HRA balance was £0.213m. This was £20.142m less than the HRA Income

and Expenditure Account surplus of £20.355m. This is explained as follows.

The HRA reflects a statutory obligation to maintain a revenue account for local authority housing provision in

accordance with Part 6 of the Local Government Housing Act 1989, which also sets out the framework for

ring-fencing the HRA, preventing subsidisation of rents from the General Fund income of the authority and vice

versa.

Information to be disclosed in the notes is prescribed in The Housing Revenue Account (Accounting Practices)

Directions 2016 as issued by the Department for Communities and Local Government in May 2016.

The HRA includes the credit and debit items, which are taken into account in determining the surplus or deficit

on the HRA for the year. The amounts included in the HRA differ from the amounts in respect of HRA services

included in the Comprehensive Income and Expenditure Statement for the Council as a whole, which includes

income and expenditure in accordance with the Accounting Code of Practice rather than statute and

non-statutory proper practices. For this reason, the HRA statement has two parts:

• HRA Income and Expenditure Statement – shows in more detail the income and expenditure on HRA

services included in the whole Council Comprehensive Income and Expenditure Statement; and

• Movement on the Housing Revenue Account Statement – shows how the HRA Income and Expenditure

Statement surplus or deficit for the year reconciles to the movement on the HRA Balance for the year.

The surplus or deficit on the Income and Expenditure Statement is a measure of the Council’s operating financial

performance for the year for HRA services. The surplus or deficit on the Statutory HRA indicates whether the

Council has added to or drawn on the brought forward balance on its statutory HRA Reserve during the year.

This in turn affects the amount of the balance upon the HRA that the Council can take into account when

determining its spending plans on HRA services for the following year. Note 3 summarises the movements on

the two separate sections of the account.



2. ADJUSTMENT BETWEEN ACCOUNTING BASIS AND FUNDING BASIS UNDER REGULATIONS

Housing Major Earmarked Usable Total

Revenue Repairs Revenue Capital Usable Unusable

2021/22 Note Account Reserve Reserves Receipts Reserves Reserves

£000 £000 £000 £000 £000 £000

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


Item 8 determination to reverse impairment losses -4,608 0 0 0 -4,608 4,608

Item 8 determination to reverse impairment losses (previous year adjustments) 10,909 0 0 0 10,909 -10,909

Non-current asset written out in gain or loss on disposal/sale of non-current assets -4,788 0 0 0 -4,788 4,788

Capital grant/contributions to finance fixed assets from in-year income 1,643 0 0 0 1,643 -1,643

Reverse depreciation to CAA -9,995 0 0 0 -9,995 9,995

Addition of items not debited or credited to the HRA Income and Expenditure Statement

Capital expenditure charged to HRA balance 7a 5,105 0 0 0 5,105 -5,105


Transfer of sale proceeds credited as part of disposal/sale of non-current assets 7b 7,023 0 0 -7,023 0 0


costs of non current asset disposals 7b -104 0 0 104 0 0

Other income (RTB Discounts) 7b 42 0 0 -42 0 0

Deferred capital receipts received (Mortgage repayments) 7b 0 0 0 0 0 0


Additional transfer to MRR for Depreciation 7c 9,995 -9,995 0 0 0 0

Use of the Major Repairs Reserve to finance new capital expenditure 7c 0 11,566 0 0 11,566 -11,566

Use of the Major Repairs Reserve to repay debt 7c 0 21,000 0 0 21,000 -21,000

Transfer to MRR - Debt Repayment 7c 4,086 -4,086 0 0 0 0

Transfer to MRR - New Build 7c 2,326 -2,326 0 0 0 0


Net charges made for retirement benefits in accordance with IAS 19 8 -2,281 0 0 0 -2,281 2,281

Employer's contributions payable to the East Riding Pension Fund 8 726 0 0 0 726 -726


Amount by which officer remuneration charged to the Comprehensive Income

and Expenditure Statement on an accruals basis is different from remuneration

chargable in the year in accordance with statutory requirement 63 0 0 0 63 -63

Total adjustments between accounting basis and funding basis under regulations 20,142 16,159 0 -6,961 29,340 -29,340

Transfer to or from earmarked reserves - voluntary 0

Net additional amount required to be credited to the HRA balance for the year 20,142 16,159 0 -6,961 29,340 -29,340



Housing Major Earmarked Usable Total

Revenue Repairs Revenue Capital Usable Unusable

2020/21 Note Account Reserve Reserves Receipts Reserves Reserves

£000 £000 £000 £000 £000 £000

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


Item 8 determination to reverse impairment losses -23,828 0 0 0 -23,828 23,828

Item 8 determination to reverse impairment losses (previous year adjustments) 24,432 0 0 0 24,432 -24,432

Non-current asset written out in gain or loss on disposal/sale of non-current assets -2,155 0 0 0 -2,155 2,155

Capital grant/contributions to finance fixed assets from in-year income 1,170 0 0 0 1,170 -1,170

Reverse depreciation to CAA -9,383 0 0 0 -9,383 9,383

Addition of items not debited or credited to the HRA Income and Expenditure Statement

Capital expenditure charged to HRA balance 7,605 0 0 0 7,605 -7,605


Transfer of sale proceeds credited as part of disposal/sale of non-current assets 3,536 0 0 -3,536 0 0


costs of non current asset disposals -44 0 0 44 0 0

Other income (RTB Discounts) 8 0 0 -8 0 0

Deferred capital receipts received (Mortgage repayments) 0 0 0 -1 -1 1


Additional transfer to MRR for Depreciation 9,383 -9,383 0 0 0 0

Use of the Major Repairs Reserve to finance new capital expenditure 0 9,383 0 0 9,383 -9,383

Transfer to MRR - Debt Repayment 2,293 -2,293 0 0 0 0

Transfer to MRR - New Build 818 -818 0 0 0 0


Net charges made for retirement benefits in accordance with IAS 19 -1,481 0 0 0 -1,481 1,481

Employer's contributions payable to the East Riding Pension Fund 714 0 0 0 714 -714


Amount by which officer remuneration charged to the Comprehensive Income

and Expenditure Statement on an accruals basis is different from remuneration

chargable in the year in accordance with statutory requirement -138 0 0 0 -138 138

Total adjustments between accounting basis and funding basis under regulations 12,930 -3,111 0 -3,501 6,318 -6,318

Transfer to or from earmarked reserves - voluntary 0 0 0 0 0 0

Net additional amount required to be credited to the HRA balance for the year 12,930 -3,111 0 -3,501 6,318 -6,318



3. SUMMARY OF 2021/22

Following abolition by the Government of HRA subsidy in 2011-12, the HRA now operates on a self-financing

basis, resourced from the rent it receives. This required the Council taking on additional debt of £208.082m, as

calculated by a Government formula. Adequate rent income is required as a first call to meet the cost of servicing

the debt, followed by maintaining the Decent Home Standard on all dwellings, with any remaining income, set

aside for future major investment in new/existing stock.

The HRA Income and Expenditure Statement showed a surplus on HRA services of £20.355m. After applying

the Movement on the HRA Statement, the net increase to the HRA was £0.213m, giving a balance on the account

to be carried forward of £5.610m.

The 2021-22 surplus of £0.213m was £0.059m underachieved against the £0.272m budgeted surplus.

In total all HRA reserves stand at £42.414m, which includes the general reserve and monies set aside for debt

repayment and investment in new stock and repairs.

4. RENT ACCOUNT

The specific provision for the possible non-collection of all rent related charges at 31 March is £2.923m, which

represents 70% of the total outstanding arrears. The calculation assesses the potential for future impairment

based on an analysis of arrears with and without arrangements with current and former tenants. These are then

further analysed on an age outstanding basis and provisions made on percentages, relating to the age of debt

outstanding. The provision has been increased in recent years to reflect the non-collection of rent due to the

reduction in rebates from the removal of the spare room subsidy as well as the introduction of Universal Credit

where claimants have a period without benefits at the start of their claim.

Rent Arrears

2020/21 2021/22

£000 £000

Arrears by tenant

2,081 Current tenants 3,174

832 Former tenants 1,016

2,913 Total arrears 4,190

Assistance towards payment of rent is available via Universal Credit or through Housing Benefit for those on low

incomes. In 2021-22 £18.814m (38%) of the £49.426m gross rent was funded via Housing Benefit rebates and

40.75% (49.23% in 2020-21) of the Council’s tenants receive some help with the cost of their rent via this method,

resulting in an average Housing Benefit caseload in 2021-22 of 4,636 (4,752 in 2020-21). The decrease in the

caseload is due to the phasing out of Housing Benefit, which is gradually being replaced with Universal Credit

(UC) (administered by the Department for Work and Pensions) which is paid direct to tenants and therefore

reporting of caseloads is no longer achievable.



5. HOUSING ASSETS

(a) Housing Stock

The Council was responsible for managing the following operational dwellings in 2021/22. Flats or maisonettes

sold under the Right to Buy Scheme are sold as long leasehold. This allows the purchaser and their successors

to live in it for a fixed time, usually 125 years. The block is still owned by the Council, which is responsible for

the upkeep of the building as a whole and for any communal areas or facilities. Leaseholders have to pay a

nominal ground rent of £10 per year and a reasonable share of the costs for works, services and management of

the block as incurred by the Council. The Council also has a number of Shared Ownership properties (where

tenants can purchase a proportion of equity in the property and pay rent on the remainder). The in-year

movements are categorised below:

2020/21

Shared

Houses Flats Ownership** Total

Operational Dwellings

11,285 As at 1 April 7,713 3,707 67 11,487

-35 Sales -87 -6 0 -93

221 Acquisitions 27 5 0 32

6 Newly built dwellings 0 22 0 22

0 Surplus to requirements -2 0 0 -2

10 Reclassification 3 -3 8 8

11,487 As at 31 March 7,654 3,725 75 11,454

Leasehold Dwellings

226 As at 1 April 0 226 226

1 Additions 0 6 6

-1 Removal* 0 -5 -5

226 As at 31 March 0 227 227

2021/22

*Five leasehold dwellings have been repurchased.

**This is the total number of properties in which the Council holds an equity stake - the retained proportion of

each property will vary from this. 8 shared ownership properties have been reclassified from assets under

construction.

(b) The Vacant Possession Value of Council Dwellings

In accordance with Government guidance, the basis of valuation for the Council’s housing stock in the balance

sheet is its existing use value for social housing (EUV-SH).

To arrive at EUV-SH, the vacant possession value of the dwellings is used as a base on the assumption that each

property is used as residential accommodation that will be occupied by a secure tenant. At 1 December 2021,

following revaluation, this value was £1,161.1m. This value is then adjusted by a regional adjustment factor, in

this case 41%, to arrive at the value for inclusion in the Balance Sheet. At 1 December 2021 this was £476.0m.

The difference between the vacant possession value and balance sheet value of dwellings shows the economic

cost of providing council housing at less than open market rents.

The Council’s housing stock is revalued annually at 1 December.



(c) Movement of Property, Plant & Equipment

Other Vehicles, plant,

Council land and furniture and Infra- Surplus Assets under

Dwellings buildings equipment structure assets construction Total

£000 £000 £000 £000 £000 £000 £000

Cost or Valuation

1 April 2021 476,752 4,382 162 2,340 175 7,310 491,121

Additions / Enhancement 15,362 125 0 883 0 10,593 26,963


(decreases) to RR -106 -54 0 0 95 0 -65


(decreases) to SDPS -4,536 0 0 0 0 0 -4,536

Revaluation loss

reversal to SDPS 10,848 61 0 0 0 0 10,909

Derecognition - Disposals -243 0 0 0 0 0 -243


Held for Sale -4,621 0 0 0 0 0 -4,621

Other movements 7,714 -35 0 0 -32 -7,398 249

At 31 March 2022 501,170 4,479 162 3,223 238 10,505 519,777


1 April 2021 45 170 30 305 0 0 550

Charge for the year 9,473 85 17 53 3 0 9,631


to the RR -6,345 -49 0 0 -3 0 -6,397

Impairment losses to RR 0 0 0 0 0 0 0

Impairment losses to SDPS 0 0 0 0 0 0 0



Held for Sale 0 0 0 0 0 0 0

Other movements 5 -4 0 0 0 0 1

At 31 March 2022 3,174 202 47 358 0 0 3,781

Net Book Value

At 1 April 2021 476,707 4,212 132 2,035 175 7,310 490,571

At 31 March 2022 497,996 4,277 115 2,865 238 10,505 515,996

2021/22

SDPS = Surplus or Deficit on the Provision of Services

RR = Revaluation Reserve

The £4.536m revaluation loss on Council Dwellings includes a £2.561m loss on the 22 newly built dwellings, a

£1.369m loss on 28 of the newly acquired dwellings, a £0.363m loss on the 8 shared ownership properties

brought into stock, a £0.213m loss on existing stock and a £0.030m on the 3 reclassified-in dwellings. The HRA

was also charged £0.072m revaluation loss on Assets Held for Sale.

The HRA was also charged £0.030m amortisation in relation to an intangible asset and £0.334m depreciation for

the use of general fund assets (depots, fleet vehicles and equipment).

In addition to the capital expenditure of £26.963m shown in the above table, the HRA spent £0.294m on an

intangible asset, resulting in total capital expenditure of £27.257m.



Other Vehicles, plant,

Council land and furniture and Infra- Surplus Assets under

Dwellings buildings equipment structure assets construction Total

£000 £000 £000 £000 £000 £000 £000

Cost or Valuation

1 April 2020 454,635 4,316 162 1,879 166 9,813 470,971

Additions / Enhancement 19,423 95 0 461 0 7,771 27,750


(decreases) to RR -6,773 15 0 0 192 0 -6,566


(decreases) to SDPS -23,827 -1 0 0 0 0 -23,828

Revaluation loss

reversal to SDPS 24,420 0 0 0 12 0 24,432



Held for Sale -1,574 0 0 0 0 0 -1,574

Other movements 10,799 -43 0 0 -195 -10,274 287

At 31 March 2021 476,752 4,382 162 2,340 175 7,310 491,121


1 April 2020 8,751 114 13 262 0 0 9,140

Charge for the year 8,948 85 17 43 3 0 9,096


to the RR -17,596 -28 0 0 -3 0 -17,627

Impairment losses to RR -59 0 0 0 0 0 -59

Impairment losses to SDPS 0 0 0 0 0 0 0

Derecognition - Disposals 0 0 0 0 0 0 0


Held for Sale 0 0 0 0 0 0 0

Other movements 1 -1 0 0 0 0 0

At 31 March 2021 45 170 30 305 0 0 550

Net Book Value

At 1 April 2020 445,884 4,202 149 1,617 166 9,813 461,831

At 31 March 2021 476,707 4,212 132 2,035 175 7,310 490,571

2020/21

SDPS = Surplus or Deficit on the Provision of Services

RR = Revaluation Reserve

The £23.827m revaluation loss on Council Dwellings includes a £18.651m loss on existing stock, a £3.340m loss

on 113 of the newly acquired dwellings and £1.836m on the 42 shared ownership properties brought into stock.

The HRA was also charged £0.029m amortisation in relation to an intangible asset and £0.257m depreciation for

the use of general fund assets (depots, fleet vehicles and equipment).

In addition to the capital expenditure of £27.750m shown in the above table, the HRA spent -£0.025m on two

General Fund assets awaiting appropriation into the HRA and £0.255m on an intangible asset, resulting in total

capital expenditure of £27.980m.



6. CAPITAL FINANCING CHARGES

Charges and credits to the Housing Revenue Account, as determined by the Government, contain the following

amounts calculated in accordance with the prescribed ‘Item 8 Debit and Credit’ determinations.

2020/21

£000 £000 £000Revaluation loss / Impairment

-593 Council dwellings -6,312

-11 Other HRA assets / NDCs 11 -6,301

Depreciation

8,948 Council dwellings 9,473

435 Other HRA assets / NDCs 522 9,995

8,779 3,694

63 Debt management expenses 77

Transfer to the MRR

818 - investment in new major schemes 2,326

2,293 - loan debt repayment provision 4,086 6,412

7,669 Interest on loans 7,814

19,622 Item 8 Debit 17,997

-285 Interest on cash balances -188

604 Reversal of impairment on dwellings 6,301

Transfer from the MRR

0 - self financing debt repayment -21,000

319 Item 8 Credit -14,887

19,941 Net Debit 3,110

2021/22



7. SUMMARY OF CAPITAL EXPENDITURE AND FINANCING

(a) Financing of Capital Expenditure

Details of capital expenditure within the HRA and the financing of that expenditure are set out below.

2020/21

Land & Infra- Assets General Fund

Total Dwellings Buildings structure construction Assets Intangibles Total

£000 Capital Investment £000 £000 £000 £000 £000 £000 £000

27,980 Non-current assets 15,362 125 883 10,593 0 294 27,257

Financing

1,216 Capital Receipts 85 0 0 2,366 0 0 2,451

1,170 Grants/contributions 145 0 0 1,498 0 0 1,643

7,605 Revenue contributions 4,290 125 690 0 0 0 5,105

0 Investment Reserve 837 0 193 247 0 294 1,571

9,383 Major Repairs Reserve 9,995 0 0 0 0 0 9,995

8,606 Borrowing 10 0 0 6,482 0 0 6,492

27,980 15,362 125 883 10,593 0 294 27,257

2021/22

(b) Capital Receipts

Capital receipts in respect of the HRA received during the year are as follows:

2020/21

Council Land/

Total Dwelling Other Total

£000 £000 £000 £000

3,536 Sales proceeds* 6,996 27 7,023

-44 Less administrative costs -104 0 -104

3,492 Net proceeds 6,892 27 6,919

8 Right to buy discount repaid 42 0 42

1 Mortgage principal repaid 0 0 0

3,501 6,934 27 6,961

2021/22

*includes the part-sale of 10 shared ownership properties at £0.642m in 2021-22.



(c) Major Repairs Reserve

The following is an analysis of the movement on the Major Repairs Reserve.

2020/21 2021/22

£000 £000

49,852 As at 1 April 52,963

Improvements to Existing Stock

Amount transferred from HRA to reserve during the year

9,383 Depreciation 9,995

Amount transferred from reserve during the year

-9,383 Capital expenditure on existing stock -9,995

Investment in New Build Programmes

818 Transfer from HRA to reserve during the year 2,326

0 Capital Expenditure Funded from reserve -1,571

Debt Repayment

2,293 Transfer from HRA to reserve during the year 4,086

0 Used to Repay Debt -21,000

52,963 As at 31 March 36,804

Balances on each reserve at 31 March

26,962 Investment in New Build Programmes 27,717

26,001 Debt Repayment 9,087

52,963 36,804

The reserve allows for spending on HRA capital expenditure only, including repayment of HRA debt, with the

flexibility of carrying over any unspent funds from one year to another. No restrictions, other than demolition

works, are imposed on what types of capital works the funds can be used for and, as with other capital resources,

the council will determine stock investment and major maintenance priorities as part of its business planning

process.



8. PENSION COSTS

The charges in the HRA relating to the defined benefit scheme, accounted for in accordance with IAS 19 are

shown below. These costs have been apportioned to the HRA on the basis of pensionable pay.

2020/21 2021/22

£000 £000

1,273 Current service cost 1,988

1,273 Operating Charges 1,988

208 Interest on pension scheme liabilities 293

208 Amount Debited to Other Operating Costs 293

1,481 Net Housing Revenue Account Cost 2,281

-714 Employer contributions -726

767 Appropriation from the Pension Reserve 1,555

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.

Business Council Business Council

Rates Tax Total Rates Tax Total

£000 £000 £000 £000

Income

-224,039 -224,039 Council taxpayers -236,834 -236,834

-76,160 -76,160 Business ratepayers -97,645 -97,645

-76,160 -224,039 -300,199 Total Income -97,645 -236,834 -334,479

Expenditure

Apportionment of previous years surplus/ deficit

-238 -238 Central Government -18,790 -18,790

-233 2,695 2,462 East Riding of Yorkshire Council -18,414 359 -18,055

402 402 Humberside Police and Crime Commissioner 53 53

-5 153 148 Humberside Fire and Rescue Service -376 20 -356

-476 3,250 2,774 -37,580 432 -37,148

Precepts

48,064 48,064 Central Government 48,358 48,358

52,581 184,330 236,911 East Riding of Yorkshire Council 53,250 189,275 242,525

26,966 26,966 Humberside Police & Crime Commissioner 28,531 28,531

967 10,236 11,203 Humberside Fire and Rescue Service 970 10,365 11,335

101,612 221,532 323,144 102,578 228,171 330,749

Charges to Collection Fund

434 434 Costs of Collection 445 445

9,870 9,870 Transitional protection payments payable 7,423 7,423

179 179 Renewables and Enterprize zones balance -106 -106

1,370 544 1,914 Increase / Decrease (-) in Bad Debt Provision 1,177 417 1,594

0 617 617 Write-offs of uncollectable amounts 0 237 237

-931 -931 Increase / Decrease (-) in Provision for Appeals 296 296

10,922 1,161 12,083 9,235 654 9,889

112,058 225,943 338,001 Total Expenditure 74,233 229,257 303,490

35,898 1,904 37,802 Surplus (-)/Deficit arising during the Year -23,412 -7,577 -30,989

-2,718 4,188 1,470 Surplus / Deficit (-) b/fwd 1 April -38,616 2,284 -36,332

-35,898 -1,904 -37,802 Surplus / Deficit (-) for the Year 23,412 7,577 30,989

-38,616 2,284 -36,332 Surplus / Deficit (-) c/fwd 31 March -15,204 9,861 -5,343

2021/222020/21

COLLECTION FUND


1. COUNCIL TAX

Council tax is charged on a series of property valuation bands. The number of chargeable dwellings in each band

(adjusted for exemptions and discounts), the calculation of the council tax base, and the average council tax

chargeable in each band are shown in the table below:

Number of Band D Number of Band D

Chargeable Equivalent Average Council Tax Band Chargeable Equivalent Average

Dwellings Dwellings Council Tax (ratio to Band D) Dwellings Dwellings Council

£ £

27,248 18,165 1,249.91 A (6/9) 26,807 17,871 1,296.65

29,643 23,055 1,458.22 B (7/9) 29,468 22,920 1,512.75

26,931 23,939 1,666.54 C (8/9) 27,113 24,100 1,728.86

22,179 22,179 1,874.86 D (9/9) 22,270 22,270 1,944.97

14,561 17,797 2,291.50 E (11/9) 14,872 18,177 2,377.19

6,734 9,727 2,708.13 F (13/9) 6,877 9,934 2,809.40

3,032 5,053 3,124.77 G (15/9) 3,046 5,077 3,241.62

216 432 3,749.72 H (18/9) 221 441 3,889.94

130,544 120,347 Total 130,674 120,790

-2,187 Adjustment* -3,477

118,160 Council Tax Base 117,313

* For anticipated collection rate and Ministry of Defence properties

2020/21 2021/22

The average council tax chargeable in each band includes charges from East Riding of Yorkshire Council, the

Humberside Police and Crime Commissioner, Humberside Fire and Rescue Service, and town and parish councils.

The estimated council tax collectable is calculated by multiplying the tax base by the Band D average council tax.

The estimated council tax collectable in 2021-22 was £228.170m (2020-21 £221.533m) when the council tax

base was set by the billing authority prior to the start of the financial year. This corresponds with the council tax

precepts set by East Riding of Yorkshire Council (including town and parish councils), the Humberside Police and

Crime Commissioner, and Humberside Fire and Rescue Service, as shown in the Collection Fund Statement.

The actual amount collectable from council taxpayers is subject to changes during the year to the number of

properties eligible to be charged and individual taxpayers’ circumstances, as well as the collection rate. The actual

amount collectable during 2021-22 is £236.834m (2020-21 £224.039m), as shown in the income section of the

Collection Fund Statement.

As part of the Spending Review in November 2020 it was announced that the Government would compensate

local authorities for 75% of irrecoverable losses in council tax and business rates income expected in 2020-21

(the ‘local tax income guarantee’).

The local tax income guarantee compensation for council tax was calculated as £0.7m and was transferred to


collection deficit.

COLLECTION FUND


2. NON-DOMESTIC RATES (BUSINESS RATES)

Non-Domestic ratepayers contribute to local services based on a nationally agreed rate poundage levied by the

Government. This poundage is multiplied by the rateable value of their business premises and paid to the council.

The total amount collected is distributed to the Government (50%), the Council (49%), and Humberside Fire and

Rescue (1%) after making allowable deductions e.g. losses in collection.

The total business rateable value for East Riding at 31 March 2022 was £258.449m (2020-21 £255.861m), of

which £33.868 (2020-21 £33.220m) related to small businesses. The poundage for 2021-22 was 51.2p (2020-21

51.2p) and 49.9p for small businesses (2020-21 49.9p). This gives a gross collectable figure at 31 March 2022 of

£131.866m (£130.569m at 31 March 2021).

The collectable amount is adjusted for several mandatory and discretionary reliefs (i.e. discounts), such as those

applied to premises occupied by charities or those that are empty in order to derive the business rates income

figure shown in the Collection Fund Statement.

In a continued response to the pandemic, business rates discounts were expanded so that no businesses in the

retail, leisure and hospitality sectors were liable to pay any business rates from 1 April 2021 to 30 June 2021,

followed by 66% relief from 1 July 2021 to 31 March 2022. These discounts amount to over £16m. This means

that the Council has not collected the amount of business rates it originally expected to because these businesses

have not been required to pay full business rates in 2021-22. £8.6m of additional grant was received to offset

the Council’s share of additional business rate relief awarded.

As part of the Spending Review in November 2020 it was announced that the Government would compensate

local authorities for 75% of irrecoverable losses in council tax and business rates income expected in 2020-21

(the ‘local tax income guarantee’).

The local tax income guarantee compensation for business rates was calculated as £0.5m and was transferred to


collection deficit.

PENSION FUND


1. FOREWORD

The Fund was created on the reorganisation of local government in 1974 and East Riding of Yorkshire Council

became the Administering Authority on 1 April 1996.

At 31 March 2022, the Fund was valued at £6262.6m, having paid out £188.4m during the year for the benefit of

Scheme members. This is an increase in the Fund value of £513.4m from 31 March 2021, due to the strength of

the recovery of global economies and investment markets from the impact of the COVID-19 pandemic. This was

mainly due to the huge amount of monetary and fiscal stimulus provided by central governments and the rapid

rollout of the vaccine programme.

Alternatives was the strongest performer, with private equity and other alternatives producing particularly high

returns. Private equity investments continued to benefit from the support provided to economies, and other

investments including aircraft and shipping leasing bounced back from a difficult 2020-21 as travel restrictions

were lifted. Equities performed well, with the UK market leading the way. Towards the end of the year, concerns

were growing on inflation and on the impact of the Russian invasion of Ukraine. Energy and other sectors more

resilient to these issues form a bigger proportion of the UK market than is the case overseas. Bonds performed

satisfactorily in 2021 but ended the year with a negative return due to rising interest rates and inflation.

Throughout 2021-22, the number of Scheme Employers in the Fund with active members was 325 (31 March

2021: 316). There were 17 new Scheme Employers joining the Fund during 2021-22 with 8 existing Scheme

Employers ceasing their membership of the Fund. All employees, other than teachers, of the Administering

Authority and the majority of the Scheme Employers are entitled to participate in the Scheme. Employees of

Scheme Employers classed as designating bodies, such as town and parish councils, and employees of the 61

Admission Bodies may be nominated for membership by their employer. Teachers, police officers and firefighters

have separate pension arrangements.

Although membership is not compulsory, it is automatic for all employees who have a contract of employment

that is for at least 3 months and who are under the age of 75. Employees have freedom of choice to leave the

Scheme and make alternative pension arrangements.

At 31 March 2022, the total membership records administered by the East Riding Pension Fund was 120,427, an

increase of 2.7% in the year (2021: 117,162). For active members, each separate employment contract is classed

as a record where an individual has multiple employments, and the number of active member records has

increased by 4.7% to 40,299 (2021: 38,417). For pensioner members, each pension entitlement is classed as a

record where an individual is in receipt of more than one pension and the number of pensioner member records,

including the pensions paid to spouses and dependants of the former scheme members, has increased by 4.6% to

36,189 (2021: 34,528). All the membership figures are based on the up-to-date position recorded on the pension

administration system, with all previous years restated on a consistent basis. The average pension payment is

£4,864.71 per annum, equivalent to a weekly payment of £93.30.

The Fund generated a return of 9% for the year to 31 March 2022 compared to the strategic benchmark return

of 8.8%. Over the three years to 31 March 2022, the Fund returned 6.8% per annum, compared to the strategic

benchmark return of 5.9% per annum and the long-term investment objective of 5.5% per annum.

The Fund continues to be managed in a cost-effective manner with total pension administration, investment

management, and oversight and governance costs equating to just 0.13% (2021: 0.14%) of funds under

management.

The key challenge for the Fund in the year ahead is to maintain investment performance in an environment of

rising interest rates and inflation at levels not seen for over 30 years.

2. REPORT OF THE PENSIONS COMMITTEE

The Pensions Committee is responsible for the administration of the East Riding Pension Fund in accordance

with Statutory Regulations, under delegation contained in the Constitution of East Riding of Yorkshire Council.

During the past year the Committee consisted of ten Members of East Riding of Yorkshire Council. In addition,

a Member from each of the other three unitary Councils and four trade union representatives attend Committee

meetings to ensure that the views of the other major employers and of individual members of the scheme are

taken into account.

PENSION FUND


The Committee met quarterly to consider investment reports from the Executive Director of Corporate

Resources, the external managers and the independent advisor. The Committee also met on two further

occasions to consider pension administration issues. A number of training sessions were held throughout the

year on governance, administration and investment issues to contribute to the member training programme.

During the year the Committee:

• approved the Annual Report and Accounts 2020-21

• reviewed the Fund’s expenditure against budget for the 2020-21 financial year and approved the budget for

the 2021-22 financial year

• reviewed the audit and assurance reports of the Fund’s investment and administration functions, the Fund’s

investment managers and the custodian

• commenced the review of the funding strategy and the 2022 valuation process

• commenced a detailed review of the Fund’s investment strategy, which was completed shortly after the end

of the financial year

• received reports on the development of investment arrangements at Border to Coast, the investment pool

selected by the Fund to meet the requirements of the Government’s LGPS reform agenda

• reviewed the management of the Fund’s investments and analysed the performance of the Fund and its

investment managers

• reviewed the corporate governance and voting activity of the East Riding investment team and of its

investment managers

• adopted Border to Coast’s updated policies on responsible investment including a Climate Change Policy,

and determined that the Fund has a target to become carbon neutral by 2050 or sooner

• reviewed the Fund’s administration and investment policies

• reviewed the Fund’s strategic risk register

• reviewed the Fund’s Treasury Management policy and treasury activity during the year

• reviewed the status of the Fund’s UK and Overseas Withholding Tax reclaims

For the year ended 31 March 2022, the Fund generated a return of 9%, compared to the strategic benchmark

return of 8.8%. The strength of the investment markets reflected the growth in global economies, underpinned

by unprecedented monetary and fiscal support from central banks and governments around the world. The

speed of the vaccine programme added to the recovery. However, the last quarter of the year was much less

positive. Concerns over inflation and the impact on supply chains of the Russian invasion of Ukraine weighed

heavily on financial markets. Market conditions deteriorated after the end of the year and the outlook is

extremely challenging.

Over the three years to 31 March 2022, the Fund generated a return of 6.8% per annum, compared to the

strategic benchmark return of 5.9% per annum. The long-term investment objective was 5.5% per annum,

reflecting the rate of return required to meet the cost of the Fund’s liabilities. At the year end, the funding level

was preliminarily estimated at approximately 120%.

The Pensions Committee is responsible for determining the Pension Fund’s investment strategy, but the

implementation of the strategy is in the process of being handed over to Border to Coast, which is increasingly

responsible for managing the Fund’s assets. Approximately 50% of the Fund’s assets were managed by Border

to Coast at the year end, with further asset transitions planned in the coming years.

All of the Fund’s administration responsibilities will remain with East Riding of Yorkshire Council.

It is anticipated that there will continue to be significant changes to the Local Government Pension Scheme in

the coming few years, which will represent a considerable challenge to the Pension Fund. In particular, the 2022

Valuation will impact on administration resources, as will addressing the Governments agendas on levelling up,

governance arrangements and reporting in relation to climate change. The Committee will strive to ensure the

long-term sustainability of the Pension Fund in the light of these and other developments and ensure members

are aware of their potential impact.

PENSION FUND


3. AUDITOR’S REPORT

PENSION FUND


4. STATEMENT OF RESPONSIBILITIES FOR THE FINANCIAL STATEMENTS

Responsibility for the Financial Statements of the Fund is set out below.

a) The Administering Authority

The Administering Authority is East Riding of Yorkshire Council.

The Administering Authority is required to:

• make arrangements for the proper administration of the financial affairs of the Fund and to secure that an

officer has the responsibility for the administration of those affairs. In this Authority, that officer is the

Director of Finance;

• manage its affairs to secure economic, efficient and effective use of resources and safeguard its assets; and

• approve the Statement of Accounts.

b) The Director of Finance

The Director of Finance is responsible for the preparation of the Fund’s Financial Statements in accordance with

proper practices as set out in the CIPFA/LASAAC Code of Practice on Local Authority Accounting in the United

Kingdom based on International Financial Reporting Standards (the Code).

In preparing these financial statements, the Director of Finance has:

• selected suitable accounting policies and then applied them consistently;

• made judgements and estimates that were reasonable and prudent;

• complied with the Code;

• kept proper accounting records which were up to date;

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

• assessed the Fund’s ability to continue as a going concern, disclosing, as applicable, matters related to going

concern;

• used the going concern basis of accounting on the assumption that the functions of the Fund will continue in

operational existence for the foreseeable future; and

• maintained such internal control as they determine is necessary to enable the preparation of financial statements

that are free from material misstatement, whether due to fraud or error.

c) Certificate

I hereby certify that the following accounts give a true and fair view of the financial position of the East Riding

Pension Fund as at 31 March 2022 and its income and expenditure for the financial year then ended.

The accounts are currently unaudited and may be subject to change.

Julian Neilson

Section 151 Officer

29 July 2022

East Riding of Yorkshire Council

County Hall

Beverley, East Riding of Yorkshire, HU17 9BA

PENSION FUND


5. LEGAL FRAMEWORK

The Local Government Pension Scheme (LGPS) has been in existence since 1922 and has developed into a

comprehensive scheme providing pensions for all members and their spouses, civil partners or eligible

cohabitating partners and eligible children.

The current scheme, LGPS 2014, is a Career Average Revalued Earnings (CARE) scheme. The scheme rules for

LGPS 2014 are contained within the LGPS Regulations 2013 (Statutory Instrument Number 2013 No. 2356) and

subsequent amendments and the Local Government Pension Scheme (Transitional Provisions, Savings and

Amendment) Regulations 2014 (Statutory Instrument Number 2014 No 525). Amendments to LGPS 2014 are

made under the Public Service Pensions Act 2013. Details of the main provisions of LGPS 2014 can be found at

http://lgpsregs.org/schemeregs/lgpsregs2013.php.

The Regulations specify the type and amounts of pension and other benefits payable in respect of scheme

members who leave, retire or die, and also fix the member contributions rates payable on an ongoing basis.

Employees have freedom to opt-out and make their own pension provision.

Employer contribution rates are set by the Fund’s Actuary every three years following the valuation of the Fund,

in order to maintain the solvency of the Fund. Following the 2019 Actuarial Valuation, the Actuary issued the

new rates payable by scheme employers for the period from 1 April 2020 to 31 March 2023. Details of the new

rates can be found on the East Riding Pension Fund website at

https://www.eastriding.gov.uk/EasySiteWeb/EasySite/StyleData/pensions/assets/erpf-2019-valuation-report.pdf

Whilst the Regulations are fixed on a national basis, the LGPS is managed by a designated Administering Authority

and throughout England and Wales there are 85 such authorities. East Riding of Yorkshire Council is responsible

for administering the ‘East Riding Pension Fund’ for the benefit of its own employees and the employees of the

scheme employers and admission bodies. Teachers, Police Officers and Firefighters are excluded from the LGPS

as they are members of separate statutory pension schemes.

The Local Government Pension Scheme (Management and Investment of Funds) Regulations 2016 make the

provision in relation to the management and investment of pension funds held by administering authorities

required to maintain pension funds by the Local Government Pension Scheme Regulations 2013.

HM Revenues and Customs has granted the LGPS ‘exempt approval’ for the purposes of the Income and

Corporation Taxes Act 1988. Since April 2006, the LGPS has been classified as a registered public service pension

scheme under Part 4 of Chapter 2 of the Finance Act 2004. It complies with the relevant provisions of the

Pension Schemes Act 1993, the Pensions Act 1995, the Pensions Act 2004 and meets the Government’s new

standards under the automatic enrolment provisions of the Pensions Act 2008.

The East Riding Pension Fund Local Pension Board

As required under section 5 of the Public Service Pensions Act 2013 and regulation 106 of the LGPS Regulations

2013 (as amended), the East Riding Pension Fund Local Pension Board (ERPFLPB) was established on 25 February

2015 and is made up of three employer representatives and three member representatives. The ERPFLPB is

responsible for assisting East Riding of Yorkshire Council (as administering Authority) in securing compliance

with the LGPS regulations, overriding legislation and guidance from the Pensions Regulator.

Details of the activities of the ERPFLPB can be found on the East Riding Pension Fund website at

https://www.erpf.org.uk/local-pension-board/.

https://www.eastriding.gov.uk/EasySiteWeb/EasySite/StyleData/pensions/assets/erpf-2019-valuation-report.pdf

https://www.erpf.org.uk/local-pension-board/

PENSION FUND


6. ACTUARIAL VALUATION

Legislation requires an actuarial valuation of the Fund every three years. The purpose of the valuation is to

establish that the Fund is able to meet its liabilities to past and present contributors.

The valuation is carried out in accordance with Regulation 62 of the Local Government Pension Scheme 2013

and the most recent valuation was carried out as at 31 March 2019 and resulted in a funding level of 109% (2016

88%). The next triennial valuation is due as at 31 March 2022 and any change in employers’ contribution rates

as a result of that valuation will take effect from 1 April 2023.

The results of the 2016 and 2019 valuations are set out in the tables below:

The past service adjustment assumes that the deficit will be funded over a 20-year period.

The improvement in the funding position in the three years to 31 March 2019 is mainly due to strong investment

performance over the period. The liabilities have also increased due to a reduction in the future expected

investment return, although this has been partially offset by lower than expected pay and benefit growth.

2016 2019

£m £m

Past Service Liabilities

- Employees 1,538 1,643

- Deferred pensioners 835 953

- Pensioners 1,853 2,038

Total Past Service liabilities 4,226 4,634

Assets 3,714 5,058

(Deficit) / Surplus -512 424

PENSION FUND


7. REPORT OF THE ACTUARY

This statement has been prepared in accordance with Regulation 57(1)(d) of the Local Government Pension

Scheme (Administration) Regulations 2013. It has been prepared at the request of the Administering Authority

of the Fund for the purpose of complying with the aforementioned regulation.

Description of Funding Policy

The funding policy is set out in the Administering Authority’s Funding Strategy Statement (FSS). In summary, the

key funding principles are as follows:

• to ensure the long-term solvency of the Fund using a prudent long-term view. This will ensure that sufficient

funds are available to meet all members / dependents benefits as they fall due for payment;

• to ensure that employer contribution rates are reasonably stable where appropriate;

• to minimise the long-term cash contributions which employers need to pay to the Fund, by recognising the

link between assets and liabilities and adopting an investment strategy that balances risk and return (this will

also minimise the costs to be borne by Council Tax payers);

• to reflect the different characteristics of different employers in determining contribution rates. This involves

the Fund having a clear and transparent funding strategy to demonstrate how each employer can best meet

its own liabilities over future years; and

• to use reasonable measures to reduce the risk to other employers and ultimately to the Council Taxpayer

from an employer defaulting on its pension obligations.

The FSS sets out how the Administering Authority seeks to balance the conflicting aims of securing the solvency

of the Fund and keeping employer contributions stable. For employers whose covenant was considered by the

Administering Authority to be sufficiently strong, contributions have been stabilised to have a sufficiently high

likelihood of achieving the funding target over 20 years. Asset-liability modelling has been carried out which

demonstrate that if these contribution rates are paid and future contribution changes are constrained as set out

in the FSS, there is at least a 70% likelihood that the Fund will achieve the funding target over 20 years.

Funding Position as at the last formal funding valuation

The most recent actuarial valuation carried out under Regulation 62 of the Local Government Pension Scheme

Regulations 2013 was at 31 March 2019. This valuation revealed that the Fund’s assets, which at 31 March 2019

were valued at £5.058 million, were sufficient to meet 109% of the liabilities (i.e. the present value of promised

retirement benefits) accrued up to that date. The resulting surplus at the 2019 valuation was £424 million.

Each employer had contribution requirements set at the valuation, with the aim of achieving their funding target

within a time horizon and liability measure as per the FSS. Individual employers’ contributions for the period 1

April 2020 to 31 March 2023 were set in accordance with the Fund’s funding policy as set out in its FSS.

Principal Actuarial Assumptions and Method used to value the liabilities

Full details of the methods and assumptions used are described in the 2019 valuation report, available on the

Funds website.

Method

The liabilities were assessed using an accrued benefits method which takes into account pensionable membership

up to the valuation date and makes an allowance for expected future salary growth to retirement or expected

earlier date of leaving pensionable membership.

Assumptions

A market-related approach was taken to valuing the liabilities, for consistency with the valuation of the Fund

assets at their market value.

PENSION FUND


The key financial assumptions adopted for the 2019 valuation were as follows:

Financial Assumptions 31 March 2019

% p.a.

Discount Rate 4.1

Salary increase assumption 3.2

Benefit increase assumption (CPI)* 2.3

* Consumer Prices Index

The key demographic assumption was the allowance made for longevity. The life expectancy assumptions are

based on the Fund’s VitaCurves with improvements in line with the CMI 2018 model, an allowance for smoothing

of recent mortality experience and a long term rate of 1.25% p.a. Based on the assumptions, the average future

life expectancies at age 65 are as follows:

Females Males

Current Pensioners 23.3 20.9

Future Pensioners * 24.8 21.8

* Aged 45 at the 2019 Valuation

Copies of the 2019 valuation report and Funding Strategy Statement are available on request from the

Administering Authority to the Fund.

Experience over the period since 31 March 2019

Markets were severely disrupted by COVID-19 in March 2020, but over most of 2020/21 and 2021/22 they

recovered strongly. However, due to the war in Ukraine, March 2022 markets were particularly volatile, which

affects values as at the accounting date. All other things being equal, the funding level of the Fund as at 31 March

2022 is likely to be better than that reported at the previous formal valuation as at 31 March 2019.

It is important to note that the formal triennial funding valuation exercise is at 31 March 2022 and this may show

a different picture when the finalised position is disclosed in next year’s annual report. In particular, changes in

Fund membership, changes in anticipated real investment returns and changes in demographic assumptions will

affect the valuation results. The Funding Strategy Statement will also be reviewed as part of the triennial funding

valuation exercise.

Douglas Green FFA

For and on behalf of Hymans Robertson LLP

10 May 2022

Hymans Robertson

20 Waterloo Street

GLASGOW G2 6BD

PENSION FUND


8. FUND ACCOUNT

2020/21 Note

£000 £000 £000

Dealings with Members and Employers

Contributions

258,686 Contributions receivable 10f 162,595

7,795 Individual transfer values receivable 8,593

524 Group transfer values receivable 0 8,593

267,005 171,188

Benefits

-180,340 Benefits payable 10g -188,474

-9,308 Payment to and on account of leavers 10h -10,442

Net Additions / Withdrawals (-) from dealings

77,357 with Members -27,728

-8,103 Management Expenses 10i -7,991

Net Additions / Withdrawals (-) including

69,254 Fund Management Expenses -35,719

Returns on Investments

187,817 Investment income 10j 165,704

-501 Taxes on income -718

728,633 Profit and losses on disposal of investment and 10k 384,167

changes in the market value of investments

915,949 Net Return on Investments 549,153

Net Increase / Decrease (-) in the Net Assets Available

985,203 for Benefits during the Year 513,434

2020/21 2021/22

£000 £000

Net Assets of the Fund

4,764,005 Opening Net Assets as at 1 April 5,749,208

985,203 Surplus / Deficit (-) on the pension fund for the year 513,434

5,749,208 Closing Net Assets as at 31 March 6,262,642

2021/22

PENSION FUND


9. NET ASSETS STATEMENT

31 March 2021 31 March 2022

£000 Note £000

1181 Long Term Investments 1,181

5,737,892 Investment Assets 6,266,206

5,739,073 10k 6,267,387

-4,012 Investment Liabilities 10k -18,492

5,735,061 Total Net Investments 10k 6,248,895

16,125 Current Assets 16,092

5,751,186 6,264,987

-1,978 Current Liabilities -2,345

Net Assets of the Scheme Available to Fund

5,749,208 Benefits at 31 March 6,262,642

The Accounts summarise the transactions and deals with the net assets of the Fund and do not take into account

liabilities to pay pensions and other benefits in the future.

PENSION FUND


10. NOTES TO THE ACCOUNTS

a) Fund Status

The Fund is a funded defined benefits scheme.

b) Audit of the East Riding Pension Fund Accounts

These accounts are subject to external audit.

c) Accounting Policies

1. General

These Accounts have been prepared in accordance with the CIPFA/LASAAC Code of Practice on Local

Authority Accounting in the United Kingdom 2021-22 based on International Financial Reporting Standards,

which requires that the Fund’s Accounts comply with IAS 26 Accounting and Reporting by Retirement

Benefit Plans.

The accounts do not take account of liabilities to pay pensions and other benefits in the future.

The accounts have been prepared on a going concern basis.

2. Changes to Accounting Policies, Disclosure Requirements and Accounting Estimates

There have been no changes in Accounting Policies required by the Code in 2021-22.

3. Income

a) Contributions income

Normal contributions are accounted for on an accruals basis as follows:

o Employee contribution rates are set in accordance with LGPS regulations, using common

percentage rates for all schemes which rise according to pensionable pay. Any amounts due but not

received are shown in the Net Asset Statement as a current asset;

o Employer contributions are set at the percentage rate recommended by the Fund Actuary in his

valuation of 31 March 2019 effective from 1 April 2020, for the period to which they relate.

Employer contributions are accounted for on the date on which they are due or when received, if

earlier. Further information regarding the Actuary’s Report and Actuarial Valuation, as at 31 March

2019, effective from 1 April 2020, can be found on pages 128 to 130 of these accounts.

Employers’ pensions strain contributions are accounted for in the period in which liability arises.

Employer deficit funding contributions are set at the rates certified by the Fund Actuary in his valuation

of 31 March 2019, effective from 1 April 2020. Deficit funding payments are payable over a maximum

of 20 years.

b) Transfer values receivable

Transfer values receivable relate to amounts received for members joining the Fund during the financial

year and are accounted for in the year of receipt. Transfer values are disclosed as individual transfers

and group transfers.

c) Investment income

i) Dividend income

Dividend income is accounted for on an accruals basis and any outstanding amount is included in

the Net Asset Statement as an investment asset. Dividend income is recognised on the date the

asset is quoted ex-dividend.

PENSION FUND


ii) Interest income

Interest income is accounted for on an accruals basis using the effective interest rate of the financial

instrument as at the date of origination. Accrued interest income is shown in the Net Assets

Statement as an investment asset.

iii) Stock lending income

Stock lending income is accounted for on an accruals basis and any outstanding amount is included

in the Net Asset Statement as an investment asset.

iv) Distributions from pooled investment assets

Distributions from pooled investment vehicles are recognised at the date of issue. Distribution

income is accounted for on an accruals basis and any outstanding amount is included in the Net

Asset Statement as an investment asset.

v) Movement in the net market value of investments

Changes in the net market value of investments, including all realised and unrealised profits/losses

are shown as returns on investments.

vi) Currency conversion

Investment income received in overseas currency is converted at the appropriate exchange rate

quoted in the Financial Times on the date of receipt.

4. Expenditure

a) Benefits payable

Pensions and lump sum benefits payable include all amounts known to be due as at the end of the financial

year. Any amounts due but unpaid are shown in the Net Assets Statement as current liabilities.

b) Transfer values payable

Transfer values payable relate to amounts paid relating to members leaving the Fund during the financial

year and are accounted for in the year of payment.

5. Expenses

Expenses are accrued appropriately to ensure charges are incurred within the relevant accounting period.

6. Valuation of Assets

Investments are included in the Net Assets Statement at their fair value.

Investments made through the UK Stock Exchanges are valued at bid market price at the close of business

on 31 March 2022. Investments made on overseas stock exchanges are valued at bid price or last trade

price.

Cash comprises cash in hand and demand deposits. Cash equivalents are short term, highly liquid

investments that are readily convertible to known amounts of cash and that are subject to minimal risk of

changes in value.

Unquoted investments are inherently difficult to value and rely, to a certain extent, on estimation techniques

and non-market observable inputs; where market values are available at the date of the Statement these are

used as above.

Fair value is calculated as the net asset value as at the date of the Statement in accordance with recognised

valuation standards, e.g. Royal Institution of Chartered Surveyors (RICS). Where the net asset value at the

date of the Statement is not available, fair value is calculated based on either a valuation estimate by the

fund manager or using the last available set of financial statements, adjusted for subsequent cash flows. The

valuation of the investment may be amended for material changes notified in subsequent documentation

received from the fund manager.

The valuation in the Fund's investment in Border to Coast Pension Partnership has been assessed using the

criteria set out in IFRS9 Financial Instruments. The key factors considered include:

• There is currently no market for these investments and no identical or similar market to compare to.

Therefore, it is not possible to use a 'quoted price'.

• Border to Coast Pensions Partnership is intending to trade at a breakeven position (nominal profit or

loss) with any values offset against Partner Fund future costs. The company has now published audited

accounts, and these show the company equity as equal to the 'Called up Share Capital' i.e. Class B

Regulated Capital of £12.99m (shared equally between the eleven partner funds).

PENSION FUND


• Given the limited available evidence identified above there are potentially a wide range of fair values

available for this investment. Cost has been determined as the appropriate fair value. The Fund’s value

of the shareholding in Border to Coast Pensions Partnership is £1.181k.

7. Future Liabilities

The Accounts summarise the transactions and net assets of the Fund and do not take into account liabilities

to pay pensions and other benefits in the future. The adequacy of the Fund’s investments and contributions

in relation to its overall obligations is dealt with in the report by the Actuary on pages 128 to 130 of these

accounts and should be read in conjunction with the report.

8. Taxation

The scheme is a Registered Pension Scheme in accordance with Paragraph 1 (1) of Schedule 36 to the

Finance Act 2004 and for UK taxation purposes is wholly exempt from income tax and capital gains tax.

Income from overseas investments suffers withholding tax in the country of origin, unless exemption is

permitted. Irrecoverable tax is accounted for as a fund expense as it arises.

9. Value Added Tax

The Fund is reimbursed VAT by HM Revenue and Customs and the accounts are shown exclusive of VAT.

10. Management Expenses

All pension administration expenses are accounted for on an accrual’s basis. All employee costs of the

pension administration section are charged direct to the Fund. Associated management, accommodation

and other overheads are apportioned to this activity and charged as expenses to the Fund.

All investment management expenses, including external management and custody, are accounted for on an

accrual’s basis. All employee costs of the investment section are charged directly to the Fund. Associated

management, accommodation and other overheads are apportioned to this activity and charged as expenses

to the Fund.

External manager Schroder Investment Management fee is on a fixed rate basis.

External manager Border to Coast Pensions Partnership fee is based on an agreed budget.

Custody fees are agreed in the mandate for the provision of custodian services.

All oversight and governance costs are accounted for on an accrual’s basis. All staff costs associated with

governance and oversight are charged directly to the Fund. Associated management, accommodation and

other overheads are apportioned to this activity and charged as expenses to the Fund.

11. Currency Conversion Rates

Overseas investments have been converted at the exchange rate quoted in the Financial Times at close of

business on 31 March 2022 to arrive at sterling values in the Net Asset Statement.

12. Additional Voluntary Contributions

An additional voluntary contribution (AVC) scheme is provided for members of the Fund by Prudential.

Contributions are paid to Prudential by scheme members and are specifically for providing additional

benefits for individual contributors. AVCs do not form part of the Fund accounts in accordance with the

Local Government Pension Scheme (Management and Investment of Funds) Regulations 2016, see note q.

13. Actuarial Present Value of Promised Retirement Benefits

The actuarial present value of promised retirement benefits is based on the triennial valuation of the Fund

by the Actuary, with liabilities at 31 March 2022 being projected using a roll forward approximation from

the latest formal funding valuation as at 31 March 2019. The Fund has opted to disclose the actuarial present

value of promised retirement benefits as a note to the accounts, see note s.

14. Contingent Assets and Contingent Liabilities

A contingent asset arises where an event has taken place giving rise to a possible asset whose existence will

only be confirmed by the occurrence of future events.

PENSION FUND


A contingent liability arises where an event has taken place prior to the year-end giving rise to a possible

financial obligation whose existence will only be confirmed or otherwise by the occurrence of future events.

Contingent liabilities can also arise in circumstances where a provision would be made, except that it is not

possible at the balance sheet date to measure the value of the financial obligation reliably.

Contingent assets and liabilities are not recognised in the net asset statement but are disclosed in the notes.

15. Assumptions Made About the Future and Other Major Source of Estimation Uncertainty

The Statement of Accounts includes estimated figures that are based on assumptions and estimates, which

take into account historical experience, current trends and other relevant factors. Therefore, these

estimated figures cannot be determined with certainty and actual results could be materially different from

the assumptions and estimates.

The items in the Statement of Accounts for which there is a significant risk of material adjustment in the

forthcoming financial year are as follows:

Actuarial present value of promised retirement benefits

The calculation of the actuarial present value of promised retirement benefits is undertaken by the Actuary

and is projected using a roll forward approximation from the latest formal funding valuation as at 31 March

2019. Estimates and assumptions are made in a number of judgements including discount rate, salary

increases, inflation, pensions increase rate, longevity of current and future pensioners, type of member in

scheme and commutation sums. See note s.

Any variance in the estimates and assumptions in any of the elements used to calculate the actuarial present

value of promised retirement benefits would impact on the quoted figure. For example, a 0.1% decrease in

the discount rate used would result in an increase in the pension liability of 2%, equivalent to £163m, a 0.1%

increase in the salary increase rate used would increase the value of liabilities by 0% or £15m, and a 0.1%

increase in the pensions increase rate used would increase the pension liability by 2% or £147m. A one-year

increase in life expectancy would approximately increase the liabilities by around 1% to 4%.

Unquoted Investments

By definition these investments are not publicly quoted, and the valuation depends on estimation techniques

and non-marketable observable inputs. Unquoted investments are valued at £1.4bn in the financial

statements and a 10% variance in the valuation risks these investments being under or overstated in the

accounts by up to £140m.

d) Stock Lending

State Street, the Fund’s Custodian has authorisation to release stock to third parties as determined by the

contract between State Street and the Fund.

During the year to 31 March 2022 stock lending income of £0.078m (2021 £0.115m) was raised against

expenditure for the activity of £0.024m (2021 £0.035m). At 31 March 2022 the total value of securities on loan

was £47.5m (2021 £120.5m) and are analysed by asset class as follows:

31 March 2021 31 March 2022

£000 £000

26,121 Equities - UK 3,310

0 Equities - Overseas 25,502

88,070 UK Bonds - Public Sector 18,666

6,272 Overseas Bonds - Public Sector 0

120,463 47,478

Against the stock on loan the Fund held collateral at 31 March 2022 of £50.2m (2021 £124.7m) analysed by asset

class as follows:

31 March 2021 31 March 2022

£000 £000

28,096 Equities - UK 3,502

0 Equities - Overseas 27,626

90,207 UK Bonds - Public Sector 19,076

6,397 Overseas Bonds - Public Sector 0

124,700 50,204

PENSION FUND


e) Derivatives

Equities have historically generated strong returns for the Fund, but the returns have been very volatile. To

protect the Fund from these short-term falls in equity markets, the Fund engaged River and Mercantile to manage

derivatives contracts. These contracts operate in a similar way to insurance arrangements. If equity markets fall,

the losses are covered. If equity markets do not fall, part of the investment return on equities is given up,

equivalent to an insurance premium.

The derivative contract was terminated during the year, before the contract expiry date.

Equity Option:

Value at Value at

31 March 2021 Counterparty Maturity Date Notional 31 March 2022

£000 £000

-3,192 Barclays 13 June 2022 £175m 0

-2,274 Goldman Sachs 13 June 2022 £125m 0

-5,466 0

15,095 UK Bonds 0

7,000 Cash 0

22,095 0

16,629 0

f) Contributions Receivable

2020/21

£000 £000 £000

Employers

140,571 Normal 102,157

12,442 Augmentation 11,521

65,977 Deficit Recovery 7,789 121,467

39,696 Employees 41,128

258,686 162,595

From

85,752 Administering Authority 20,729

164,894 Scheduled Bodies 134,837

8,040 Admission Bodies 7,029

258,686 162,595

2021/22

PENSION FUND


g) Benefits Payable

2020/21 2021/22

£000 £000

150,056 Pensions 153,995

24,751 Commutations, compounded and lump sum retirement benefits 30,736

5,533 Lump sum death benefits 3,743

180,340 188,474

Paid to

34,800 Administering Authority 37,242

132,947 Scheduled Bodies 138,351

12,593 Admission Bodies 12,881

180,340 188,474

h) Payments to and on account of leavers

2020/21 2021/22

£000 £000

383 Refunds to Members leaving service 360

8,925 Individual transfer values payable 10,082

9,308 10,442

i) Management Expenses

2020/21 2021/22

£000 £000

2,065 Pensions Administration 2,221

5,174 Investment Management 4,810

864 Oversight and Governance 960

8,103 7,991

Of the Investment Management expenses in 2021-22, no payment was made in respect of performance related

fees paid to the Fund’s internal investment manager.

Of the Oversight and Governance expenses in 2021-22, the external audit fee payable to Mazars LLP is £0.022m

(2020-21 £0.022m). It is possible that additional costs may be incurred relating to the 2021-22 audit. The

statutory audit fee does not include fees chargeable to the Fund for pension assurance work undertaken by

Mazars LLP at the request of employer auditors. Fees payable for this work are £0.0.14m (2020-21 £0.013m).

These fees will be recharged to the employer for whom the information is provided. No fees have been paid to

Mazars LLP in 2021-22 in respect of non-audit work.

Externally managed funds are managed by Schroder Investment Management Ltd and Border to Coast.

PENSION FUND


j) Investment Income

2020/21 2021/22

£000 £000

19,705 Bonds 25,904

12,112 Equities 13,613

155,988 Pooled Investments 126,339

398 Derivatives 46

-2,139 Other -947

1,252 Cash deposits 31

187,316 164,986

k) Reconciliation of Movements in Investments

2021/22 Change in

Value Reclass Purchases Sales Market Value at

1 April 2021 -ification at Cost Proceeds Value 31 March 2022

Investment Assets £000 £000 £000 £000 £000 £000

Bonds 776,463 153,971 -386,817 646 544,263

Equities 665,345 260,872 -254,213 46,769 718,773

Derivatives -5,466 0 -8,111 -2,645 0

Pooled Investment Vehicles

Pooled equities 2,375,706 -36,177 50,498 0 136,289 2,526,316

Pooled bonds 245,102 0 308,295 -571 -30,714 522,112

Pooled property 666,543 0 54,352 -178,297 48,596 591,194

Pooled private equity 326,946 21,764 62,403 -162,024 104,724 353,813

Pooled infrastructure 344,552 14,413 86,813 -123,879 12,175 334,074

Pooled other 180,277 0 400,859 -75,685 67,900 573,351

4,139,126 0 963,220 -540,456 338,970 4,900,860

5,575,468 0 1,378,063 -1,189,597 383,740 6,163,896

Investment Cash 145,050 777,538 -842,119 427 80,897

5,720,518 0 2,155,601 -2,031,716 384,167 6,244,793

Other Investments 18,555 22,594

Investment Assets 5,739,073 0 2,155,601 -2,031,716 384,167 6,267,387

Investment Liabilities -4,012 -18,492

5,735,061 0 2,155,601 -2,031,716 384,167 6,248,895

Net Gains and Losses on Financial Instruments

All net gains and losses on financial assets are fair value through profit and loss.

PENSION FUND


2020/21 Restated

Value Purchases Purchases Sales Market Value at

1 April 2020 at Cost at Cost Proceeds Value 31 March 2021

Investment Assets £000 £000 £000 £000 £000 £000

Bonds 623,812 388,790 388,790 -211,412 -24,727 776,463

Equities 400,901 678,745 678,745 -545,493 131,192 665,345

Derivatives 16,256 0 0 1,042 -22,764 -5,466

Pooled Investment Vehicles

Pooled equities 2,047,382 104,439 104,439 -317,887 541,770 2,375,706

Pooled bonds 110,730 129,069 129,069 -852 6,155 245,102

Pooled property 624,687 55,605 55,605 -49,740 35,991 666,543

Pooled private equity 247,952 60,185 60,185 -39,753 58,563 326,946

Pooled infrastructure 283,024 74,237 74,237 -23,265 10,557 344,552

Pooled other 175,519 31,169 31,169 -18,264 -8,147 180,277

3,489,294 454,704 454,704 -449,761 644,889 4,139,126

4,530,263 1,522,239 1,522,239 -1,205,624 728,590 5,575,468

Investment Cash 188,141 1,199,877 1,199,877 -1,243,011 43 145,050

4,718,404 2,722,116 2,722,116 -2,448,635 728,633 5,720,518

Other Investments 35,884 18,555

Investment Assets 4,754,288 2,722,116 2,722,116 -2,448,635 728,633 5,739,073

Investment Liabilities -8,043 -4,012

4,746,245 2,722,116 2,722,116 -2,448,635 728,633 5,735,061

l) Concentration of Investments

The Code requires disclosure where there is a concentration of investment which exceeds 5% of the total value

of the net assets of the scheme.

% of Number % of

Number of Units Value Net Assets of Units Value Net Assets

£000 £000

1,513,050,159.030 1,583,710 27.5 Border to Coast PP UK Listed Equity A 1,513,050,159.030 1,776,624 28.4

0.000 0 0.0 Border to Coast PP Listed Alternatives A 346,474,455.380 360,645 5.8

19,826,260.710 223,534 4.7 Border to Coast PP Overseas Developed Markets A 211,406,273.140 313,135 5.0

31 March 2021 31 March 2022

m) Managerial Arrangements of Assets

£m % £m %

2,473 43 Internally managed 2,074 33

1,100 19 Externally managed (Schroder Investment Management Limited) 1,110 18

2,176 38 Externally managed (Border to Coast Pensions Partnership) 3,079 49

5,749 100 6,263 100

31 March 2021 31 March 2022

PENSION FUND


n) Contractual Commitments

At 31 March 2022, the Fund had commitments to the purchase of investments as analysed below. The Fund will

be advised on the drawdown of these commitments by the individual fund manager.

Foreign £000 Foreign £000

Currency Currency

0 301,666 Sterling Denominated ( £ ) 0 324,963

239,776 173,788 US Dollar Denominated ( $ ) 209,740 159,292

104,255 88,811 Euro Denominated ( € ) 87,452 73,899

564,265 558,154

31 March 2021 31 March 2022

o) Members’ Allowances

Following modernisation of the Committee structures, allowances are not paid to Members directly in respect

of Pensions Committee attendance. The Chairman of the Pensions Committee is paid a special responsibility

allowance. However, allowances are not cumulative, and only the highest allowance for any committee

responsibility is paid to the Member. Payments to Members are disclosed on the Council’s website.

p) Related Party Transactions

In accordance with International Accounting Standard (IAS) 24 and International Public Sector Accounting

Standard (IPSAS) 20 ‘Related Party Disclosures’, material transactions with related parties not disclosed

elsewhere are detailed below.

• The officer responsible for the proper administration of the financial affairs of the East Riding Pension Fund

(the Section 151 officer) is also the Section 151 officer of East Riding of Yorkshire Council.

• The East Riding Pension Fund is administered by East Riding of Yorkshire Council. During the financial year,

the Council incurred costs of £7.991m (2021 £8.103m) comprising pensions administration costs of £2.221m

(2021 £2.065m), investment management costs of £4.810m (2021 £5.174m) and oversight and governance

costs of £0.960m (2021 £0.864m). The Council was subsequently reimbursed by the Fund for these expenses.

The Council is also the largest employer of members of the Pension Fund and, during the financial year, made

contributions of £20.729m to the Fund (2021 £85.752m). £10.152m (2021 £10.088m) of this total sum is in

respect of contributions paid by members of the Pension Fund. As at 31 March 2022, the Council was a net

debtor to the Fund of £2.469m (2021 £3.326m).

• Under legislation introduced in 2003-04, Councillors were entitled to join the Pension Scheme. The LGPS

(Transitional Provisions, Savings and Amendment) Regulations 2014 removed this entitlement for Councillors

from the later of 1 April 2014 or the end of their current term in office (or to age 75 if earlier). Therefore,

no members of the Pension Committee made contributions to the Fund during the financial year in their

member capacity. Councillors Rudd, Horton and Whittle declared being members of the Local Government

Scheme during 2021-22.

• No senior officers responsible for the administration of the Fund have entered into any contract, other than

their contract of employment with the Council, for the supply of goods or services to the Fund.

• The key management personnel of the Pension Fund are the Executive Director of Corporate Resources and

the Director of Finance. The charge to the Pension Fund for these two posts in 2021-22 was £44,107 (2021

£43,455).

• Councillor John Holtby was the Vice Chair of the Pensions Committee until 13 May 2021 and was a Non-

Executive Director of Border to Coast Pensions Partnership for the whole of 2021-22.

q) Additional Voluntary Contributions

The Fund's approved Additional Voluntary Contributions (AVC) provider. Prudential have not been able to

provide details of contributions made by scheme members (2021 £1.530m) and the total value of the funds

invested by Prudential on behalf of members of the East Riding Pension Fund as 31 March 2022 (2021 £24.985m)

by the account’s deadline.

AVCs do not form part of the Pension Fund Accounts in accordance with the Local Government Pension Scheme

(Management and Investment of Funds) Regulations 2016.

PENSION FUND


r) Investment Strategy Statement

The East Riding Pension Fund is required to maintain an Investment Strategy Statement (ISS) in accordance with

the LGPS Regulations. Full details of the ISS for the Fund are set out within the East Riding Pension Fund Annual

Report and Accounts. The Pensions Committee approved the ISS at its meeting on 13 March 2020, and it

complies with the LGPS Regulations.

The Fund is also required to maintain a Funding Strategy Statement (FSS) in accordance with the LGPS

Regulations. The FSS for the Fund has been revised to take into account the results of the actuarial valuation,

effective 31 March 2017. The FSS, which was approved by the Pensions Committee at its meeting on 16 March

2018, complies with these Regulations. The FSS effective 31 March 2021 was approved by Pensions Committee

on 13 March 2020, taking into account the results of the 2019 actuarial valuation.

In preparing the ISS and the FSS, the Pensions Committee has taken professional advice from its advisers and

investment managers, whom it considers are suitably qualified and experienced in investment matters. The

principal employers and trade unions are represented at the Pensions Committee, enabling their views to be

taken into account.

The investment managers and the investment advisers are required to adhere to the principles set out in the ISS.

The Pensions Committee requires an annual, written statement from its investment managers confirming that

they have adhered to the principles set out in the statement.

s) The Actuarial Present Value of Promised Retirement Benefits

The actuarial present value of promised retirement benefits at 31 March 2022 was £7.977bn (31 March 2021

£8.271bn). The promised retirement benefits at 31 March 2022 have been projected using a roll forward

approximation from the latest formal funding valuation as at 31 March 2019. The net assets of the Scheme

available to pay benefits at 31 March 2022 was £6.263bn (31 March 2021 £5.749bn). The fund accounts do not

take account of liabilities to pay pensions and other benefits in the future.

Significant actuarial assumptions are shown below:

Year ended (% p.a.) 31 March 2021 31 March 2020

Pension Increase Rate 2.85% 1.9%

Salary Increase Rate 3.75% 2.8%

Discount Rate 2.00% 2.3%

PENSION FUND


t) Disclosure Relating to Financial Instruments

The items in the Net Asset Statement are made up of the following categories of financial instrument.

31 March 2021

£000 £000 £000

Financial Assets at fair value through profit or loss

776,463 Bonds 544,263

664,164 Equities 717,592

4,139,126 Pooled Investment Vehicles 4,900,860

-5,466 Derivatives 0

5,215 Foreign Currency 8,003

5,280 Other Investment Balances 4,995

5,584,782 Total Financial Assets at fair value through profit or loss 6,175,713

Financial Assets at cost

1,181 Long term investments 1,181

5,585,963 Total Financial Assets 6,176,894

Financial Assets at Amortised Cost

153,110 Cash Deposits - Sterling 90,493

16,125 Current Assets 16,092

169,235 Total Financial Assets at Amortised Cost 106,585

Financial Liabilities at fair value through profit or loss

-4,012 Other Investment Balances -18,492

Financial Liabilities at Amortised Cost

-1,978 Current liabilities -2,345

5,749,208 Net Financial Assets 6,262,642

31 March 2022

The methodology for the valuation of investment assets is described in Note 10 c), 6. Valuation of Assets.

The Fund’s primary long-term risk is that the Fund’s assets do not meet its liabilities i.e. the benefits payable to

members. Therefore, the aim of the Fund’s investment management is to achieve the long term expected rate

of return with an acceptable level of risk. The Fund achieves this by setting a strategic asset allocation on a

triennial basis which is expected to achieve the target rate of return over the long term. The tactical asset

allocation is determined by the Pensions Committee on a quarterly basis.

The Fund has a dedicated strategic risk register which identifies the key risks within the Pension Fund and the

risk controls that are in place to mitigate these risks. The risk register is reviewed by the Pensions Committee

on a semi-annual basis. In addition, an investment risk management schedule is reviewed by the Pensions

Committee on a quarterly basis which considers issues such as performance; regulation and compliance; and

personnel and structure.

The key risks inherent in the Pension Fund in relation to its financial assets are:

Market risk

• Market risk is the risk that the value of an investment decreases as a result of changing market conditions.

The risk is mitigated by an appropriate strategic asset allocation is determined on a triennial basis in

conjunction with the actuarial valuation exercise. This aims to meet the target long term rate of return with

an acceptable level of risk and includes an appropriate diversification of asset classes. The allocation is agreed

by the Pensions Committee and the Fund’s advisers and investment managers.

• The strategic asset allocation is disclosed in the Fund’s Investment Strategy Statement including the permitted

asset classes, their allocations, and the permitted ranges.

• Tactical asset allocation is determined on a quarterly basis by the Pensions Committee in light of financial

market conditions and following advice from the Fund’s advisers and investment managers.

• The Pensions Committee regularly reviews the long-term investment strategy to ensure that it remains

appropriate.

The investment policy of the East Riding Pension Fund does not permit any employer-related investment, either

in the assets, stock, land or property of the Principal Employers or the assets, stock, land or property of any

PENSION FUND


associated employers. The Pensions Committee considers that employer related investments pose too great a

risk to the security of the Fund.

The Fund has adopted the CIPFA Code of Practice for Treasury Management in Public Services and maintains

and operates a Treasury Management Policy comprising an overview of the principles and practices to which the

activity will comply. The Treasury Management Policy is approved by the Pensions Committee on an annual basis

and they also receive a half-yearly and annual report on treasury activity.

The Local Government Pension Scheme (Management and Investment of Funds) Regulations 2016 state the

following regarding the use and investment of Pension Fund monies:

• an Administering Authority must invest any fund money that is not needed immediately to make payments

from the fund;

• they may vary their investments;

• their investment policy must be formulated with a view to the advisability of investing fund money in a wide

variety of investments and to the suitability of particular investments and types of investments;

• an Administering Authority must obtain proper advice at reasonable intervals about their investments; and

• the Authority must consider such advice in taking any steps about their investments.

The Fund has determined that the following movements in market price risk are possible for the 2022-23

reporting period:

Potential market

movements

(+/-)

Asset Type %

Bonds 5.7

Equities 13.8

Property 3.2

Pooled Investments 13.8

Private Equity 4.0

Cash 1.1

Had the market price of the fund investments increased or decreased in line with the above, the change in the

net assets available to fund benefits would have been as follows:

Value as at the Potential value Potential value

31 March 2022 on increase on decrease

Asset Type £000 £000 £000

Bonds 544,263 575,286 513,240

Equities 718,773 817,964 619,582

Derivatives 0 0 0

Pooled Investments 4,900,860 5,367,538 4,434,182

Cash 80,897 81,787 80,007

Total 6,244,793 6,842,575 5,647,011

PENSION FUND


The Fund determined that the following movements in market price risk were possible for the 2021-22 reporting

period:

Potential market

movements

(+/-)

Asset Type %

Bonds 5.3

Equities 14.3

Property 2.3

Pooled Investments 14.3

Private Equity 4

Cash 0.9

Value as at the Potential value Potential value

31 March 2021 on increase on decrease

Asset Type £000 £000 £000

Bonds 776,463 817,616 735,311

Equities 665,345 760,491 570,202

Derivatives -5,466 -4,684 -6,248

Pooled Investments 4,139,126 4,595,487 3,682,766

Cash 145,050 146,354 143,744

Total 5,720,518 6,315,264 5,125,775

Performance risk

Performance risk is the risk that the Fund’s investment managers fail to deliver returns in line with the

underlying asset classes. This risk is mitigated by:

• investment management responsibilities are split between the internal and external investment managers;

• each investment manager has a robust investment process including detailed research and analysis;

• analysis of market performance and investment managers’ performance relative to their index benchmark on

a quarterly basis by an independent third party;

• detailed analysis of investment managers’ performance on an annual basis.

Valuation risk

This is the risk that the valuations disclosed in the financial statements are not reflective of the value that could

be achieved on disposal.

The valuation of financial instruments has been classified into three levels, according to the quality and reliability

of information used to determine fair values.

• Level 1 – Level 1 valuations are those derived from unadjusted quoted prices in active markets for identical

assets or liabilities. Products classified as level 1 include quoted equities.

• Level 2 – Level 2 valuations are those where quoted market prices are not available. Products classified as

level 2 include property funds, fixed interest securities, index linked securities and unit trusts. Prices for Level

2 investments assets can be provided by evaluated price feeds in the case of bonds or net asset valuations for

property investments.

• Level 3 – Level 3 valuations are those where at least one input which could have a significant effect on an

instrument’s valuation is not based on observable market data. Products classified as level 3 include unquoted

investments. Level 3 valuations are based on net asset values provided by the fund managers adjusted for

calls and distributions from date of valuation to 31 March. Assurance is gained by using audited financial

statements. Valuations could be affected by material events occurring between the date of the financial

statements provided and the pension funds reporting date.

PENSION FUND


Level 1 Level 2 Level 3 Total

Values at 31 March 2022 £000 £000 £000 £000

Financial Assets at fair value through profit or loss 3,489,537 1,302,703 1,371,656 6,163,896

Financial Assets at amortised cost 119,583 0 0 119,583

3,609,120 1,302,703 1,371,656 6,283,479

Financial Liabilities at fair value through profit or loss 18,492 0 0 18,492

Financial Liabilities at amortised cost 2,345 0 0 2,345

20,837 0 0 20,837

3,588,283 1,302,703 1,371,656 6,262,642

Level 1 Level 2 Level 3 Total

Values at 31 March 2021 £000 £000 £000 £000

Financial Assets at fair value through profit or loss 3,048,846 1,326,794 1,199,828 5,575,468

Financial Assets at amortised cost 179,730 0 0 179,730

3,228,576 1,326,794 1,199,828 5,755,198

Financial Liabilities at fair value through profit or loss 4,012 0 0 4,012

Financial Liabilities at amortised cost 1,978 0 0 1,978

5,990 0 0 5,990

3,222,586 1,326,794 1,199,828 5,749,208

Level 3 Analysis

Value at Change Value at

1 April 2021 Purchases at Sales Market 31 March 2022

£000 £000 £000 £000

1,199,828 261,227 -266,560 177,161 1,371,656

£000

Level 3 Analysis

Value at Change Value at

Purchases at Sales Market 31 March 2021

£000 £000 £000 £000

1,160,721 197,124 -140,441 -17,576 1,199,828

£000

1 April 2020

The main characteristic of Level 3 assets is the absence of any observable market data. The inputs used to

determine the fair value of Level 3 assets include the provision of net asset values by the fund manager,

prepared in accordance with IFRS and US GAAP accounting principles, which are adjusted for cash flows from

the report date to 31 March. Valuations could be affected by material events occurring between the date of the

financial statements provided and the pension funds own reporting date by changes to expected cashflows and

by any difference between audited and unaudited accounts.

The table below shows the effect of potential market movements on those assets classified at Level 3.

Value at Potential market Potential value Potential value

31 March 2022 movements (+/-) on increase on decrease

£000 % £000 £000

Multi Asset Credit 270,869 5.7 286,309 255,429

Property 374,235 3.2 386,211 362,259

Private Equity 284,434 5.5 300,078 268,790

Infrastructure 290,414 5.5 306,387 274,441

Other 151,704 5.5 160,048 143,360

1,371,656 1,439,033 1,304,279

PENSION FUND


Value at Potential market Potential value Potential value

31 March 2021 movements (+/-) on increase on decrease

£000 % £000 £000

Multi Asset Credit 254,531 5.3 268,021 241,041

UK Equities - 14.3 - -

Property 364,967 2.3 373,361 356,573

Private Equity 214,360 4.0 222,934 205,786

Infrastructure 230,159 4.0 239,365 220,953

Other 135,811 4.0 141,243 130,379

1,199,828 1,244,924 1,154,732

Credit risk

This is the risk that the Fund’s counterparties fail to pay amounts due. Appropriate credit limits have been

established by the Fund for individual counterparties for Treasury Management purposes. The Pension Fund

Treasury Management Policy specifies the following framework for credit limits for individual counterparties:

31 March 2021 Maximum 31 March 2022

Actual Limit Actual

£000 £000 £000

44,944 Institutions or Funds with a minimum rating of AAA/A2 50,000 34,693

10,000 Institutions with a minimum rating of AA/A2 25,000 0

20,000 Institutions with a minimum rating of A/A2 20,000 5,000

0 Local Authorities 10,000 0

5,000 Building Societies - top 15 ranked by asset value 10,000 0

The investment balances at the end of the financial year were:

31 March 2021 31 March 2022

£000 £000

97,903 Institutions or Funds with a minimum rating of AAA/A2 72,693

10,000 Institutions with a minimum rating of AA/A2 0

37,362 Institutions with a minimum rating of A/A2 8,204

0 Local Authorities 0

5,000 Building Societies - top 15 ranked by asset value 0

150,265 80,897

Treasury credit risk has been managed dynamically during the year, responding to national and international

events in financial markets. Security of principal sums invested continues to be the prime objective. The duration

of investments is limited to a maximum of twelve months to enable a reasonable exit strategy to be implemented

if necessary. The Pension Fund makes use of Money Market Funds which are instant access funds whose

objectives match those of the Pension Fund, being security of principal and diversification of investments. The

present restrictions within the approved Treasury Management Policy will continue until economic and market

conditions normalise.

Liquidity risk

Liquidity risk is the risk that the Pension Fund is not able to meet its financial obligations as they fall due or can

do so only at an excessive cost. The Pension Fund’s policy is to maintain sufficient funds in a liquid form at all

times to ensure that it can cover all fluctuations in cash flow and meet its financial obligations. The accounts do

not take into account liabilities to pay pensions and other benefits.

PENSION FUND


The table below profiles investment assets by maturity date, however it should be noted that those investments

in the 1 - 5 years and more than 5 years categories, i.e. bonds, can be liquidated at any given time.

Not more More No

than 3 3 - 12 1 - 5 than 5 specific

months months years years maturity Total

£000 £000 £000 £000 £000 £000

As at 31 March 2022

Assets

Cash 5,000 0 0 0 93,496 98,496

Investments 0 7,997 102,047 136,143 5,917,708 6,163,895

Other investment balances 4,996 0 0 0 0 4,996

Current assets 16,092 0 0 0 0 16,092

Total assets 26,088 7,997 102,047 136,143 6,011,204 6,283,479

Liabilities


Current liabilities 2,345 0 0 0 0 2,345

Total liabilities 20,837 0 0 0 0 20,837

Liquidity Surplus 5,251 7,997 102,047 136,143 6,011,204 6,262,642

Not more More No

than 3 3 - 12 1 - 5 than 5 specific

months months years years maturity Total

£000 £000 £000 £000 £000 £000

As at 31 March 2021

Assets

Cash 25,000 10,000 0 0 123,325 158,325

Investments 0 15,481 109,376 160,155 5,290,456 5,575,468


Current assets 16,125 0 0 0 0 16,125

Total assets 46,405 25,481 109,376 160,155 5,413,781 5,755,198

Liabilities


Current liabilities 1,978 0 0 0 0 1,978

Total liabilities 5,990 0 0 0 0 5,990

Liquidity Surplus 40,415 25,481 109,376 160,155 5,413,781 5,749,208

Interest rate risk

Interest rate risk is the risk that a change in interest rates will result in a change in the valuation of an investment.

The Fund’s direct exposure to changes in interest rates is as follows:

31 March 2021 31 March 2022

£000 £000

Asset Type

Cash and cash equivalents 126,151 75,897

Bonds 776,463 544,263

902,614 620,160

PENSION FUND


The table below shows the effect in the year on assets exposed to interest rate changes of a + / - 100 basis points

in interest rates:

Asset exposed to Value as at Potential movement on Value on Value on

interest rate risk 31 March 2022 1% change in interest rates Increase Decrease

£000 £000 £000 £000

Cash and cash equivalents 75,897 759 76,656 75,138

Bonds 544,263 5,443 549,706 538,820

Total 620,160 6,202 626,362 613,958

Asset exposed to Value as at Potential movement on Value on Value on

interest rate risk 31 March 2021 1% change in interest rates Increase Decrease

£000 £000 £000 £000

Cash and cash equivalents 126,151 1,262 127,413 124,889

Bonds 776,463 7,765 784,228 768,698

Total 902,614 9,026 911,640 893,588

The table below shows the impact on income exposed to interest rate changes of + / - 100 basis points change

in interest rates:

Value as at Potential movement on Value on Value on

Income exposed to 31 March 2022 1% change in interest rates Increase Decrease

interest rate risk £000 £000 £000 £000

Cash and cash equivalents -13 - -13 -13

Bonds 25,950 260 26,210 25,691

Total 25,937 260 26,197 25,678

Value as at Potential movement on Value on Value on

Income exposed to 31 March 2021 1% change in interest rates Increase Decrease

interest rate risk £000 £000 £000 £000

Cash and cash equivalents 1,251 13 1,264 1,238

Bonds 19,706 197 19,903 19,509

Total 20,957 210 21,167 20,747

Foreign exchange risk

Foreign exchange risk is the risk that an adverse movement in foreign exchange rates will impact on the value of

the Fund’s investments denominated in foreign currencies. The calculated volatility of 7.3% (2021 8.4%) associated

with foreign exchange movements would increase or decrease the net assets available to fund benefits as follows:

Asset value Potential market Value on Value on

Assets exposed to at 31 March 2022 movement Increase Decrease

currency risk £000 £000 £000 £000

Bonds 237,567 17,342 254,909 220,225

Equities 717,591 52,384 769,975 665,207

Managed Funds 554,062 40,447 594,509 513,615

Total 1,509,220 110,173 1,619,393 1,399,047

Asset value Potential market Value on Value on

Assets exposed to at 31 March 2021 movement Increase Decrease

currency risk £000 £000 £000 £000

Bonds 274,967 23,097 298,064 251,870

Equities 652,767 54,832 707,599 597,935

Managed Funds 835,220 70,158 905,378 765,062

Total 1,762,954 148,087 1,911,041 1,614,867

PENSION FUND


u) Contingent assets

As at 31 March 2022, the Fund had submitted claims totalling £8.69m (2021 £8.93m) relating to the reclaiming

of UK and overseas withholding tax on investment income received, of which £1.85m (2021 £1.85m) has been

received to date. The decrease in the sterling value of the tax claims is due to exchange movements on euro

denominated tax claims. Professional costs to date have totalled £0.74m (2021 £0.73m).

v) Accounting standards that have been issued but not yet adopted

Changes to accounting standards adopted by CIPFA’s Code of Practice for 2021-22 include the following:

IFRS 3 ‘Business Combinations’ – Minor amendments to the definition of a business. This clarifies whether a

transaction should be accounted for an asset acquisition or a business combination.

Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS 7) has an impact on hedge accounting

if interest rates change. The amendment will not have an impact on the Council as it does not undertake these

transactions.

Interest Rate Benchmark Reform Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16) addresses

issues arising during the reform of benchmark interest rates if the existing interest rate is replaced by an

alternative one.

w) Events after Balance Sheet Date

This note considers events that arise after the balance sheet date, which concerns conditions that did not exist

at that time and are of such materiality that their disclosure is required for the fair presentation of the final

statements. Events after the balance sheet date are reflected up to the date when the Statement of Accounts

was authorised by the Director of Finance as Section 151 Officer on 29 July 2022.

At the date of signing there have been no adjusting or non-adjusting events after the reporting period.

x) Scheme Registration Number

The Fund’s scheme registration number with the Pensions Regulator is 10079121.

11. FURTHER DETAIL

The complete Annual Report and Accounts of the East Riding Pension Fund can be found on the Fund’s website

www.erpf.org.uk.

GLOSSARY OF TERMS


A CHANGE IN ACCOUNTING

ESTIMATE

An adjustment of the carrying amount of an asset or a liability, or the amount

of the periodic consumption of an asset, that results from the assessment of

the present status of and expected future benefits/obligations. Changes in

accounting estimates result from new information or new developments and,

accordingly, are not correction of errors.

A PRINCIPLE MARKET The market with the greatest volume and level of activity for the asset or

liability.

ACADEMIES Academies are publicly funded independent schools, no longer under Local

Authority (LA) control. Their funding is received directly from the Education

Funding Agency (EFA) rather than from the LA.

ACCOUNTING PERIOD The period of time covered by the accounts, normally a period of twelve

months commencing on 1 April. The end of the accounting period is the

balance sheet date.

ACCOUNTING POLICIES Specific principles, bases, conventions, rules and practices applied by an

Authority in preparing and presenting financial statements.

ACCRUALS Sums included in the final accounts to recognise revenue and capital income

and expenditure earned or incurred in the financial year, but for which actual

payment had not been received or made as at 31 March.

ACCRUALS BASIS The authority recognises items as assets, liabilities, income and expenses when

they satisfy the definitions and recognition criteria for those elements in the

Code. Accrual accounting depicts the effects of transactions and other events

and circumstances on an authority's economic resources and claims in the

periods in which those effects occur, even if the resulting cash receipts and

payments occur in a different period.

ACTIVE MARKET

A market in which transactions for the asset or liability take place with

sufficient frequency and volume to provide pricing information on an ongoing

basis.

ACTUARIAL GAINS AND

LOSSES

For a defined benefit pension scheme, the changes in actuarial surpluses or

deficits that arise because:

• events have not coincided with the actuarial assumptions made for the last

valuation (experience gains and losses); or

• the actuarial assumptions have changed.

AGENT This is where the Authority is acting as an intermediary.

AMORTISATION The depreciable amount of an intangible asset with a finite useful life. It is

amortised (depreciated) on a systematic basis over its useful life, beginning

when the intangible asset is available for use.

ASSET CEILING The present value of any economic benefits available in the form of refunds

from the plan or reductions in future contributions to the plan.

ASSET RATIONALISATION The process of reorganising assets to improve operating efficiencies.

ASSETS A resource controlled by the Authority, as a result of past events and from

which future economic benefits or service potential are expected flow to the

Authority.

GLOSSARY OF TERMS


ASSETS HELD BY A LONG-

TERM EMPLOYEE BENEFIT

FUND

Are assets (other than non-transferable financial instruments issued by the

reporting Authority) that are either:

a) held by a fund that is separated within the reporting Authority in

accordance with Local Government Pension Scheme requirements and

exists solely to pay or

b) held by an entity (a fund) that is legally separate from the reporting

Authority and exists solely to pay or fund employee benefits, and

c) are available to be used only to pay or fund employee benefits, are not

available to the reporting Authority’s own creditors (even in bankruptcy),

and cannot be returned to the reporting Authority, unless either:

i) the remaining assets of the fund are sufficient to meet all the related

employee benefit obligations of the plan or the reporting Authority, or

ii) the assets are returned to the reporting Authority to reimburse it for

employee benefits already paid.

ASSOCIATE An entity over which an investor has significant influence.

AUDIT OF ACCOUNTS An independent examination of the Authority’s financial affairs.

AVAILABLE FOR SALE

FINANCIAL ASSETS

Those non-derivative financial assets that are not classified as loans and

receivables or held-to-maturity investments or financial assets at fair value

through profit or loss.

BALANCE SHEET A statement of the recorded assets, liabilities and other balances at the end of

the accounting period.

BORROWING COST Interest and other costs that an Authority incurs in connection with the

borrowing of funds.

BUDGET The forecast of net revenue and capital expenditure over the accounting

period.

CAPITAL EXPENDITURE Expenditure on the acquisition of a non-current asset, which will be used in

providing services beyond the current accounting period or expenditure that

adds to, and not merely maintains, the value of an existing non-current asset.

CAPITAL FINANCING Funds used to pay for capital expenditure. There are various methods of

financing capital expenditure including borrowing, leasing, direct revenue

financing, usable capital receipts, capital grants, capital contributions, revenue

reserves and earmarked reserves.

CAPITAL PROGRAMME The capital schemes the Authority intends to carry out over a specified period

of time.

CAPITAL RECEIPT The proceeds from the disposal of land or other non-current assets.

Proportions of Housing capital receipts can be used to finance new capital

expenditure, within rules set down by the Government, but they cannot be

used to finance revenue expenditure except for Revenue Expenditure Funded

from Capital under Statute.

CARRYING AMOUNT The amount at which an asset is recognised after deducting any accumulated

depreciation and impairment losses.

CASH Cash on hand and demand deposits.

CASH EQUIVALENTS Short-term, highly liquid investments readily convertible to known amounts of

cash and which are subject to an insignificant risk of changes in value.

GLOSSARY OF TERMS


CASH FLOW STATEMENT The financial statement that shows the changes in cash and cash equivalents of

the Authority during the reporting period.

CASHFLOWS Inflows and outflows of cash and cash equivalents.

CHANGE IN ACCOUNTING

ESTIMATE

An adjustment of the carrying amount of an asset or a liability, or the amount

of the periodic consumption of an asset, that results from the assessment of

the present status of, and expected future benefits and obligations associated

with, assets and liabilities. Changes in accounting estimates result from new

information or new developments and, accordingly, are not correction of

errors.

CLASS OF PROPERTY, PLANT

AND EQUIPMENT

A grouping of assets of a similar nature and use in an Authority's operations.

CLOSE MEMBERS OF THE

FAMILY OF A PERSON

These are those family members who may be expected to influence, or be

influenced by, that person in their dealings with the entity and include: that

person's children and spouse or domestic partner; children of that person's

spouse or domestic partner and dependants of that person or that person's

spouse or domestic partner.

COLLECTION FUND A separate fund that records the income and expenditure relating to council

tax and non-domestic rates.

COLLECTION FUND

ADJUSTMENT ACCOUNT Manages the differences arising from the recognition of council tax and non-

domestic rates income in the Comprehensive Income and Expenditure

Statement as it falls due from council tax payers and business rate payers

compared with the statutory arrangements for paying across amounts to the

General Fund from the Collection Fund.

COMMENCEMENT OF THE

LEASE TERM

The date from which the lessee is entitled to exercise its right to use the leased

asset. It is the date of initial recognition of the lease.

COMMUNITY ASSETS Non-current assets that the Authority intends to hold in perpetuity, that have

no determinable useful life and that may have restrictions on their disposal.

Examples of community assets are parks and historical buildings

COMPARABILITY Information about an Authority is more useful if it can be compared with

similar information about other authorities and entities and with similar

information about the same Authority for another period or another date

COMPONENT A part of an asset requiring separating from the total (host) asset into an asset

in its own right as it has a cost that is significant in relation to the total cost of

the asset. If the components also has a significantly different depreciable life

from the host, then it is depreciated separately.

COMPREHENSIVE INCOME

AND EXPENDITURE

STATEMENT

Shows the accounting economic 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.

CONDITIONS ON

TRANSFERRED ASSETS

Stipulations that specify that the future economic benefits or service potential

embodied in the asset are required to be consumed by the recipient as

specified or future economic benefits or service potential must be returned to

the transferor.

CONSISTENCY The concept that the accounting treatment of like items within an accounting

period and from one period to the next are the same.

GLOSSARY OF TERMS


CONSTRUCTIVE

OBLIGATION

An obligation that derives from the Authority’s actions where:

• by an established pattern of past practice, published policies or a sufficiently

specific current statement, the Authority has indicated to other parties

that it will accept certain responsibilities; and

• as a result, the Authority has created a valid expectation on the part of

those other parties that it will discharge those responsibilities.

CONTINGENT ASSET A possible asset that arises from past events and whose existence will be

confirmed only by the occurrence or non-occurrence of one or more

uncertain future events not wholly within the control of the Authority.

CONTINGENT LIABILITY A contingent liability is either:

• a possible obligation that arises from past events and whose existence will

be confirmed only by the occurrence or non-occurrence of one or more

uncertain future events not wholly within the control of the Authority, or

• a present obligation that arises from past events but is not recognised

because it is not probable that an outflow of resources embodying

economic benefits or service potential will be required to settle the

obligation or the amount of the obligation cannot be measured with

sufficient reliability.

CONTROL OF AN INVESTEE An investor controls an investee when the reporting Authority is exposed, or

has rights, to variable returns from its involvement with the investee and has

the ability to affect those returns through its power over the investee.

CONSTRUCTION

CONTRACT

A contract, or a similar binding arrangement, specifically negotiated for the

construction of an asset or a combination of assets that are closely interrelated

or interdependent in terms of their design, technology and function or their

ultimate purpose or use. Construction contracts include contracts for the

rendering of services which are directly related to the construction,

destruction or restoration of assets, and the restoration of the environment

following the demolition of assets.

CONTRACTOR An entity that performs construction work pursuant to a construction

contract

CORPORATE AND

DEMOCRATIC CORE

The corporate and democratic core comprises all activities that local

authorities engage in specifically because they are elected, multi-purpose

authorities. The cost of these activities are thus over and above those which

would be incurred by a series of independent, single purpose, nominated

bodies managing the same services. There is therefore no logical basis for

apportioning these costs to services.

COST The amount of cash or cash equivalent paid or the fair value of the other

consideration given to acquire an asset at the time of acquisition or

construction

COST APPROACH A valuation technique that reflects the amount that would be required

currently to replace the service capacity of an asset (often referred to as

current replacement cost).

COSTS TO SELL The incremental costs directly attributable to the disposal of an asset,

excluding finance costs.

CRC The Carbon Reduction Commitment Energy Efficiency Scheme commenced in

April 2010.

GLOSSARY OF TERMS


CREDITOR Amount owed by the Authority for works done, goods received or services

rendered within the accounting period, but for which payment has not been

made by the end of that accounting period.

CURRENT ASSET An item having value to the Authority in monetary terms. A current asset will

be consumed or cease to have material value within the next financial year (e.g.

cash and inventories).

CURRENT REPLACEMENT

COST

The cost the Authority would incur to acquire the asset on the reporting date.

CURRENT SERVICE COST

(PENSIONS)

The increase in the present value of a defined benefit pension scheme’s

liabilities, expected to arise from employee service in the current period.

CURRENT VALUE Measurements reflect the economic environment prevailing for the service or

function the asset is supporting at the reporting date.

DEBTOR Amount owed to the Authority for works done, goods received or services

rendered within the accounting period, but for which payment has not been

received by the end of that accounting period.

DECISION MAKER An entity with decision-making rights that is either a principal or an agent for

other parties.

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 Council does not treat these gains

as usable for financing new capital expenditure until they are backed by cash

receipts.

DEFINED BENEFIT PENSION

SCHEME

Pension schemes in which the benefits received by the participants are

independent of the contributions paid and are not directly related to the

investments of the scheme.

DEFINED CONTRIBUTION

PLANS

Post-employment benefit plans under which an Authority pays fixed

contributions into a separate entity and will have no legal or constructive

obligation to pay further contributions if the fund does not hold sufficient asset

to pay all employee benefits relating to employee service in the current and

prior periods.

DEPRECIATION(TANGIBLES)/

AMORTISATION

(INTANGIBLES)

The measure of the cost of the wearing out, consumption or other reduction

in the useful economic life of the Authority’s non-current assets during the

accounting period, whether from use, the passage of time, or obsolescence

through technological or other changes.

DEPRECIATED

REPLACEMENT COST

(DRC) is a method of valuation which provides the current cost of replacing

an asset with its modern equivalent asset less deductions for all physical

deterioration and all relevant forms of obsolescence and optimisation.

DERECOGNITION The removal of a previously recognised financial asset or financial liability from

an Authority's Balance Sheet.

DERIVATIVE A financial instrument with all three of the following characteristics: its value

changes in response to the change in a specified interest rate, financial

instrument price, commodity price, foreign exchange rate, index of prices or

rates, credit rating or credit index, or other variable, provided in the case of

anon-financial variable that the variable is not specific to a party to the contract;

it requires no initial net investment or an initial investment that is smaller than

would be required for other types of contracts that would be expected to

have a similar response to changes in market factors; it is settled at a future

date.

GLOSSARY OF TERMS


DISCONTINUED OPERATION Activity of an Authority that must cease completely; that is, responsibilities

transferred from one part of the public sector to another are not discontinued

operations.

DISCRETIONARY BENEFITS

(PENSIONS)

Retirement benefits which the employer has no legal, contractual or

constructive obligation to award and are awarded under the Authority’s

discretionary powers such as The Local Government (Discretionary

Payments) Regulations 1996.

DISPOSAL GROUP A group of assets to be disposed of, by sale or otherwise, together as a group

in a single transaction, and liabilities directly associated with those assets that

will be transferred in the transaction.

DONATED ASSETS Assets (including heritage assets) transferred at nil value or acquired at less

than fair value.

DRC Depreciated replacement cost is a method of valuation which provides the

current cost of replacing an asset with its modern equivalent asset less

deductions for all physical deterioration and all relevant forms of obsolescence

and optimisation.

ECONOMIC COST Economic cost incorporates the total cost of everything involved in providing

a service in accordance with accounting standards i.e. includes non-cash

charges such as depreciation and the employee benefit accrual. These are then

adjusted in the Movement in Reserves Statement in accordance with statute

to produce the General Fund balance. Statute always takes precedence over

accounting standard treatment.

EFFECTIVE INTEREST RATE This is the rate of interest necessary to discount the estimated stream of

principal and interest cash flows through the expected life of a financial

instrument to equal the amount at initial recognition.

EMPLOYEE BENEFITS All forms of consideration given by an Authority in exchange for service

rendered by employees or for the termination of employment.

ENTRY PRICE The price paid to acquire an asset or received to assume a liability in an

exchange transaction.

EQUITY INSTRUMENT Any contract that evidences a residual interest in the assets of an entity after

deducting all of its liabilities.

EQUITY METHOD A method of accounting whereby the investment is initially recognised at cost

and adjusted thereafter for the post-acquisition change in the investor's share

of net assets of the investee. The reporting Authority's Surplus or Deficit on

the Provision of Services includes its share of the investee's profit or loss and

the reporting Authority's Other Comprehensive Income and Expenditure

includes its share of the investee's Other Comprehensive Income and

Expenditure

EVENTS AFTER THE

REPORTING PERIOD

Events after the reporting period are those events, favourable or unfavourable,

that occur between the balance sheet date and the date when the Statement

of Accounts is authorised for issue.

EXCHANGE TRANSACTIONS Transactions in which one entity receives assets or services, or has liabilities

extinguished, and directly gives approximately equal value (primarily in the

form of cash, goods, services, or use of assets) to another entity in exchange.

EXECUTORY CONTRACTS Contracts under which neither party has performed any of its obligation or

both parties have partially performed their obligations to an equal extent.

GLOSSARY OF TERMS


EXISTING USE VALUE (EUV) The estimated amount for which a property should exchange on the date of

valuation between a willing buyer and a willing seller in an arm’s-length

transaction, after proper marketing wherein the parties had each acted

knowledgeably, prudently and without compulsion, assuming that the buyer is

granted vacant possession of all parts of the property required by the business

and disregarding potential alternative uses and any other characteristics of the

property that would cause its market value to differ from that needed to

replace the remaining service potential at least cost. Under IFRS this is the

same as Fair Value.

EXISTING USE VALUE-

SOCIAL HOUSING (EUV-SH)

The estimated amount for which a property should exchange, on the date of

valuation, between a willing buyer and a willing seller, in an arm’s-length

transaction, after proper marketing where in the parties had each acted

knowledgeably, prudently and without compulsion, subject to the following

further assumptions that; the property will continue to be let by a body and

used for social housing at the valuation date, any regulatory body, in applying

its criteria for approval, would not unreasonably better the vendor’s ability to

dispose of the property to organisations intending to manage their housing

stock in accordance with that regulatory body’s requirements properties

temporarily vacant pending re letting should be valued, if there is a letting

demand, on the basis that the prospective purchaser intends to re-let them,

rather than with vacant possession.

Any subsequent sale would be subject to all of the above assumptions.

EXPECTED RETURN ON

PENSION ASSETS

For a funded defined benefit scheme, this is the average rate of return, including

both income and changes in fair value but net of scheme expenses, which is

expected over the remaining life of the related obligation on the actual assets

held by the scheme.

EXPENDITURE AND

FUNDING ANALYSIS

The Expenditure and Funding Analysis takes the net expenditure that is

chargeable to taxation and rents and reconciles it to the Comprehensive

Income and Expenditure Statement. The Expenditure and Funding Analysis

promotes accountability and stewardship by providing a direct link with the

annual decision making process of the Authority and its budget i.e. the General

Fund.

EXPENSES Decreases in economic benefits or service potential during the reporting

period in the form of outflows or consumption of assets or increases of

liabilities that result in decreases in reserves.

FAIR VALUE The amount for which an asset could be exchanged or a liability settled,

between knowledgeable, willing parties in an arm’s-length transaction. Under

IFRS there is no consistent definition of Fair Value; different definitions apply

in different circumstances.

FAITHFUL REPRESENTATION To be useful, financial information must not only represent relevant

phenomena, but it must also faithfully represent the phenomena that it

purports to represent. To be a perfectly faithful representation, a depiction

would have three characteristics. It would be complete, neutral and free from

error.

FINANCIAL ASSET OR

FINANCIAL LIABILITY AT

FAIR VALUE THROUGH

PROFIT OR LOSS

A financial asset or financial liability that meets either of the following

conditions. It’s is classified as held for trading or upon initial recognition it is

designated by the entity as at fair value through profit or loss

FINANCIAL INSTRUMENT Any contract that gives rise to a financial asset of one entity and a financial

liability or equity instrument of another. The term covers both financial assets

and financial liabilities, from straightforward trade receivables (invoices owing)

and trade payables (invoices owed) to complex derivatives and embedded

derivatives.

GLOSSARY OF TERMS


FINANCIAL INSTRUMENT

ADJUSTMENT ACCOUNT

Absorbs the timing differences arising from different arrangements for

accounting for income and expenses relating to certain financial instruments

and for bearing losses or benefiting from gains per statutory provisions.

FINANCE LEASE A lease that transfers substantially all the risks and rewards of ownership of an

asset to the lessee (even though title to the property may not be transferred).

The asset is recorded on the Balance Sheet of the lessee.

FINANCING ACTIVITIES Activities that result in changes in the size and composition of the principal,

received from or repaid to external providers of finance.

FReM Financial Reporting Manual.

FUND ACCOUNT A fund account disclosing changes in net assets available for benefits.

GENERAL FUND This is the main revenue fund of the Authority and includes the net cost of all

services financed by local taxpayers and Government grants (excluding the

Housing Revenue Account).

GOING CONCERN The concept that the Statement of Accounts are prepared on the assumption

that the Authority will continue in operational existence for the foreseeable

future.

GOVERNMENT This refers to government, government agencies and similar bodies whether

local, national or international.

GOVERNMENT – RELATED

ENTITY

An entity that is controlled, jointly controlled or significantly influenced by a

government

GOVERNMENT GRANTS Grants made by the Government towards either revenue or capital

expenditure in return for past or future compliance with certain stipulations

relating to the activities of the Authority. Grants may be specific to a particular

scheme or may support the revenue or capital spend (respectively) of the

Authority in general.

GRANTOR Is the Authority that grants the right to use the service concession asset to the

operator.

GRANTS AND

CONTRIBUTIONS

Assistance in the form of transfers of resources to an Authority in return for

past or future compliance with certain conditions relating to the operation of

activities. They exclude those forms of assistance which cannot reasonably

have a value placed upon them and transactions with organisations which

cannot be distinguished from the normal service transactions of the Authority.

GROSS INVESTMENT IN THE

LEASE

This is the aggregate of (a) the minimum lease payments receivable by the

lessor under a finance lease, and (b) any unguaranteed residual value accruing

to the lessor.

GROUP A parent and all its subsidiaries

GROUP ACCOUNTS The financial statements of a group in which the assets, liabilities, reserves,

income, expenses and cash flows of the parents (reporting Authority) and its

subsidiaries plus the investments in associates and interests in joint ventures

are presented as those of a single economic entity

HELD FOR SALE Property Plant and Equipment assets held by the Authority pending sale.

Assets must meet strict criteria before being classified as Held for Sale.

HELD TO MATURITY

INVESTMENTS

Non-derivative financial assets with fixed or determinable payments and fixed

maturity that an Authority has the positive intention and ability to hold to

maturity.

GLOSSARY OF TERMS


HERITAGE ASSETS An asset with historic, artistic, scientific, technological, geophysical or

environmental qualities that is held and maintained principally for its

contribution to knowledge and culture and this purpose is central to the

objectives of the entity holding it.

HISTORICAL COST The carrying amount of an asset as at 1 April 2007 or at the date of acquisition,

whichever is the later, and adjusted for subsequent depreciation or impairment

(if applicable).

HOUSING BENEFITS A system of financial assistance to individuals towards certain housing costs

administered by authorities and subsidised by Central Government.

HOUSING REVENUE

ACCOUNT (HRA)

A separate account to the General Fund that includes the expenditure and

income arising from the provision of housing accommodation by the Authority.

IDB Internal Drainage Boards

IFRIC INTERPRETATION IFRS Interpretations Committee

IFRS International Financial Reporting Standards

IMPAIRMENT A reduction in the value of a non-current asset to below its carrying amount

on the Balance Sheet. Impairment is caused by a consumption of economic

benefit, such as obsolescence or physical damage of an asset.

IMPAIRMENT LOSS The amount by which the carrying amount of an asset exceeds its recoverable

amount.

IMPRACTICABLE Applying a requirement is impracticable when the Authority cannot apply it

after making every reasonable effort to do so.

INCEPTION OF THE LEASE The earlier of the date of the lease agreement and the date of commitment by

the parties to the principal provisions of the lease.

INCOME Amounts that the Authority receives or expects to receive from any source,

including fees, charges, sales and grants.

INCOME APPROACH Is a valuation technique that converts future amounts (e.g. cash flows or

income and expenses) to a single current (i.e. discounted) amount. The fair

value measurement is determined on the basis of the value indicated by current

market expectations about those future amounts.

INCOME FROM A

STRUCTURED ENTITY

Recurring and non-recurring fees, interest, dividends, gains or losses on the

re-measurement or de-recognition of interests in structured entities and gains

or losses from the transfer of assets and liabilities to the structured entity.

INFRASTRUCTURE ASSETS Non-current assets belonging to the Authority that cannot be transferred or

sold, on which expenditure is only recoverable by continued use of the asset

created. Examples are highways, footpaths and bridges.

INPUT TAX VAT charged on purchases

INSTANT BUILD

DEPRECIATED

REPLACEMENT COST (DRC)

A method of valuation which provides the current cost of replacing an asset

with its modern equivalent asset less deductions for all physical deterioration

and all relevant forms of obsolescence and optimisation. The ‘instant build’

element reflects the fact that the valuation is prepared excluding an allowance

for borrowing costs incurred over an assets construction period i.e. the asset

is assumed to be replaced immediately.

GLOSSARY OF TERMS


INTANGIBLE ASSETS An intangible (non-physical) item may be defined as an identifiable non-

monetary asset when it is probable that the expected future economic benefits

attributable to the asset will flow to the entity, and its cost can be measured

reliably. An asset meets the identifiability criterion when it: (a) is separable,

i.e. capable of being separated or divided from the entity and sold, transferred,

licensed, rented or exchanged, either individually or together with a related

contract, asset or liability; or (b) arises from contractual or other legal rights,

regardless of whether those rights are transferable or separable from the

entity or from other rights and obligations.

INTEREST COST (PENSIONS) For a defined benefit scheme, the expected increase during the period in the

present value of the scheme liabilities because the benefits are one period

closer to settlement.

INTEREST IN ANOTHER

ENTITY

This refers to contractual and non-contractual involvement that exposes a

reporting Authority to variability of returns from the performance of the other

entity. An interest in another entity can be evidenced by, but not limited to,

the holding of equity or debt instruments as well as other forms of involvement

such as the provision of funding, liquidity support, credit enhancement and

guarantees. It includes the means by which an entity has control or joint

control of, or significant influence over, another entity. a reporting Authority

does not necessarily have an interest in another entity solely because of a

typical customer-supplier relationship.

INVENTORIES Items of raw materials and stores an Authority has procured and holds in

expectation of future use. Examples are consumable stores, raw materials and

products and services in intermediate stages of completion (work in progress).

INVESTING ACTIVITIES The acquisition and disposal of long-term assets and other investments not

included in cash equivalents.

INVESTMENT PROPERTY Property (land, building) held solely to earn rentals or for capital appreciation

or both, rather than for: 1) use in the production or supply of goods or services

or for administrative purposes or 2) sale in the ordinary course of operations.

INVESTMENTS (PENSION

FUND)

The investments of the Pension Fund will be accounted for in the statements

of that fund. However, authorities are also required to disclose, as part of the

disclosures relating to retirement benefits, the attributable share of pension

scheme assets associated with their underlying obligations.

IPSAS International Public Sector Accounting Standards.

JOINT ARRANGEMENT An arrangement of which two or more parties have joint control.

JOINTLY CONTROLLED

OPERATIONS

The operation of some joint ventures involves the use of the assets and other

resources of the ventures rather than the establishment of a corporation,

partnership or other entity, or a financial structure that is separate from the

ventures themselves. Each venture uses its own property, plant and equipment

and carries its own inventories. It also incurs its own expenses and liabilities

and raises its own finance, which represent its own obligations. The joint

venture activities may be carried out by the venture’s employees alongside the

venture’s similar activities. The joint venture agreement usually provides a

means by which the revenue from the sale of the joint product/service and any

expenses incurred in common are shared among the ventures.

JOINT VENTURE This is a contractual or binding arrangement whereby two or more parties are

committed to undertake an activity that is subject to joint control. The

contractual or binding arrangement is usually in writing.

GLOSSARY OF TERMS


KEY MANAGEMENT

PERSONNEL

These are all chief officers, elected members, chief executive of the Authority

and other persons having the Authority and responsibility for planning,

directing and controlling the activities of the Authority, including the oversight

of these activities.

LEASE An agreement whereby the lessor conveys to the lessee in return for a

payment or series of payments the right to use an asset for an agreed period

of time.

LEASE TERM The non-cancellable period for which the lessee has contracted to lease the

asset together with any further terms for which the lessee has the option to

continue to lease the asset, with or without further payment, when at the

inception of the lease it is reasonably certain that the lessee will exercise the

option.

LEGAL OBLIGATION An obligation that derives from: a contract (through its explicit or implicit

terms), legislation or other operation of law.

LIABILITY A liability is where the Authority owes payment to an individual or another

organisation, arising from past events.

• A current liability is an amount which will become payable or could be

called in within the next accounting period, e.g. creditors or cash

overdrawn.

• A deferred liability is an amount which by arrangement is payable beyond

the next year at some point in the future or to be paid off by an annual

sum over a period of time.

LOANS AND RECEIVABLES Are non-derivative financial assets with fixed or determinable payments that

are not quoted in an active market.

LONG-TERM CONTRACT A contract entered into for the design, manufacture or construction of a single

substantial asset or the provision of a service (or a combination of assets or

services which together constitute a single project), where the time taken to

substantially complete the contract is such that the contract activity falls into

more than one accounting period.

MARKET APPROACH A valuation technique that uses prices and other relevant information

generated by market transactions involving identical or comparable (ie similar)

assets, liabilities or a group of assets and liabilities, such as a business.

MARKET PARTICIPANTS Buyers and sellers in the principal (or most advantageous) market for the asset

or liability that have all of the following characteristics:

a) They are independent of each other, i.e. they are not related parties,

although the price in a related party transaction may be used as an input

to a fair value measurement if the entity has evidence that the transaction

was entered into at market terms.

b) They are knowledgeable, having a reasonable understanding about the

asset or liability and the transaction using all available information, including

information that might be obtained through due diligence efforts that are

usual and customary.

c) They are able to enter into a transaction for the asset or liability.

d) They are willing to enter into a transaction for the asset or liability, i.e.

they are motivated but not forced or otherwise compelled to do so.

MATERIAL Omissions or misstatements of items are material if they could, individually or

collectively, influence the decisions or assessments of users made on the basis

of the financial statements.

GLOSSARY OF TERMS


MATERIALITY The concept that the Statement of Accounts should include all amounts which,

if omitted, or misstated, could be expected to lead to a distortion of the

financial statements and ultimately mislead a user of the accounts.

MEASUREMENT Measurement is the process of determining the monetary amounts at which

the elements of the financial statements are to be recognised and carried in

the Balance Sheet and Comprehensive Income and Expenditure Statement.

MINIMUM REVENUE

PROVISION (MRP)

The minimum amount, which must be charged to the revenue account each

year in order to provide for the repayment of loans and other amounts

borrowed by the Authority.

MINORITY INTEREST The equity in a subsidiary not attributable, directly or indirectly , to a parent.

MULTI-EMPLOYER PLANS Defined contribution plans (other than state plans) or defined benefit plans

(other than state plans) that:

a) pool the assets contributed by various entities that are not under common

control, and

b) use those assets to provide benefits to employees of more than one entity,

on the basis that contribution and benefit levels are determined without

regard to the identity of the entity that employs the employees.

NET ASSET STATEMENT A statement that shows the assets available for benefits at the year end.

NET BOOK VALUE (NBV) The amount at which non-current assets are included in the Balance Sheet, i.e.

their historical costs or current value less the cumulative amounts provided

for depreciation and impairment.

NET DEFINED BENEFIT

LIABILITY

The deficit or surplus, adjusted for any effect of limiting a net defined benefit

asset to the asset ceiling.

NET INTEREST ON THE NET

DEFINED BENEFIT LIABILITY

The change during the period in the net defined benefit liability that arises from

the passage of time.

NET INVESTMENT IN THE

LEASE

The gross investment in the lease discounted at the interest rate implicit in the

lease.

NET REALISABLE VALUE The estimated selling price in the ordinary course of operations less the

estimated costs of completion and the estimated costs necessary to make the

sale, exchange or distribution.

NON CURRENT ASSET An item having value to the Authority in monetary terms. A non-current asset

provides benefits to the Authority and to the services it provides for a period

of more than one year and may be tangible e.g. a school building, or intangible,

e.g. computer software licences.

NON-DISTRIBUTED COSTS

(NDC)

These are overheads for which no user now benefits and as such are not

apportioned to services.

NON-DOMESTIC RATES

(NDR)

The Non-Domestic Rate is a levy on businesses, based on a national rate in

the pound set by the Government and multiplied by the assessed rateable value

of the premises they occupy. It is collected by the Authority on behalf of itself,

Central Government and Humberside Fire and Rescue Service.

NON-EXCHANGE

TRANSACTIONS

Transactions that are not exchange transactions. In a non-exchange

transaction, an Authority either receives value from another entity without

directly giving approximately equal value in exchange, or gives value to another

entity without directly receiving approximately equal value in exchange.

GLOSSARY OF TERMS


NOTES Contain information in addition to that presented in the Movement in Reserves

Statement, Comprehensive Income and Expenditure Statement, Balance Sheet

and Cash Flow Statement. Notes provide narrative descriptions or

disaggregation of items presented in those statements and information about

items that do not qualify for recognition in those statements.

OBLIGATING EVENT An event that creates a legal or constructive obligation that results in an

Authority having no realistic alternative to settling that obligation.

ONEROUS CONTRACT A contract for the exchange of assets or services in which the unavoidable

costs of meeting the obligations under the contract exceed the economic

benefits or service potential expected to be received under it

OPERATING ACTIVITIES The activities of the Authority that are not investing or financing activities.

OPERATING LEASE A lease other than a finance lease. The risks and rewards of ownership of a

non-current asset that is leased remain with the lessor and on the lessor’s

Balance Sheet. The lessee accounts for the rental payments as revenue income

and expenditure.

OPERATOR Is the entity that uses the service concession asset to provide public services

subject to the local Authority's control of the asset.

ORDERLY TRANSACTION A transaction that assumes exposure to the market for a period before the

measurement date to allow for marketing activities that are usual and

customary for transactions involving such assets or liabilities; it is not a forced

transaction (e.g. a forced liquidation or distress sale).

OTHER COMPREHENSIVE

INCOME AND EXPENDITURE

Comprises items of expense and income (including reclassification

adjustments) that are not recognised in the Surplus or Deficit on the Provision

of Services as required or permitted by the Code. Examples include changes

in revaluation surplus; actuarial gains and losses on defined benefit plans; and

gains and losses on re-measuring available-for-sale financial assets.

OTHER LONG-TERM

EMPLOYEE BENEFITS

All employee benefits other than short-term employee benefits, post-

employment benefits and termination benefits

OUTPUT TAX VAT charged in sales.

OVERSIGHT This means the supervision of the activities of an Authority, with the Authority

and responsibility to control, or exercise significant influence over, the financial

and operating decisions of the Authority.

OWNER-OCCUPIED

PROPERTY

Property held for use in the delivery of services or production of goods or for

administrative purposes.

PARENT An entity that has one or more subsidiaries.

PARTY TO A JOINT

ARRANGEMENT

An entity that participates in a joint arrangement, regardless of whether that

entity has joint control of the arrangement.

PAST SERVICE COST The change in the present value of the defined benefit obligation for employee

service in prior periods, resulting from a plan amendment or a curtailment and

any gain or loss on settlement.

PAST SERVICE COST

(PENSIONS)

For a defined benefit pension scheme, the increase in the present value of the

scheme liabilities related to employee service in prior periods arising in the

current period as a result of the introduction of, or improvement to,

retirement benefits.

GLOSSARY OF TERMS


PENSION SCHEME

LIABILITIES

The liabilities of a defined benefit scheme for outgoings due after the valuation

date. Scheme liabilities measured using the projected unit method reflect the

benefits that the employer is committed to provide for service up to the

valuation date.

PLAN ASSETS comprise:

a) assets held by a long-term employee benefit fund, and

b) qualifying insurance policies.

POST-EMPLOYMENT

BENEFIT PLANS

Formal or informal arrangements under which an Authority provides post-

employment benefits for one or more employees.

POST-EMPLOYMENT

BENEFITS

Employee benefits that are payable after the completion of employment.

POWER Existing rights that give the current ability to direct the relevant activities

PRECEPT The levy made by precepting authorities on billing authorities, requiring the

latter to collect income from council taxpayers on their behalf.

PRESENT VALUE OF A

DEFINED BENEFIT

OBLIGATION

The present value, without deducting any plan assets, of expected future

payments required to settle the obligation resulting from employee service in

the current and prior periods.

PRINCIPAL Where the Authority is acting on its own behalf

PRIOR PERIOD ERRORS Omissions from and misstatements in, the Authority's financial statement for

one or more prior periods

PRIOR YEAR ADJUSTMENT Material adjustments applicable to prior years arising from changes in

accounting policies or from the correction of material errors. This does not

include normal recurring corrections or adjustments of accounting estimates

made in prior years.

PRIVATE FINANCE

INITIATIVE (PFI)

A contract between a public sector body and a private sector entity. This

typically involves the private sector entity constructing or enhancing property

used in the provision of a public service, and operating and maintaining that

property for a specified period of time on behalf of the public sector body. In

return the public sector body pays for the use of the assets and associated

services over the period of the arrangement through a unitary payment

PROPERTY, PLANT AND

EQUIPMENT

Property, Plant and Equipment held and occupied, used or consumed by the

Authority in the pursuit of its strategic objectives and in the direct delivery of

those services for which it has either a statutory or discretionary

responsibility.

PROSPECTIVE APPLICATION Applying new accounting policies to transactions, other events and conditions

occurring after (not before) the date as at which the policy is changed and

recognising the effect of the change in the accounting estimate in the current

and future periods affected by the change.

PROVISION An amount put aside in the accounts for future liabilities or losses which are

certain or very likely to occur as a result of a past event, but the amounts or

dates of when they will arise are uncertain.

PUBLIC PRIVATE

PARTNERSHIPS (PPP)

A joint venture in which a private sector partner agrees to provide services to

or on behalf of a public sector organisation. A Public Finance Initiative is a

form of PPP.

GLOSSARY OF TERMS


PUBLIC WORKS LOAN

BOARD (PWLB)

A Central Government Agency, which provides loans for one year and above

to authorities at interest rates only slightly higher than those at which the

Government itself can borrow.

QUALIFIED VALUER A person conducting the valuations who holds a recognised and relevant

professional qualification and having sufficient current local and national

knowledge of the particular market, and the skills and understanding to

undertake the valuation competently.

QUALIFYING ASSET An asset that necessarily takes a substantial period of time to get ready for its

intended use or sale.

QUALIFYING INSURANCE

POLICY

An insurance policy issued by an insurer that is not a related party of the

reporting Authority, if the proceeds of the policy:

a) can be used only to pay or fund employee benefits under a under a defined

benefit plan and

b) are not available to the reporting Authority’s own creditors (even in

bankruptcy) and cannot be paid to the reporting Authority, unless either:

i) the proceeds represent surplus assets that are not needed for the

policy to meet all the related employee benefit obligations, or

ii) the proceeds are returned to the reporting Authority to reimburse it

for employee benefits already paid.

RATEABLE VALUE The annual assumed rental value of a hereditament, which is used for Non-

Domestic Rate purposes.

RECLASSIFICATION

ADJUSTMENTS

Amounts reclassified to Surplus or Deficit on the Provision of Services in the

current period that were recognised in Other Comprehensive Income and

Expenditure in the current or previous periods.

RECOVERABLE AMOUNT An asset is the higher of fair value less costs to sell and its value in use.

REGULAR WAY PURCHASE

OR SALE

Purchase or sale of a financial asset under a contract whose terms require

delivery of the asset within the time frame established generally by regulation

or convention in the marketplace concerned.

RELATED PARTIES There is a detailed definition of related parties in IPSAS 20. For the Council’s

purposes, related parties are deemed to include the Authority’s Members, the

Chief Executive, its Directors and their close family and household members,

partners, levying bodies, other public sector bodies, the Pension Fund and

Assisted Organisations.

RELATED PARTY

TRANSACTIONS

The Code requires the disclosure of any material transactions between the

Authority and related parties to ensure that stakeholders are aware when

these transactions occur and the amount and implications of such.

RELEVANCE Relevant financial information is capable of making a difference in the decisions

made by users. Information may be capable of making a difference in a decision

even if some users choose not to take advantage of it or are already aware of

it from other sources. financial information is capable of making a difference in

decisions if it has predictive value, confirmatory value or both.

RELEVANT ACTIVITIES Activities of the investee that significantly affect the investee's returns.

REMUNERATION All sums paid to or receivable by an employee and sums due by way of

expenses allowances (as far as those sums are chargeable to UK income tax)

and the monetary value of any other benefits received other than in cash.

Pension contributions payable by the employer are excluded.

GLOSSARY OF TERMS


RESERVES The residual interest in the assets of the Authority after deducting all its

liabilities. These are split into two categories, usable and unusable. Usable

reserves are those reserves that contain resources that an Authority can apply

to fund expenditure of either a revenue or capital nature (as defined).

Unusable reserves are those that an Authority is not able to utilise to provide

services. They 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 between

expenditure being incurred and its financing e.g. Capital Adjustment Account.

RESIDUAL VALUE The net realisable value of an asset at the end of its useful life.

RESTRICTIONS ON

TRANSFERRED ASSETS

Stipulations that limit or direct the purposes for which a transferred asset may

be used, but do not specify that future economic benefits or service potential

are required to be returned to the transferor if not deployed as specified

RESTRUCTURING A programme that is planned and controlled by management, and materially

changes either: the scope of an Authority’s activities or the manner in which

those activities are carried out

RETIREMENT BENEFITS All forms of consideration given by an employer in exchange for services

rendered by employees that are payable after the completion of employment.

RETROSPECTIVE

APPLICATION

Applying a new accounting policy to transactions, other events, and conditions

as if that policy had always been applied. Opening balances and prior year

income and expenditure comparatives must be adjusted.

RETROSPECTIVE

RESTATEMENT

Correcting the recognition, measurement, and disclosure of amounts of

elements of financial statements as if a prior period error had never occurred.

REVALUATION LOSS A reduction in the value of a non-current asset below its carrying amount on

the Balance Sheet, caused by a general fall in prices across a whole class of

assets.

REVENUE Gross inflow of economic benefits or service potential during the reporting

period when those inflows result in an increase in net worth.

REVENUE EXPENDITURE The day-to-day expenses of providing services.

REVENUE EXPENDITURE

FUNDED FROM CAPITAL

UNDER STATUTE (REFCUS)

Expenditure that is revenue in nature, which can be funded from capital

resources in accordance with statutory direction. It does not result in the

expenditure being carried on the Balance Sheet as a non-current asset.

Examples of REFCUS are grants of a capital nature to voluntary organisations.

REVENUE SUPPORT GRANT A grant paid by Central Government to authorities, contributing towards the

general cost of their services.

SALE AND LEASEBACK The Authority sells an asset and then leases the same asset back. The

arrangement may be treated as finance lease or an operating lease depending

on the circumstances and in accordance with the finance lease criteria.

SEPARATE VEHICLE Separately identifiable financial structure, including separate legal entities or

entities recognised by statute, regardless of whether those entities have a legal

personality.

SeRCOP Service Reporting Code of Practice

SETTLEMENT A transaction that eliminates all further legal or constructive obligations for

part or all of the benefits provided under a defined benefit plan, other than a

payment of benefits to, or on behalf of, employees that is set out in the terms

of the plan and included in the actuarial assumptions.

GLOSSARY OF TERMS


SERVICE CONCESSION

ARRANGEMENT

A contract is deemed to be a service concession arrangement if:

1. The operator (usually a private sector entity) provides services to the

grantor (usually a public sector body) and/or services to other parties on

behalf of the grantor. The contract must involve the use of an

infrastructure asset, such as roads or schools that are dedicated to

providing the services under the arrangement. These typically involve the

operator constructing or upgrading the infrastructure used to provide the

public service and operating and maintaining it for a specified period of

time.

2. The grantor controls or regulates what services the operator must provide

with the infrastructure, to whom it must provide them, and at what price;

and

The grantor controls, through ownership, beneficial entitlement or otherwise,

a significant residual interest in the infrastructure at the end of the term of the

arrangement.

SERVICE CONCESSION

ASSET

An asset used to provide public services in a service concession arrangement

that:

a) is provided by the operator which:

i) the operator constructs, develops, or acquires from a third party, or

ii) is an existing asset of the operator, or

b) is provided by the local Authority which:

i) is an existing asset of the local Authority, or

ii) is an upgrade to an existing asset of the local Authority.

Service concession assets include providing assets (and related services) for

the direct use of a public sector entity where these services contribute to the

provision of services to the public.

SHORT-TERM EMPLOYEE

BENEFITS

Employee benefits that are expected to be settled wholly before 12 months

after the end of the annual reporting period in which the employees render

the related service.

SIGNIFICANT INFLUENCE The power to participate in the financial and operating policy decisions of an

Authority, but not control those policies. Significant influence may be exercised

in several ways, usually by representation on the board of directions or

equivalent governing body but also by, for example, participation in the policy-

making process, material transactions between entities within an economic

entity, interchange of managerial personnel or dependence on technical

information. Significant influence may be gained by an ownership interest,

statute or agreement.

SINGLE ENTITY FINANCIAL

STATEMENTS

Statements presented by a parent or an investor with joint control, or

significant influence over, an investee, in which the investments are accounted

for at cost

SOCIAL BENEFITS Goods, services and other benefits provided in the pursuit of the social policy

objectives of an Authority

SOFT LOAN A loan made interest free or at a rate less than the market rate, usually for

policy reasons. Such loans are often made to individuals or organisations that

the Authority considers benefits the local population.

STIPULATIONS ON

TRANSFERRED ASSETS

Terms in laws or regulation, or a binding arrangement, imposed upon the use

of a transferred asset by entities external to the reporting Authority.

GLOSSARY OF TERMS


STRUCTURED ENTITY An entity that has been designed so that voting or similar rights are not the

dominant factor in deciding who controls the entity, such as when any voting

rights relate to administrative tasks only and the relevant activities are directed

by means of contractual arrangements.

SUBSIDIARY An entity, including an unincorporated entity such as a partnership that is

controlled by another entity

SURPLUS OR DEFICIT ON

THE PROVISION OF

SERVICES

The total of income less expenses, excluding the components of Other

Comprehensive Income and Expenditure

TEMPORARY BORROWING Money borrowed for a period of less than one year.

TERMINATION OF BENEFITS Employee benefits provided in exchange for the termination of an employee's

employment.

THE CODE The Code of Practice on Local Authority Accounting in the United Kingdom.

THE EFFECTIVE INTEREST

METHOD

A method of calculating the amortised cost of a financial asset or a financial

liability (or group of financial assets or financial liabilities) and of allocating the

interest income or interest expense over the relevant period.

THE RETURN ON PLAN

ASSETS

Interest, dividends and other income derived from the plan assets, together

with realised and unrealised gains or losses on the plan assets, less any costs

of managing plan assets and any tax payable by the plan itself, other than tax

included in the actuarial assumptions used to measure the present value of the

defined benefit obligation.

TIMELINESS This means having information available to decision-makers in time to be

capable of influencing their decisions.

TOTAL COMPREHENSIVE

INCOME AND EXPENDITURE

Compresses all components of Surplus or Deficit on the Provision of Services

and of Other Comprehensive Income and Expenditure.

TRANSACTION COSTS Are incremental costs that are directly attributable to the acquisition, issue or

disposal of a financial asset or financial liability (see Appendix A, paragraph

AG13).An incremental cost is one that would not have been incurred if the

Authority had not acquired, issued or disposed of the financial instrument.

TRUE AND FAIR VIEW The Statement of Accounts should be the faithful representation of the effects

of transactions, other events and conditions in accordance with the definitions

and recognition criteria for assets, liabilities, income and expenses set out in

the Code. Compliance with the Code is presumed to result in financial

statements that achieve a true and fair presentation.

UNAUDITED ACCOUNTS The date on which the responsible financial officer certifies that the accounts

give a true and fair view of the Authority's financial position and financial

performance in advance of approval.

UNDERSTANDABILITY Classifying characterising and presenting information clearly and concisely

makes it understandable.

USEFUL LIFE The period which an asset is expected to be available for use by an Authority.

USEFUL ECONOMIC LIFE The period over which the Authority will derive benefits from the use of a

non-current asset.

VALUE IN USE Non-cash generating asset is the expected present value of the asset’s

remaining service potential. Value in use of a cash-generating asset is the

present value of the future cash flows expected to be derived from an asset.

GLOSSARY OF TERMS


VAT An indirect tax levied on most business transactions and on many goods and

some services.

VERIFIABILITY Verifiability means that different knowledgeable and independent observers

could reach consensus, although not necessarily complete agreement, that a

particular depiction is a faithful representation.

VESTING PERIOD The vesting period is the window of service when members can get a refund

on their contributions if they leave the LGPS instead of having a small deferred

pension in the LGPS until retirement.

ABBREVIATIONS


INDEX


statement of accounts 2021-22 (unaudited)

Documents