statement of accounts 0809 final - wyre€¦ · originally considered by audit committee 23 june...

Appendix 1

STATEMENT OF ACCOUNTS

FOR THE YEAR ENDED

31 MARCH 2009

WYRE BOROUGH COUNCIL

P DAVIES CPFA DIRECTOR OF FINANCE AND REVENUES

(CHIEF FINANCIAL OFFICER)

Originally considered by Audit Committee 23 June 2009 and confirmed by the Audit Committee (post audit) 22 September 2009

………………………………………………………………………………… Councillor C Grunshaw, Chairman

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Wyre Borough Council Statement of Accounts 2008/09

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CONTENTS Page • Explanatory Foreword 2 • Statement of Responsibilities for the Statement of Accounts 5 • Independent Auditor’s Reports 6 • Statement of Accounting Policies 9 • Annual Governance Statement 15 • Income and Expenditure Account 25 • Statement of Movement on the General Fund Balance 26 • Statement of Total Recognised Gains and Losses 33 • Balance Sheet 34 • Cash Flow Statement 48 • Collection Fund Account 52 • Glossary of Accounting Terms 54


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EXPLANATORY FOREWORD 1. INTRODUCTION

This Statement of Accounts covers the financial year ended 31 March 2009 (2008/09). It has been prepared in accordance with the Accounts and Audit (Amendment) Regulations 2006 and the Statement of Recommended Practice on Local Authority Accounting 2008. The main Accounting Statements within this document are:

i) Income and Expenditure Account - this statement is fundamental to the understanding of a local authority’s activities, in that it reports the net cost for the year of all the functions for which the authority is responsible, and demonstrates how that cost has been financed from general government grants and income from local taxpayers. It brings together expenditure and income relating to all of the local authority’s functions, in three distinct sections, each divided by a sub-total.

ii) Statement of Movement on the General Fund Balance – a reconciliation showing how the balance of resources generated/consumed in the year links in with statutory requirements for raising council tax.

iii) Statement of Total Recognised Gains and Losses – this brings together all gains and losses of the council for the year and shows the aggregate increase in its net worth. In addition to the surplus generated on the Income and Expenditure Account, it includes gains and losses relating to the revaluation of fixed assets and re-measurement of the net liability to cover the cost of retirement benefits.

iv) Balance Sheet - this statement is fundamental to the understanding of an authority’s financial position at year end. It shows the balances and reserves and its long-term indebtedness, and the fixed and net current assets employed in its operations, together with summarised information on the fixed assets held.

v) Cash Flow Statement - this summarises the inflows and outflows of cash arising from transactions with third parties for revenue and capital purposes.

vi) Collection Fund Account - this account reflects the statutory requirement for billing authorities to maintain a separate Collection Fund. The statement shows the transactions of the Council in relation to non-domestic rates and the council tax, and illustrates the way in which these have been distributed to Lancashire County Council, Lancashire Police Authority, Lancashire Combined Fire Authority and Wyre Borough Council.

These statements are supported by:

a) Statement of Responsibilities for the Statement of Accounts - this sets out the respective responsibilities of the Council and the Director of Finance and Revenues (Chief Financial Officer) for the Statement of Accounts.

b) Statement of Accounting Policies - the purpose of this statement is to explain the basis for the recognition, measurement and disclosure of transactions and other events in the Accounts. By disclosing the policies applied, a better understanding of the view presented by the Accounts on material items can be obtained.

c) Annual Governance Statement - this statement sets out the framework that forms the basis of the Code of Corporate Governance and reviews the Authority’s arrangements in the light of the code.


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2. THE 2008/09 BUDGET AND REVENUE OUTTURN

Each year the Council estimates what it is going to spend in the following year and calculates the precept it will have to levy on the Collection Fund to meet that cost, having allowed for income and government grants. The following table sets out the comparison between the Updated Revised Budget and the actual expenditure:

2008/09 Updated Revised

2008/09 Actual

Variance

£ £ £ Expenditure 17,551,403 17,026,188 (525,215) (Use of)/Additions to Balances (972,080) (446,865) 525,215 TOTAL SPENDING

16,579,323 16,579,323 0

General Government Grant (1,199,441) (1,199,441) 0 Non Domestic Rate Redistribution (8,616,170) (8,616,170) 0 Wyre Precept (6,570,497) (6,570,497) 0 Parish Precepts (217,248) (217,248) 0 Collection Fund Deficit 24,033 24,033 0 TOTAL RESOURCES (16,579,323) (16,579,323) (0) The main reasons for the reduction in expenditure of £525,215 are listed below: 2008/09 £ £ Increased Spending/Reduced Income: Parish Elections – Referendum 12,552 Marine Hall - Admissions Income net of costs 25,226 Marine Hall – Bar and Catering 6,461 Development Control – Planning Fees 39,882 Planning – Consultants 100,202 Off Street Car Parking – Fees/Excess Charges 14,489 Employee Services – Legal Fees 19,131 Housing and Council Tax Benefits (net of subsidy) 29,600 Benefits Equalisation Reserve – Top Up 250,000 Job Evaluation – Top Up 150,000 Pension Fund Actuarial Review - Net of reclassification of

Prudential Code Reserve

103,180

750,723 Reduced Spending/Increased Income: Slippage into 2009/10 requiring use of Balances (292,947) Council Tax/NNDR - Costs Income (35,403) Grants – Previous Years C/f (14,206) Concessionary Travel (181,937) Fleetwood Cemetery – Additional Income (14,716) Land Drainage – costs net of agency contribution (45,170) Waste Management (incl. microchipping refund) (102,159) Community Safety – Over provision of Area Based Grant (49,250) Licensing – Income (Premises) (10,539) Building Maintenance Costs (22,385) Car Allowances (22,965) Employee Costs (139,827) Insurance Excess Payments (21,530) Tenants’ Services Charges – Income (12,201) Training Expenses (30,136) Vehicle Expenses (incl. fuel) (27,121) Water, Sewerage and Gas costs (48,851) Interest Received/Paid (141,065) Other Net Savings (incl. Contingency provision) (63,530) (1,275,938) (525,215)


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3. CAPITAL

The Council spent a total of £5,790,070 (2007/08 £10,854,974) on capital investment in the year compared with the Updated Revised Budget of £6,870,288. A summary of the main items of expenditure is shown below:

2007/08 Main items of Expenditure 2008/09 £ £ 1,789,093 Housing Grants 1,126,912 390,533 Environmental Improvements 121,641 6,383,736 Sea Defences 2,897,541 158,869 Cultural and Leisure Facilities 300,164 47,249 Re-Cycling Initiatives 4,853 225,281 E-Government/Business Improvement Programme 352,100 576,280 Refurbishment of Public Conveniences 319,370 0 Fleetwood Ferry Dock 165,000 1,082,816 Asset Management 272,330 66,450 Community Safety 172,954 134,667 Other 57,205 10,854,974 5,790,070 The main reasons for the variation of £1,080,218 when compared to the Updated Revised Budget

are listed below:

2008/09 £ £ Capital slippage into future years (1,059,819) Increased Spending: Advance spending – 09/10 schemes 2,217 Coast Protection 21,531 23,748 Reduced Spending: Civic Centre Upgrade of Electrical Installations (13,000) Fleetwood Market Improvements (10,000) Refurbishment of Changing Rooms – Fleetwood L.C. (14,161) Other Variations (net) (6,986) (44,147) (1,080,218) A summary of how the Authority’s capital expenditure was financed can be found in the notes to

the Balance Sheet on page 36.

4. FURTHER INFORMATION Further information about the Accounts is available from the Financial Services Section at Wyre Borough Council, Civic Centre, Breck Road, Poulton-le-Fylde, Lancashire, FY6 7PU, or via the Council’s web site at www.wyrebc.gov.uk. In addition, interested members of the public have a statutory right to inspect the Accounts before the annual audit is completed. The availability of the Accounts for inspection is advertised in the local press. If you would like this information in another language or format, please contact ConnectWyre on 01253 891000.


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STATEMENT OF RESPONSIBILITIES FOR THE STATEMENT OF ACCOUNTS

The Authority’s Responsibilities The Authority is required: • to make arrangements for the proper administration of its financial affairs and to secure that one of

its officers has the responsibility for the administration of those affairs. In this Authority, that officer is the Director of Finance and Revenues (Chief Financial Officer).

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

• to approve the Statement of Accounts. The Director of Finance and Revenues (Chief Financial Officer)’s Responsibilities The Director of Finance and Revenues (Chief Financial Officer) is responsible for the preparation of the Authority’s Statement of Accounts in accordance with proper practices as set out in the CIPFA/LASAAC Code of Practice on Local Authority Accounting in the United Kingdom (‘the Code of Practice’). In preparing this Statement of Accounts, the Director of Finance and Revenues (Chief Financial Officer) has: • selected suitable accounting policies and applied them consistently; • made judgements and estimates that were reasonable and prudent; • complied with the Code of Practice; • kept proper accounting records which were up to date; • taken reasonable steps for the prevention and detection of fraud and other irregularities. Director of Finance and Revenues (Chief Financial Officer)’s Certification I certify that the Statement of Accounts presents fairly the financial position of the authority at the accounting date and its income and expenditure for the year ended 31 March 2009.

P DAVIES DIRECTOR OF FINANCE AND REVENUES (CHIEF FINANCIAL OFFICER)

22 September 2009


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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF WYRE BOROUGH COUNCIL

Independent auditors’ report to the Members of Wyre Borough Council Opinion on the accounting statements We have audited the accounting statements and related notes of Wyre Borough Council for the year ended 31 March 2009 under the Audit Commission Act 1998. The accounting statements comprise the Income and Expenditure Account, the Statement of Movement on the General Fund Balance, the Balance Sheet, the Statement of Total Recognised Gains and Losses and the Cash Flow Statement. The accounting statements have been prepared under the accounting policies set out in the Statement of Accounting Policies. This report is made solely to Wyre Borough Council, as a body, in accordance with Part II of the Audit Commission Act 1998. Our audit work has been undertaken so that we might state to Wyre Borough Council, as a body, those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than Wyre Borough Council, as a body, for our audit work, for this report, or for the opinions we have formed. Respective responsibilities of the Director of Finance and auditors The Director of Finance’s responsibilities for preparing the financial statements in accordance with relevant legal and regulatory requirements and the Code of Practice on Local Authority Accounting in the United Kingdom 2008 are set out in the Statement of Responsibilities for the Statement of Accounts. Our responsibility is to audit the accounting statements and related notes in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland). We report to you our opinion as to whether the accounting statements and related notes present fairly, in accordance with relevant legal and regulatory requirements and the Code of Practice on Local Authority Accounting in the United Kingdom 2008, the financial position of the Authority and its income and expenditure for the year. We review whether the governance statement reflects compliance with ‘Delivering Good Governance in Local Government: A Framework’ published by CIPFA/SOLACE in June 2007. We report if it does not comply with proper practices specified by CIPFA/SOLACE or if the statement is misleading or inconsistent with other information we are aware of from our audit of the financial statements. We are not required to consider, nor have we considered, whether the governance statement covers all risks and controls. Neither are we required to form an opinion on the effectiveness of the Authority’s corporate governance procedures or its risk and control procedures. We read other information published with the accounting statements and related notes and consider whether it is consistent with the audited accounting statements and related notes. This other information comprises the Explanatory Foreword. We consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the accounting statements and related notes. Our responsibilities do not extend to any other information.


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Basis of audit opinion We conducted our audit in accordance with the Audit Commission Act 1998, the Code of Audit Practice issued by the Audit Commission and International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the accounting statements and related notes. It also includes an assessment of the significant estimates and judgments made by the Authority in the preparation of the accounting statements and related notes, and of whether the accounting policies are appropriate to the Authority’s circumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the accounting statements and related notes are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the accounting statements and related notes. Opinion In our opinion the accounting statements and related notes present fairly, in accordance with relevant legal and regulatory requirements and the Code of Practice on Local Authority Accounting in the United Kingdom 2008, the financial position of the Authority as at 31 March 2009 and its income and expenditure for the year then ended. Certificate I certify that I have completed the audit of the accounts in accordance with the requirements of the Audit Commission Act 1998 and the Code of Audit Practice issued by the Audit Commission. Trevor Rees Senior Statutory Auditor for and on behalf of KPMG LLP Chartered Accountants Statutory Auditor St James Square Manchester 22 September 2009


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USE OF RESOURCES CONCLUSION Conclusion on arrangements for securing economy, efficiency and effectiveness in the use of resources Authority’s Responsibilities The Authority is responsible for putting in place proper arrangements to secure economy, efficiency and effectiveness in its use of resources, to ensure proper stewardship and governance and regularly to review the adequacy and effectiveness of these arrangements. Auditor’s Responsibilities We are required by the Audit Commission Act 1998 to be satisfied that proper arrangements have been made by the Authority for securing economy, efficiency and effectiveness in its use of resources. The Code of Audit Practice issued by the Audit Commission requires us to report to you our conclusion in relation to proper arrangements, having regard to relevant criteria specified by the Audit Commission for principal local authorities. We report if significant matters have come to our attention which prevent us from concluding that the Authority has made such proper arrangements. We are not required to consider, nor have we considered, whether all aspects of the Authority’s arrangements for securing economy, efficiency and effectiveness in its use of resources are operating effectively. Conclusion We have undertaken our audit in accordance with the Code of Audit Practice. Having regard to the criteria for principal local authorities specified by the Audit Commission and published in May 2008 and updated in February 2009, we are satisfied that, in all significant respects, Wyre Borough Council has made proper arrangements to secure economy, efficiency and effectiveness in its use of resources for the year ending 31 March 2009 Trevor Rees (Senior Statutory Auditor) for and on behalf of KPMG LLP Chartered Accountants Statutory Auditor St James Square 22 September 2009


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STATEMENT OF ACCOUNTING POLICIES 1. General

These Accounts have been prepared in accordance with The Code of Practice on Local Authority Accounting in the United Kingdom 2008: A Statement of Recommended Practice (SORP), issued by the Chartered Institute of Public Finance and Accountancy (CIPFA). To meet legislative requirements concerning the timetable for publishing the Statement of Accounts, it has been necessary for some estimates to be used, the most significant being Housing Benefit Subsidy figures. Any amendments necessary due to differences between final claim and estimated figures will be taken into account within the 2009/10 financial year.

2. Fixed Assets The Council’s Capitalisation Policy has been implemented in full, whereby all expenditure on the acquisition, creation or enhancement of fixed assets is capitalised on an accruals basis. Fixed Assets are classified into the groupings required by the Code of Practice on Local Authority Accounting. The valuation basis is as follows: • Operational assets are held by the Council in pursuit of its strategic and service objectives.

They have been included in the balance sheet at either net current replacement cost or depreciated replacement cost depending on whether they are regarded as non-specialised or specialised operational properties.

Depreciated Replacement Cost is the aggregate amount of the value of the land for the existing use or a notional replacement site in the same locality and the gross replacement cost of the buildings and other site works from which appropriate deductions may be made to allow for age, condition, economic or functional obsolescence, environmental and other relevant factors. All of these may result in the existing property being worth less to the undertaking in occupation than would a new replacement. Specialised properties are those which are designed for a specific purpose and incapable of any other use without extensive conversion or alteration. Likewise, the arrangement, size or location may be such that there is no market for their sale or occupation by a single occupier for a continuation of the existing use. Operational Specialised Properties have been valued on the basis of Depreciated Replacement Cost (DRC). Operational Non-Specialised Property is valued on the basis of Existing Use Value, which is deemed to be the Net Current Replacement Cost (ie. the cost of purchasing premises to replace it in the open market.) • Non-operational assets are investment properties, assets under construction or surplus

assets held for disposal. They have been included in the balance sheet on the basis of open market value.

• Infrastructure is entered into the accounts at historical cost and includes pumping stations,

roads, bridges etc. • Community assets include public open space, buildings of a purely historical nature, civic

regalia, allotments, land at cemeteries, and parks. These properties have been included at historical cost where known or at a nominal value of £1.

Assets included in the Balance Sheet at current value are revalued where there have been material changes in the value, but as a minimum every five years. Increases in valuations are matched by credits to the Revaluation Reserve to recognise unrealised gains. Exceptionally, gains might be credited to the Income and Expenditure Account where they arise from the reversal of an impairment loss previously charged to a service revenue account.


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The Revaluation Reserve contains revaluation gains recognised since 1 April 2007 only, the date of its formal implementation. Gains arising before that date have been consolidated into the Capital Adjustment Account. • Intangible Fixed Assets. The Council must also disclose the value of any Intangible Fixed

Assets, which are defined as non-monetary fixed assets, which nevertheless are of lasting benefit. This includes computer software which will bring benefits to the Council beyond the current year. The value is amortised to the relevant service over the economic life of the investment reflecting the consumption of benefits.

3. Impairment

The values of each category of assets and of material individual assets that are not being depreciated are reviewed at the end of each financial year for evidence of reductions in value. Where impairment is identified as part of this review or as a result of a valuation exercise, this is accounted for by: • where attributable to the clear consumption of economic benefits – the loss is charged to the

relevant service revenue account. • otherwise – written off against any revaluation gains attributable to the relevant asset in the

Revaluation Reserve, with any excess charged to the relevant service revenue account. Where an impairment loss is charged to the Income and Expenditure Account but there were accumulated revaluation gains in the Revaluation Reserve for that asset, an amount up to the value of the loss is transferred from the Revaluation Reserve to the Capital Adjustment Account.

4. Depreciation Assets other than land, non-operational land and buildings, and community assets (excluding play equipment) are now being depreciated over their useful economic lives in order to comply with CIPFA’s Code of Practice on Local Authority Accounting in the United Kingdom - A Statement of Recommended Practice. Where depreciation is provided for, assets are being depreciated using the straight-line method over the relevant period. Buildings with asset lives estimated to be greater than 50 years have been depreciated using 50 years as the base. Revaluation gains are also depreciated, with an amount equal to the difference between current value depreciation charged on assets and the depreciation that would have been chargeable based on their historical cost being transferred each year from the Revaluation Reserve to the Capital Adjustment Account. Infrastructure Assets are being depreciated over 40 years with effect from April 2005.

5. Charges to Revenue for Fixed Assets Service revenue accounts, support services and trading accounts are debited with the following amounts to record the real cost of holding fixed assets during the year: • Depreciation attributable to the assets used by the relevant service. • Impairment losses attributable to the clear consumption of economic benefits on tangible fixed

assets used by the service and other losses where there are no cumulative gains in the Revaluation Reserve against which they can be written off.

• Amortisation of intangible fixed assets attributable to the service. The Council is not required to raise council tax to cover depreciation, impairment losses or amortisations. However, it is required to make an annual provision from revenue to contribute towards the reduction in its overall borrowing requirement. (New proposals introduced during 2007/08 require the Council to align the period over which MRP is charged with the estimated life


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of an asset). Depreciation, impairment losses and amortisations are therefore replaced by revenue provision in the Statement of Movement on the General Fund Balance, by way of an adjusting transaction with the Capital Adjustment Account for the difference between the two.

6. Revenue Expenditure Funded from Capital Under Statute The 2008 SORP recognises a new category of expenditure, Revenue Expenditure Funded from Capital Under Statute, which effectively replaces Deferred Charges. Legislation allows some expenditure to be classified as capital for funding purposes when it does not result in the expenditure being carried on the Balance Sheet as a fixed asset. The purpose of this is to enable it to be funded from capital resources rather than be charged to the General Fund and impact on that year’s council tax. Expenditure that would fall into this category would include home improvement grants and similar advances to finance capital investment by other parties. Where the council has determined to meet the cost of this expenditure from existing capital resources or by borrowing, a transfer to the Capital Adjustment Account then reverses out the amounts charged in the Statement of Movement on the General Fund Balance so there is no impact the level of council tax.

7. Asset Disposal When an asset is disposed of or decommissioned, the value of the asset in the balance sheet is written off to the Income and Expenditure Account as part of the gain or loss on disposal. Receipts from disposals are credited to the Income and Expenditure Account as part of the gain or loss on disposal (i.e. netted off against the carrying value of the asset at the time of disposal). Where there are any revaluation gains these are transferred to the Capital Adjustment Account. Amounts in excess of £10,000 are categorised as capital receipts. A proportion of receipts relating to housing disposals (75% for dwellings, 50% for land and other assets, net of statutory deductions and allowances) is payable to the Government. The balance of receipts is required to be credited to Usable Capital Receipts Reserve and can then only be used for new capital investment or set aside to reduce the Council’s underlying need to borrow (the capital financing requirement). Receipts are appropriated to the Reserve from the Statement of Movement on the General Fund Balance. The written-off value of disposals is not a charge against council tax, as the cost of fixed assets is fully provided for under separate arrangements for capital financing. Amounts are appropriated to the Capital Adjustment Account from the Statement of Movement on the General Fund Balance.

8. Grants and Contributions Grants and other contributions are accounted for on an accruals basis and recognised in the accounting statements when the conditions for their receipt have been complied with and there is reasonable assurance that the grant or contribution will be received. Revenue grants are matched in service revenue accounts with the service expenditure to which they relate. Grants to cover general expenditure, eg. Revenue Support Grant and Area Based Grant, are credited to the Income and Expenditure account under Net Operating Expenditure.

9. Leases The Council does not have any finance leases. Leases that do not meet the definition of finance leases are accounted for as operating leases. Rentals payable are charged to the relevant service revenue account on a straight-line basis over the term of the lease, generally meaning that rentals are charged when they become payable.

10. Local Government (Goods and Services) Act 1970


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The Council has performed a number of services for Fylde Borough Council during the 2008/09 financial year including Property Services (£228,490) and Coastal and General Engineering Services (£40,748). Services have also been provided for the Environment Agency in relation to Land Drainage (£131,255) and for Regenda Housing Association in connection with property maintenance (£102,862).

11. Debtors and Creditors The revenue accounts of the Council are maintained on an accruals basis, that is, sums due to or from the Council during the year are included whether or not the cash has actually been received or paid in the year. Wages and related costs are included on the basis of the number of weeks that fall within the financial year, rather than being apportioned between financial years. This policy is consistently applied each year and therefore does not have a material effect on the year’s Accounts. All capital transactions have been recorded on an accruals basis.

12. Stocks and Work in Progress All stocks held by the Council at 31 March are included in the Accounts at cost price.

13. Cost of Support Services The costs of the Council’s central support activities such as finance and legal etc, are fully allocated to service accounts. Charges are primarily based on actual and estimated time allocations with other bases being used as appropriate such as floor area and facility usage.

14. Pensions The 2008 SORP requires the council to value quoted securities, held as assets, at bid price rather than mid-market value. The effect of this change is that the value of scheme assets at 31 March 2008 has been restated from £52,500,000 to £52,394,000, a decrease of £106,000, resulting in an increase in the net liability of £106,000. Traditionally, the accounting policy was to recognise liabilities in relation to retirement benefits only when employer’s contributions became payable to the pension fund or payments fell due to pensioners for which the Council was directly responsible. The current policy now reflects the commitment in the long-term to increase contributions to make up any shortfall in attributable net assets to the pension fund, and has had the following effects on the results of the prior and current periods: • The overall amount to be met from Government grants and local taxation has remained

unchanged, but the costs disclosed for individual services are £356,000 or 1.93% lower (2007/08 £7,000 or 0.03%) after the replacement of employer’s contributions by current service costs and Net Operating Expenditure is £850,000 or 4.33% higher (2007/08 £174,000 or 0.79% higher) than it would otherwise have been. Details of the revenue transactions associated with retirement benefits are set out in Note 12 to the Income and Expenditure Account on pages 31 to 32.

• The requirement to recognise the net pensions liability in the balance sheet has reduced the

reported net worth of the authority by £24,977,000 or 67.36% (2007/08 £25,032,000 or 66.66%). Details of the Council’s pension assets and liabilities are shown at Note 10 to the Balance Sheet on pages 39 to 41.

The costs of inflation awards (Pension Increase Act payments) to the Pension Fund, as notified by the County Council, are charged to the Income and Expenditure Account as Non Distributed


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Costs, in compliance with the requirements of the Best Value Accounting Code of Practice.

15. Financial Assets and Financial Liabilities Loans and receivables are initially measured at fair value and carried at their amortised cost. Annual credits/debits to the Income and Expenditure Account for interest receivable/payable are based on the carrying amount of the asset multiplied by the effective rate of interest for the instrument. The amount presented in the Balance Sheet as the carrying value of the investment/loan is the outstanding principal receivable/payable including any outstanding interest.

16. Provisions and Reserves Earmarked reserves are created to meet ‘known or predicted requirements’. Provisions are required for any liabilities of uncertain timing or amounts that ‘have been incurred’. There were no outstanding provisions required at 31 March 2009, apart from a provision for Bad Debts that is disclosed within the Balance Sheet under Current Liabilities on page 34. The Council operates a number of different reserves, the purpose of each is summarised below:

• Benefits Equalisation – established in 2005/06 to offset fluctuations in annual costs.

• Building Control - A fundamental principal of the Building Regulations Scheme introduced 1 April 1999 is that there is a three year rolling accounting period over which costs should equate with charge income. This reserve can assist with achieving that aim in future periods or fund expenditure promoting increased efficiency and reduced costs.

• Business Growth Incentive – established in 2005/06 to support initiatives under the government’s business growth programme funded from increased income from National Non Domestic Rates on new developments.

• Car Parking – originally established for upgrading of the car parks, but recent movements reflect the potential VAT liability regarding off-street car parks.

• Community Safety – established in 2008/09 in anticipation of a continuing contribution to Police Community Support Officers, 3 years from April 2009.

• CPA Improvement Planning – established to assist with the matched funding of improvements identified following the Comprehensive Performance Assessment.

• Elections – established in 2008/09, annual contributions to fund future Borough Elections.

• Insurance Fund – established to fund the increased level of excesses following a review of the Council’s insurance arrangements and related Risk Management costs. Ongoing costs will no longer be met by contributions from this reserve

• Investment - IT Strategy - to meet costs of the rolling replacement of IT equipment and other known future costs.

• Job Evaluation – established in 2004/05 to fund the implementation of the scheme, including increases in payroll costs, resulting from the exercise to compare the remuneration of different jobs across the Council.

• Leisure Management – established with the implementation of the new Leisure Management Partnership to fund the Council’s 50% share of costs above the agreed target level.

• Pension Fund Actuarial Review – originally established in 2004/05 to fund potential increases in future pension costs following the triennial actuarial review.


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• Planning Development - established in 2003/04 to fund improved planning performance.

• Property Investment – established in 2004/05 to meet the cost of improving security

measures at all Council buildings.

• Prudential Code – established in 2003/04 for future debt redemption and now reclassified / transferred to the Pension Fund Actuarial Review Reserve.

• Value for Money – established in 2005/06 for future value for money initiatives and now incorporates the Lancashire Public Service Agreement reward grant pending utilisation.

• Vehicle Replacement – established in 2005/06 to fund the future replacement of the mobile advice centre.

Certain reserves are kept to manage the accounting processes for fixed assets and retirement benefits and do not represent usable resources for the Council.

17. Partnerships and Group Accounts The Council is satisfied that there are no partnership or other arrangements in place that require it to prepare group accounts.

18. Value Added Tax VAT is included in service income and expenditure only to the extent that it is irrecoverable.


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ANNUAL GOVERNANCE STATEMENT

1. INTRODUCTION TO COPORATE GOVERNANCE Good Governance leads to good management, good performance, good stewardship of pubic money, good public engagement and ultimately leads to good outcomes for the citizens and the service users of Wyre. Good governance also enables the Council to pursue its corporate vision effectively as well as underpinning that vision, with mechanisms for control and management of risks. 2. SCOPE OF RESPONSIBILITY Wyre Borough Council is responsible for ensuring that its business is conducted in accordance with the law and proper standards, and that public money is safeguarded and properly accounted for, and used economically, efficiently and effectively. The Council also has a duty under the Local Government Act 1999 to make arrangements to secure continuous improvement in the way in which its functions are exercised, having regard to a combination of economy, efficiency and effectiveness. In discharging this overall responsibility the Council is also responsible for putting in place proper arrangements for the governance of it’s affairs including a sound system of internal control which facilitates the effective exercise of its functions and which includes arrangements for the management of risk 3. WYRE BOROUGH COUNCIL’S LOCAL CODE OF CORPORATE GOVERNANCE The Chartered Institute of Public Finance (CIPFA) and the Society of Local Authority Chief Executives (SOLACE) have published a framework and guidance for delivering good governance in local government. The guidance helps local authorities to interpret the overarching principles contained in the framework prior to developing and maintaining their own ‘local’ corporate governance arrangements. The framework recognises that effective governance is achieved through the following six core principles:

1. Focusing on the purpose of the authority and on outcomes for the community and creating and implementing a vision for the local area.

2. Members and officers working together to achieve a common purpose with clearly defined

functions and roles.

3. Promoting values for the authority and demonstrating the values of good governance through upholding high standards of conduct and behaviour.

4. Taking informed and transparent decisions, which are subject to effective scrutiny and managing

risk.

5. Developing the capacity and capability of members and officers to be effective.

6. Engaging with local people and other stakeholders to ensure robust public accountability. It should be noted that the CIPFA/SOLACE guidance is not prescriptive and authorities are encouraged to consider the content of the framework and to use it in a way that best reflects their structure, type, function and size. The Council has developed its local code, which is included as part of the Council’s Annual Governance Statement (AGS). The AGS is reported with the Council’s Statement of Accounts each year and can be found on the Council’s website. 4. LEVEL OF ASSURANCE


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This framework refers to the Councils systems, processes, culture and values, by which the Council is directed and controlled. The system of internal control is a significant part of our framework and is designed to manage risk to a reasonable level. It cannot eliminate all risk of failure to achieve our corporate priorities, key targets and future performance indicators; it can therefore only provide reasonable and not absolute assurance of effectiveness. The system of internal control is based on an ongoing process designed to identify and prioritise the risks, to evaluate the likelihood of those risks being realised and the impact should they be realised, and to manage them efficiently, effectively and economically. Effective systems of governance have been in place within this Authority for the year ended 31st March 2009, and up to the date of approval of the annual accounts. 5. REVIEWING AND REPORTING ARRANGMENTS The CIPFA/SOLACE guidance recommends that authorities should undertake annual reviews of their governance arrangements to ensure continuing compliance with best practice as set out in the framework. Twice a year Directors and individual key officers are required to complete a ‘Governance Assurance Review’ and submit this to the Chief Executive. The Chief Executive will then complete a Governance Assurance Statement stating that he is aware of any governance issues within the Authority and of the measures that are required to improve the control environment. On overall action plan will be formulated of the actions required to mitigate the areas of concern raised in the Governance Assurance Statements and progress will be monitored and reported to the Audit Committee in November of each year. 6. MEETING THE CORE PRINCIPLES The tables below demonstrate how each of the core principles has been upheld during the 2008/09 financial year.


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Core Principle Focusing on the purpose of the authority and on outcomes for the community and creating and implementing a vision for the local area. Supporting Principles • Exercising leadership by clearly communicating the Authority’s purpose and vision and its

intended outcome for citizens and service users. • Ensuring that users receive a high quality of service whether directly, or in partnership or

by commissioning. • Ensuring that the Authority makes best use of resources and that tax payers and service

users receive excellent value for money. Specific Actions • The Council has made a clear statement of the Authority’s purpose and vision in its

Corporate Plan and uses this as a basis for corporate and service planning and shaping the Sustainable Community Strategy and the Local Development Framework.

• The Council reviews on a regular basis the vision for the local area and how this impacts on governance arrangements.

• There are effective arrangements to deal with failure in service delivery. • The Medium Term Financial Plan, budgets and Capital Programme are soundly based

and are designed to deliver the Council’s strategic priorities. • The Council undertakes the Use of Resources assessment on an annual basis and

continues to build on the sound arrangements already in place.

Core Principle Members and officers working together to achieve a common purpose with clearly defined functions and roles. Supporting Principles • Ensuring specific leadership throughout the Authority by being clear about executive and

non-executive functions and of the roles and responsibilities of the scrutiny function. • Ensuring that a constructive working relationship exists between elected Members and

officers and that the responsibilities of Members and officers are carried out to a high standard.

• Ensuring relationships between the Authority and the public are clear so that each know what to expect of each other.

Specific Actions

• The Constitution sets out the responsibilities of elected Members by defining the decision-making powers of the Council, Executive, Overview and Scrutiny and Regulatory and other committees, providing clear terms of reference, and describing roles and functions.

• There is also a clearly defined management structure and a scheme of delegation to officers, which is underpinned by the Members’ Code of Conduct and a Protocol for Officer/Member relations.

• There are established protocols, which ensure that the Leader and Chief Executive negotiate their respective roles early in the relationship and that a shared understanding of roles and objectives is maintained.

• There are clear terms and conditions for remuneration of Members and officers and an


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effective structure for managing the process including an effective remuneration panel. • The Council’s vision, strategic plans, priorities and targets are developed through robust

mechanisms, and in consultation with the local community and other key stakeholders, and are clearly articulated and disseminated.

• Key partnerships are periodically reviewed and risks are assessed using our Partnership Toolkit including the signing of a ‘Partnership Charter’. The booklet ensures that the key risks associated with partnership working are identified and controlled.

• Effective mechanisms exist to monitor service delivery following a review of Overview and Scrutiny arrangements by the IDeA.

• Effective management arrangements are in place at the top of the organisation. • The Chief Executive is responsible and accountable to the Authority for all aspects of

operational management. • The Director of Finance and Revenues (s151 officer) is responsible to the Authority for

ensuring that appropriate advice is given on all financial matters, for keeping proper financial records and accounts, and for maintaining an effective system of internal financial control.

• The Deputy Chief Executive and Monitoring Officer is responsible to the Authority for ensuring that agreed procedures are followed and that all applicable statutes, regulations and other relevant statements of good practice are complied with.

Core Principle Promoting values for the authority and demonstrating the values of good governance through upholding high standards of conduct and behaviour. Supporting Principles • Ensuring Council Members and officers exercise leadership by behaving in ways that

uphold high standards of conduct and exemplify effective governance. • Ensuring that organisational values are put into practice and are effective.

Specific Actions • The Council has developed, and maintains shared values both for the organisation and its

staff reflecting public expectations about the conduct and behaviour of individuals. • Established Codes of Conduct define expected standards of personal behaviour. • An effective Standards Committee acts as the main means to raise awareness and takes

the lead in ensuring high standards of conduct are firmly embedded within the culture. • Arrangements are in place to ensure that Members and employees of the Authority are not

influenced by prejudice, bias or conflicts of interest in dealing with different stakeholders. • Procedures and operations are designed in conformity with appropriate ethical standards,

and continuing compliance is monitored. • Governance arrangements are in place with key partners.

Core Principle Taking informed and transparent decisions which are subject to effective scrutiny and managing risk. Supporting Principles • Exercising leadership by being rigorous and transparent about how decisions are taken

and listening to and acting upon the outcome of constructive scrutiny. • Having good quality information, advice and support to ensure that services are delivered

effectively and are what the community wants/needs.


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• Making sure that an effective risk management system is in place. • Recognising the limits of lawful action and observing both the specific requirements of

legislation and the general responsibilities placed on local Authorities by public law, but also accepting responsibility to use their legal powers to the full benefit of the citizens and communities in their area.

Specific Actions • The Council has an effective scrutiny function which encourages constructive challenge

and enhances the Authority’s performance overall. • There are effective mechanisms for documenting evidence for decisions and recording the

criteria, rationale and considerations on which decisions are based. • Arrangements are in place so that conflicts of interest on behalf of Members and officers

are avoided. • Arrangements are in place for whistle blowing, to which all staff and all those contracting

the Authority have access. • Effective transparent and accessible arrangements are in place for dealing with

complaints. • An effective Audit Committee is in place, which is independent of the Executive and the

scrutiny function. • An effective Standards Committee lies at the heart of decision-making and raises

awareness on standards issues. • Those making decisions are provided with information that is fit for the purpose - relevant,

timely and gives clear explanations of technical issues and their implications. • Effective arrangements are in place for determining the remuneration of senior staff. • Professional advice on legal and financial matters is available and recorded well in

advance of decision-making and used appropriately when decisions have significant legal or financial implications.

• Risk management is being embedded into the culture of the Authority, with Members and managers at all levels recognising that risk management is part of their job.

• Limits of lawful activity are recognised by the ultra vires doctrine and managers strive to utilise their powers to the full benefit of the community.

• Specific legislative requirements are observed, as well as the requirements of general law, and in particular the key principle of administrative law - rationality, legality and natural justice form part of procedures and decision-making.

• When working in partnership, protocols exist for working together which include a shared understanding of respective roles and responsibilities of each organisation.

• When working in partnership, there are robust procedures for scrutinising decisions. • When working in partnership, partnership papers are easily accessible and meetings are

held in public unless there are good reasons for confidentiality. The partners ensure that the partnership receives good quality advice and support and information about the views of citizens and stakeholders, so that robust and well-reasoned decisions are made and that risk is managed at a corporate and operational level.

Core Principle Developing the capacity and capability of Members to be effective and ensuring that officers - including the statutory officers - also have the capability and capacity to deliver effectively. Supporting Principles • Making sure that Members and officers have the skills, knowledge, experience and

resources they need to perform well in their roles. • Developing the capability of people with governance responsibilities and evaluating their

performance, as individuals and as a group.


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• Encouraging new talent for membership of the Authority so that best use can be made of resources in balancing continuity and renewal.

Specific Actions • The Authority assesses the skills required by Members and officers and makes a

commitment to develop these to enable roles to be carried out effectively. • The Authority ensures that the statutory officers have the skills, resources and support

necessary to perform effectively in their roles and that these roles are properly understood throughout the Authority.

• Induction programmes are tailored to individual needs and there are opportunities for Members and officers to update their knowledge on a regular basis.

• Skills are developed on a continuing basis to improve performance, including the ability to scrutinise and challenge and to recognise when outside expert advice is needed.

• Arrangements are in place for reviewing the performance of the Executive as whole and of individual members and agreeing an action plan, which might for example aim to address any training or development needs.

• Arrangements are in place to encourage individuals from all sections of the community to engage with, contribute to and participate in the work of the Authority.

Core Principle Engaging with local people and other stakeholders to ensure robust public accountability. Supporting Principles • Exercising leadership through a robust scrutiny function, which effectively engages local

people and all local institutional stakeholders including partnerships, and develops constructive accountability relationships.

• Taking an active and planned approach to dialogue with and accountability to the public to ensure effective and appropriate service delivery.

• Making best use of resources by taking an active and planned approach to meet responsibility to staff.

Specific Actions • Staff consider those institutional stakeholders to whom they are accountable and assess

the effectiveness of the relationships and any changes required. • Clear channels of communication exist with all sections of the community and other

stakeholders and monitoring arrangements are in place to ensure that they operate effectively.

• Arrangements are in place to enable the Authority to engage with all sections of the community effectively. These arrangements recognise that different sections of the community have different priorities and there are explicit processes for dealing with these competing demands.

• There is a clear policy on the types of issues for consultation and service users including a feedback mechanism for those consulted.

• A corporate plan is published every 3 years giving information on the Authority’s vision, strategy and plans as well as information about its outcomes and achievements. The plan is refreshed annually.

• An executive summary supports the financial statements, which are statutorily produced as at 31 March each year.

• Effective systems are in place to protect the rights of staff. Policies for whistle blowing which are accessible to staff and those contracting with the Authority, and arrangements for the support of whistle blowers, are in place.

• There are clear policies on how staff and their representatives are consulted and involved


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in decision-making. • An annual report is produced on scrutiny function activity. • The Authority as a whole is open and accessible to the community, service users and its

staff and is committed to openness and transparency in all its dealings, including partnerships, subject only to the need to preserve confidentiality in those specific circumstances where it is proper and appropriate to do so.

7. STRATEGIC RISK MANAGEMENT The Council has adopted a corporate risk management policy, and operates a fully integrated risk management system across the organisation. Relevant officers have received training in risk management enabling the production of a risk register with associated risk action plans, which are reviewed on a regular basis. Each year the Council’s senior management team hold a workshop, facilitated by an external risk consultant to identify and prioritise strategic risks and to produce action plans. Significant business risks that may impact upon the Council’s priorities have been identified and assessed, and appropriate control measures are in place. The report and associated action plans have been presented to Management Board and progress is monitored on a regular basis. 8. REVIEW OF EFFECTIVENESS Wyre Borough Council has responsibility for conducting, at least annually, a review of the effectiveness of the system of internal control. The review of effectiveness of the system of internal control is informed by the work of the internal auditors and the Director of Finance and Revenues (Section 151 Officer) who have responsibility for the development and maintenance of the internal control environment, and also by comments made by the external auditors and other review agencies and government inspectorates.

• The Council has completed numerous internal reviews upon the internal control environment, working through a comprehensive and risk based internal audit plan. Progress on the completion of the audit plan and on the embedding of risk management is reported to the Council’s Audit Committee on a six monthly basis.

• Internal Audit reviews are conducted under the Auditing Practices Board Guidelines and CIPFA Code of Practice for Internal Audit in Local Government.

• The External Auditor in their Annual Audit and Inspection Letter issued an unqualified opinion on the Council’s accounts and assessed the Council as ‘performing consistently above minimum standards’ in the way it manages its use of resources.

• An annual review of the Council’s Financial Regulations and Financial Procedure Rules is performed and Internal Audit test compliance to these regulations.

• The Council has a local code of corporate governance in place which is updated annually. Assurance work has been performed on the key policies that contribute towards this framework to ensure policies are being applied as intended. A review of the Council’s governance arrangements will be carried out by an independent third party during 2009.

• Internal audit reviews the effectiveness of the data collection process that underpins the internal and external reporting of local and national Performance Indicators. In the External Auditor’s Annual Audit and Inspection Letter it is reported that Wyre has ranked ninth out of 388 authorities for the percentage of national indicators improved since 2006/07.

• The Audit Committee carries out an overview of the activities of the Council’s internal and external audit functions; Members are provided with copies of all reports produced by both internal and external audit and approve the annual audit plans.

• The Standards Committee is responsible for standards and probity, and receives regular reports from the Monitoring Officer.

• The Councils risk management procedures have been independently assessed and it has


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been recognised that ‘good practices have been established in the procedures for developing and communicating the Council’s risk management strategy, policy and procedures. Objectives of the risk management function have been defined and documented, and arrangements have been established to enable senior management and the Cabinet to monitor the effectiveness of the function’.

• In accordance with the Accounts and Audit Regulations, the authority has undertaken a review of its systems of internal audit through a self assessment process. The review recognises the important role that internal audit play in the assurance process and the need to continually ensure that it remains effective.

• The Audit Committee annually undertakes a review of it’s own effectiveness against the checklist in the CIPFA guidance ‘Effective Audit Committees’ and is satisfied that it meets the required standard.

• An assessment of the employee’s awareness of the Council’s anti-fraud and corruption arrangements has been carried out which has resulted in the overall opinion that the Council’s knowledge of the anti-fraud and anti-corruption policies is ‘Good’.


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9. USE OF RESOURCES AUDITOR JUDGEMENT The annual Use of Resources (UoR) assessment evaluates how well local authorities manage and use their financial resources and focuses on the importance of having sound and strategic financial management to ensure that resources are available to support the authority’s priorities and improve services. The Council’s overall UoR score for 2007/08 has been assessed as level 3, which means that overall the Council is performing well and consistently above minimum requirements. For the last three years the Council has sustained its performance in all areas demonstrating that relevant arrangements are embedded i.e. they have been working effectively with clear demonstrable outcomes. The 2008 assessment will be the final assessment under the CPA framework. The assessment for 2008/09 will be the first under the CAA framework being introduced from April 09. The 2008/09 UoR assessment will not only challenge authorities to improve further but emphasise the importance of activities achieving improved value for money. The new framework is more output and outcome focused, which means the level of performance that might be expected to score at level 3 in future has been raised. Themes

Score 2007/08 Score 2006/07 Score 2005/06

Financial Reporting Financial Management Financial Standing Internal Control Value for Money

3 3 3 3 3

3 3 3 3 3

3 3 3 3 3

Overall Score 3 3 3 As the Leader of the Council, I am aware of the governance issues within this Authority and of the measures that are needed to improve the control environment. Overall my assessment of the control environment as at 31st March 2009 is satisfactory.

COUNCILLOR R. FORSYTH LEADER OF THE COUNCIL

DATE : 19 May 2009 As the Chief Executive, I am aware of the governance issues within this Authority and of the measures that are needed to improve the control environment. Overall my assessment of the control environment as at 31st March 2009 is satisfactory.

J CORRY

CHIEF EXECUTIVE DATE : 19 May 2009


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ANNUAL GOVERNANCE STATEMENT 2008/09 - ACTION PLAN

Governance Issues Perceived Risk Actions to remedy Responsible Officer

1. Health and Safety Medium 1.1 Annual update of risk

assessments. 1.2 Introduce arrangements for self-

monitoring. 1.3 Introduce procedure re

aggressive and dangerous customers

1.4 Undertake audit of H&S arrangements council wide

1.5 Review effectiveness of H&S contract

All R Posner R Posner/M Ryan M Ryan M Ryan

2. Communication Low 2.1 Introduce content management

system/web authors to ensure that the intranet and web pages within Directorates is up to date and regularly reviewed.

M Ryan

3. Data Quality Medium 3.1 Data quality training to be

included in Manager Essentials and Corporate Induction

3.2 Monitoring procedures to be reviewed

3.3 Implement recommendations of Data Management audit

M Ryan R Posner M Ryan

4. Policies and

Procedures Low 4.1 Arrange refresher training on the

Financial Regulations and Financial Procedure Rules

4.2 Procedure for annual review to be included within service plan

4.3 Review of quality assurance system

4.4 Review procedures around Partnership Grants

P Davies T Pridmore R Posner M Ryan

5. Insurance Low 5.1 Asset inventories to be compiled

5.2 Advice from Insurance Officer to be sought about assets known to be uninsured

All R Posner

6. Other Low 6.1 Monitor partnership

arrangements

P Davies


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INCOME AND EXPENDITURE ACCOUNT

2007/08 2008/09 Net

Expenditure

Notes Gross

Expenditure Gross

Income Net

Expenditure £ £ £ £

1,313,060 Central Services to the Public 9,875,789 (8,561,325) 1,314,464

14,149,406 Cultural, Environmental, Regulatory and Planning Services

18,994,024 (6,685,517) 12,308,507

1,906,561 Highways and Transport Services 3,475,188 (1,518,813) 1,956,3752,162,584 Other Housing Services 25,532,996 (25,089,389) 443,6072,409,118 Corporate and Democratic Core 2,347,390 (73,039) 2,274,351

464,000 Non Distributed costs 131,000 0 131,000

22,404,729 Net Cost of Services 1 60,356,387 (41,928,083) 18,428,304

(326,287) (Gain)/Loss on Disposal of fixed assets (Including LSVT Receipts)

(182,284)

198,602 Precepts paid to Parish Councils 217,2480 (Surplus)/Deficit of trading undertaking

not included in Net Cost of Services 2

0

24,135 Interest payable and similar charges 120,3720 Contribution of Housing Capital

Receipts to Government Pool 0

(141,930) Interest on Investments (150,587)181,000 Pensions interest cost and expected

return on pensions assets 1,206,000

(200,000) Prior Year Adjustment (RSG/NNDR) 0

22,140,249 Net Operating Expenditure 19,639,053

(1,359,352) General Government Grants (1,221,941)(82,988) Business Growth Incentive Grant (485,566)

(1,784) Lancashire Public Service Agreement (LPSA) Grant

0

(8,100,027) Non Domestic Rates redistribution (8,616,170)(6,514,656) Demand on the Collection Fund (6,787,745)

(22,647) Transfers (from)/to the Collection Fund in respect of surpluses/deficits

24,033

6,058,795 (Surplus) / Deficit for the year 2,551,664


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STATEMENT OF MOVEMENT ON THE GENERAL FUND BALANCE The Income and Expenditure Account shows the Council’s actual financial performance for the year, measured in terms of the resources consumed and generated over the last twelve months. However, the authority is required to raise council tax on a different accounting basis, the main differences being: • Capital investment is accounted for as it is financed, rather than when the fixed assets are

consumed. • The payment of a share of housing capital receipts to the Government is recorded as a loss in the

Income and Expenditure Account, but is met from the usable capital receipts’ balance rather than council tax.

• Retirement benefits are charged as amounts become payable to pension funds and pensioners, rather than as future benefits are earned.

The General Fund Balance compares the Council’s spending against the council tax that it raised for the year, taking into account the use of reserves built up in the past and contributions to reserves earmarked for future expenditure. This reconciliation statement summarises the differences between the outturn on the Income and Expenditure Account and the General Fund Balance.

2007/08 2008/09 £ £

6,058,795 Deficit for the year on the Income and Expenditure Account 2,551,664

(6,884,028) Net additional amount required by statute and non-statutory proper practices to be debited or credited to the General Fund Balance for the year

(2,104,799)

(825,233) (Increase)/Decrease in General Fund Balance for the Year 446,865(2,274,305) General Fund Balance brought forward (3,099,538)(3,099,538) General Fund Balance carried forward (2,652,673)

(3,099,538) General Fund Balance generally available for new expenditure (2,652,673)


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NOTE OF RECONCILING ITEMS FOR THE STATEMENT OF MOVEMENT ON THE GENERAL FUND BALANCE

2007/08 2008/09 £ £

Amounts included in the Income and Expenditure Account but required by statute to be excluded when determining the Movement on the General Fund Balance for the year

(248,250) Amortisation of intangible fixed assets

(426,715)

(1,472,677) Depreciation of fixed assets

(1,688,920)

(3,821,920) Impairment of fixed assets (incl. Revaluation Decreases)

(1,169,631)

513,775

0

Government Grants Deferred amortisation Housing Grants Applied

562,495

1,138,773

(1,952,795) Revenue Expenditure Funded from Capital under Statute

(1,227,633)

326,287 Net Gain/(Loss) on sale of fixed assets (Including LSVT Receipts)

182,284

(174,000) Net charges made for retirement benefits in accordance with FRS 17

(850,000)

(6,829,580) (3,479,347) Amounts not included in the Income and Expenditure

Account but required to be included by statute when determining the Movement on the General Fund Balance for the year

0 Minimum revenue provision for capital financing

55,998

75,231 Capital expenditure charged in-year to the General Fund Balance

254,737

0 Transfer from Usable Capital Receipts to meet payments to the Housing Capital Receipts Pool

0

0 Employer’s contributions payable to the Pension Fund and retirement benefits payable direct to pensioners

0

75,231 310,735 Transfers to or from the General fund Balance that are

required to be taken into account when determining the Movement on the General Fund Balance for the year.

0 Voluntary revenue provision for capital financing

0

(129,679) Net transfer to or (from) earmarked reserves 1,063,813

(129,679) 1,063,813

(6,884,028) Net additional amount required to be credited to the

General Fund balance for the year

(2,104,799)


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NOTES TO INCOME AND EXPENDITURE ACCOUNT 1. Net Cost of Services

The main reasons for the reduction in expenditure compared to the Updated Revised Budget are detailed in the Explanatory Foreword. Other significant variations in the net cost of services year on year include the following: • Central Services to the Public – Full Borough Elections were held in 2007 so costs reduced

in 2008/09 by £115,436. Local Searches income reduced by £64,660 as a result of changes in demand. The cost of Council Tax Collection and Council Tax Benefit Administration has increased by £16,326 due to Government Grant changes and the re-apportionment of costs.

• Cultural, Environmental, Regulatory and Planning Services – Notional capital charges and

depreciation have reduced by £2,735,430. Support service reallocations have increased by £387,744. Net operation costs for Domestic Waste increased by £106,247 and Consultancy costs increased by £116,833 mainly in regard to the Fleetwood Thornton Area Action Plan. Government grant income for Planning Delivery reduced by £91,353.

• Highways and Transport Services – Off Street Car Parking income increased by £324,214

mainly because of a reduction in 2007/08 for VAT adjustments. Ferry Landing Stage costs increased due to a notional impairment by £160,000. The administration and operation of Concessionary Travel increased by £150,625 as a result of national scheme changes.

• Other Housing Services – A reduction in capital expenditure charged to revenue in respect of

Housing grants of £662,180 was offset by a consequential reduction in associated Administration fees of £59,308 and notional grant and contribution income of £1,138,773.

• Corporate and Democratic Core – This mainly reflects a reduction in support service costs of

over £111,000 due in part to the one-off costs of a management restructuring exercise and the Comprehensive Performance Assessment during 2007/08 and not being repeated in 2008/09.

• Non Distributed Costs – Past service gains have reduced by £453,000 offset by an increase

in curtailment losses of £120,000.

2. Trading Operations In accordance with the Best Value Accounting Code of Practice (BVACOP) trading services or undertakings with the public or with third parties includes, amongst other categories, catering undertakings, markets, trade refuse collection and industrial units. Where trading accounts are an integral part of the total cost of particular services they should be fully consolidated into the total cost of that service as indicated for those services listed below.

2007/08 2008/09

Income Total

Expenditure

(Surplus) / Deficit

Income

Total Expenditure

(Surplus) / Deficit

£ £ £ £ £ £ Trading Operations (271,040) 528,824 257,784 Catering (236,368) 429,004 192,636 (142,431) 115,729 (26,702) Ashdell Nursery (144,148) 144,148 0 (662,187) 2,337,473 1,675,286 Industrial Sites (640,342) 257,147 (383,195) (413,594) 405,802 (7,792) Trade Refuse (441,167) 463,141 21,974 (670,325) 371,259 (299,066) Fleetwood Market (680,543) 468,866 (211,677) (2,159,577) 3,759,087 1,599,510 (2,142,568) 1,762,306 (380,262)


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The aim of this note to the Accounts is to disclose the circumstances in which the authority is

exposed to commercial risk and has achieved its trading objectives however two of the services listed above, namely the catering operation at the Marine Hall and the Ashdell Nursery are considered to be incidental to the delivery of key Council services. The deficit in relation to Industrial sites in 2007/08 is related to a notional impairment charge of £2,100,000 at the Landfill Site, Jameson Road, Fleetwood, without which a surplus of £424,714 would have been declared.

3. Section 137, Local Government Act 2000 (as amended) The Local Government Act 2000 granted new powers to authorities to promote wellbeing in their area. The authority has, however, continuing powers under Section 137, to incur expenditure when in its opinion it is in the interests of its area or some of its inhabitants and which is not otherwise authorised e.g. to contribute to funds of charities operating in the UK, not for profit bodies providing a public service in the UK and mayoral appeals. Separate account of this expenditure has to be made, but there is no specific limit on such expenditure. No such expenditure was incurred in 2008/09.

4. Publicity - Memorandum Account Section 5(1) of the Local Government Act, 1986 which came into force on 1 April 1988, requires a local authority to keep a separate account of its expenditure on publicity. A sum of £112,080 was included in the Revised Budget and actual costs were as follows:

2007/08 Publicity Area 2008/09 £ £ 23,369 Recruitment Advertising 6,332 21,024 Advertising Statutory Notices 22,038 55,341 Advertising Other 59,022 8,749 Holiday Guide 10,696 108,483 98,088 The above figures are included in the Income and Expenditure Account.

5. Building Control

In accordance with the Building (Local Authority Charges) Regulations 1998, the following illustrates the extent of activity on chargeable and non-chargeable activities during the year.

2007/08 2008/09 Total Chargeable Non

Chargeable Total

£ £ £ £ Expenditure 212,619 Employees expenses 169,908 76,184 246,092 116 Premises 0 620 620 16,555 Transport 12,165 5,454 17,619 24,139 Supplies and Services 11,080 1,694 12,774 99,464 Central/Support Services 71,802 34,850 106,652 352,893 TOTAL EXPENDITURE 264,955 118,802 383,757 Income (272,765) Building Regulation Charges (241,922) 0 (241,922) (854) Miscellaneous Income 0 (663) (663) (273,619) TOTAL INCOME (241,922) (663) (242,585) 79,274 (Surplus) / Deficit in the Year 23,033 118,139 141,172


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(Surplus)/Deficit In the Year

Cumulative (Surplus)/ Deficit

£ £ 2006/07 (63,508) 2007/08 (35,260) Current Year – 2008/09 23,033 (75,735) The cumulative surplus has been separated into a Building Control Reserve, as required by the

Regulations. The Council resolved to use earlier years’ surpluses to support related initiatives.

6. Agency Services The Highways Partnership agency arrangement was terminated at the end of June 2006, with Lancashire County Council assuming direct responsibility for the delivery of highway related functions from 1 July 2006. There remains a residual agreement in place which covers the maintenance of highway verges, roundabouts and urban core and this enables the Council to provide a small number of highway and street scene related functions. Total reimbursement in 2008/09 was £95,587 (2007/08 £107,044). The above sums are not included in the Income and Expenditure account.

7. Pension Costs In 2008/09 the employer’s contribution was at 20.7%, following the triennial actuarial review of the Pension Fund which was completed in January 2008.

8. General Government Grants In England, Area Based Grant (ABG) replaces Local Area Agreement (LAA) Grant from 2008/09. Unlike LAA Grant, ABG is a non-ringfenced general grant. As such, no conditions on use are imposed as part of the ABG determination, and its use is not restricted to supporting the achievement of LAA targets.

The breakdown of the General Government Grants income £1,221,941 by type in 2008/09 was £1,199,441 Revenue Support Grant and £22,500 Area Based Grant.

9. Members’ Allowances The Council’s Members’ Allowance Scheme is based on recommendations from an Independent Remuneration Panel. Basic Allowance is an annual sum payable to all Members, and Special Responsibility Allowance is paid to certain Members with specific additional responsibilities. The total of the payments made in 2008/09 was £292,906 (2007/08 £291,894). In addition £12,729 (2007/08 £15,518) was paid to cover Members’ Travel and Subsistence claims. No claims, as in 2007/08, were submitted for the payment of Dependants’ Carers’ Allowances.

10. Employees’ Remuneration The Accounts and Audit Regulations require the number of employees whose total remuneration exceeds £50,000 to be disclosed in the Accounts. For 2008/09, the remuneration for 10 employees (2007/08, 11 employees) fell within the following bands:

2007/08 Bands 2008/09 5 £50,000 - £59,999 4 - £60,000 - £69,999 4 4 £70,000 - £79,999 - - £80,000 - £89,999 1 1 £90,000 - £99,999 1 - £100,000 - £109,999 - 1 £110,000 - £119,999 - - £120,000 - £129,999 -


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Remuneration includes all amounts paid to or receivable by an employee and includes sums due by the way of expenses and the estimated monetary value of all other benefits received by an employee otherwise than in cash. Redundancy and Pension payments have been included.

11. Audit Fees In 2008/09, the Council incurred the following fees relating to external audit and inspection:

2007/08 Audit Fee Type 2008/09 £ £ 102,000 Fees payable to KPMG with regard to external audit services

carried out by the appointed auditor 105,000

8,024 Fees payable to the Audit Commission in respect of statutory inspection

7,622

14,420 Fees payable to the Audit Commission in respect of Corporate Performance Assessments

(700)

24,572 Fees payable to KPMG for the certification of grant claims and returns

32,130

149,016 144,052 12. Retirement Benefits

As part of the 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 is committed to make the payments. Under Financial Reporting Standard 17 ‘Retirement Benefits’, the Council has to disclose the authority’s net asset or liability relating to its portion of the Lancashire County Pension Fund within the financial statements at the time that employees earn their future entitlements. The Lancashire County Pension Fund is a funded scheme, meaning that the Authority and employees pay contributions into the Fund, calculated at a level intended to balance the pension liabilities with investment assets. It is a defined benefit scheme. The Authority recognises the cost of retirement benefits in the Net Cost of Services when they are earned by employees, rather than when the benefits are eventually paid as pensions. However, the charge the Authority is required to make against council tax is based on the cash payable in the year, so the real cost of retirement benefits is reversed out of the Income and Expenditure Account after Net Operating Expenditure. The following transactions have been made in the Income and Expenditure Account and Statement of Movement on the General Fund balance during the year:

2007/08 Local Government Pension Scheme 2008/09 £’000 £’000 Net Cost of Services 1,215 - Current Service Cost 1,363 453 - Past Service Cost 0 11 - Curtailment Cost 131 Net Operating Expenditure 3,956 - Interest Cost 4,671 (3,775) - Expected Return on Assets in the Scheme (3,465) Amounts to be met from Government Grants and Local Taxation (174) - Movement on Pensions Reserve (850) Actual amount charged against council tax for pensions in the

year 1,686 - Employers’ contributions payable to scheme 1,850 Note 10 to the Balance Sheet on pages 39 to 41 contains details of the assumptions made in


32

estimating the figures included in this note.

13. Leases The total payments in the year for operating leases were £209,212 (£18,782 for plant and machinery and £190,430 for vehicles). The estimated un-discharged obligations for operating leases totalled £326,479 (£42,141 for plant and machinery and £284,338 for vehicles). This includes £268,469 outstanding on vehicles transferred under a sub-lease to Fylde Borough Council in April 2005 as part of the waste management agreement. These payments will be due as follows:

Transferred to Fylde BC

£

Retained by Wyre BC

£

TOTAL

£ Leases expiring in 2009/10 130,246 39,228 169,474 Leases expiring between 2010/11 and 2011/12 138,223 18,782 157,005 Leases expiring in 2012/13 and beyond 0 0 0 Total 268,469 58,010 326,479 14. Related Party Transactions

In accordance with FRS8, the financial statements must contain the disclosures necessary to draw attention to the possibility that the reported financial position of the Authority may have been affected by the existence of related parties and by material transactions with them. Related parties include: • Central Government • Other local authorities and precepting bodies • Subsidiary and associated companies • Joint venture and joint venture partners • Elected Members and Senior Officers The following transactions involving related parties to the Council are disclosed elsewhere within the accounts: • Receipts from Central Government – see Cash Flow Statement • Payments to the Local Government Pension Scheme – see Note 12 to the Income and

Expenditure account on page 31 • Precepts in relation to the Lancashire Police Authority, Lancashire Combined Fire Authority

and Lancashire County Council – see the Collection Fund Elected Members: During the year some Councillors of Wyre Borough acted in a number of other capacities for related parties, namely being either employed by other local organisations or serving on the management boards of companies and voluntary bodies. Examples include: • Lancashire County Council and associated companies • Wyre Tourism Association • Wyre Borough Council/Regenda Partnership Group • Garstang Town Trust • Garstang Area Partnership • Poulton Market Town Initiative • Lancashire Economic Partnership Forum There are no transactions to disclose in respect of Elected Members or Senior Officers, (including their close families) or regarding grants to voluntary and other organisations.


33

STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES This statement brings together all the gains and losses of the Council for the year and shows the aggregate increase in its net worth. In addition to the deficit generated on the Income and Expenditure Account, it includes gains and losses relating to the revaluation of fixed assets and re-measurement of the net liability to cover the cost of retirement benefits.

2007/08 As restated

2008/09

£ £

6,058,795 Deficit / (Surplus) for the year on the Income and Expenditure Account 2,551,664

(1,739,989) Deficit / (Surplus) arising on revaluation of fixed assets (less (Gain) / Loss on Disposal of fixed assets)

(498,967)

*8,807,000 Actuarial (gains)/losses on pension fund assets and liabilities (905,000)

Any other gains and losses required to be included

162,032 • Movement in usable capital receipts (4,449)

369,987 • Movement in collection fund balance (58,418)

(726,419) • Capital receipts applied 0

0 • Repayment of long term debtors 0

(2,032,877) • Capital Grants applied 0

24,308 • Pre-Revaluation Reserve Adjustment (Disposals in year and Depreciation adjustment)

0

10,922,837 Total recognised (gains)/losses for the year 1,084,830 *Prior year adjustment made due to Pension scheme assets valued at bid price rather than mid-market value.


34

BALANCE SHEET As at 31 March

2007/08 As restated

Notes 2008/09

£ £ £ LONG TERM ASSETS Net Tangible Fixed Assets 1a

49,213,116 - Operational 50,847,735 10,632,290 - Non-Operational 10,550,303 61,398,038

1,216,891 Intangible Fixed Assets 1b 1,057,099

10,019 Investments 2 19 27,614 Long Term Debtors - Mortgages/Loans 18,460 1,075,578

61,099,930 Total Long Term Assets 62,473,616 CURRENT ASSETS

65,298 Stocks and Work in Progress 3 63,019 7,310,168 Debtors 4 8,411,203 1,800,000 Investments 2 360,000

72,707 Cash and Bank 102,439 8,936,66170,348,103 Total Assets 71,410,277

CURRENT LIABILITIES

(2,003,748) Short-Term Borrowing 5 0 (8,194,663) Creditors 6 (6,263,499) (1,195,313) Provision for bad and doubtful debts (1,355,399)

(97,427) Bank Overdrawn (2,322,150) (9,941,048)

58,856,952 Total Assets less Current Liabilities 61,469,229 LONG TERM LIABILITIES

(2,552,000) Long-Term Borrowing (3,552,000) (18,558,923) Government Grants and Contributions Deferred 7 (21,343,721)

(191,783) Deferred Liabilities 8 (159,092) *(25,032,000) Liability related to defined benefit Pension Scheme 10 (24,977,000) (50,031,813)

12,522,246 TOTAL ASSETS LESS LIABILITIES 12 11,437,416

FINANCED BY:

2,066,276 Revaluation Reserve 11 2,496,58429,484,612 Capital Adjustment Account 11 26,820,058

0 Usable Capital Receipts 11 419,050*(25,032,000) Pensions Reserve 11 (24,977,000)

3,212,548 Earmarked Reserves 11 4,276,3612,790,810 General Fund Balances 11 2,402,363

12,522,246 TOTAL NET WORTH 11,437,416

*Prior year adjustment made due to Pension scheme assets valued at bid price rather than mid-market value.


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NOTES TO THE BALANCE SHEET 1a. Net Tangible Fixed Assets Operational

Land and Buildings

Vehicles and Plant

Non-Operational

Infra-structure

Community Total

£ £ £ £ £ £ Cost or valuation B/fwd at 01/04/08 31,101,931 744,874 10,883,040 22,207,294 786,794 65,723,933 Additions 47,518 230,984 0 2,889,651 318,274 3,486,427 Disposals (156,298) 0 (227,000) 0 (1) (383,299) Impairments (326,013) 0 (34,530) 0 0 (360,543) Reclassifications 89,910 0 20,091 (110,000) (1) 0 Revaluations 339,515 0 159,452 0 0 498,967 Sub-Total 31,096,563 975,858 10,801,053 24,986,945 1,105,066 68,965,485 Depreciation B/fwd at 01/04/08 (3,370,127) (211,856) (250,750) (1,940,914) (104,880) (5,878,527) Charge in year (918,475) (122,368) 0 (622,867) (25,210) (1,688,920) C/fwd at 31/03/09 (4,288,602) (334,224) (250,750) (2,563,781) (130,090) (7,567,447) Net Book Value

c/fwd at 31/03/09 26,807,961 641,634 10,550,303 22,423,164 974,976 61,398,038

Non Operational assets at 31 March 2009 are further categorised as follows:

£ £ Investment properties 10,550,303 Assets under construction 0 Surplus assets held for disposal 0 10,550,303 An analysis of the main fixed assets: 2007/08

(No’s) Asset Types 2008/09

(No’s) 4 Sports Centres 4 2 Community Centres 2 17 Car Parks 17 1 Fleetwood Market 1 1 Civic Centre and Area Offices 1 22 Public Conveniences 20 4 Cemeteries 4 1 Theatre (Thornton) 1 1 Marine Hall (Fleetwood) 1 1b. Intangible Fixed Assets

The Council must also disclose the value of any Intangible Fixed Assets in its possession, which are defined as non-monetary fixed assets, which nevertheless are of lasting benefit. Expenditure on assets that do not have physical substance but are identifiable and controlled by the Council (eg software licences) is capitalised when it will bring benefits to the Council for more than one financial year. The balance is amortised to the relevant service revenue account over the economic life of the investment to reflect the pattern of consumption of benefits. Essentially, intangible fixed assets relate to computer software and associated implementation costs which will bring benefits to the Council over an estimated five year period.


36

During 2008/09, the movement of Intangible Fixed Assets is as follows:

Software / Associated Costs

£ Original Cost 1,641,512 Amortisation to 1 April 2008 (424,620) Balance at 1 April 2008 1,216,892 Expenditure in Year 266,922 Written off to revenue in year (426,715) Balance at 31 March 2009 1,057,099 1c. Capital Expenditure and Financing

2007/08 2008/09 £ £ Total Capital Expenditure 7,108,758 Tangible Fixed Assets - Additions 3,486,427 1,569,550 Tangible Fixed Assets - Impairment 809,088 223,872 Intangible Assets 266,922 56,990 De Minimis Capital Expenditure 0 1,895,804 Revenue Expenditure Funded from Capital under Statute 1,227,633 10,854,974 5,790,070 Financing 726,419 Capital Receipts – Usable 162,843 7,956,589 Government Grants and other contributions 4,474,205 2,096,735 Borrowing 898,285 75,231 Revenue Contributions 254,737 10,854,974 5,790,070 Commitments on the Capital Programme in 2009/10

The following significant contracts for capital investment have been entered into:

Scheme Purpose Approx Value £

Period over which Investment will take

place Asset Management New IT software system 43,000 April’09 to Sept’09 Civic Centre Heating System improvements 9,000 April’09 to Sept’09 Customer Relationship

Management Development of system 43,000 May’09 to March’10

Telephony New system 12,000 April’09 to March’10 Marine Gardens Refurbishment of play

area 7,000 April’09 to Sept’09

Marine Lakes General improvements 6,000 April’09 to Sept’09 Housing Grants Improved standards 8,000 April’09 to Sept’09 Cycle Route New facility 25,000 April’09 to Sept’09 Car Parks General improvements 62,000 April’09 to Dec’09 Coast Protection Improved sea defences 539,000 April’09 to March’10 Slippage totalling £1,059,819 has also been requested in respect of capital schemes and this will

therefore fall in the 2009/10 financial year.


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1d. Fixed Asset Valuation

In 2005/06, Lancashire County Council’s Property group carried out a revaluation of fixed assets in accordance with the Royal Institute of Chartered Surveyors’ Appraisal and Valuation Manual. Since then all assets valued on a current value basis are being revalued on a rolling five year programme. This is in accordance with the requirements of the Accounting Code of Practice. Any additions in the year have either been included in the Accounts at their cost of acquisition, and will be formally valued at a future date as part of the rolling revaluation exercise, or have been written in at an appropriate valuation. Specific valuation bases are disclosed within the Statement of Accounting Policies. The following statement shows the progress of the Council’s rolling programme for the revaluation of fixed assets.

Operational Land and Buildings

Vehicles and Plant

Non-Operational

Infra-structure

Community Total

£’000 £’000 £’000 £’000 £’000 £’000 Book Value Valued at historic

cost. 0 0 0 0 0 0

Valued at current

value in:

2004/05 5,413 0 617 0 (15) 6,015 2005/06 4,392 0 1,782 0 (58) 6,116 2006/07 (24) 0 422 0 0 398 2007/08 1,594 0 (1,738) 0 0 (144) 2008/09 340 0 159 0 0 499 Total Change 11,715 0 1,242 0 (73) 12,884 2. Investments

The Council holds an interest of 19 £1 shares in Wyre Fish Dock Management Company and has £360,000 invested on the money market with Alliance & Leicester Bank at 31 March 2009.

3. Stocks and Work in Progress

2007/08 Analysis 2008/09 £ £ Stocks - 25,956 Recreation and Tourism 25,553 1,843 Environmental Health 7,327 5,521 Refuse Collection 10,059 31,978 Other Services 20,080 65,298 63,019 There was no work in progress at 31 March 2009.

The main reasons for the overall reduction of £2,279 in stock levels include a write off for Copse Rd fuel £7,452. This has been offset by an increase in stock levels of refuse sacks £4,537.


38

4. Debtors

2007/08 Analysis 2008/09 £ £ Amounts falling due in one year: 1,485,228 Government Departments 2,218,076 724,143 Other Public Authorities 956,072 2,554,837 Council Taxpayers 2,671,247 920,805 Non-domestic Ratepayers 1,065,996 0 Mortgagors 208 1,591,858 Sundry Debtors and Payments in Advance 1,486,845 7,276,871 8,398,444 Amounts falling due after one year: 10,551 Home Computer Initiative 557 22,746 Car Loans to Employees 12,202 7,310,168 8,411,203 5. Short-term Borrowing

There were no short-term loans held at 31 March 2009.

6. Creditors

2007/08 Analysis 2008/09 £ £ 3,035,568 Government Departments 972,474 1,535,052 Other Public Authorities 1,339,674 759,258 Council Taxpayers 847,307 376,994 Non-domestic Ratepayers 562,629 2,484,968 Sundry Creditors 2,537,848 2,823 Mortgagors 3,567 8,194,663 6,263,499 7.

Government Grants Deferred

2007/08 Analysis 2008/09 £ £ (13,148,985) Balance b/fwd (18,558,923) (5,923,713) Grants received in year (3,347,293) (19,072,698) (21,906,216) 513,775 Amortised during year 562,495 (18,558,923) Balance c/fwd (21,343,721) 8. Deferred Liabilities

Deferred Liabilities represent future income to the Council and include the amounts derived from sales of Council dwellings, £15,479 (2007/08 £20,720) which will be received in instalments over an agreed period of time and form the main part of mortgages under long term debtors. Monies received from developers for future maintenance of grounds and open spaces, i.e. commuted sums, are credited to revenue over a ten year period, with the amount due for the coming year being treated as a receipt in advance, and the amount due for subsequent years being treated as a deferred liability. The total amount outstanding at year-end was £171,063 (2007/08 £200,670), of which £27,450 (2007/08 £29,607) has been included under sundry creditors, and £143,613 (2007/08 £171,063) has been included under deferred liabilities.

9. Bequests and Trust Funds


39

The Council administers the Kenyon Park bequest being £28,070 left by an inhabitant many years ago for future provision of Recreation and Leisure facilities in the Borough. In addition the Council administers the Fielden Trust Fund, being £15,781 in respect of monies for the former Fleetwood Museum and Library, which will be utilised for the benefit of the Fleetwood community. These sums are not included in the Balance Sheet.

10. Retirement Benefits Note 12 to the Income and Expenditure account on page 31 contains details of the Authority’s participation in the Local Government Pension Scheme, administered by Lancashire County Council. The underlying assets and liabilities for retirement benefits attributable to the Authority at 31 March are as follows: Reconciliation of present value of the scheme liabilities

Funded liabilities: LocalGovernment Pension Scheme

2007/08 2008/09 £’000 £’000 1 April (73,860) (77,426) Current Service Cost (1,215) (1,363) Interest Cost (3,956) (4,671) Contribution by Scheme Participants (442) (451) Actuarial Gains and Losses (333) 15,002 Benefits Paid 2,844 3,509 Past Service Costs and Curtailments (464) (131) 31 March (77,426) (65,531) Reconciliation of fair value of the scheme assets Local Government

Pension Scheme2007/08 As restated 2008/09

£’000 £’0001 April 57,693 52,394Expected Rate of Return 3,767 3,465Actuarial Gains and Losses (8,350) (14,097)Employer Contribution 1,686 1,850Contribution by Scheme Participants 442 451Benefits Paid (2,844) (3,509)

31 March 52,394 40,554

The expected return on scheme assets is determined by considering the expected returns available on the assets underlying the current investment policy. Expected yields on fixed interest investments are based on gross redemption yields as at the Balance sheet date. Expected returns on equity investments reflect long-term real rates of return experienced in the respective markets. The actual return on scheme assets in the year was £10,632,000 (2007/08 £849,000)

Scheme History


40

2004/05* 2005/06* 2006/07 As restated

2007/08 As restated

2008/09

£’000 £’000 £’000 £’000 £’000

Fair Value of Assets 44,056 55,676 57,693 52,394 40,554Present Value of Liabilities (64,642) (74,610) (73,860) (77,426) (65,531)

Surplus/(Deficit) in the Scheme (20.586) (18,934) (16,167) (25,032) (24,977)

*The council has elected not to restate the fair value of scheme assets for 2004/05 and 2005/06 as permitted by FRS 17 (as revised). The liabilities show the underlying commitments that the Authority has in the long-run to pay retirement benefits. The total liability of £24,977,000 has a substantial impact on the net worth of the Authority as recorded in the Balance Sheet. However, statutory arrangements for funding the deficit mean that the financial position of the Authority remains healthy as the deficit on the Scheme will be made good by increased contributions over the remaining working life of employees, as assessed by the Scheme Actuary. Liabilities have been assessed on an actuarial basis using the projected unit method, an estimate of the pensions that will be payable in future years dependent on assumptions about mortality rates, salary levels, etc. It is recognised that current service costs will increase, as the members of the scheme approach retirement, for schemes in which the age profile of the active membership is rising significantly. The Pension Fund liabilities have been assessed by Mercer Human Resource Consulting Ltd, an independent firm of actuaries, with estimates being based on the last full Actuarial Valuation of the Scheme as at 31 March 2007. The main assumptions used in their calculations have been:

2007/08 2008/09 Long-term expected rate of return on assets

in the scheme

Equity investment 7.5% 7.5% Bonds 4.6% 4.0% Other Bonds 6.1% 6.0% Property 6.5% 6.5% Cash Liquidity 5.25% 0.50% Other 7.5% 7.5% Mortality assumptions Longevity at 65 for current pensioners Men 21.1 years 21.2 years Women 24.0 years 24.0 years Longevity at 65 for future pensioners Men 22.2 years 22.2 years Women 25.0 years 25.0 years Rate of inflation 3.6% 3.3% Rate of increase in salaries 5.35% 5.05% Rate of increase in pensions 3.6% 3.3% Discount rate 6.1% 7.1% Take-up option to convert annual pension into

retirement lump sum 50% 50%

The discount rate of 7.1% is based on an AA Corporate bond rate and incorporates an element for inflation.


41

Assets in the Lancashire County Pension Fund are valued at realisable values (i.e. bid values), as opposed to the previous requirement of fair values (in effect, mid-market values), and consist of the following categories, by proportion of the total assets held by the Fund:

31 March 2008

31 March 2009

% % Equities 62.2 61.2 Government Bonds 7.1 7.8 Other Bonds 15.0 12.3 Property 6.0 7.4 Cash Liquidity 3.3 4.9 Other 6.4 6.4 100.0 100.0 11. Detail of Movements on Reserves

The Council keeps a number of reserves in the Balance Sheet. Some are required to be held for statutory reasons, some are needed to comply with proper accounting practice and others have been set up voluntarily to earmark resources for future spending plans.

Balance Balance 1 April 2008

£

Net Movement

in Year £

Balance 31 March

2009 £

Purpose of Reserve Further Detail of

Movements

Revaluation Reserve (2,066,276) (430,308) (2,496,584) Store of gains on revaluation of fixed assets not yet realised through sales.

(a) below

Capital Adjustment Account

(29,484,612) 2,664,554 (26,820,058) Store of capital resources set aside to meet past expenditure.

(b) below

Usable Capital Receipts

0 (419,050) (419,050) Proceeds of fixed asset sales available to meet future capital investment.

(c) below

Pensions Reserve 25,032,000 (55,000) 24,977,000 Balancing account to allow inclusion of Pensions Liability in the Balance Sheet.

Note 10 to the Balance Sheet, pages 39 to 41

Earmarked Reserves (3,212,548) (1,063,813) (4,276,361) (d) below

General Fund Balances Collection Fund

(3,099,538)

308,728

446,865

(58,418)

(2,652,673)

250,310

Resources available to meet future running costs.

Part Statement of Movement on the General Fund Balance, page 26

Total (12,522,246) 1,084,830 (11,437,416)

£ £ £ (a) Revaluation Reserve


42

Increase in Valuations – rolling programme (498,967) Depreciation of revaluation gains 68,659 (430,308)(b) Capital Adjustment Account Financing of Capital Expenditure in Year - Capital Grants Applied (Net of Government Grants

Deferred) (1,126,912)

Usable Capital Receipts (162,843) Capital Expenditure financed from revenue (254,737) (1,544,492) Disposals in year 383,299 Adjustments to the Income and Expenditure A/c - Depreciation in year 1,688,920 Impairment 1,169,631 Write down of Revenue Expenditure Funded from

Capital under Statute 1,227,633

Write down of Government Grants Deferred (562,495) Minimum Revenue Provision (55,998) Amortisation 426,715 3,894,406

Depreciation Adjustment (68,659) 2,664,554 (c) Usable Capital Receipts Received in year (581,893) Applied in Year 162,843 (419,050)(d) Earmarked Reserves Balance at

1st April Transfers

To Transfers

(From) Balance at 31 March

£ £ £ £ Benefits Equalisation 150,000 250,000 0 400,000 Building Control 249,941 0 (94,359) 155,582 Business Growth Incentive 635,143 485,566 (27,809) 1,092,900 Car Parking 3,816 122,446 (126,262) 0 Community Safety 0 680,000 0 680,000 CPA Improvement Planning 9,060 0 (9,060) 0 Elections Reserve 0 31,500 0 31,500 Insurance Fund 120,000 37,780 (157,780) 0 Investment - I.T. Strategy 322,980 160,535 0 483,515 Job Evaluation 603,551 150,000 (350,135) 403,416 Leisure Management 0 40,000 (17,423) 22,577 Pension Fund Actuarial Review 174,000 540,000 (58,000) 656,000 Planning Development 346,571 155,055 (266,174) 235,452 Property Investment 10,269 0 (6,375) 3,894 Prudential Code 436,820 0 (436,820) 0 Value for Money 111,397 0 (54,472) 56,925 Vehicle Replacement 39,000 15,600 0 54,600 Total Earmarked Reserves 3,212,548 2,668,482 (1,604,669) 4,276,361 12. Analysis of Net Assets Employed


43

In accordance with SSAP 25 there is a requirement to disclose the net assets by the General Fundand Trading Undertakings. This requirement does not refer to fixed assets but the overall net assetposition.

2007/08 Total £’000

2008/09 Total £’000

9,353 General Fund 8,903 3,169 Trading Operations 3,201 12,522 Total 12,104 13. Post Balance Sheet Events

The Statement of Accounts was authorised for issue on 22 September 2009 by the Director ofFinance and Revenues, P Davies CPFA. This is the date up to which post balance sheet events have been considered.

14. Financial Instrument Balances The borrowings and investments disclosed in the Balance Sheet are made up of the following

categories of financial instruments: Long Term Current 31/03/08 31/03/09 31/03/08 31/03/09 £'000 £'000 £'000 £'000 Financial liabilities at amortised cost 2,552 3,552 2,000 0 Total Borrowings 2,552 3,552 2,000 0 Loans and receivables 0 0 1,800 360 Total Investments 0 0 1,800 360 15. Financial Instruments Gains/Losses

The gains and losses recognised in the Income and Expenditure Account and the Statement ofRecognised Gains and Losses in relation to financial instruments are made up as follows:

2008/09

Financial Assets

Financial Liabilities

Fair Value through Liabilities Loans Available Income and measured at and for sale Expenditure Total amortised cost receivables assets Account £'000 £'000 £'000 £'000 £'000 Interest expense 0 (120) 0 0 (120) Interest payable and similar charges 0 (120) 0 0 (120) Interest income 0 151 0 0 151


44

Interest and investment income 0 151 0 0 151 Gains on revaluation 0 Losses on revaluation 0 Amounts recycled to the Income and 0 Expenditure Account after impairment 0 Surplus arising on revaluation of financial assets 0 Net gain/(loss) for the year 0 31 0 0 31

16. Fair Value of Assets and Liabilities carried at Amortised Cost

Financial liabilities and financial assets represented by loans and receivables are carried on the

balance sheet at amortised cost. Their fair value can be assessed by calculating the present value ofthe cash flows that take place over the remaining life of the instruments, using the followingassumptions:

The fair values for financial liabilities have been determined by reference to the Public Works Loan

Board (PWLB) redemption rules and prevailing PWLB redemption rates as at each balance sheetdate, and include accrued interest. The fair value of non-PWLB debt has also been calculated using the same procedures and interest rates and this provides a sound approximation for fair value forthese instruments.

Where an instrument has a maturity of less than 12 months or is a trade or other receivable, the fair

value is taken to be the principal outstanding or the billed amount. The fair values calculated are as follows: 31 March 2008 31 March 2009 Carrying amount Fair value Carrying amount Fair value £'000 £'000 £'000 £'000 Market Debt 2,000 2,004 0 0 PWLB Debt 2,552 2,550 3,552 3,564 Total Borrowings 4,552 4,554 3,552 3,564 Creditors 8,195 8,195 6,263 6,263 Total Financial Liabilities 12,747 12,749 9,815 9,827

The fair value is greater than the carrying amount because the Council's portfolio of loans includes anumber of fixed rate loans where the interest rate payable is higher than the rates available for similar loans in the market at the balance sheet date.

Investments < 1 year 1,800 1,800 360 360 Investments > 1 year 0 0 0 0 Long Term Debtors 28 28 18 18 Debtors 7,310 7,310 8,411 8,411 Total Loans and Receivables 9,138 9,138 8,789 8,789

17. Nature and Extent of Risks arising from Financial Instruments


45

Key Risks The Council’s activities expose it to a variety of financial risks, the key risks are:

- Credit risk – the possibility that other parties might fail to pay amounts due to the Council; - Liquidity risk – the possibility that the Council might not have funds available to meet its commitments

to make payments; - Re-financing risk – the possibility that the Council might be requiring to renew a financial instrument

on maturity at disadvantageous interest rates or terms. - Market risk - the possibility that financial loss might arise for the Council as a result of changes in

such measures as interest rates movements. Overall Procedures for Managing Risk The Council’s overall risk management procedures focus on the unpredictability of financial markets,

and implementing restrictions to minimise these risks. The procedures for risk management are set outthrough a legal framework set out in the Local Government Act 2003 and the associated regulations.These require the Council to comply with the CIPFA Prudential Code, the CIPFA TreasuryManagement in the Public Services Code of Practice and Investment Guidance issued through the Act.Overall these procedures require the Council to manage risk in the following ways:

- by formally adopting the requirements of the Code of Practice; - by approving annually in advance prudential indicators for the following three years limiting: The Council’s overall borrowing; Its maximum and minimum exposures to fixed and variable rates; Its maximum and minimum exposures of the maturity structure of its debt; Its maximum annual exposures to investments maturing beyond a year.

- by approving an investment strategy for the forthcoming year setting out its criteria for both investing

and selecting investment counterparties in compliance with the Government Guidance; The Prudential Indicators are required to be reported and approved at or before the Council’s annual

Council Tax setting meeting. They are also reported with the annual Treasury Management Strategy which outlines the detailed approach to managing risk in relation to the Council’s financial instrumentexposure. Actual performance is also reported annually to Members in July.

These policies are implemented by an in-house treasury team. The Council maintains written

principles for overall risk management, as well as written policies covering specific areas, such asinterest rate risk, credit risk, and the investment of surplus cash through Treasury Management Practices (TMPs). These TMPs are a requirement of the Code of Practice and are reviewed regularly.

Credit risk

Credit risk arises from deposits with banks and financial institutions, as well as credit exposures to theCouncil’s customers. Deposits are not made with banks and financial institutions unless they meet theminimum requirements of the investment criteria and limits approved by Council.

The following analysis summarises the Authority’s potential maximum exposure to credit risk, based on

experience of default assessed by the ratings agencies and the Council’s experience of its customercollection levels over the last three financial years, adjusted to reflect current market conditions.

31/03/2009

Historical experience of

default

Adjustment for market conditions at

31/03/09

Estimated maximum

exposure to default


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£'000 % % £'000 a b c a x c

Deposits with banks and financial institutions (market value):

AA- rated counterparties 360 0.0 0.0 0

Trade debtors (O/S Sundry Debtors at 31/03/09) 1,294 2.31 4.00 51

1,654 51

No breaches of the Council’s counterparty criteria occurred during the reporting period and the Councildoes not expect any losses from non-performance by any of its counterparties in relation to deposits.

Whilst the current credit crisis in international markets has raised the overall possibility of default the

Council maintains strict credit criteria for investment counterparties. As a result of this high creditcriteria, we have used historical default rates as an indicator under the current conditions.

The Council does not generally allow credit for its trade debtors. Of the £1,293,739 outstanding fortrade debtors, £1,293,739 is overdue. The past due amount can be analysed by age as follows:

2008/09 £'000 Less than three months 1,095 Three months to one year 30 More than one year 169 1,294 Collateral – During the reporting period the council held no collateral as security. Liquidity risk The Council has ready access to borrowings from the Money Markets to cover any day to day cash flow

need, and the PWLB provides access to longer term funds. There is therefore no significant risk that itwill be unable to raise finance to meet its commitments under financial instruments.

The Council manages its liquidity position through the risk management procedures above (the setting

and approval of prudential indicators and the approval of the treasury and investment strategy reports),as well through cash flow management procedures required by the Code of Practice.

Refinancing and Maturity Risk The approved prudential indicator limits for the maturity structure of debt and the limits placed on

investments placed for greater than one year in duration are the key parameters used to address thisrisk. The Council approved treasury and investment strategies address the main risks and the in-house treasury team address the operational risks within the approved parameters.


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The maturity analysis of financial liabilities is as follows: £'000 Less than one year 6,263 Between one and two years 1,000 Between two and five years 1,000 Between five and ten years 0 More than ten years 1,552 9,815 The maturity analysis of financial assets is as follows: £'000 Less than one year 8,769 Between one and two years 5 Between two and three years 0 More than three years 15 8,789

Market Risk

Interest rate risk - The Council is exposed to interest rate movements on its investments but, as theCouncil did not have any variable rate short or long-term investments during 2008/09, it was not exposed to risk that actual interest receivable could increase or decrease as a result of interest ratemovements.

The Council has a number of strategies for managing interest rate risk. The Annual Treasury Management Strategy draws together the Council’s prudential indicators and its expected treasuryoperations, including an expectation of interest rate movements. From this Strategy a prudentialindicator is set which provides maximum and minimum limits for fixed and variable interest rateexposure. The in-house treasury team will monitor the market and forecast interest rates within theyear to adjust exposures appropriately. For instance during periods of falling interest rates, andwhere economic circumstances make it favourable, fixed rate investments may be taken for longer periods to secure better long term returns

Price risk - The Council, excluding the pension fund, does not generally invest in instruments withthis type of risk.

Foreign exchange risk - The Council has no financial assets or liabilities denominated in foreigncurrencies. It therefore has no exposure to loss arising from movements in exchange rates.

18. Contingent Assets

The Council has submitted a claim for overpaid VAT in relation to Sporting Services for the period 1 January 1990 to 31 March 1994 totaling £480,784 following changes in European law and the subsequent exemption in UK law. No provision has been made for this receipt in the 2008/09 accounts.

19. Contingent Liabilities

A number of legal challenges have been made by a selection of bus operators in relation to the Joint Concessionary Fares Scheme 2009. The County Council as administrator of the scheme is currently considering the preferred way forward but should this involve judicial review proceedings then significant costs (as yet not quantified) could be incurred which would be shared between the participating authorities.


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CASH FLOW STATEMENT

As at 31 March

2007/08 Notes 2008/09 £ £ £

Revenue Activities Cash Outflows

11,501,380 Cash paid to and on behalf of employees 12,049,209 14,873,194 Other operating costs 10,332,374 18,248,481 Housing Benefit paid out 22,272,962 17,779,475 National Non-Domestic Rate payments to national pool 19,081,101 47,953,442 Disbursements from the Collection Fund 49,318,873

113,054,519 Cash Inflows

(821,152) Rents (after rebates) (830,469) (47,218,083) Council Tax receipts (48,865,269)

(8,100,027) National Non-Domestic Rate receipts from national pool (8,616,170) (17,968,517) Non-Domestic Rate receipts (19,230,323)

(1,559,352) Revenue Support Grant (1,199,441) (25,597,481) DSS grants for benefits 1a (30,073,669)

(1,826,098) Other government grants 1b (2,212,791) (9,143,900) Other operating cash receipts (32,904)

(111,061,036)(1,878,638) 2 1,993,483

Returns on Investments and Servicing of Finance Cash Outflows

24,135 Interest paid 120,372 Cash Inflows

(141,930) Interest Received (150,587) (117,795) (30,215)

Capital Activities Cash Outflows

7,952,012 Purchase of Fixed Assets 3,704,532 1,895,804 Other capital cash payments 1,227,633

Cash Inflows

(576,505) Sale of Fixed Assets (594,057) (6,937,314) Capital grants received (3,670,133)

2,333,997 667,975

337,564 Net Cash (Inflow)/Outflow Before Financing 2,631,243 Management of Liquid Resources

1,121,000 Net increase / (decrease) in short term deposits 3 (1,440,000)

1,121,000 (1,440,000)

1,458,564 Balance carried forward 1,191,243


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CASH FLOW STATEMENT (Continued)

As at 31 March

2007/08 Notes 2008/09 £ £ £

1,458,564 Balance brought forward 1,191,243

Financing Cash Outflows

8,200,000 Repayment of amounts borrowed 7,700,000 Cash Inflows

(10,355,748) New loans raised (6,696,252) (2,155,748) 1,003,748

(697,184) Net (Increase) / Decrease in Cash 3 2,194,991


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NOTES TO THE CASH FLOW STATEMENT 1. Government Grants Received in 2008/09 £ £ a. DSS Grants for Benefits Rent Allowance (22,360,053) Rent Rebates (11,471) Council Tax Benefits (7,644,213) Discretionary Benefits (57,932) (30,073,669) b. Other Government Grants Council Tax Benefits Administration (357,044) Benefits Administration (582,012) Comprehensive Performance Assessment (5,448) Garstang Market Town Initiative (93,913) Planning Delivery Grant (155,055) Care and Repair (49,256) Homelessness (48,000) Concessionary Travel - Bus (323,436) Business Growth Initiative (485,566) Street Scene (23,305) Fleetwood Masterplan (27,000) Area Based Climate Change (22,500) Other (40,256) (2,212,791) (32,286,460) 2. Reconciliation of Revenue Surplus to Net Cash Flow 2007/08 2008/09 £ £ £ (825,233) (Surplus) / Deficit for the Year - General Fund 446,865 369,987 - Collection Fund (58,418) 388,447 Non-cash transactions 129,680 Contribution to reserves (1,063,813) 476,294 Provision for doubtful debts (160,086) (75,231) Contribution to capital outlay (254,737) (1,478,636) Items on an accrual basis (308,429) Increase in creditors 1,931,164 (1,776,235) Decrease in debtors 1,101,035 (17,655) Reduction in stocks and WIP (2,279) (15,894) Decrease in long term debtors (9,154) 46,283 Decrease in deferred liabilities 32,691 3,053,457 Items in another classification 117,795 Servicing of finance 30,215 (1,878,638) 1,993,483


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3. Movement in Management of Liquid Resources and Cash As at 31 March 2008 2009 Movement £ £ £ Net increase/(decrease) in short term deposits Short Term Investments 1,800,000 360,000 (1,440,000) Net increase/(decrease) in other liquid resources Long Term Investments 10,019 19 (10,000) Net increase/(decrease) in Cash Bank Overdraft (97,427) (2,322,150) (2,224,723) Petty Cash 72,707 102,439 29,732 (2,194,991)


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COLLECTION FUND ACCOUNT Foreword 1. Under the provisions of Part IV of the Local Government Finance Act 1988 (Section 89) Wyre

Borough Council as charging authority was required to establish and maintain a Collection Fund from 1st April 1990. The Local Government Finance Act 1992 established arrangements for 1993/94 and subsequent financial years for the setting of Council Taxes in place of Community Charges.

2. Wyre Borough Council, as billing authority for Council Tax under the requirements of the 1988 Act, as amended, continues to maintain a Collection Fund which shows Council Tax, residual Community Charge and Non Domestic Rating transactions and illustrates the way in which these have been distributed to precepting authorities and the Council’s General Fund.

Statement of Accounting Policies 1. The Accounts have been prepared on an accruals basis and in accordance with the Code of

Practice on Local Authority Accounting issued by the Chartered Institute of Public Finance and Accountancy (CIPFA).

2007/08 Notes 2008/09 £ £ £

INCOME:

(47,071,530) Income from Council Tax (48,869,871) Transfers from General Fund

(7,131,559) - Council Tax Benefit (7,604,413)

0 Contributions to previous year’s Collection Fund deficit 2 (202,063)

(18,035,548) Income collectable from Business Ratepayers (19,265,087)

(100) Income received from Community Charge payers 0

(72,238,737) TOTAL INCOME (75,941,434) EXPENDITURE:

54,303,445 Precepts and Demands 1 56,284,649 Business Rate

17,885,739 - Payment to National Pool 19,114,699 149,809 - Costs of Collection Allowance 150,388

19,265,087 Bad and Doubtful Debts

321,081 - Write offs 208,782 (238,650) - Provisions 124,498

333,280 Contributions

187,300 - To previous year’s Collection Fund surplus 2 0

72,608,724 TOTAL EXPENDITURE 75,883,016

369,987 Movement on Fund Balance (58,418)


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NOTES TO THE COLLECTION FUND ACCOUNT 1. Precepts and Demands

2007/08 Precepting Body 2008/09 £ £ 40,661,217 Lancashire County Council 41,872,350 4,895,130 Lancashire Police Authority 5,285,751 2,232,442 Lancashire Combined Fire Authority 2,338,803 6,514,656 Wyre Borough Council 6,787,745 54,303,445 56,284,649 2. Distribution of Collection Fund prior year balance

2007/08 2008/09 £ £ £ Lancashire County Council 140,929 - Council Tax (151,478) Lancashire Police Authority 15,989 - Council Tax (18,236) Lancashire Combined Fire Authority 7,735 - Council Tax (8,317) Wyre Borough Council 22,647 - Council Tax (24,269) 0 - Community Charge 237 (24,032) 187,300 (202,063) 3. Income from Business Ratepayers

The total non-domestic rateable value at 31 March 2009 was £48,559,260. The Government set a National Non-domestic multiplier (rate in the pound) of 46.2 pence in the pound for 2008/09 and a Small Business non-domestic multiplier of 45.8 pence. This rateable value figure is different from the figure in the account due to various relief awards.

4. Council Tax The Council Tax base for 2008/09 was calculated at 38,876.38 and a Band D Council Tax set at £1,442.19. The tax base was calculated as follows:

Total No. of *Relevant Chargeable Dwellings Amount Additional Band 28 14.74 Band A 10,306 5,912.78 Band B 11,234 7,801.24 Band C 11,589 9,380.63 Band D 7,035 6,536.35 Band E 4,523 5,223.76 Band F 2,195 3,018.00 Band G 941 1,493.11 Band H 48 87.80 47,899 39,468.41 Collection Rate 98.5% = Relevant Amount x 0.985 38,876.38

* Total number of chargeable dwellings adjusted where discounts apply and converted to an

equivalent number of Band D dwellings.


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GLOSSARY OF ACCOUNTING TERMS • ACCOUNTING PERIOD

The period of time covered by the accounts, 12 months commencing on 1 April. The end of the accounting period is 31 March, the balance sheet date.

• ACCRUALS Spending and income included in the accounts for the year in which relevant services or goods have been supplied.

• AGENCY SERVICES Services provided by the Council, as an agent on behalf of the responsible body, where the principal reimburses the Council for the cost of the work carried out.

• AMORTISATION The writing down in value of intangible fixed assets, which is charged to service revenue accounts to reflect the cost of such assets, used in the provision those services. This is the equivalent of depreciation for fixed assets.

• ASSET Something of worth which is measurable in monetary terms. Fixed Assets - those of a permanent nature (eg. buildings, machinery, long-term investments). Current Assets - those which change value frequently (eg. stock, debtors).

• AUDITOR’S OPINION The opinion required by statute from the Council’s external auditors, indicating whether the statement of accounts presents fairly the financial position of the Council.

• BALANCE SHEET A statement of the recorded assets, liabilities and other balances at the end of an accounting period.

• BUDGET A statement of the Council’s spending plans for a financial year.

• CAPITAL CHARGE A charge to revenue accounts to reflect the cost of fixed assets used in the provision of services.

• CAPITAL EXPENDITURE Expenditure on the acquisition and/or improvement of an existing fixed asset which adds to, and not merely maintains, its value.

• CAPITAL RECEIPTS Income from selling assets that have a long-term value.


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• CASH

Money held either as cash-in-hand or as a bank balance.

• COLLECTION FUND The account which shows the transactions of the Council in relation to non-domestic rates and council tax, and the distribution of these to preceptors and the general fund. The collection fund is consolidated with the other accounts of the Council.

• CONSISTENCY The concept that the accounting treatment of like items is the same within an accounting period and from one period to the next.

• CONTINGENCY A sum set-aside in addition to approved budgets to meet unforeseen items of expenditure, eg. excess inflation, pay awards.

• CONTINGENT LIABILITY A potential liability at the balance sheet date which arises as the result of a condition which exists where the outcome will be confirmed only on the occurrence or non-occurrence of one or more uncertain future events. The liability should be included in the balance sheet if it can be estimated reasonably accurately. Otherwise, where the contingency is likely to be material, the fact that it exists should be disclosed as a note to the accounts.

• COUNCIL TAX This is a property based local tax. Each domestic property is valued and placed in one of eight bands A to H; the tax paid is fixed in relation to the Band D tax. Dwellings shown in ‘Additional Band’ refer to those dwellings in Band A which it is estimated will qualify for a Disabled Persons Reduction of an amount equal to 1/9 of the Band D Council Tax.

• CREDITORS Money the Council owes for work, goods or services which have not been paid for by the end of the financial year.

• CURRENT ASSET An asset held by a Council which will be consumed or cease to have value within the next financial year eg. Stock and debtors.

• CURRENT LIABILITY An amount which will become payable or could be called in within the next accounting period, eg. Creditors or cash overdrawn.

• DEBT FREE An authority is “debt free” when it has no external long-term debt and a “negative credit ceiling”.

• DEBTORS


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Money that is owed to the Council but is not received by the end of the financial year.

• DEFINED BENEFIT SCHEME

A pension or other retirement benefit scheme other than a defined contribution scheme. Usually, the scheme rules define the benefits independently of the contributions payable, and the benefits are not directly related to the investments of the scheme. The scheme may be funded or unfunded (including notionally funded).

• DEFINED CONTRIBUTION SCHEME A pension or other retirement benefit scheme into which an employer pays regular contributions fixed as an amount or as a percentage of pay and will have no legal or constructive obligation to pay further contributions if the scheme does not have sufficient assets to pay all employee benefits relating to employee service in the current and prior periods.

• DEPRECIATION The reduction in the value of assets, for example through wear and tear.

• EXPECTED RATE OF RETURN ON PENSIONS ASSETS For a funded defined benefit scheme, the average rate of return, including both income and changes in fair value but net of scheme expenses, expected over the remaining life of the related obligation on the actual assets held by the scheme.

• EXPENDITURE The costs incurred relating to the accounting period irrespective of whether or not the amounts due have been paid or not. The difference between expenditure and payments is calculated by reference to levels of accruals.

• FAIR VALUE The fair value of an asset is the price at which it could be exchanged in an arm’s length transaction less, where applicable, any grants receivable towards the purchase or use of the asset.

• FINANCE LEASE A lease that transfers substantially all of the risks and rewards of ownership of a fixed asset to the lessee. Such a transfer of risks and rewards may be presumed to occur if at the inception of the lease the present value of the minimum lease payments, including any initial payment, amounts to substantially all the fair value of the leased asset.

• FIXED ASSETS Tangible assets that yield benefits to the Council and the services it provides for a period of more than one year.

• GENERAL FUND The main revenue fund of the Council. Day-to-day spending on services is met from the fund.

• GOING CONCERN


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The concept that a Council will remain in operational existence for the foreseeable future, in particular that the revenue accounts and balance sheet assume no intention to curtail significantly the scale of operations.

• GOVERNMENT GRANT DEFERRED When a government grant or any other contribution has been applied to the financing of capital expenditure on fixed assets, a balance is established representing a deferred credit to be released to revenue to set off the depreciation that might be charged on the assets.

• GROSS EXPENDITURE The cost of service provision before allowing for Government grants, Council Taxes and income.

• IMPAIRMENT The values of each category of assets and of material individual assets that are not being depreciated are reviewed at the end of each financial year for evidence of reductions in value.

• INCOME Amounts due to a Council that have been or are due to be received. The difference between income and receipts is calculated by reference to levels of accruals.

• INVESTMENTS A long-term investment is an investment that is intended to be held for use on a continuing basis in the activities of the Council. Investments should be classified as such only where an intention to hold for the long term can be clearly demonstrated or where there are restrictions as to the investor’s ability to dispose of the investment.

• LARGE SCALE VOLUNTARY TRANSFER (LSVT) The process of transferring Council housing to a Housing Association.

• LIABILITIES Money the Council will have to pay to people or organisations in the future.

• LOANS OUTSTANDING The total amounts borrowed from external lenders for capital and temporary revenue purposes but not repaid at the balance sheet date.

• LONG TERM DEBTORS These are debts of a capital nature repayable over a period of time. In the Council’s Accounts these are mortgages to the public.

• MATERIALITY The concept that the Statement of Accounts should include all amounts which, if omitted, or mis-stated, could be expected to lead to a distortion by a reader of those statements.

• MORTGAGES Loans raised by executing formal mortgage deeds which secure the amounts of these loans.

• NATIONAL NON-DOMESTIC RATES (NNDR) A National Non-Domestic Rate poundage for commercial premises is set annually by the


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Government and collected by all Local Authorities. The proceeds are redistributed between Local Authorities in accordance with need.

• OPERATING LEASE A lease other than a finance lease.

• OUTTURN Final Account position of the authority as at 31 March each year in terms of income and expenditure.

• PRECEPT The amount the County Council, the Police Authority, the Combined Fire Authority and the parish councils (the precepting authorities) ask the Council to collect every year.

• PROVISIONS Money set aside to meet specific service liabilities, and to meet spending.

• PRUDENCE Accounts should be prepared in accordance with the prudence concept. Income should only be anticipated to the extent that it will be received, as cash or other assets, with reasonable certainty and full and proper allowance should be made for all known and foreseeable losses and liabilities.

• RESERVE Amounts included in one financial year’s accounts to provide for payment for goods or services, whether revenue or capital, in a future financial year.

• 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. Retirement benefits do not include termination benefits payable as a result of either (i) an employer’s decision to terminate an employee’s employment before the normal retirement date or (ii) an employee’s decision to accept voluntary redundancy in exchange for those benefits, because these are not given in exchange for services rendered by employees.

• REVENUE ACCOUNT An account that records a Council’s day-to-day expenditure and income on such items as salaries and wages and other running costs of services.

• REVENUE EXPENDITURE Expenditure incurred in the course of earning revenue, in maintaining capital and on the acquisition of goods for resale.

• REVENUE SUPPORT GRANT The main Government grant to support local authority services.

• 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


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committed to provide for service up to the valuation date.

• SECTION 137 EXPENDITURE Under Section 137, as amended by LGA 2000, authorities have continuing powers to contribute to funds of charities operating in the UK, not for profit bodies providing a public service in the UK and mayoral appeals.

• STOCKS Items of raw materials and stores a Council has procured to use on a continuing basis and which it has not yet used. These comprise the following categories:

(a) Goods or other assets purchased for resale (b) Consumable stores (c) Raw materials and components purchased for incorporation into products for sale (d) Products and services in intermediate stages of completion (e) Finished goods

• TEMPORARY LOANS

Loans where repayment can be demanded or made within one year.

• USEFUL LIFE The period over which the Council will derive benefits from the use of a fixed asset.

• WORK IN PROGRESS The cost of work done on an uncompleted project at a specified date, which should be accrued where appropriate.

statement of accounts 0809 final - wyre€¦ · originally considered by audit committee 23 june...

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