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South Hams District Council

Audited Statement of Accounts

2021/22

 

Title: South Hams District Council Logo

 

 

Contents                                                                                                      

 

                                                                                                                                                                        Page

 

                                               

Section 1 – Narrative Statement                                                                 3 - 31

 

·          Introduction

·          Review of the Year – the Revenue Budget         

·          Key areas to note from the 2021/22 Statement of Accounts      

·          Financial needs and resources

·          Looking forward to the future and next steps

·          Corporate Performance for 2021/22

·          Principal risks and uncertainties           

 

Section 2 - Core Financial Statements                                                       32 - 37

 

·          A. Comprehensive Income and Expenditure Statement 

·          B. Movement in Reserves Statement                 

·          C. Balance Sheet

·          D. Cash Flow Statement                                     

 

Section 3 - Notes to the Financial Statements                                          38 - 122

 

Section 4 - Collection Fund                                                                         123 - 127

 

Section 5 - Statement of Responsibilities/Approval of the Accounts    128 - 129

 

Section 6 - Auditors’ Report                                                                        130 - 135  

 

Section 7 - Glossary of Terms                                                                     136 – 138

 

 

 

Statement of Accounts 2021/22

 

The Statement of Accounts 2021/22 can be made available in large print, Braille, tape format or other languages upon request.

 

South Hams District Council is committed to reflecting the full diversity of our community and to promoting equality of opportunity for everyone.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Section 1

 

 

Narrative Statement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Introduction to the 2021/22 Statement of Accounts by Councillor Pearce, Leader of South Hams District Council

 

Title: Picture of Councillor PearceI am very pleased to welcome you to the 2021/22 Statement of Accounts for South Hams District Council. One of the significant achievements this year has been the development and adoption of our Better Lives for All Strategy which sets clear and measurable actions that the Council will take over the next few years. This report includes many examples of actions we have delivered through the strategy that will make a positive impact on lives across the District.

 

Having a decent, safe home is essential for the wellbeing of all residents. This year the Council has declared a Housing Crisis, to highlight the significant shortage of homes within the District. The Council has taken steps to develop a detailed action plan in response, agreeing twelve individual actions. We know it will take time but we have a clear way forward to tackle the issues.

 

We have continued to be on the forefront of offering vital support to businesses impacted by the Covid-19 pandemic with a total of £85m in grants processed to date. Working with Plymouth City Council and Devon County Council, we have progressed plans for the Freeport which have now been approved by the Government. The scheme will result in the creation of 3,500 jobs and £311million investment to the areas. It will secure significant investment in innovation, skills, research and development. In September, Sherford hosted the kick-off of the second stage of the Tour of Britain, the event also acted as a brilliant showcase to the nation of just how stunning our area is and of course promotes cycling and active travel.

 

The Council is making good progress in delivering against our climate and biodiversity action plan. District wide tree planting schemes are underway, we’ve had almost unanimous support from the public for our plans to increase biodiversity on Council land and had our progress recognised at a national level.

 

Of course this year has not been without its challenges. The ongoing issues with our waste and recycling service continue to be a significant cause of frustration for residents. The Council and FCC Environment have reached a mutual agreement to end the contract for waste, recycling, street and toilet cleaning services. Both parties agree that the past few years have presented a number of extremely challenging circumstances. In the best interest of the residents of the South Hams, it has been agreed that services will be operated by the Council from 3 October 2022.

Looking ahead, our focus is on ensuring that we continue to deliver on our strategic priorities, making a positive impact for communities across the South Hams. I am pleased to report a surplus for the 21/22 year of £214,000 (2.2% of the net budget of £9.677m).  This demonstrates the Council’s financial resilience and actions taken to maintain longer term stability in service delivery going forward. This surplus will go into the Council’s unearmarked reserves, with a view to it being reinvested in our core services and our ‘Better Lives for All’ strategy.

 

Councillor J Pearce, Leader of the Council

Foreword by the Chief Executive

A person wearing glasses  Description automatically generated with low confidence 

I have been incredibly impressed by the efforts of staff across the Council to support our residents and communities. We began the year continuing with our response to the global pandemic and as we ended the year, teams from across the Council were stepping up to support the Homes for Ukraine scheme. While our staff have continued to work from home throughout the pandemic, we have started to see a return to a form of normality, bringing our office staff together and working face to face.

 

I have to say, personally it has been fantastic to begin meeting colleagues in the office for the first time in over two years! I’ve also been pleased to have been able to begin joining local Members in their Towns and Parishes, experiencing first hand the incredibly positive work being delivered across the District. I look forward to being able to carry out many more of these insightful visits in the coming year.

 

It is a great achievement that South Hams District Council and West Devon Borough Council won the Gold award at the iESE Public Sector Transformation Awards in 2022. The Councils installed software called Liberty Create which enabled both Councils to quickly set up an online system for businesses to apply for emergency Government business grants. The software saved the Councils time and money (£450,000) and also helped us to respond to the needs of our business community when they needed us most.

 

For the first time in a generation, the Council is building its own affordable homes for local people. This is another step in the plan to tackle the housing crisis in the South Hams.

 

This year we were recognised as one of the top 20 District Councils nationally for our Climate Change Action Plan by Climate Emergency UK, independent validation that we’re taking the crisis seriously.

 

Yet again, the Council has managed to balance its budget exceptionally well while continuing to provide a level of good service to residents of the District. Time and again, our staff have impressed me with their efforts to support the people and communities of South Hams.

We’re responding to new challenges that continue to appear, like making sure we offer adequate support to our Ukrainian guests through the Homes for Ukraine scheme, but I have no doubt that our teams will continue to rise to those challenges.

We know that the year ahead will be challenging for many across the District, as the cost of living continues to provide day to day challenges. We will do all we can to support our residents and businesses by delivering the essential support you need.

 

Andy Bates, Chief Executive

 

 

 

Message from the Section 151 Officer and Corporate Director for Strategic Finance - Lisa Buckle

 

A close-up of a person smiling  Description automatically generatedThe Statement of Accounts has been prepared in accordance with the requirements of the Chartered Institute of Public Finance and Accountancy (CIPFA). The aim of the Accounts is to enable members of the public, Council Members, partners, stakeholders and other interested parties to:

·         Understand the financial position of the Council as at 31 March 2022 and how the Council has performed against the budget set for 2021/22

·         Be assured that the financial position of the Council is secure, with a degree of resilience.

This Narrative Statement provides information about South Hams District Council, including the key issues affecting the Council and its Accounts. It is very important to us to provide residents and other stakeholders with the confidence that the public money for which we are responsible has been properly accounted for.

 

Prudent financial management in the past, has meant that the Council was in a relatively healthy position financially before the pandemic hit. When Councillors set the Budget for 2020/21 in February 2020, no-one could have foreseen how our future finances and everyday lives were about to be impacted. The pandemic has also changed the world we operate in. Across the Council, staff have been called upon to continue the efforts to help local communities against the impact of the pandemic.

 

The management of risk and promoting financial resilience is a key principle of our budget strategy and this has helped facilitate our response. Key to the authority’s financial resilience are our reserves, which are at a prudent level. As part of the 2022/23 Budget process, a new reserve ‘Financial Stability Earmarked Reserve’ for £280,000 was set up, to be available for any future financial pressures from local government funding reforms and any other budget pressures.

 

The recent challenges presented by the war in Ukraine with its broader implications along with the current ‘cost of living crisis’ will have an impact on the Council’s finances as well as the finances of the residents of the District. The Council’s approach to delivering services remains steadfast.

 

There is no indication of the detailed local government funding levels for 2023/24 and beyond and therefore there are many uncertainties in preparing for the challenges we know we will face in the near future. These include the review of local authority funding as part of the Government’s fair funding review, the business rates baseline reset and changes to the New Homes Bonus scheme. We will continue to assess the impacts on our finances and our communities through embedded long term strategic financial planning.

 

Mrs Lisa Buckle BSc (Hons), ACA

Corporate Director for Strategic Finance (S151 Officer)

 

NARRATIVE STATEMENT – INTRODUCTION

 

1.         Each year South Hams District Council publishes a Statement of Accounts that incorporates all the financial statements and disclosure notes required by statute. The Statement of Accounting Policies summarises the framework within which the Council’s accounts are prepared and published.

 

REVIEW OF THE YEAR – THE REVENUE BUDGET

2.         The 2021/22 budget for South Hams was £9.677 million.  A surplus of £214,000 means that the actual spend was 2.2% less than the budget. This saving of £214,000 will go into the Council’s Unearmarked Reserves which now stand at £2.06 million. The main components of the General Fund budget for 2021/22 and how these compare with actual income and expenditure are set out below:

 

 

Estimate £000

Actual £000

Difference Cost/ (Saving) £000

Cost of services

(after allowing for income and reserve contributions)

9,881

9,778

(103)

Parish Precepts

2,960

2,960

-

Interest and Investment income

(203)

(140)

63

Amount to be met from Government grants and taxation including parish precepts

12,638

12,598

(40)

Financed from:

 

 

 

Business Rates (baseline funding level)

(1,928)

(1,928)

-

Business Rates (achieved over baseline funding level)

 

(426)

(426)

-

Business Rates Pooling Gain

(125)

(299)

(174)

Council Tax (including parish precepts)

(9,679)

(9,679)

-

Deficit on Collection Fund

30

30

-

Rural Services Delivery Grant

(428)

(428)

-

Lower Tier Services Grant

(82)

(82)

-

SURPLUS FOR 2021/22

-

(214)

(214)

 

 

3.         The movement in the General Fund Balance is shown in the Movement In Reserves Statement in Section 2B and can be summarised as follows:

 

£000

General Fund Balance (un-earmarked revenue reserve) at 1 April 2021

(2,122)

Surplus for the 2021/22 financial year

(214)

Transfer from the General Fund Balance to earmarked reserves

280

General Fund Balance (un-earmarked revenue reserve) at 31 March 2022

(2,056)

*On including the earmarked reserves, Total General Fund Reserves are £22.9 million.

4.         The surplus on the General Fund of £214,000 is essentially a break-even position, representing 0.5% of the Council’s gross turnover in 2021/22 of £41 million.

5.         The table below shows a reconciliation of the position shown on the bottom of the Comprehensive Income and Expenditure Statement and the reported surplus for the 2021/22 financial year.

 

£000

Total Comprehensive Income and Expenditure Statement

(14,157)

Surplus on the revaluation of Property, Plant and Equipment

1,633

Deficit on the revaluation of Financial Instruments

325

Remeasurements of the net defined benefit pension liability

12,608

Transfers to earmarked reserves

(935)

The detail of the items below are shown in Note 7 ‘Adjustments between Accounting Basis and Funding Basis under Regulations’ in the General Fund Balance column.

 

Adjustments primarily involving the Capital Adjustment Account

(1,868)

Adjustments primarily involving the Capital Grants Unapplied Account

260

Adjustments primarily involving the Capital Receipts Reserve

775

Adjustments primarily involving the Pensions Reserve

(3,878)

Adjustments primarily involving the Council Tax Collection Fund Adjustment Account

328

Adjustments primarily involving the Business Rates Collection Fund Adjustment Account

4,702

Adjustments primarily involving the Accumulated Absences Account

(7)

Surplus for the 2021/22 financial year

(214)

6.         A summary of the main variances to budget in 2021/22 is provided below:

ANALYSIS OF VARIATIONS 2021/22

(% column shows variation against budget)

£000

% variation

Reductions in expenditure/additional income

 

 

Car parking – additional income from extra usage, especially in the coastal car parks

(420)

13.3%

Planning – additional income - £70k was utilised to pay for extra planning salaries and £320k was transferred into the planning earmarked reserve

(390)

42.4%

Dartmouth Lower Ferry – additional income – this was in part offset by additional costs as shown below

(280)

33.9%

Trade Waste – Mainly savings on tipping fees and extra income on recycling sacks, due to more trade waste being recycled. This also includes additional income from CWR (Controlled Waste Regulation) properties of an extra £20k.

(190)

48.7%

Business Rates pooling gain – Actual pooling gain for 2021/22 was £299k, which was £174k higher than the estimate of £125k

(174)

139.2%

Employment estates – additional income

(160)

18.0%

Increases in expenditure/reduction in income

 

 

COVID 19 expenditure – extra housing costs, ICT and remote working, waste, cleaning costs and community support costs.

225

-

Dartmouth Lower Ferry – fleet refurbishment, equipment costs and professional fees – offset by additional ferry income as shown above

190

475.0%

ICT software and support contracts – additional costs from above inflation increases, increased number of users on the Council’s network, increase in remote working and disability access legislation compliance.

90

16.8%

Salaries – additional planning salaries – financed by additional planning income

70

7.6%

Waste & Recycling – delay to the September 2020 go live date for Devon Aligned Service for all properties. Some costs are associated with continuing to supply single use sacks for recycling and the reprocessing of the recyclable materials in the current global market. The savings from the green waste element of the waste contract reduced the cost of the service overall in 2021/22 and a one-off amount of £200,000 was transferred into a community composting earmarked reserve as shown below.

65

2.5%

Investment income – shortfall in treasury management investment income due to low base rates

63

31.0%

Additional repairs and maintenance costs

40

6.2%

Joint Local Plan contribution

25

-

Council Tax Collection – shortfall in budgeted income from summons costs

25

16.1%

Other small variances

87

 

Add: Transfer of additional planning income into the planning earmarked reserve – Minute CM 81 (Council 31st March 2022)

320

-

Add: Transfer of a one-off amount of £200,000 into a community composting earmarked reserve. This was aligned to the savings in the green waste element of the waste contract in 2021/22 – Minute CM63 (Council 10th February 2022)

200

-

TOTAL SURPLUS FOR 2021/22

(214)

(2.2%)

The 2021/22 Budget for South Hams was £9.677 million but the actual spend was 2.2% lower, providing a surplus of £214,000 as shown above.

KEY AREAS TO NOTE FROM THE 2021/22 STATEMENT OF ACCOUNTS

 

Pension Liability

 

7.         International Accounting Standard 19 (IAS19) requires local authorities to recognise pension assets and liabilities within their accounts. The overall impact on the General Fund of the IAS 19 entries is neutral.

8.         The Actuary has estimated a net deficit on the funded liabilities within the Pension Fund as at 31 March 2022 of £52.6 million. This compares to £61.4 million as at 31 March 2021. The deficit is derived by calculating the pension assets and liabilities at 31 March 2022. See Note 35 for further information.

Business Rates

 

9.         The Local Government Finance Act 2012 introduced a Business Rates Retention Scheme (BRRS) that enabled local authorities to retain a proportion of the business rates generated in their area, with effect from 1 April 2013. There is a risk of volatility in the system because Councils are exposed to any loss of income if businesses go into decline or if a Council’s income from business rates falls due to successful business rates appeals.

10.      Provision is made for likely refunds of business rates as a result of appeals against the rateable value of business properties. The provision is based on the total value of outstanding appeals at the end of the financial year as advised by the Valuation Office Agency. Using this information, an assessment was made about the likely success rate of appeals and their value.

11.      In 2021/22 there has been a £354,000 decrease in the provision for appeals within the Collection Fund. The balance on the Business Rates Collection Fund at 31 March 2022 is a deficit of £6,351,000 (£18,106,000 deficit in 2021/22). South Hams District Council’s share of the surplus is 40% (£2,540,000).

12.      Monies are set aside in the Business Rates Retention Earmarked Reserve to mitigate the impact of volatility in Business Rates income due to the complex accounting arrangements for Business Rates. In 2021/22 the balance of the Business Rates Retention Scheme (BRRS) earmarked reserve reduced by £2.56m to £4.55m as at 31 March 2022. This included a transfer of £450,000 from the Business Rates Retention Earmarked Reserve to a new earmarked reserve called the Recovery and Renewal Reserve to support the costs of the Recovery and Renewal Plan and the Council’s 20 year vision ‘Better Lives for All’. Some of this additional business rates income is due to timing differences in the way the Collection Fund operates and part of the funding will be needed to meet future years’ budgets for business rates, in particular as business rates baselines are due to be re-set in the future.

13.      In 2020/21 a new earmarked reserve was created called the S31 Compensation Grant (Business Rates) Reserve to hold the S31 grant (£5.49m) received in 2020/21 to offset the business rate reliefs given to businesses during the pandemic and the Tax Income Guarantee S31 grant for Business Rates (£0.79m). The balance on this reserve as at 31 March 2021 was £6.28m. Under current Collection Fund accounting rules, the S31 grants received will not be discharged against the Collection Fund deficit until the following year. In 2021/22 further S31 grants were transferred to the S31 Compensation Grant (Business Rates) Reserve (£3.23m) and S31 grant received in 2020/21 was discharged to the Business Rates Collection Fund (£5.25m). This compensation grant will continue to be applied to the Collection Fund over the next three years to smooth the impact of the Business Rates deficit. The balance on this reserve as at 31 March 2022 is £4.26m.

 

Waste, recycling, street and toilet cleaning services

 

14.      Throughout 2021/22, the Council had a significant focus on trying to resolve issues with its waste and recycling service.

 

15.      On 12 July 2022, Executive considered a report, with advice from the Council’s Waste Working Group. The Waste Working Group advised that the Council and FCC Environment have reached a mutual agreement to end their contract for waste, recycling, street and toilet cleaning services.

 

16.      Both parties agree that the past few years have presented a number of extremely challenging circumstances.

 

17.      In the best interests of the residents of the South Hams, it was proposed that the services will be operated by the Council from Monday 3 October 2022. This decision was subsequently approved by Full Council on 14 July 2022. The Council and FCC Environment will work closely together to ensure a smooth transfer of the services.

18.      At the point of preparing the Statement of Accounts, planning continues and a further update will be considered by the Executive and Council in September, ahead of the transfer of services in-house in October.

 

 

Trading Company

 

19.      South Hams District Council and West Devon Borough Council set up a trading company, Servaco Limited, on 4th September 2014. This is a company limited by shares. The company has not traded in 2021/22 and a set of statutory dormant Accounts will be filed with Companies House for the period 1 April 2021 to 31 March 2022.  The future of Servaco Limited will be reviewed during 2022/23.

 

 

Sherford Community Land Trust

 

20.      As part of the conditions of the S106 agreement for the new town of Sherford a limited company was created on 13th July 2018 to handle the various requirements of the S106 agreement. The company is limited by guarantee without share capital. It has seven directors, made up of one representative from each of the local authorities (South Hams District Council, Plymouth City Council and Devon County Council) and one representative from each of the developers. Group accounts are not required to be prepared as the Council’s interest is below 20% and therefore does not have enough influence to be an associate.

 
Housing

 

21.      For the first time in a generation, South Hams District Council is building its own affordable homes for local people. This is another step in the plan to tackle the housing crisis facing residents in the South Hams. To mark the start of the building works, Councillors attended the official turf cutting event in St Ann’s Chapel, near Bigbury on 3rd May 2022, where 8 affordable homes will be built, with 3 open market units and 2 serviced plots. The severe shortage of affordable rented and shared ownership accommodation, particularly in coastal areas like St Ann’s Chapel, resulted in the Council declaring a housing crisis. They will be high quality, energy efficient homes and will be low cost to heat and run. Air source heat pumps and low water use fittings form part of the design, along with electric car charging points. With the current energy crisis, this will be great news for future tenants to keep their bills low and manageable.

 

22.      The Council's determination to do everything in its power to ease the area's housing crisis is paying off, with hundreds of new affordable homes being built over the last four years. Since 2018/19, 419 new affordable homes have been built in the South Hams. These include 39 new homes in Ivybridge and 12 specialist homes at Elmhurst Lodge in Dartington. Elmhurst Lodge offers local people with learning difficulties their very first taste of independent living.

 

23.      These 419 homes are requirements of Section 106 agreements; these planning obligations with a landowner are made as part of the Council granting planning permission. S106 agreements are one of the strongest tools that the Council has to make new housing developments deliver on affordable housing. This is the District's main source of new affordable housing, which is providing incredibly high numbers of new homes for local people.

 

24.      Homes England Strategic Partnership funding has led to an additional 54 properties being delivered during 2021-22, over and above what the Council was expecting. This funding allows a Registered Provider to purchase open market homes and convert them to affordable properties.

 

25.      The numbers of affordable homes being built are tracking well above what the Joint Local Plan requirements would be at this point in time.

 

Ivybridge Regeneration Project

 

26.      Over the last few years, South Hams District Council has considered proposals to bring more shoppers to the market town of Ivybridge by developing the Leonards Road car park including a discount food store. Before starting this journey, the Council carried out a public consultation, which showed that 66% (of nearly 2,000) respondents felt a new supermarket would improve footfall into the town centre and supported the proposals.

 

27.      An independent economic assessment commissioned by South Hams District Council, called the CACI Report, carried out at the same time as the residents’ public survey in 2020, forecast that the new store would see 13,000 additional trips made to the high street boosting footfall within the town centre. The report estimated that this would result in 16% more money being spent in the high street. The economic study reported that residents were still shown to support their local independent shops through ‘cross shopping’. The project was envisaged to meet the aims of the town’s Neighbourhood Plan, to ensure retail growth within the town centre to increase the town’s economy and anchor other retailers to the centre. It would have also created local employment opportunities of around 30-40 new jobs.

 

28.      As a result of public support, the Council took a decision to proceed in February 2021. Council approved the progress of the Ivybridge Regeneration project through to planning, tender, construction and lease (subject but not limited to the regulatory statutory planning process and the total scheme cost being within the £9million financial envelope).

 

29.      The initial spend of up to £450,000 was approved, recognising these will be abortive costs and funded from the Business Rates Retention earmarked reserve, if the project did not proceed at any given stage pre-construction.

 

30.      At its meeting on 7 July 2022, the Executive agreed to stop work permanently on the discount food store proposal in Ivybridge. The decision came after the South Hams' Development Management Committee, having considered all of the relevant planning matters, unanimously refused the planning application on 6 July 2022. It was refused for a number of reasons. Firstly, it failed to show how the development would not have a harmful impact on town centre businesses. Secondly, the loss of trees and the loss of biodiversity. Finally, it considered that the design and the scale of the proposal would not fit in with its surroundings.

 
Borrowing

 

31.      In 2021/22 the long term borrowing of the Council reduced from £14,380,000 (20/21) to £14,284,000. Short term borrowing increased from £94,000 to £96,000. No further external borrowing took place during 2021/22.

 

 

Capital spending

 

32.      The Council spent £3.99m on capital projects in 2021/22. The main areas of expenditure were as follows:

·         residential renovation grants including disabled facilities grants (£1.11m)

·         Batson Harbour Depot/Commercial Units (£1.03m)

·         Scheduled replacement of plant, vehicles and marine infrastructure (£0.38m)

·         Dartmouth Health and Wellbeing Hub (£0.35m)

·         St Ann’s Chapel housing scheme (£0.33m)

·         replacement of audio visual equipment and furniture in the Council Chamber (£0.16m)

·         purchase of future IT (£0.12m)

·         new play areas (£0.10m)

·         Affordable Housing (£0.09m)

·         purchase of IT replacement hardware (£0.08m)

·         purchase of payroll/HR system (£0.04m)

The capital programme is funded from capital receipts, capital grants, external contributions and earmarked reserves (please see Note 32).

 

 
 
 
 
 
Financial Instruments – IFRS9 Election to treat Equity Instruments as Fair Value through Other Comprehensive Income

 

33.      At 31 March 2022 the Council had investments of £1.5 million with the CCLA Property Fund and £2 million with the CCLA Diversified Income Fund.

 

34.      Upon transition to IFRS 9 – Financial Instruments on 1 April 2018, and in accordance with paragraphs 5.7.5 and 7.2.8 (b) of IFRS9, South Hams District Council makes an irrevocable election to present in other comprehensive income, changes in the fair values of its equity instruments. These investments are eligible for the election because they meet the definition of equity instruments in paragraph 11 of IAS32 and are neither held for trading (the Council holds these investments as a long term strategic investment) nor contingent consideration recognised by an acquirer in a business combination to which IFRS3 applies. They are not considered to be puttable instruments because the Council does not have a contractual right to put the instrument back to the issuer for cash.

 

35.      A summary of the position of these equity instruments as at 31 March 2022 is shown below:

 

 

Purchase cost

Fair Value at 31 March 2022

Movement in Financial Instruments Revaluation Reserve 2021/22

£000

£000

£000

Equity Instrument

 

 

 

CCLA Local Authorities Property Fund

1,500

1,573

73

CCLA Diversified Income Fund

2,000

2,032

32

TOTAL

3,500

3,605

105

 

 

 

 

 

 

 

 

FINANCIAL NEEDS AND RESOURCES

 

36.      The Council maintains both capital and revenue reserves. The provision of an appropriate level of balances is a fundamental part of prudent financial management, enabling the Council to build up funds to meet known and potential financial commitments. 

37.      General Fund reserves (which include earmarked reserves) have decreased by £0.721m from the preceding year and stand at £22.895 million at 31 March 2022.  This is mainly due to a reduction in Earmarked Reserves of £0.655m. This follows the application of some of the S31 Business Rates compensation grant received in 2020/21 which was held in the S31 Compensation Grant Business Rates Reserve.

38.      The total Earmarked Reserves balance at 31 March 2022 of £20.839m includes £4.26m held in the Business Rates s31 Compensation Grant Reserve. This is due to a technical accounting adjustment where Councils were compensated for the business rates holidays that were announced by the Government for the retail, hospitality and leisure sectors in 2020/21 and 2021/22 (this funding is in the S31 Compensation Grant Reserve). This temporary increase in reserves will reverse back out again in the 2022/23 Accounts, to fund the deficit on the Collection Fund. Therefore this is not money which is available for the Council to spend and it is important that this is not misinterpreted in the Accounts, as this is a national issue.

39.      The General Fund Balance (un-earmarked reserve) has reduced by £66,000 in 2021/22 and totals £2.056 million. This reflects the underspend from 2021/22 of £214,000 offset by a transfer of £280,000 from the General Fund Balance to the Financial Stability Earmarked Reserve. This is a new reserve set up in 2021/22 as part of the 2022/23 Budget process to be available for any future financial pressures from local government funding reforms and any other budget pressures. Revenue reserves may be used to finance capital or revenue spending plans. The level of Reserves are assessed as adequate for the Council’s operations.

40.      Capital Reserves are represented by capital receipts and capital contributions unapplied. The balance at 31 March 2022 amounts to £3.45 million compared to £3.27 million at the end of the previous year.

41.      There are a number of Unusable Reserves which include the Revaluation Reserve, Capital Adjustment Account, Financial Instruments Revaluation Reserve and Pensions Reserve which are subject to complex accounting arrangements. The Revaluation Reserve and Capital Adjustment Account are used primarily to account for changes in fixed asset values associated with revaluations and new capital expenditure and as such cannot be used to finance capital or revenue expenditure.

42.      When reviewing the amount of overall reserves held, consideration should be given to the possible implications of the Pension Fund deficiency disclosed within the notes to the balance sheet.  The requirement to recognise the net pension liability in the balance sheet has reduced the reported net worth of the Authority by £52.6 million at 31 March 2022. This disclosure follows the implementation of the International Accounting Standards (IAS 19).  This standard requires local authorities and other businesses to disclose pension assets and liabilities within the balance sheet.

43.      It is important to gain an understanding of the accounts to appreciate the nature of this reported deficiency, which is based on a “snapshot” of pension assets and liabilities at the year end.  This is quite different from the valuation basis used for the purposes of establishing the employer’s contribution rate and fund shortfall, which are calculated using actuarial assumptions spread over a number of years.

 

 

Annual Governance Statement (AGS)

 

44.      The Council’s Annual Governance Statement sets out the arrangements for governance which the Council has in place. The AGS is published alongside the Accounts for 2021/22.

 

 

 

COVID-19 Response

 

45.      The COVID-19 pandemic undoubtedly continued to have an impact on the Council. The pandemic required us to refocus officer effort to deliver support to our residents, businesses and communities while maintaining the majority of our core services. We continued to process business grants and launched a grant scheme for community groups that work to support the Health and Wellbeing of our residents.

 

 

Better Lives for All

 

46.      During the year we continued the development of a new corporate strategy for the Council, now known as Better Lives for All. Better Lives for All was developed over 12 months in response to the impacts of Covid-19 and a post-Brexit UK. A series of workshops were held with our Councillors and a wide range of partner organisations were consulted to shape our focus for the next three years.

 

47.      The strategy is underpinned by a detailed delivery plan setting out specific actions that we will undertake in each of the years. Each meeting of the Overview and Scrutiny committee now considers a detailed update on one of the themes. Furthermore, we have implemented a quarterly ‘Integrated Performance Management Report’ process to highlight progress and key risks related to the strategy to our Executive.

 

Title: Achieving our vision - Description: Timeline  Description automatically generated

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Report of Achievements

 

48.      The Council has prepared an Annual Report of Achievements setting out the key activities it has been involved in during the year.

 

Title: Action accross South Hams - Description: Map  Description automatically generated

 

 

49.      The Annual Report was considered by the Executive at their meeting on 7th July 2022 and can be seen on our website.

 
 

 

 
 
 
 
 
 
 
 
 
 
 
 
 
LOOKING FORWARD TO THE FUTURE AND NEXT STEPS

 

Continuing to respond to the housing crisis

 

50.      A significant focus for us during 2022/23 will be on delivering our action plan to address the Housing Crisis in South Hams. We will be pressing ahead with our action plan while continuing to deliver on our longer-term housing strategy.

 

51.      We have already committed to increasing capacity within the Housing Team and recruitment to these roles will be carried out in the coming year.

 

Climate Emergency Response

 

52.      This year we will be in the third year of delivering our Climate and Biodiversity Emergency Action Plan. We will be continuing to deliver on those actions including ensuring the Council delivers on commitments including progressing plans for an electric vehicle fleet and continuing with our wild flowering on Council land.

 

Homes for Ukraine

 

53.      As the conflict in Ukraine continues, we will be ensuring that the District Council develops a package of support for our Ukrainian guests and those residents stepping up to offer them a safe space to live. We’ll be working closely with the voluntary sector to ensure wrap-around support and to ensure that as many host/sponsor placements as possible are maintained as they come towards the end of the initial 6-month term.

 

Levelling up

 

54.      A significant focus for the Council in the coming 12 months will be submitting bids for Levelling Up funding and the Shared Prosperity Fund. We’ll be identifying and working up bids for projects that can make a positive difference to the lives of our communities and businesses in the future.

 

Plymouth and South Devon Freeport

 

55.      Working with Plymouth City Council and Devon County Council, we have progressed the submission of a full business case to the Government in April this year. It is fantastic news that the Plymouth and South Devon Freeport has now been approved by the Government.

 

56.      We are only one of eight areas to get Freeport status and we see this as a brilliant catalyst to build back better and drive economic growth. It is also a chance to showcase our strengths in the marine and defence sectors to the rest of the country, the world, and to support the growing space sector. We have the commitment of some of our largest local employers, including Babcock and Princess Yachts, as key partners in the Freeport.

 

57.      Additionally, the Freeport is also about the long term prospects for up-skilling our future workers, making sure there are great job prospects for tomorrow’s workforce. The three key sites in and around Plymouth will form part of the Freeport these being, Langage, Sherford and South Yard.

 

58.      The Freeport is expected to see over 3,500 direct jobs created and total capital investment in the Freeport is predicted to reach £311million. This is made up of £25m in Government seed capital grant and matched locally with £29m. A further £10m will be raised through Levelling Up grant income and it is anticipated that total private sector investment will be close to £247 million.

 

Our financial future

 

59.      The financial standing of the Council is secure in the immediate future, but there is still much work to do to ensure the long term financial sustainability of the Council. In his speech to the Local Government Association (LGA) conference on 28 June 2022, the Secretary of State, Michael Gove MP, promised to give local authorities greater “financial certainty”. It was confirmed that a 2-year financial settlement will be introduced.  The proposal for a 2-year settlement suggests that there will be rollover settlements in both 2023/24 and 2024/25, meaning financial settlements that are broadly similar to 2022/23.  The Fair Funding Review, business rates baseline reset, and other funding reforms now look set to be pushed back to 2025/26.  It also suggests that the 2021 Census might not be reflected in funding allocations until 2025/26. In addition the timing of the cessation of the current New Homes Bonus scheme is not clear, but if it does continue, it will be smaller in value with no historic legacy payments.

 

60.      Pushing these major changes back to 2025/26 means that they can be aligned with the next spending review period (the current spending review runs to 2024/25). 2025/26 now looks like it is shaping up to be a very significant financial year for local government, incorporating a new spending review, the 2021 Census, and funding reforms. 

 

Going Concern

 

61.      As highlighted above there is a high degree of uncertainty about future levels of funding for local government. However, the S151 Officer is keeping a close watch on developments and planning for this longer-term uncertainty. The Council has a strong track record of financial prudence and as a result has set aside Reserves. For example, at Council on 10 February 2022 Members approved the creation of a new earmarked reserve, the Financial Stability reserve. It was resolved that £280,000 be transferred from Unearmarked Reserves to a Financial Stability Earmarked Reserve as part of the process of closing the 2021/22 Accounts, to be available for any future financial pressures from future local government funding reforms and any other budget pressures.  

 

62.      Based on the S151 Officer’s management assessment (which has included consideration of the Government support available, the Council’s current level of reserves, the level of working capital including cash and investments, a sensitivity analysis on forecast cashflows, income from local taxation and borrowing headroom etc.), there is no material uncertainty and as a result the Accounts for 2021/22 are prepared on a going concern basis.

 

 

Issue of the Accounts

 

63.      The Corporate Director for Strategic Finance authorised the audited Statement of Accounts 2021/22 for issue on 24 November 2022. Events taking place after this date are not reflected in the financial statements or notes.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CORPORATE PERFORMANCE FOR 2021/22

 

The Council adopted its ‘Better Lives for All’ strategy in September 2021 and regularly reports on the performance of the delivery plan to both Overview and Scrutiny and the Executive. At the end of the year, the performance for the priorities within the strategy is as set out below. Overall, positive progress has been made across all themes. Each theme has a lead officer and lead Executive Member who meet regularly to monitor progress.

 

Title: Performance Management - the golden thread - Description: Diagram  Description automatically generated with medium confidence

 

 

The following update is from the Quarter 4 Performance Management Update considered by Executive on 7th April 2022.

 

Title: Overall performance against actions - Description: Table  Description automatically generated

The performance by theme is as set out below.

 

Adapting and Mitigating Climate Change

Back in 2019, we declared a Climate and Biodiversity Crisis in response to global warming and a decline in biodiversity. During the past year we have continued to make good progress in delivering against our climate and biodiversity action plan, District wide tree planting schemes are underway, we’ve had almost unanimous support from the public for our plans to increase biodiversity on Council land and had our progress recognised at a national level.

 

Title: Adapting and Mitigating Climate Change - Description: Table  Description automatically generated with low confidence

 

 

Strengthening Community Wellbeing

From awarding funding to support community schemes to ensuring we’ve

continued to deliver leisure facilities within the district.

 

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Improving Homes

We know that having a decent, safe home is essential for the wellbeing of all residents. This year we’ve taken the step of declaring a Housing Crisis in South Hams to highlight the significant shortage of homes within the District.

 

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Thriving Economy

2021/22 continued to see sectors within our economy impacted by the Covid-19 pandemic, but we’ve taken positive steps to support South Hams businesses into the future.

 

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Protecting, conserving and enhancing our built and natural environment

During the year we have taken many steps to ensure that our built and natural environment is protected, conserved and enhanced. We’ve simplified our planning process and supported neighbourhoods to shape their own futures through neighbourhood plans.

 

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Quality Council Services

2021/22 has been another incredibly busy year for our core services. As Councillors we were able to return to our Chamber for the first time in over two years, our achievements on customer focused processes were recognised nationally and we continued to process a range of support packages for businesses and residents impacted by Covid-19.

 

We of course know that one service that we have not delivered to the required standard has been our waste contract. Resolving this has been a top priority for the past year and will continue to be in the coming months. In July 2022, the Council and FCC Environment have reached a mutual agreement to end the contract for waste, recycling, street and toilet cleaning services. Both parties agree that the past few years have presented a number of extremely challenging circumstances. In the best interest of the residents of the South Hams, it has been agreed that services will be operated by the Council from 3 October 2022.

 

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PRINCIPAL RISKS AND UNCERTAINTIES

 

A risk and opportunity management strategy is in place to identify and evaluate risks. There are clearly defined steps to support better decision making through the understanding of risks, whether a positive opportunity or a threat and the likely impact. The latest update was presented to the Audit Committee on 9th December 2021 and a high-level summary considered by Executive as part of the quarterly Integrated Performance Management Reports.

 

 

Title: PRINCIPAL RISKS AND UNCERTAINTIES - Description: Graphical user interface  Description automatically generated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The following sets out the key strategic risks for the Council as at the last report to Audit Committee. This will be updated to reflect the next update which will be considered by Audit Committee in September 2022.

 

Risk Title

Description

Note at last Audit Committee Report – December 2021

Delivery of waste & recycling service changes

Diagram, text  Description automatically generated with medium confidence

The risk is that the contractor, FCC, lacks the capacity or ability to rectify the issues being experienced by residents at this stage resulting in further delays, increased reputational damage and overall significant frustration for our residents.

Issues with the service continue to be experienced at the time of this update. The Council is working with FCC Environment to resolve ongoing issues.

 

The Executive continue to meet regularly with FCC Senior Management. The Council continues to use contractual mechanisms to improve service performance.

 

The contractor was not able to rectify issues with the collection by the end of July 2021 as previously updated on the risk register.

 

To alleviate the pressure on the service, the decision has been taken to temporarily suspend garden waste collections, enabling the contractor to focus available resources on collection of waste and household recycling.

 

The Executive have asked that FCC provide a detailed plan to the Council by 31st December 2021 for resuming the service by 31st March 2022 (or sooner)

 

(See paragraphs 14 to 18 in the Narrative Statement for an update on the Council’s waste service).

 

Adherence to Medium Term Financial Strategy

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Failure to sustain a robust on-going medium term financial strategy in SHDC with adequate reserves to meet unforeseen circumstances, due to cost pressures and reduced income targets, council decisions, changes in Government policy with regard to business rates and affordable housing;

Potential impact on delivering the MTFS, particularly if national/regional businesses successfully appeal against business rate valuations or litigation

proceedings / legal challenges / planning appeals, etc.

Due to the volatility of Business Rates income, Council on 23 September 2021 approved the use of funding from the Business Rates Retention

Earmarked Reserve to smooth the volatility in business rates income over the next three years. The volatility is due to the business rates baseline reset anticipated in 2023/24 (this will mean the Council will have negative revenue support grant in 23/24) and the predicted reduction in business rates pooling gains at the same time in 23/24. There is a risk that the Government may introduce a more aggressive business rates tariff in 22/23 to account for the fact that the baseline reset is highly likely to be delayed until at least 23/24. If this happens, it would be recommended that a higher amount of funding from the business rates retention reserve is used in 22/23, to offset the higher tariff rate and the ensuing lower business rates income. More will be known on this when details of the Local Government Finance Settlement are announced around mid December.

The forecast budget gap for 2022/23 is currently £28,500, 0.3% of the Net Budget of 2021/22 of £9.7 million. A cumulative budget gap of £349,925 is predicted for 2023/24 (the £349,925 assumes that the 22/23 budget gap of £28,500 has not been closed). The cumulative aggregated Budget Gap by 2024/25 is £1.1 million, if no action has been taken in each individual year to close the budget gap annually.

The Council awaits the details of the Local Government Finance Settlement announcement in mid December, which will enable the Council to further firm up some of the assumptions within the Budget for 2022/23 onwards.

Covid-19 Impact on in-house Services 

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The risk is that Covid-19 (Coronavirus) will impact on the ability for the Council to deliver its in-house services leading to a drop in operational performance and customer satisfaction. There is the potential for additional financial implications due to increased demand for

services or a reduction in income.

Our office based staff continue to work from home in order to mitigate the risk of spreading Covid 19 and in turn reducing the capacity of our workforce. Our frontline staff continue to employ safety measures to reduce the risk of transmission of Covid with risk assessments continually being updated.

Member meetings have resumed face to face for many months and with the exception of wearing facemasks when moving around the building and maintaining social distancing, other safety measures have been removed. This has not so far resulted in any significant outbreaks.

We will continue to monitor the impact on our in-house services (particularly given Omicron variant developments) over the winter and if required, instigate our incident management approach

Health and Wellbeing Service Provision

 Diagram  Description automatically generated

Covid-19 has a significant impact on Leisure provision given the nature of activities and hygiene requirements. The risk is that as leisure centres make adjustments to reduce the risk of Covid-19 to both staff and customers, the capacity of the centres is significantly reduced while many overheads and operating costs remain the same.

At their meeting in March 2022, the Executive will consider an update from Fusion Leisure which will set out the impact Covid-19 continues to have on participation and what steps they are taking to encourage a return to pre-pandemic levels.

 

The Councils lead for Fusion continue to promote the available activities within the centres.

Business Continuity

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The risk is that we do not develop and keep maintained robust processes to ensure business continuity in the event of a significant event occurring,

e.g. Failure to ensure the continuous availability of critical IT systems leading to inability to deliver key council services.

While we still find ourselves in the 'response' phase of the pandemic however focus is now changing to refining our broader business continuity plans to cover other scenarios.

Our ability to work online is fundamental to our ongoing delivery of services and this is therefore a key focus for our Business Continuity Planning.

We are aware of rising incidents of cyber attacks on local authorities and are monitoring their learning closely in order to refine our own response plans.

 

 

Where cyber attacks on those have been successful (i.e. not prevented by their systems and processes) they have been without core operating systems for many months and with the cost of recovery being in the several millions of pounds. As a result of this learning we have increased the financial impact score to 5.

Additionally, our contracted waste collection services continue to be under significant pressure triggered in part by the national HGV driver shortage which could be compounded as we enter the typical flu season and also the added covid-19 infection and isolation risk.

We have commissioned external advice to support us in updating our ICT Business Continuity Plans with this work aiming to complete in January 2022. Following this we can update our other service business continuity plans.

A group of core officers will be recommencing a dedicated work stream to reduce this risk to acceptable levels

Emergency Response

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The risk is that the council fails to meet the high public expectation in relation to supporting communities during storm damage/flooding/ other events, as well as engagement in longer term recovery, in particular assumptions about capital investment to restore assets. The risk relates to how best to support dispersed communities, e.g. with filling, transporting and laying sandbags as well as providing workforce on site, given limited resources and

expectations during an event.

The Council continues to engage with the Local Resilience Forum and is keeping its emergency response plans up to date. Winter plans are

developed and in place.

 

Most of our emergency response support will be provided by the Environmental Health Team who are also the team that are involved in supporting

any requirements to respond to Covid-19. To support their ability to respond to any other emergencies through the winter, we have extended the contract of the covid-19 support officers until end of March 2022.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Section 2

 

 

Core Financial Statements

 

 

 

 


This statement shows the accounting cost in the year of providing services in accordance with generally accepted accounting practices, rather than the amount to be funded from taxation. Authorities raise taxation to cover expenditure in accordance with regulations; this may be different from the accounting cost. The taxation position is shown in both the Expenditure and Funding Analysis (Note 4) and the Movement in Reserves Statement (Section 2B).

 

2020/21                                                                                              2021/22

Gross

Expenditure

Gross

Income

Net

Expenditure

 

Segment

Gross

Expenditure

Gross

Income

Net

Expenditure

£000

£000

£000

 

£000

£000

£000

33,553

(24,511)

9,042

Customer Service & Delivery

31,625

(22,398)

9,227

737

(199)

538

Strategic Finance

908

(386)

522

12,423

(10,656)

1,767

Place & Enterprise*

11,075

(11,393)

(318)

6,602

(1,419)

5,183

Governance & Assurance

7,236

(2,309)

4,927

53,315

(36,785)

16,530

Cost of Services

50,844

(36,486)

14,358

 

 

2,850

Other operating expenditure (Note 9)

 

 

3,023

 

 

636

Financing and investment income and expenditure (Note 10)

 

 

61

 

 

(17,647)

Taxation and non-specific grant income (Note 11)

 

 

(17,033)

 

 

2,369

(Surplus) or Deficit on Provision of Services

 

 

409

 

 

(451)

(Surplus) or deficit on revaluation of Property, Plant and Equipment

 

 

(1,418)

 

 

10,490

Remeasurements of the net defined benefit liability

 

 

(12,608)

 

 

(141)

(Surplus) or deficit from investments in equity instruments designated at fair value through other comprehensive income

 

 

(325)

 

 

9,898

Other Comprehensive Income and Expenditure

 

 

(14,351)

 

 

12,267

Total Comprehensive Income and Expenditure

 

 

(13,942)

 

* The net expenditure in Place and Enterprise has reduced by £2.085 million in 2021/22. This is largely due to increases in Car Parking and Ferry income, amounting to £1.8m. In addition, in 2020/21 both gross expenditure and gross income were higher due to the impact of the payment profile (and receipt) of business grants received and paid out during the pandemic – this has no overall impact on net expenditure.


Movement in Reserves Statement

 

This statement shows the movement from the start of the year to the end on the different reserves held by the Authority, analysed into ‘usable reserves’ (i.e. those that can be applied to fund expenditure or reduce local taxation) and other ‘unusable reserves’. The Movement in Reserves Statement shows how the movements in year of the Authority’s reserves are broken down between gains and losses incurred in accordance with generally accepted accounting practices and the statutory adjustments required to return to the amounts chargeable to council tax for the year. The Increase/Decrease in Year line shows the statutory General Fund Balance movements in the year following these adjustments.

 

 

 

2021/22

General Fund Balance

 

£000

Earmarked

General Fund Reserves

£000

Total General Fund Reserves

£000

Capital Receipts Reserve

 

£000

Capital Grants Unapplied

 

£000

Total Usable Reserves

 

£000

Unusable Reserves

 

 

£000

Total Authority Reserves

2021/22

£000

Balance at 31 March 2021 carried forward

2,122

21,494

23,616

2,848

423

26,887

16,243

43,130

Movement in Reserves during

2021/22

 

 

 

 

 

 

 

 

Total Comprehensive Income and Expenditure

(409)

-

(409)

-

-

(409)

14,351

13,942

Adjustments between accounting

basis and funding basis under

regulations (Note 7)

(312)

-

(312)

102

81

(129)

129

-

Transfers to/from Earmarked

Reserves (Note 8)

655

(655)

-

-

-

-

-

-

Increase/ (Decrease) in Year

(66)

(655)

(721)

102

81

(538)

14,480

13,942

Balance at 31 March 2022 carried forward

2,056

20,839

22,895

2,950

504

26,349

30,723

57,072

 

 

 

 

 

 

 

 

2020/21 Comparatives

General Fund Balance

 

£000

Earmarked General Fund Reserves

£000

Total General Fund Reserves

£000

Capital Receipts Reserve

 

£000

Capital Grants Unapplied

 

£000

Total Usable Reserves

 

£000

Unusable Reserves

 

 

£000

Total Authority Reserves

2020/21

£000

Balance at 31 March 2020 carried forward

2,010

13,998

16,008

3,059

341

19,408

35,989

55,397

Movement in Reserves during

2020/21

 

 

 

 

 

 

 

 

Total Comprehensive Income and Expenditure

(2,369)

-

(2,369)

-

-

(2,369)

(9,898)

(12,267)

Adjustments between accounting

basis and funding basis under

regulations (Note 7)

9,977

-

9,977

(211)

82

9,848

(9,848)

-

Transfers to/from Earmarked

Reserves (Note 8)

(7,496)

7,496

-

-

-

-

-

-

Increase/ (Decrease) in Year

112

7,496

7,608

(211)

82

7,479

(19,746)

(12,267)

Balance at 31 March 2021 carried forward

2,122

21,494

23,616

2,848

423

26,887

16,243

43,130

 

 

 

 

 

 


The Balance Sheet shows the value as at the Balance Sheet date of the assets and liabilities recognised by the Authority. The net assets of the Authority (assets less liabilities) are matched by the reserves held by the Authority. Reserves are reported in two categories. The first category of reserves are usable reserves, i.e. those reserves that the Authority may use to provide services, subject to the need to maintain a prudent level of reserves and any statutory limitations on their use (for example the Capital Receipts Reserve that may only be used to fund capital expenditure or repay debt). The second category of reserves is those that the Authority is not able to use to provide services. This category of reserves includes reserves that hold unrealised gains and losses (for example the Revaluation Reserve), where amounts would only become available to provide services if the assets were sold, and reserves that hold timing differences shown in the Movement in Reserves Statement line ‘Adjustments between accounting basis and funding basis under regulations’.

31 March

2021

£000

 

Notes

31 March

2022

£000

79,149

Property, Plant and Equipment

12

80,245

18,560

Investment Properties

13

18,610

202

Intangible Assets

 

285

3,280

Long Term Investments

14

3,605

101,191

Long Term Assets

 

102,745

15,600

Short Term Investments

14

30,500

293

Assets Held for Sale

 

-

67

Inventories

 

79

15,321

Short Term Debtors

15

8,862

23,838

Cash and Cash Equivalents

17

22,981

55,119

Current Assets

 

62,422

(27,542)

Short Term Creditors

18

(32,532)

(94)

Short Term Borrowing

14

(96)

(1,336)

Revenue Grants in Advance

30

(188)

(1,636)

Provisions

19

(1,494)

(30,608)

Current Liabilities

 

(34,310)

(74)

Long Term Creditors

18

(92)

(5,725)

Long Term Revenue Grants in Advance - Section 106 Deposits

30

(5,717)

(14,380)

Long Term Borrowing

14

(14,284)

(61,351)

Pensions Liability

35

(52,621)

(1,042)

Capital Grants - Receipts in Advance

30

(1,071)

(82,572)

Long Term Liabilities

 

(73,785)

43,130

Net Assets

 

57,072

26,887

Usable Reserves

20

26,349

16,243

Unusable Reserves

21

30,723

43,130

Total Reserves

 

57,072

 

The notes on pages 38 to 122 form part of these financial statements. The unaudited accounts were issued on 29 July 2022. The audited accounts were issued on 24 November 2022.

 

Lisa Buckle BSc (Hons), ACA

Corporate Director of Strategic Finance (Section 151 Officer)


The Cash Flow Statement shows the changes in cash and cash equivalents of the Authority during the reporting period. The statement shows how the Authority generates and uses cash and cash equivalents by classifying cash flows as operating, investing and financing activities. The amount of net cash flows arising from operating activities is a key indicator of the extent to which the operations of the Authority are funded by way of taxation and grant income, or from the recipients of services provided by the Authority. Investing activities represent the extent to which cash outflows have been made for resources which are intended to contribute to the Authority’s future service delivery. Cash flows arising from financing activities are useful in predicting claims on future cash flows by providers of capital (i.e. borrowing) to the Authority.

 

 

2020/21

£000

 

 

2021/22

£000

2,369

Net (surplus) or deficit on the provision of services

409

(16,653)

Adjustments to net surplus or deficit on the provision of services for non-cash movements (Note 22)

(9,385)

1,716

Adjustments for items included in the net surplus or deficit on the provision of services that are investing and financing activities (Note 23)

2,012

(12,568)

Net cash outflows/ (inflow) from Operating Activities

(6,964)

1,683

Net increase/(decrease) in Investing Activities (Note 24)

15,649

3,866

Net cash outflow/(inflow) from Financing Activities (Note 25)

(7,828)

(7,019)

Net (increase) or decrease in cash and cash equivalents

857

16,819

 

Cash and cash equivalents at the beginning of the reporting period

23,838

23,838

 

Cash and cash equivalents at the end of the reporting period (Note 17)

22,981

 

 

 


 

 

 

 

 

 

 

 

 

Section 3

 

 

Notes to the

 

Financial Statements

 

 


CONTENTS

 

 

  1. Assumptions Made about the Future and Other Major Sources of Estimation Uncertainty
  2. Material Items of Income and Expense
  3. Events After the Reporting Period
  4. Expenditure and Funding Analysis
  5. Note to the Expenditure and Funding Analysis
  6. Expenditure and Income Analysed by Nature
  7. Adjustments between Accounting Basis and Funding Basis under    Regulations
  8. Transfers to/from Earmarked Reserves
  9. Other Operating Expenditure
  10. Financing and Investment Income and Expenditure
  11. Taxation and Non-Specific Grant Income
  12. Property, Plant and Equipment
  13. Investment Properties
  14. Financial Instruments
  15. Debtors
  16. Debtors for Local Taxation
  17. Cash and Cash Equivalents
  18. Creditors
  19. Provisions
  20. Usable Reserves
  21. Unusable Reserves
  22. Cash Flow Statement – Adjustments to Net Surplus or Deficit on the Provision of Services for Non-Cash Movements
  23. Cash Flow Statement – Adjustments to Net Surplus or Deficit on the Provision of Services that are Investing and Financing Activities
  24. Cash Flow Statement - Investing Activities
  25. Cash Flow Statement - Financing Activities
  26. Trading Operations – Building Control
  27. Members’ Allowances
  28. Officers’ Remuneration
  29. Payments to External Auditors
  30. Grant Income
  31. Related Parties
  32. Capital Expenditure and Capital Financing
  33. Leases
  34. Exit Packages and Termination Benefits
  35. Defined Benefit Pension Schemes
  36. Contingent Liabilities
  37. Nature and Extent of Risks Arising from Financial Instruments
  38. Accounting Policies
  39. Accounting Standards that have been Issued but have not yet been Adopted
  40. Critical Judgements in Applying Accounting Policies

 

 

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

 

The Statement of Accounts contains estimated figures that are based on assumptions made by the Authority about the future or that are otherwise uncertain. Estimates are made taking into account historical experience, current trends and other relevant factors. However, because balances cannot be determined with certainty, actual results could be materially different from the assumptions and estimates.

 

The items in the Authority’s Balance Sheet at 31 March 2022 for which there are significant risks of material adjustment in the forthcoming financial year are as follows:

 

Item

Uncertainties

Effect if Actual Results Differ from Assumptions

Property, Plant and Equipment

Asset valuations are based on market prices and are periodically reviewed to ensure that the Council does not materially misstate its non-current assets.

 

 

Assets are depreciated over useful lives that are dependent on assumptions about the level of repairs and maintenance that will be incurred in relation to individual assets.  The current economic climate makes it uncertain that the Authority will be able to sustain its current spending on repairs and maintenance, bringing into doubt the useful lives assigned to assets.

 

The carrying value of Property, Plant and Equipment as at 31 March 2022 is £80 million.

A reduction in the estimated valuations would result in reductions to the Revaluation Reserve and / or a loss recorded as appropriate in the Comprehensive Income and Expenditure Statement. If the value of the Council’s operational properties were to reduce by 10%, this would result in an impact on the financial statements of approximately £8m.

 

An increase in estimated valuations would result in increases to the Revaluation Reserve and / or reversals of previous negative revaluations to the Comprehensive Income and Expenditure Statement and / or gains being recorded as appropriate in the Comprehensive Income and Expenditure Statement.

 

If the useful life of assets is reduced, depreciation increases and the carrying amount of the asset falls. If the depreciation lives of the assets were to reduce by 1 year across all assets, this would have an impact of approximately £254,000 on the Council’s finances.

Pensions Liability

Estimation of the net liability to pay pensions depends on a number of complex judgements relating to the discount rate used, the rate at which salaries are projected to increase, changes in retirement ages, mortality rates and expected returns on pension fund assets.  A firm of consulting actuaries is engaged to provide the Authority with expert advice about the assumptions to be applied.

 

The value of pension assets is estimated based upon information available at the Balance Sheet date, although these valuations could be earlier. The actual valuations at the Balance Sheet date, which may not be available until sometime later, may give a different value of pension assets, but this difference is not considered to be material.

The Pension Fund’s Actuary has provided updated figures for the year based on the valuation in 2019. This valuation is based upon cash flow and assets values as at 31 March 2022.

 

Contributions are set every 3 years as a result of the actuarial valuation of the Fund required by the Regulations. The next actuarial valuation of the Fund will be carried out during 2022/23 (as at 31 March 2022) and will set contributions for the period from 1 April 2023 to 31 March 2026.

 

The carrying value of the pensions liability as at 31 March 2022 is £52.6 million.

 

Movements in the value of investments due to current economic uncertainty will affect the valuation of the pension liability. This will include the impact on the value of Investment Properties held by the Local Government Pension Scheme on behalf of South Hams District Council.

The effects on the net pension liability of changes in individual assumptions can be measured.  For example, a 0.1% increase in the discount rate assumption would result in a decrease in the pension liability of £3 million.

 

 

The assumptions interact in complex ways. For example, in 2021/22, the Authority’s actuaries advised that the pension liability has decreased by £7 million as a result of a change in “financial assumptions” and there had been no change as a result of a change in "demographic assumptions".          

 

Please refer to Note 35 for further information about the assumptions used by the actuaries.

 

If the value of investments is found to have changed from the estimates used by the actuaries, it will impact the overall value of the pension liability. For instance, a 5% increase in the pension liability would have an impact of £2.6m on the financial statements.

 

The Council’s share of these Pension Fund property investments would be material to the Council’s net liability, this would also present a material uncertainty on the valuation of the Council’s pension assets and liabilities as at 31 March 2022.

 

 

 

2. MATERIAL ITEMS OF INCOME AND EXPENSE

 

There are no material items of income and expense in 2020/21 or 2021/22.

 

 

3. EVENTS AFTER THE REPORTING PERIOD

 

The draft Statement of Accounts (SOA) for 2021/22 was approved for issue by the Section 151 Officer & Corporate Director for Strategic Finance on 29 July 2022. The Statement of Accounts were then reviewed by the Audit Committee on 8 September 2022 and the audited accounts were authorised for issue on 24 November 2022.This is also the date up to which events after the reporting period have been considered.

 

There is one event after the reporting period for 2021/22. This concerns the Council’s Waste and Recycling service. On 12 July 2022 Executive considered a report with advice from the Council’s Waste Working Group. The Waste Working Group advised that the Council and FCC Environment have reached a mutual agreement to end their contract for Waste, Recycling, Street and Toilet Cleaning services. In the best interests of the residents in the South Hams, it is proposed that the services will be operated by the Council from Monday 3 October 2022. This decision was subsequently approved by Council on 14 July 2022.

At the point of preparing the Statement of Accounts, planning continues and a further update will be considered by Executive and Council in September ahead of the transfer.

 

 

4. EXPENDITURE AND FUNDING ANALYSIS

 

The objective of the Expenditure and Funding Analysis is to demonstrate to council tax payers how the funding available to the Authority (i.e. government grants, council tax and business rates) for the year has been used in providing services in comparison with those resources consumed or earned by the Authority in accordance with generally accepted accounting practices. The Expenditure and Funding Analysis also shows how this expenditure is allocated for decision making purposes between the Authority’s service areas. Income and expenditure accounted for under generally accepted accounting practices is presented more fully in the Comprehensive Income and Expenditure Statement in Section 2A. The Expenditure and Funding Analysis also fulfils the requirement to report by segments.

 

 

 

 

 

 

 

 

2021/22 – Expenditure and Funding Analysis

Net Expenditure Chargeable to the General Fund

 

£000

Adjustments between Funding and Accounting Basis (Note 5)

 

£000

Net Expenditure in the Comprehensive Income and Expenditure Statement

£000

Customer Service & Delivery

6,097

3,130

9,227

Strategic Finance

522

-

522

Place & Enterprise

(2,240)

1,922

(318)

Governance & Assurance

3,203

1,724

4,927

Net Cost of Services

7,582

6,776

14,358

Other income and expenditure

(6,861)

(7,088)

(13,949)

(Surplus)/Deficit on Provision of Services

721

(312)

409

 

 

 

General Fund Balance

£000

Earmarked Reserves

£000

Total General Fund Reserves

£000

Opening Balance at 31 March 2021

(2,122)

(21,494)

(23,616)

(Increase)/decrease in year

66

655

721

Closing Balance at 31 March 2022

(2,056)

(20,839)

(22,895)

 

 

 

 

2020/21 Comparatives – Expenditure and Funding Analysis

Net Expenditure Chargeable to the General Fund

 

£000

Adjustments between Funding and Accounting Basis (Note 5)

 

£000

Net Expenditure in the Comprehensive Income and Expenditure Statement

£000

Customer Service & Delivery

7,149

1,893

9,042

Strategic Finance

538

-

538

Place & Enterprise

(511)

2,278

1,767

Governance & Assurance

4,378

805

5,183

Net Cost of Services

11,554

4,976

16,530

Other income and expenditure

(19,162)

5,001

(14,161)

(Surplus)/Deficit on Provision of Services

(7,608)

9,977

2,369

 

 

 

General Fund Balance

£000

Earmarked Reserves

£000

Total General Fund Reserves

£000

Opening Balance at 31 March 2020

(2,010)

(13,998)

(16,008)

(Increase)/decrease in year

(112)

(7,496)

(7,608)

Closing Balance at 31 March 2021

(2,122)

(21,494)

(23,616)

 
 
 
5. NOTE TO THE EXPENDITURE AND FUNDING ANALYSIS

 

This note explains the main adjustments from the net expenditure chargeable to the general fund balances to arrive at the amounts in the Comprehensive Income and Expenditure Statement (CIES).

 

 

Adjustments between Funding and Accounting Basis

 

2021/22

Adjustments for capital purposes

 

(Note A)

£000

Net change for the pensions adjustments

(Note B)

£000

Other Differences

 

 

(Note C)

£000

Total adjustments

 

 

 

£000

Customer Service & Delivery

1,280

1,842

7

3,129

Place & Enterprise

1,438

485

-

1,923

Governance & Assurance

1,448

276

-

1,724

Net Cost of Services

4,166

2,603

7

6,776

Other income and expenditure from the Expenditure & Funding Analysis

(3,333)

1,275

(5,030)

(7,088)

Difference between the General Fund surplus or deficit, and the surplus or deficit on the provision of services in the CIES

833

3,878

(5,023)

(312)

 

 

 

 

 

 

 

 

 

 

Adjustments between Funding and Accounting Basis

 

2020/21 Comparatives

Adjustments for capital purposes

 

(Note A)

£000

Net change for the pensions adjustments

(Note B)

£000

Other Differences

 

 

(Note C)

£000

Total adjustments

 

 

 

£000

Customer Service & Delivery

1,165

723

5

1,893

Place & Enterprise

2,008

270

-

2,278

Governance & Assurance

629

176

-

805

Net Cost of Services

3,802

1,169

5

4,976

Other income and expenditure from the Expenditure & Funding Analysis

(3,490)

1,188

7,303

5,001

Difference between the General Fund surplus or deficit, and the surplus or deficit on the provision of services in the CIES

312

2,357

7,308

9,977

 

Note A: Adjustments for Capital Purposes

Adjustments for capital purposes reflect:

For services this column adds in depreciation and impairment and adjusts for revenue expenditure funded from capital under statute.

Other income and expenditure from the Expenditure and Funding Analysis – this adjusts for statutory charges for capital financing and other capital contributions are deducted. It also adjusts for capital disposals with a transfer of the income on the disposal and the amounts written-off.

 

Note B: Net Change for the Pensions Adjustments

Net changes for the removal of pension contributions and the addition of IAS 19 Employee Benefits pension related expenditure and income:

For services this represents the removal of the employer pension contributions made by the Authority as allowed by statute and the replacement with current service costs and past service costs.

For other income and expenditure from the Expenditure and Funding Analysis – the net interest on the defined benefit liability is charged to the CIES.

 

Note C: Other Differences

Other differences between amounts debited/credited to the Comprehensive Income and Expenditure Statement and amounts payable/receivable to be recognised under statute:

For services reflects the change in the annual leave accrual when compared with the previous year.

For other income and expenditure from the Expenditure and Funding Analysis represents the timing difference between what is chargeable under statutory regulations for Council Tax and Business Rates that was projected to be received at the start of the financial year, and the income recognised under generally accepted accounting practices.

6. EXPENDITURE AND INCOME ANALYSED BY NATURE

 

The Expenditure and Income Analysed by Nature note shows the amounts that make up the surplus or deficit on the provision of services on the CIES, but here they are categorised by nature instead of by service segment.

 

Expenditure and Income Analysed by Nature

 

2020/21

 

£000

 

2021/22

 

£000

Employee Benefits Expenses*

14,342

17,009

Other Service Expenses**

35,234

29,677

Depreciation, Amortisation and Impairment

4,088

4,116

Interest Payments

414

366

Pension Fund Administration Expenses

65

63

Net Interest on the net defined benefit liability

1,123

1,212

Losses/(Gains) on disposal of non current assets

49

-

Total Expenditure

55,315

52,443

 

 

 

Fees, Charges and Other Service Income***

(13,376)

(17,002)

Interest and Investment Income

(220)

(153)

Income from Council Tax and Business Rates****

(59)

(4,744)

Revenue Grants and Contributions*****

(37,758)

(28,481)

Capital Grants and Contributions

(1,420)

(1,237)

Other Income

(113)

(417)

Total Income

(52,946)

(52,034)

 

 

 

(Surplus) or Deficit on Provision of Services

2,369

409

 

* Employee Benefits Expenses

The increase in Employee Benefit Expenses is mainly due to an increase in the accounting adjustment for pensions (IAS19) of £1.4m. This is shown in Note 5 - Note to the Expenditure and Funding Analysis.

 

** Other Service Expenses

Other Service Expenses have reduced by £6.8m in 2021/22. This mainly reflects the reduction in payment of business grants during the pandemic. In addition there has been a reduction in Housing Benefit Payments of £1.3m.

 

*** Fees, Charges and Other Service Income

The increase in fees and charges income in 2021/22 reflects the detrimental impact of the pandemic on the Council’s income in 2020/21. For example, car parking income was almost £1.4m lower in 2020/21.

 

**** Income from Council Tax and Business Rates

The increase in income from Council Tax and Business Rates in 2021/22 mainly reflects the impact of the accounting treatment of the Business Rates S31 compensation grant. During 2020/21 local authorities received S31 grants to offset the business rate reliefs given to businesses during lockdown. Under current Collection Fund accounting rules, the S31 grants received in 2020/21 were not discharged against the Collection Fund deficit until 2021/22 onwards. This has resulted in an increase in the total Business Rates Receivable from £15.6m in 2020/21 to £22.9m in 2021/22.

The figure for Council Tax and Business Rates in this statement is shown net of expenditure (precepts to other bodies).

 

*****Revenue Grants and Contributions

The overall reduction in grant income between 2020/21 and 2021/22 of £9.3m mainly relates to the S31 Business Rate Relief Grants. The larger share of this funding was received in 2020/21. This S31 compensation grant was awarded to local authorities to offset the business rate reliefs given to businesses during the pandemic. In addition there has been a reduction in Housing Benefit Subsidy of £1.3m to offset the reduction in Housing Benefit Payments shown in ‘Other Service Expenses’ shown above.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7. ADJUSTMENTS BETWEEN ACCOUNTING BASIS AND FUNDING BASIS UNDER REGULATIONS

 

This note details the adjustments that are made to the total comprehensive income and expenditure recognised by the Authority in the year, in accordance with proper accounting practice, to the resources that are specified by statutory provisions as being available to the Authority to meet future capital and revenue expenditure.

 

Usable Reserves

 

 

2021/22

 

General Fund Balance

 

£000

Capital Receipts Reserve

 

 £000

Capital Grants

Unapplied

 

£000

Movement in Unusable Reserves £000

Adjustments primarily involving the Capital Adjustment Account (CAA):

 

 

 

 

Reversal of items debited or credited to the Comprehensive Income and Expenditure Statement (CIES):

 

 

 

 

Charges for depreciation and impairment of non-current assets

3,100

 

 

(3,100)

Revaluation losses/(gains) on Property, Plant and Equipment

(217)

 

 

217

Movements in the market value of Investment Properties

(50)

 

 

50

Amortisation of Intangible Assets

82

 

 

(82)

Capital grants and contributions applied

(977)

 

 

977

Revenue expenditure funded from capital under statute (REFCUS)

1,201

 

 

(1,201)

Amounts of non-current assets written off

on disposal or sale as part of the gain/loss on disposal to the CIES

357

 

 

(357)

Insertion of items not debited or credited to the CIES:

 

 

 

 

Statutory provision for the financing of capital investment

(486)

 

 

486

Capital expenditure charged against the

General Fund

(1,019)

 

 

1,019

Revenue contribution to Capital Outlay – RCCO

(123)

 

 

123

Adjustments primarily involving the Capital Grants Unapplied Account:

 

 

 

 

Capital grants and contributions unapplied credited to the CIES

(260)

 

260

-

Application of grants to capital financing transferred to the Capital Adjustment Account

 

 

(179)

179

Adjustments primarily involving the Capital Receipts Reserve:

 

 

 

 

Transfer of cash sale proceeds credited as part of the gain/loss on disposal to the CIES

(360)

360

 

-

Costs of disposal funded from capital receipts

3

(3)

 

-

 

Usable Reserves

 

 

2021/22

 

General Fund Balance

 

£000

Capital Receipts Reserve

 

 £000

Capital Grants

Unapplied

 

£000

Movement in Unusable Reserves £000

Adjustments primarily involving the Capital Receipts Reserve:

 

 

 

 

Transfer of unattached capital receipts

(418)

418

 

-

Use of the Capital Receipts Reserve to finance new capital expenditure

 

(673)

 

673

Adjustments primarily involving the Pensions Reserve:

 

 

 

 

Reversal of items relating to retirement benefits debited or credited to the CIES (see Note 35)

5,370

 

 

(5,370)

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

(1,492)

 

 

1,492

Adjustments primarily involving the Council Tax Collection Fund Adjustment Account:

 

 

 

 

Amount by which Council Tax income credited to the CIES is different from Council Tax income calculated for the year in accordance with statutory requirements

(328)

 

 

328

Adjustments primarily involving the Business Rates Collection Fund Adjustment Account:

 

 

 

 

Amount by which Business Rates income credited to the CIES is different from Business Rates income calculated for the year in accordance with statutory requirements*

(4,702)

 

 

4,702

Adjustments primarily involving the Accumulated Absences Account:

 

 

 

 

Amount by which officer remuneration charged to the CIES on an accrual basis is different from remuneration chargeable in the year in accordance with statutory requirements

7

 

 

(7)

Total Adjustments between the Accounting Basis and Funding Basis under regulations in 2021/22

(312)

102

81

129

 

*The large adjustment in 2021/22 regarding the Business Rates Collection Fund Adjustment Account reflects the reduced deficit on the Business Rates Collection Fund at 31 March 2022 (£6.4m compared to £18.1m at 31 March 2021). During 2020/21 local authorities received S31 grants to offset the business rate reliefs given to businesses during lockdown. Under current Collection Fund accounting rules, the S31 grants received in 2020/21 are being discharged against the Collection Fund deficit in 2021/22 onwards. Further S31 grants were also received in 2021/22 which will have a similar impact on the Business Rates Collection Fund in future years.

 

Usable Reserves

 

 

2020/21 Comparatives

 

General Fund Balance

 

£000

Capital Receipts Reserve

 

 £000

Capital Grants

Unapplied

 

£000

Movement in Unusable Reserves £000

Adjustments primarily involving the Capital Adjustment Account (CAA):

 

 

 

 

Reversal of items debited or credited to the Comprehensive Income and Expenditure Statement (CIES):

 

 

 

 

Charges for depreciation and impairment of non-current assets

2,557

 

 

(2,557)

Revaluation losses/(gains) on Property, Plant and Equipment

(188)

 

 

188

Movements in the market value of Investment Properties

286

 

 

(286)

Amortisation of Intangible Assets

29

 

 

(29)

Capital grants and contributions applied

(1,241)

 

 

1,241

Revenue expenditure funded from capital under statute (REFCUS)

1,404

 

 

(1,404)

Amounts of non-current assets written off

on disposal or sale as part of the gain/loss on disposal to the CIES

232

 

 

(232)

Insertion of items not debited or credited to the CIES:

 

 

 

 

Statutory provision for the financing of capital investment

(344)

 

 

344

Capital expenditure charged against the

General Fund

(1,798)

 

 

1,798

Revenue contribution to Capital Outlay – RCCO

(150)

 

 

150

Adjustments primarily involving the Capital Grants Unapplied Account:

 

 

 

 

Capital grants and contributions unapplied credited to the CIES

(179)

 

179

-

Application of grants to capital financing transferred to the Capital Adjustment Account

 

 

(97)

97

Adjustments primarily involving the Capital Receipts Reserve:

 

 

 

 

Transfer of cash sale proceeds credited as part of the gain/loss on disposal to the CIES

(184)

184

 

-

Costs of disposal funded from capital receipts

1

(1)

 

-

 

Usable Reserves

 

 

2020/21 Comparatives

 

General Fund Balance

 

£000

Capital Receipts Reserve

 

 £000

Capital Grants

Unapplied

 

£000

Movement in Unusable Reserves £000

Adjustments primarily involving the Capital Receipts Reserve:

 

 

 

 

Transfer of unattached capital receipts

(113)

113

 

-

Use of the Capital Receipts Reserve to finance new capital expenditure

 

(507)

 

507

Adjustments primarily involving the Pensions Reserve:

 

 

 

 

Reversal of items relating to retirement benefits debited or credited to the CIES (see Note 35)

3,787

 

 

(3,787)

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

(1,430)

 

 

1,430

Adjustments primarily involving the Council Tax Collection Fund Adjustment Account:

 

 

 

 

Amount by which Council Tax income credited to the CIES is different from Council Tax income calculated for the year in accordance with statutory requirements

36

 

 

(36)

Adjustments primarily involving the Business Rates Collection Fund Adjustment Account*:

 

 

 

 

Amount by which Business Rates income credited to the CIES is different from Business Rates income calculated for the year in accordance with statutory requirements

7,267

 

 

(7,267)

Adjustments primarily involving the Accumulated Absences Account:

 

 

 

 

Amount by which Business Rates income credited to the CIES is different from Business Rates income calculated for the year in accordance with statutory requirements

5

 

 

(5)

Total Adjustments between the Accounting Basis and Funding Basis under regulations in 2020/21

9,977

(211)

82

(9,848)

 

*The large adjustment in 2020/21 regarding the Business Rates Collection Fund Adjustment Account reflects the deficit position on the Business Rates Collection Fund at 31 March 2021. During 2020/21 local authorities received S31 grants to offset the business rate reliefs given to businesses during lockdown. Under current Collection Fund accounting rules, the S31 grants received in 2020/21 was not discharged against the Collection Fund deficit until 2021/22 onwards. Therefore there was a deficit of £18.1m on the Business Rates Collection Fund Adjustment Account at 31 March 2021.

8. TRANSFERS TO/ FROM EARMARKED RESERVES

 

This note details the amounts set aside from the General Fund balances in earmarked reserves to provide financing for future expenditure plans and the amounts posted back from earmarked reserves to meet General Fund expenditure in 2021/22. The purpose of some of the more significant earmarked reserves are shown below:

 

Vehicles and Plant Renewals - This reserve is used to purchase vehicles and heavy plant to maintain a modern and efficient Council fleet, and to ensure contract conditions are met.   

 

Ferry Repairs and Renewals – This reserve allows for the financing of major repairs required to the tugs and floats used in the Council’s ferry operation and the renewal of those assets.

 

Planning Policy and Major Developments – This reserve originated to help smooth out annual expenditure on the review and preparation of the Local Plan. In addition it is used to fund one off planning costs and to manage future fluctuations in planning income.

 

Sustainable Waste Management - This reserve makes some provision to enable the Council to develop sustainable waste initiatives in line with the Government's National Waste Strategy. It is also used to support any unforeseen future waste cost pressures relating to market changes.  Additional income from increased recycling credits and dry recycling income has been transferred to this reserve. In addition, the reserve also holds the value of the 2021/22 contractual performance deductions, in order to contribute to the anticipated set up costs of bringing the service back in house in October 2022 and capital outlay.                     

 

           

New Homes Bonus - This reserve was established to show how New Homes Bonus funding has been used on an annual basis.

 

Business Rates Retention Scheme - The Business Rates Retention Earmarked reserve covers any possible funding issues from the new accounting arrangements and to smooth the volatility from business rates income over a period of years.

 

Affordable Housing - To support the funding of affordable housing.

 

Emergency Climate Change Projects - This reserve was set up in 2020/21 for Emergency Climate Change projects in order to give effect to the Council’s Climate Change Action Plan.

 

Revenue Grants Reserve – This reserve holds revenue grants with no repayment conditions that have not been used during the year.

 

S31 Compensation Grant (Business Rates) Reserve - This reserve was set up in 2020/21 to hold the business rates S31 grants received to offset the business rate reliefs given to businesses during lockdown. Under current Collection Fund accounting rules, the S31 grants received in 2020/21 and 2021/22 will not be discharged against the Collection Fund deficit until 2021/22 and 2022/23 onwards respectively.

 

Recovery and Renewal Plan – This is a new reserve set up as part of the 2021/22 Budget process to support the costs of the Recovery and Renewal Plan and the Council’s 20 year vision ‘Better Lives for All’.

 

Financial Stability – This is a new reserve set up in 2021/22 as part of the 2022/23 Budget process to be available for any future financial pressures from local government funding reforms and any other budget pressures.

 

 

*The total Earmarked Reserves balance at 31 March 2022 of £20.84m includes £4.26m held in the Business Rates s31 Compensation Grant Reserve. This is due to a technical accounting adjustment where Councils were compensated for the business rates holidays that were announced by the Government for the retail, hospitality and leisure sectors in 2020/21 and 2021/22 (this funding is in the S31 Compensation Grant Reserve). This temporary increase in reserves will reverse back out again in the 2022/23 Accounts, to fund the deficit on the Collection Fund. Therefore this is not money which is available for the Council to spend and it is important that this is not misinterpreted in the Accounts, as this is a national issue.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The table below shows the earmarked reserve balances at 31 March 2022 and the movement during 2021/22.

 

2021/22

EARMARKED RESERVES

Balance at

31.3.2021

Transfers

Out

Transfers

In

Balance at

31.3.2022

 

£000

£000

£000

£000

General Fund

 

 

 

 

Affordable Housing

668

(124)

-

544

Community Parks and Open Spaces

49

(20)

17

46

Grounds Maintenance

104

(30)

75

149

Pension Fund Strain

109

-

99

208

Repairs and Maintenance

231

(30)

173

374

Members Sustainable Community

35

-

14

49

Marine Infrastructure

326

(200)

58

184

Land and Development

104

(69)

37

72

Ferry Repairs and Renewals

428

(15)

117

530

Economic Initiatives

23

-

-

23

Salary Savings

120

(120)

-

-

Emergency Climate Change Projects

400

(47)

200

553

Vehicles & Plant Renewals

143

(417)

550

276

COVID-19

100

(272)

381

209

Pay and Display Equipment

165

-

21

186

On-Street Parking

44

-

-

44

ICT Development

82

(43)

50

89

Sustainable Waste Management

246

(80)

899

1,065

District Elections

10

-

10

20

Beach Safety

14

-

-

14

Planning Policy & Major Developments 

217

(56)

370

531

Section106 Agreements (no conditions)

38

-

-

38

Revenue Grants

1,101

(270)

894

1,725

Capital Programme

181

(143)

211

249

New Homes Bonus

1,803

(954)

1,068

1,917

Business Rates Retention

7,103

(2,557)

-

4,546

Homelessness Prevention

166

(22)

90

234

Housing Capital Projects

194

(117)

331

408

Leisure Services

51

(10)

-

41

Support Services Trading

72

(27)

30

75

Environmental Health Initiatives

20

-

-

20

S106 Monitoring

149

(20)

29

158

Economic Regeneration

49

(25)

-

24

S106 Technical Support

34

(20)

-

14

Maintenance, Management & Risk

37

-

29

66

Recovery and Renewal Plan

-

-

500

500

Financial Stability

-

-

280

280

Maintenance Fund

-

-

78

78

Community Composting

-

-

200

200

Tree Maintenance

-

-

60

60

Sub Total General Fund Reserves

14,616

(5,688)

6,871

15,799

2021/22

EARMARKED RESERVES

Balance at

31.3.2021

Transfers

Out

Transfers

In

Balance at

31.3.2022

 

£000

£000

£000

£000

Business Rates s31 Compensation Grant*

6,283

(2,023)

-

4,260

Sub Total Specific Reserves Business Rates

6,283

(2,023)

-

4,260

Specific Reserves – Salcombe Harbour

 

 

 

 

Pontoons

227

-

65

292

Harbour Renewals

169

(17)

40

192

General Reserve

199

(23)

120

296

Sub Total Specific Reserves Salcombe Harbour

595

(40)

225

780

 

 

 

 

 

TOTAL EARMARKED

REVENUE RESERVES*

(See Note on the Business Rates s31

Compensation Grant above)

21,494

(7,751)

7,096

20,839

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2020/21 Comparatives

EARMARKED RESERVES

Balance at

31.3.2020

Transfers

Out

Transfers

In

Balance at

31.3.2021

 

£000

£000

£000

£000

General Fund

 

 

 

 

Affordable Housing

706

(38)

-

668

Community Parks and Open Spaces

38

(6)

17

49

Grounds Maintenance

-

-

104

104

Pension Fund Strain

29

(19)

99

109

Repairs and Maintenance

203

(15)

43

231

Members Sustainable Community

28

-

7

35

Marine Infrastructure

268

-

58

326

Land and Development

210

(113)

7

104

Ferry Repairs and Renewals

446

(135)

117

428

Economic Initiatives

6

(4)

21

23

Salary Savings

-

-

120

120

Emergency Climate Change Projects

-

-

400

400

Vehicles and Plant Renewals

1,183

(1,590)

550

143

COVID-19

-

-

100

100

Pay and Display Equipment

144

-

21

165

On-Street Parking

44

-

-

44

ICT Development

122

(90)

50

82

Sustainable Waste Management

54

-

192

246

District Elections

-

-

10

10

Beach Safety

14

-

-

14

Planning Policy & Major Developments 

187

-

30

217

Section106 Agreements (no conditions)

38

-

-

38

Revenue Grants

607

(190)

684

1,101

Capital Programme

26

(27)

182

181

New Homes Bonus

1,697

(1,093)

1,199

1,803

Renovation Grant

7

(7)

-

-

Business Rates Retention

6,192

(6,894)

7,805

7,103

Homelessness Prevention

112

-

54

166

Strategic Change

30

(30)

-

-

Innovation Fund (Invest to Earn)

9

(9)

-

-

Community Housing Fund

493

(314)

15

194

Leisure Services

57

(6)

-

51

Support Services Trading

43

-

29

72

Environmental Health Initiatives

20

-

-

20

S106 Monitoring

133

(23)

39

149

Economic Regeneration

319

(270)

-

49

Joint Local Plan

21

(21)

-

-

S106 Technical Support

16

(19)

37

34

Maintenance, Management & Risk

8

-

29

37

Sub Total General Fund Reserves

13,510

(10,913)

12,019

14,616

Business Rates s31 Compensation Grant*

-

-

6,283

6,283

Sub Total Specific Reserves Business Rates

-

-

6,283

6,283

2020/21

EARMARKED RESERVES

Balance at

31.3.2020

Transfers

Out

Transfers

In

Balance at

31.3.2021

 

£000

£000

£000

£000

Specific Reserves – Salcombe Harbour

 

 

 

 

Pontoons

162

0

65

227

Harbour Renewals

136

(7)

40

169

General Reserve

190

(46)

55

199

Sub Total Specific Reserves Salcombe Harbour

488

(53)

160

595

 

 

 

 

 

TOTAL EARMARKED

REVENUE RESERVES*

(See Note on the Business Rates s31

Compensation Grant below)

13,998

(10,966)

18,462

21,494

 

Note* - Business Rates S31 Compensation Grant Earmarked Reserve

Earmarked Reserves increased by £7.5m in 2020/21. This was mainly due to the creation of a new earmarked reserve in 2020/21 called the S31 Compensation Grant (Business Rates) Reserve. During 2020/21 local authorities received S31 grants to offset the business rate reliefs given to businesses during lockdown in the retail, hospitality and leisure sectors (business rates holidays). Under current Collection Fund accounting rules, the S31 grants received in 2020/21 are not discharged against the Collection Fund deficit until 2021/22 onwards. Therefore this S31 grant (£5.49m) together with the Tax Income Guarantee S31 grant for Business Rates of £0.79m were transferred to the S31 Compensation Grant (Business Rates) Earmarked Reserve. This compensation grant will be applied to the Collection Fund over the next three years (2021/22 onwards) to smooth the impact of the Business Rates deficit. The balance on this reserve as at 31 March 2021 was £6.28m. This is not money which is available for the Council to spend and it is important that this is not misinterpreted in the Accounts, as this is a national issue.

 

 
9. OTHER OPERATING EXPENDITURE

 

2020/21

 

 

 

2021/22

£000

 

 

 

£000

2,736

 

Parish council precepts

2,960

49

 

(Gains)/losses on the disposal of non-current assets

-

65

 

Pension administration expenses

63

2,850

 

Total

3,023

 

 

 

 

 

 

 

10. FINANCING AND INVESTMENT INCOME AND EXPENDITURE

 

2020/21

 

 

 

2021/22

£000

 

 

 

£000

414

 

Interest payable and similar charges

366

(207)

 

Interest receivable and similar income

(140)

(113)

 

Other investment income

(417)

1,123

 

Net interest on the net defined benefit liability

1,212

(581)

 

Investment properties (Note 13)

(960)

636

 

Total

61

 

 
11. TAXATION AND NON-SPECIFIC GRANT INCOME

 

2020/21

 

 

 

2021/22

£000

 

 

 

£000

 

 

Council Tax

 

(9,299)

 

·         Income

(9,679)

35

 

·         Collection Fund adjustment

(328)

(60)

 

·         Collection Fund - distribution of surplus

30

37

 

·         Support grant to parishes

-

 

 

Business Rates

 

(11,395)

 

·         Income

(11,375)

11,464

 

·         Tariff

11,464

316

 

·         Levy payment

1,109

1

 

·         Pooling administration costs

2

(348)

 

·         Pooling benefit

(299)

6,454

 

·         Transfer of Collection Fund deficit/(surplus)*

1,372

 

 

Non ring - fenced Government Grants:

 

(9,183)

 

  • S.31 Business Rate Relief Grants*

(5,789)

(1,199)

 

  • New Homes Bonus Grant

(1,068)

(408)

 

  • Rural Services Delivery Grant

(428)

-

 

  • Lower Tier Services Grant

(82)

(1,088)

 

·         COVID-19 LA Response Grant

(381)

(1,079)

 

·         COVID-19 Sales, Fees & Charges Compensation

(108)

(475)

 

·         COVID-19 New Burdens Admin Support Grant

(236)

 

 

 

 

(1,420)

 

Capital grants and contributions

(1,237)

(17,647)

 

Total

(17,033)

 

*The S31 Business Rate Relief Grants received in 2020/21 and 2021/22 include the S31 compensation grant that local authorities were awarded to offset the business rate reliefs given to businesses during the pandemic. Under current Collection Fund accounting rules, the S31 grants are not discharged against the Collection Fund deficit until the following year onwards. Therefore there is a deficit on the Business Rates Collection Fund Adjustment Account at 31 March 2021 and 31 March 2022 which is reflected in the transfers of the Collection Fund deficit above. The S31 compensation grant is held in an earmarked reserve and will be applied to the Collection Fund over the next three years to smooth the impact of the Business Rates deficit.

 

 

12.  PROPERTY, PLANT AND EQUIPMENT

 

 

Movements in 2021/22

Land and Buildings

 

 

 

£000

Vehicles, Plant, Furniture &

Equipment

£000

Infra-structure Assets

 

 

£000

Community Assets

 

 

 

£000

Assets Under Construction

 

 

 

£000

Total Property, Plant &

Equipment

 

£000

Cost or Valuation

 

 

 

 

 

 

At 1 April 2021

68,313

10,756

11,292

454

441

91,256

Additions

14

731

75

62

1,742

2,624

Revaluation increases/

(decreases) recognised in the Revaluation Reserve

365

 

 

 

 

365

Revaluation increases/

(decreases) recognised in the Surplus/Deficit on the Provision of Services

65

 

 

 

 

65

Derecognition – disposals

(65)

(52)

 

 

 

(117)

At 31 March 2022

68,692

11,435

11,367

516

2,183

94,193

+

 

 

 

 

 

 

Accumulated Depreciation & Impairment at 1 April 2021

1,731

6,038

4,338

-

-

12,107

Charge for 2021/22

1,629

1,014

457

-

-

3,100

Depreciation written out to the Revaluation Reserve

(1,053)

 

 

 

 

(1,053)

Depreciation written out to the Surplus/Deficit on the Provision of Services

(154)

 

 

 

 

(154)

Derecognition – disposals

 

(52)

 

 

 

(52)

At 31 March 2022

2,153

7,000

4,795

-

-

13,948

 

 

 

 

 

 

 

Balance Sheet amount at

31 March 2022

66,539

4,435

6,572

516

2,183

80,245

Balance Sheet amount at

31 March 2021

66,582

4,718

6,954

454

441

79,149

 

 

Comparative Movements in 2020/21

Land and Buildings

 

 

 

£000

Vehicles, Plant, Furniture &

Equipment

£000

Infra-structure Assets

 

 

£000

Community Assets

 

 

 

£000

Assets Under Construction

 

 

 

£000

Total Property, Plant &

Equipment

 

£000

Cost or Valuation

 

 

 

 

 

 

At 1 April 2020

67,314

9,799

10,912

454

397

88,876

Additions

111

2,336

341

 

1,274

4,062

Revaluation increases/

(decreases) recognised in the Revaluation Reserve

(582)

 

 

 

 

(582)

Revaluation increases/

(decreases) recognised in the Surplus/Deficit on the Provision of Services

(10)

 

 

 

 

(10)

Derecognition – disposals

(20)

(1,379)

 

 

 

(1,399)

Assets reclassified (to)/from Held for Sale

159

 

 

 

 

159

Other movements in cost/ valuation - reclassification

1,341

 

39

 

(1,230)

150

At 31 March 2021

68,313

10,756

11,292

454

441

91,256

 

 

 

 

 

 

 

Accumulated Depreciation & Impairment at 1 April 2020

1,588

6,621

3,899

-

-

12,108

Charge for 2020/21

1,377

741

439

 

 

2,557

Depreciation written out to the Revaluation Reserve

(1,033)

 

 

 

 

(1,033)

Depreciation written out to the Surplus/Deficit on the Provision of Services

(198)

 

 

 

 

(198)

Derecognition – disposals

(3)

(1,324)

 

 

 

(1,327)

At 31 March 2021

1,731

6,038

4,338

-

-

12,107

 

 

 

 

 

 

 

Balance Sheet amount at

31 March 2021

66,582

4,718

6,954

454

441

79,149

Balance Sheet amount at

31 March 2020

65,726

3,178

7,013

454

397

76,768

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

The Council provides for depreciation on all assets other than freehold land, community assets and investment properties. The provision for depreciation is made by allocating the cost (or revalued amount) less the estimated residual value of the assets over the accounting periods expected to benefit from their use.  The straight-line method of depreciation is used. Assets are depreciated in the year following acquisition and in the year of disposal.

 

Asset lives are reviewed regularly as part of the rolling programme of property revaluation and annual impairment review.  Where the useful life of an asset is revised, the carrying amount of the asset is depreciated over the revised remaining life.

 

Capital Commitments

 

As at 31 March 2022 the Authority has entered into a number of contracts for the construction or enhancement of Property, Plant and Equipment. The commitments relate to:

 

·         St Ann’s Chapel Housing Scheme - £4.20 million

·         Dartmouth Health & Wellbeing Hub - £3.94 million

·         Batson, Salcombe Harbour Workshop - £0.69 million

·         Batson, Salcombe Employment Units - £0.41 million

 

As a comparison, as at 31 March 2021 the Authority had not entered into any contracts for the construction or enhancement of Property, Plant and Equipment.

 

Revaluations

 

All material freehold land and buildings which comprise the Authority’s property portfolio are revalued by the Council’s Valuer on a rolling basis.

 

Valuations of land and buildings were carried out in accordance with the methodologies and bases for estimation set out in the professional standards of the Royal Institution of Chartered Surveyors.

 

Assets are valued in accordance with a five year rolling programme (with ad hoc valuations taking place, for example where assets have been enhanced). In addition, a formal impairment review of the entire holding of land and buildings is undertaken at the end of each financial year, to ensure the carrying value reflects the fair value at the Balance Sheet date.  The basis of valuation is set out in the Statement of Accounting policies in Note 38.

 

 

 

 

 

 

 

Land and buildings

 Vehicles, plant, furniture & equipment

Total

 

 £000

 £000

 £000

Valued at historical cost

-

4,718

4,718

Valued at current value in:

 

 

 

2021/2022

16,375

(283)

16,092

2020/2021

45,567

 

45,567

2019/2020

4,929

 

4,929

Total

66,871

4,435

71,306

 

 

Impairment Losses

 

Impairment losses and impairment reversals charged to the Surplus or Deficit on the Provision of Services and to Other Comprehensive Income and Expenditure, are summarised in the preceding movements table, reconciling the movement over the year in the Property, Plant and Equipment balances. No impairment losses other than those relating to revaluation losses were incurred.

 

 
13. INVESTMENT PROPERTIES

 

The following items of income and expense have been accounted for in the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement:

 

A. Income & Expenditure Account

2020/21

       £000

2021/22

       £000

Rental income from investment properties

(929)

(918)

Direct operating expenses arising from investment properties

348

(42)

Net (gain)/ loss

(581)

(960)

 

The following table summarises the movement in the fair value of investment properties over the year:

 

B. Movement in fair value

2020/21

       £000

2021/22

       £000

Balance at start of the year

19,156

18,560

Net gains/(losses) from fair value adjustments*

(286)

50

Transfers (to)/from Property, Plant and Equipment

(310)

-

Balance at end of the year

18,560

18,610

There are no restrictions on the Authority’s ability to realise the value inherent in its investment property or on the Authority’s right to the remittance of income and the proceeds of disposal.

 

During 2019/20 the Council incurred capital expenditure totalling £5 million for the purchase of an Investment Property in Dartmouth. This amount equated to the purchase price of the investment property plus transaction costs (e.g. stamp duty land tax) and directly attributable expenditure (costs incurred in successfully negotiating the sale terms and price and relevant professional fees e.g. legal costs) which were also capitalised in accordance with the Code. In 2020/21 there was a £286,000 reduction on the fair value adjustment due to the write down of the costs of acquisition of £296,000 (e.g. stamp duty land tax and legal and professional fees) plus a £10,000 upward valuation on Lee Mill, Ivybridge.

 

The Code requires that Investment Properties are measured annually at fair value. The fair value valuation increased by £50,000 at 31 March 2022 amounting to a total of £18.61 million. This increase in value relates to the Investment Property in Dartmouth.

 

The Code confirms that movements in fair value are debited to the provision of services and are not proper charges to the General Fund. They are reversed out to the Capital Adjustment Account in the Movement in Reserves Statement. Therefore this change in valuation does not impact on the Council’s ‘bottom line’ in the Income and Expenditure account, as it is reversed out through the Capital Adjustment Account.

 

Fair Value Measurement of Investment Property

 

Observable Inputs – Level 2

The commercial land and buildings are measured using in the income approach, by means of the discounted cash flow method, where the expected cash flows from the properties are discounted using a market-derived discount rate to establish the present value of the net income stream. The approach has been developed using the Council’s own data factoring in assumptions such as duration and timing of cash inflows and outflows, rent growth, occupancy levels, bad debt levels and maintenance costs. The Council’s commercial land and buildings are therefore categorised as Level 2 based on assumptions on observable inputs in the fair value hierarchy as the measurement technique uses observable inputs to determine the fair value measurements.

 

Highest and Best Use of Investment Properties

In estimating the fair value of the Council’s Investment Properties, it has been established that their current use is the highest and best use of the properties.

 

Valuation Techniques

There has been no change in the valuation techniques used during the year for Investment Properties.

 

 
14. FINANCIAL INSTRUMENTS

 

Categories of Financial Instruments

 

Financial instruments are recognised on the Balance Sheet when the Council becomes party to the contractual provisions of a financial instrument. They are classified based on the business model for holding the instruments and their expected cash flow characteristics.

 

Financial Liabilities

 

Financial liabilities are initially measured at fair value and subsequently measured at amortised cost. For the Council’s borrowing this means that the amount presented in the Balance Sheet is the outstanding principal repayable (plus outstanding interest payable).

 

Annual charges to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement are based on the carrying amount of the liability, multiplied by the effective rate of interest for the instrument.

 

Financial Assets

 

To meet the code requirements, financial assets are now classified into one of three categories:

 

·         Financial assets held at amortised cost – These represent loans and loan-type arrangements where repayments or interest and principal take place on set dates and at specific amounts. The figure presented in the Balance Sheet represents the outstanding principal received plus accrued interest. Interest credited to the Comprehensive Income and Expenditure Statement (CIES) is the amount receivable as per the loan agreement.

 

·          Fair Value Through Other Comprehensive Income (FVOCI) – These assets are measured and carried at fair value. All gains and losses due to changes in fair value (both realised and unrealised) are accounted for through a reserve account, with the balance debited or credited to the CIES when the asset is disposed of.

 

·         Fair Value Through Profit and Loss (FVTPL) – These assets are measured and carried at fair value. All gains and losses due to changes in fair value (both realised and unrealised) are recognised in the CIES as they occur.

 

Allowances for impairment losses have been calculated for amortised cost assets, applying the expected credit loss method. Changes in loss allowances (including balances outstanding at the date of recognition of an asset) are debited/credited to the Financing and Investment Income and Expenditure line in the CIES. Changes in the value of assets carried at fair value are debited/credited to the Financing and Investment Income and Expenditure line in the CIES as they arise.

 

The value of debtors and creditors reported in the table overleaf are solely those amounts meeting the definition of a financial instrument. The balances of debtors and creditors reported in the Balance Sheet and Notes 15 and 18 also include balances which do not meet the definition of a financial instrument, such as tax-based debtors and creditors.

 

Summary of Financial Instruments

 

The following categories of financial instrument are carried in the Balance Sheet:

 

Long-term

 

Current

 

31 March 2021

 

£000

31 March 2022

 

£000

 

31 March 2021

 

£000

31 March 2022

 

£000

Financial Assets at Amortised Cost

 

 

 

 

 

Investments*

-

-

 

15,600

30,500

Cash and Cash Equivalents

-

-

 

23,838

22,981

Debtors

-

-

 

3,456

3,542

 

 

 

 

 

 

Fair Value through Other Comprehensive Income – Financial Assets

 

 

 

 

 

Investments – CCLA Local Authorities’ Property Fund

1,338