SOUTH OXFORDSHIRE

DISTRICT COUNCIL

 

 

 

 

STATEMENT OF ACCOUNTS

2021/22

 

 


 

CONTENTS

 

 

 


 

 

Page

Narrative statement

3

Statement of responsibilities for the statement of accounts

18

Audit opinion

19

The accounting statements:

 

 

Comprehensive income and expenditure statement

22

 

Movement in reserves statement

24

 

Balance sheet

25

 

Cash flow statement

26

Notes to the accounting statements

27

Collection fund account

66

 

Notes to the collection fund account

67

Statement of accounting policies

71

Glossary of terms

87

Annual governance statement

95

 

 

 

 

 

 

 

 

 

 

South Oxfordshire District Council

Abbey House Abbey Close

Abingdon

Oxfordshire

OX14 3JE

 

                                                               

Introduction

 

This narrative statement provides a commentary on South Oxfordshire District Council’s (council) performance during 2021/22. It is a guide to the council’s performance against key targets, the most significant matters reported in the accounts, an explanation in overall terms of the council’s financial position at the end of the financial year, and a commentary on the council’s future prospects. This statement does not form part of the financial statements. 

 

To assist the reader, a glossary of financial terms is provided on pages 87-94

 

The Council’s accounts

 

The Council’s Statement of Accounts (SoA) shows the financial results of the Council’s activities for the year ended 31 March 2022 and summarises the overall financial position of the Council as at 31 March 2022.  It is prepared in accordance with the Chartered Institute of Public Finance and Accountancy (CIPFA) code of practice on local authority accounting in the United Kingdom (“the code”). The accounts have been compiled under International Financial Reporting Standards (IFRS). 

 

In addition, the Annual Governance Statement sets out the purpose and nature of the Council’s governance framework.  It also provides a review of the effectiveness of the governance framework and highlights any significant governance issues.  This statement is published as a separate document and is available on the Council’s website.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Introduction to South Oxfordshire district

 

 

South Oxfordshire is the seventh most rural district in the south east region, with an average of 2.1 persons per hectare.[1] Around 47.0 per cent of the population live in rural areas, outside the main towns of Didcot, Henley, Thame and Wallingford.[2] The population in mid-2020 was 143,782; of this figure, 21.2 per cent (or 30,461 people) were aged 65 or over and 3.0 per cent (or 4,273 people) were aged 85 or over.[3]

 

By 2032, the Office for National Statistics projects that the population of South Oxfordshire will increase to 146,617 (an extra 2,835 people when compared to the mid-2020 population estimate).[4] It is expected that there will be 37,365 people aged 65+ in 2032, comprising 25.5 per cent of the population.  There are also projected to be 6,951 people aged 85+ (4.7 per cent of the population) – this is higher than the projection for England (3.4 per cent).[5]

 

As of 21 March 2021, there were 61,500 occupied households in South Oxfordshire. Between 2011 and 2021, the total number of occupied households in the district increased by 7,100 (+ 13.1 per cent).[6]

 

Employment within South Oxfordshire is high: of the resident population aged 16 to 64 only 2.0 per cent were in receipt of out of work benefits in March 2022. This compared favourably with the average for the south east region (3.2 per cent) and for Great Britain (4.1 per cent).[7]

 

In 2021, the ratio of lower quartile house prices to lower quartile workplace based earnings in South Oxfordshire was 12.89 – considerably above the English average of 8.04. This means that many people (especially those on lower incomes and/or the young) cannot afford to buy and have to look outside of the district for housing. [8]

 

Much of the countryside in South Oxfordshire is protected from development by being part of the Oxford Green Belt or the Chilterns Area of Outstanding Natural Beauty (AONB).  These compound the challenges of providing sufficient housing to meet identified need whilst protecting the natural environment.

 

How performance is measured

 

The Council’s activities are guided by our four-year corporate plan for 2020-2024, and by fulfilling our statutory responsibilities. Key measures will be reviewed and reported via quarterly and annual corporate plan performance reports. The reports will be subject to an approval process by the Council’s senior management team, Scrutiny Committee, Climate and Ecological Emergency Advisory Committee (CEEAC) and Cabinet this will ensure the necessary checks and balances are in place around monitoring, evaluation, decision-making and policymaking and then published on the Council’s website.

 


 

The Council corporate priorities

 

The Council’s Corporate Plan 2020-2024 contains six strategic themes:

 

 

·         Providing the homes people need

·         Tackling the climate emergency

·         Building healthy communities

·         Building stable finances

·         Working in partnership

·         Working in an open and inclusive way

 

The South Oxfordshire District Council Corporate Plan for 2020-2024, sets out what is hoped to be achieved for South Oxfordshire over the next four years. Following a successful engagement with residents, a review of hundreds of responses informed the priorities that the Council will deliver. The plan was adopted at a full Council meeting in October 2020.

 

Although work is underway on these themes, there is a needto continue to explore how best to  effectively invest, resource, and deliver these. During the development of the Plan, there was much uncertainty about the future of local government, both in terms of its structure and its financing, this uncertainty remains but we will continue to position ourselves to respond to the changing landscape that the Council operates within.

 

This has meant the need to continue to prioritise what needs to be delivered. This annual performance review aims to give a high-level summary of progress towards the aims set out in the Corporate Plan. Each theme begins with a high-level written summary of key actions during 21/22 to deliver the aims under the relevant theme. The RAG (red, amber, green) ratings have been determined by Heads of Service and Officer Leads and aim to provide an “at glance” indication of overall progress towards the aims. Where aims have been identified as amber or red, some supporting commentary has been included to assist members with their discussions and suggestions for any remedial actions. 

 

Covid-19 – community hub and roadmap

The continuing impact of the pandemic on the Council’s performance can be seen in
this report. The majority of Councillors and officers continue to work from home, other
than those whose work requires otherwise, in those cases the appropriate risk
assessments are taken and government guidelines are followed. The Council is proud of
the quick and efficient response delivered by its services to support its communities during

this time.


The Council is continuing to help residents and businesses. The Community Hub puts
residents in touch with a network of volunteer groups and organisations to help with
food, medicine and friendly phone calls. In urgent cases, support is available for
food and prescription deliveries. A total of 397 food parcels have been delivered to
residents since the start of the pandemic, and 498 medicine collections took place
across both South Oxfordshire and the Vale of White Horse. This builds on a range
of information and advice available for the public and businesses on its website,
such as how to book a vaccine and how to obtain financial support.


As well as dedicating significant officer resource to the pandemic, including
community testing, the Council have also made its buildings available. Since
Cornerstone Arts Centre closed its doors to the public in March last year, it has been
home to the Council’s food distribution service, helping to ensure hundreds of
families received urgent food parcels.


The Council is working with its partners at the county and district Councils, local GPs and the
Oxfordshire Clinical Commissioning Group on a COVID-19 vaccination outreach
scheme. There are a range of reasons why people might not have responded to their
invitation to arrange a vaccination - from difficulties in booking an appointment or
arranging transport, to hesitancy or misunderstandings about the vaccine. Its
officers, will be providing the people they speak to with help to book an appointment,
arrange transport, or simply offering information and advice in a format agreed with
its NHS colleagues and using the feedback from residents and the outcomes of visits

to help build up a detailed picture of why people may be not taking up the opportunity of vaccination.


The Council hopes this outreach programme will be a valuable tool in ensuring that everyone
who wants the vaccine can be supported to get it and that nobody gets left behind in
the rollout of Oxfordshire’s vaccination programme. The outreach scheme has been
recognised by Oxfordshire CCG and the NHS regional team as an exemplar piece of
novel work that has increased uptake within its communities.


The Council has also visited 268 people across South Oxfordshire and the Vale of White
Horse who the NHS test and trace national system has been unable to reach. The
employment of 2 Government funded COVID-19 Compliance Marshals has enabled
us to encourage and support businesses to trade in a ‘COVID-19 secure’ manner,
and to provide further advice to the public. So far, £41.3 million has been paid in
financial support to businesses in South Oxfordshire, through a range of HM
Government grant schemes.


As part of the Council’s initial response to the pandemic, each Councillor was
provided with £2,000 for them to spend directly to support communities trying to
respond to the crisis.


As the COVID-19 vaccination programme continues to progress well, the frame of
thinking is moving to the medium/longer-term. The Oxfordshire Economic Recovery
Plan has been developed and we will soon be developing the Councils plan, that will
provide a route map for recovery from the COVID-19 pandemic, and the impact it
has had on its residents, the Council and businesses.

 

Protect and restore THE natural world

An elected member Biodiversity Working Group has been created. This will report to the CEEAC and help them to shape and prioritise future projects.

 

A Local Nature Partnership (LNP) for Oxfordshire has also been established. The LNP will radically enhance nature within the county and promote its positive impact on the climate. The terms of reference for the LNP Board, a provisional budget and staffing structure have been developed.

 

Several of South Oxfordshire’s partner organisations are involved in the in-depth mapping and surveying of ecosystems across the district. The data that they provide, including on species and habitat changes, supports the Council in its assessment and understanding of local nature recovery. South Oxfordshire has also contributed to various partnership projects that help support the restoration of the natural world – including the Oxfordshire Treescapes Project.


Work has continued on improving the accessibility of green spaces in and around the district’s urban areas. As part of this effort, the Council is working with the Earth Trust to manage a number of nature sites across South Oxfordshire. In addition, progress has been made on expediting the transfer of the first tranche of open spaces on Great Western Park from the housing developer.

 

South Oxfordshire, in collaboration with representatives from Good Food Oxfordshire, have been working on the initial plans for a Food Strategy for Oxfordshire. This Strategy aims to improve the area’s food system and to respond to challenges within it such as excessive waste, carbon footprints, food poverty and wages in the farming sector. 

 

Through its memberships of the Visit River Thames Association and Experience Oxfordshire, the Council intends to promote the natural environment to both residents and visitors. It is also coordinating the Wallingford Moorings Project which is intended to make berths accessible to all.

 

As part of its commitment to promote tourism, leisure and wellbeing, South Oxfordshire have continued to provide support to businesses across the district through HM Government’s Omicron Mandatory Grants Programme and Additional Restriction Grant funding.

 

A Policy for Planting Trees on Council Land has been implemented to protect, plant and manage trees on land owned by South Oxfordshire and also help support community tree planting initiatives. Since its launch, two planting licences have been completed enabling community groups within South Oxfordshire to plant trees on land owned by the Council.

 

Climate emergency

South Oxfordshire has developed and adopted a key piece of their internal policy framework during 2021/22, the Climate Action Plan 2022-25 (CAP).

 

The CAP plays a pivotal role in steering the Council’s work in achieving its objective of becoming carbon neutral by 2025. It is also designed to help guide and support local efforts to tackle the climate emergency.

Progress against the measures within the CAP will be reported on a quarterly basis to the CEEAC and Cabinet. Moreover, to ensure that the CAP has the greatest possible impact – and is also seen as an integral part of South Oxfordshire’s operations – work has commenced on aligning it with the Council’s Strategic Performance Management Framework.

The Council has focused on decarbonising its leisure centres – which are responsible for almost half of the Council’s total greenhouse gas emissions – as part of a wider programme of work to cut emissions from its own operations. 

A decarbonisation report has been completed for Thame Leisure Centre, with further surveys having been commissioned for other facilities across the district (as well as the Cornerstone Arts Centre). In addition, South Oxfordshire has also undertaken work at the both the Abbey Sports and Henley Leisure Centres to reduce emissions.

 

Whilst the emphasis has been on decarbonising the Council’s buildings, efforts have also been made in reducing carbon emissions from other areas. For example, South Oxfordshire’s waste contractor has been trialling an electric waste collection vehicle within the district – performance feedback is expected in 22/23.  

Progress has also been made on realising the Council’s commitment to ensuring net-zero standard homes across the district. The masterplan for Didcot, created with partners, aims to deliver a plethora of carbon neutral and carbon reducing initiatives, including in residential developments. In addition, agreement has been reached on the potential development of PassivHaus standard affordable homes at a site on the Broadway in Didcot.

South Oxfordshire has also considered the issue of addressing emissions from existing homes. The Joint Retrofit Task and Finish Group examined this issue at length and presented a report to the CEEAC. Their findings and recommendations were also circulated to neighbouring authorities through the Future Oxfordshire Partnership Environment Advisory Group and to HM Government.

Through the scoping of new polices for the Joint Local Plan, the Council have explored opportunities for how best to address the issue of climate change. In addition, it has provided feedback on the climate change evidence needed to support the Oxfordshire Plan 2050.

South Oxfordshire has continued to develop opportunities to expand and encourage active travel. Working with the County Council and consultants on the Oxfordshire Infrastructure Strategy, it has identified 14 schemes within the district for funding prioritisation.

Efforts have been made to support local businesses to respond to the climate emergency.  South Oxfordshire have organised workshops on the ‘circular economy’ and ‘sustainable construction’ where companies have been able to share information and learn from best practice. In addition, the Council has run a ‘Digital Carbon Footprint Reduction Campaign’ which provided a step-by-step guide on this issue to firms in the district.

South Oxfordshire has also initiated numerous communication campaigns and activities designed to encourage individuals to change their behaviours. These have included the continued promotion of repair cafes and the need to increase recycling/reduce waste. 

In December 2021, the Council’s official recycling rate for 2020/21 was published. At 63.6 per cent, South Oxfordshire was the second-best performing district in England.   

Openness and accountability

The Council has developed and approved an overarching Communications and Engagement Strategy, intended to increase its level of engagement with residents.


South Oxfordshire is determined to ensure that it not only maintains but improves on the high levels of satisfaction that residents have with the services that it provides. The Council also wishes to engage more effectively with marginalised individuals, groups and communities who often find it difficult to get their views and opinions heard. Furthermore, the Council appreciates the importance of operating in an open, inclusive and accountable manner and is, therefore, committed to being frank about both the decisions it takes and its overall performance.  To achieve these objectives, it has delivered a range of work during 2021/22.

 

During 2021/22 the Council approved a Customer Services Strategy which sets out an ambitious programme of work for departments to work together to create a single customer experience. It is envisaged that this new approach will deliver better outcomes for residents.

 

The Council through the planned procurement of a Customer Relationship Management (CRM) system is also looking to improve its relationship with its customers, streamline processes and further improve the services that it provides. 

 

The Council is also currently preparing the specification for new integrated communications software and working up the model for a customer service centre. These will form the foundation and building blocks of our customer service transition going forward into next year.

 

The Communications and Engagement Strategy incorporates initiatives to increase and improve its interactions with all the district’s communities/people, especially those from marginalised/under-represented groups.

 

Progress has also been made on the development of a Diversity and Inclusion Strategy for South Oxfordshire. This aims to ensure that the Council is doing all that it can to be inclusive in relation to staff recruitment, representation and service provision.

 

The Council has also taken action to recognise the heterogenous nature of South Oxfordshire through the publication of a Diversity Calendar. This sets out the socially important topics, national days of celebration and other public events that the Council will publicly support through its corporate communications channels.

 

While face-to-face committee meetings have returned following the pandemic, South Oxfordshire continues to livestream/broadcast their public meetings. This not only provides a greater degree of accessibility for residents but also gives them greater insight into the Council’s decision-making processes.

 

To further embed the theme of openness and accountability during 21/22 training has been delivered for Councillors on the constitution and good decision-making principles to increase accountability and improve decision-making processes.  The Monitoring Officer has also provided training to officers on local government law and process – with a particular focus on governance, delegation of powers, report writing/content and decision making.

 

Improved economic and community wellbeing

During 21/22 South Oxfordshire updated the Community Infrastructure Levy (CIL) spending strategy to accelerate the delivery of local infrastructure improvements and allocate funding to achieve the best outcomes for residents.  Quarterly CIL and Section 106 expenditure/income reports are now being provided to Cabinet and the CIL charging schedule is currently being reviewed by the Planning team. A prioritisation exercise of previously identified potential projects by CIL criteria was undertaken and presented to Councillors to allocate funding.


£2,419,500 has been allocated to projects in the 2022/23 capital programme as part of South Oxfordshire’s budget setting process. In addition, approvals have been made for CIL spending in communities – for example, the Oak Tree Health Centre in Didcot have applied for CIL funds to reconfigure their facility to create more consulting space.

 

During 2021/22, the Council have encouraged and overseen the adoption of eight neighbourhood plans. Of these, six designate a combined total of 25 Local Green Spaces (which have the highest level of protection possible under planning policy). South Oxfordshire are also supporting the preparation of a further 12 new Neighbourhood Plans and five Neighbourhood Plan reviews.


Work on Phase 1 of the Science Vale Active Travel Network has been completed. The five routes contribute 10km of improved provision for both cyclists and pedestrians. Plans are now being made for the creation and development of wayfinding opportunities for this part of the Active Travel Network


Civil parking enforcement has now been introduced across the district.  All towns and villages where there are traffic regulation orders in place are now patrolled. The focus is upon those areas where illegal parking is having the greatest impact on road safety and congestion.

 

Littering patrols have been introduced in Didcot, Henley, Wallingford and Thame. While the emphasis has primarily been on education, 805 fly-tipping incidents were reported in 2021/22.

South Oxfordshire has provided advice on access to grants, training, and diversification programmes to help local businesses. This has included the rollout of the employment support scheme ‘Kickstart’, which aimed to create new job opportunities for 16 to 24 year-olds on Universal Credit and at risk of long-term unemployment. In addition, the Council also distributed £5,862,763 in Additional Restrictions/Winter Support Grants during 2021/22 to support businesses impacted by the pandemic. 


The Council collaborated with partners on the ‘Broadband for Rural Businesses in Oxfordshire’ (BiRO) project. This aims to bring reliable broadband to businesses in rural areas, thus reducing digital exclusion and enabling home working. In addition, South Oxfordshire has liaised with Better Broadband for Oxfordshire to respond to residents’ questions about the accessibility of full fibre and concerns about the health implications of 5G masts.

 

Work has continued on the development of a new Community Wellbeing Strategy. This will set out the Council’s aspirations and ambitions for improving the health, happiness, prosperity, and welfare of its residents.

 

Homes and infrastructure that meet local needs

A key challenge is to recognise in South Oxfordshire the provision of reasonably priced housing. The Council have taken steps this year to tackle this, during 2021/22, 288 affordable homes were delivered across the district, slightly above the Council’s target of 280.

An offer has been accepted (subject to contract) for the purchase of a house in Didcot to provide temporary accommodation and progress made on the Broadway project to deliver further housing stock options.

Agreement has been reached on the potential to provide PassivHaus standard affordable homes on a Council owned site on Broadway in Didcot.

During 21/22 The Council have considered the issue of addressing greenhouse gas emissions from existing homes as part of their commitment to encouraging retrofitting. The Joint Retrofit Task and Finish Group examined this issue at length and presented a report to the CEEAC. Their findings and recommendations were circulated to neighbouring authorities through the Future Oxfordshire Partnership Environment Advisory Group and HM Government. It is recognised this challenge is best addressed at scale and it is anticipated that retrofitting will form a part of an Oxfordshire wide route map, following on from the partnership work that produced the Pathways to Zero Carbon Oxfordshire (PAZCO) report in 2022/23.

South Oxfordshire have also taken action to encourage low and zero carbon construction through the production of a Sustainable Construction Checklist for applicants. Further, through the scoping of new polices for the Joint Local Plan, the Council have explored opportunities for ensuring that new housing is sustainable and built to the highest environmental standards. Feedback has also been provided on the health, wellbeing and sustainability policy options included in the Oxfordshire Plan 2050 Regulation 18 (2) consultation.

The Council has delivered a range of work to eliminate homelessness and rough sleeping across South Oxfordshire. For two consecutive quarters (Q3 and Q4), on a rough sleeping count date, South Oxfordshire recorded zero rough sleepers. 

The homeless prevention rate for 2021/22 was 94.0%, which is above the target of 80.0%.  The very low levels of rough sleeping seen within the district reflects the success of the Council’s preventative approach. The preventative approach is also supported by the adoption of the Oxfordshire Homelessness and Rough Sleeping Strategy this year. The strategy prioritises a preventative approach to this issue, looks to ensure that there is a rapid response when an individual or household is at risk, and enshrines the need for taking a person-centred approach to homelessness.

The Councils Garden Town and Village initiatives for Didcot and the Berinsfield area are at the forefront of our progress to deliver the homes and infrastructures that people need.  Work has also progressed on a Berinsfield Grants Scheme, which is expected to be launched in Q1 2022/23. Terms of reference for a Community Investment Scheme to regenerate Berinsfield has been approved by Full Council - demonstrating our commitment to transforming Berinsfield with improved facilities in line with the community’s needs and aspirations.

Corporate governance was established for the Didcot Garden Town project and Homes England also awarded £120,000 in capacity funding.

South Oxfordshire recognises that providing the appropriate infrastructure is vitally important in encouraging sustainable travel. They have, therefore, completed their work on a Local Cycling and Walking Investment Plan for Didcot Garden Town.

Work has commenced to install 62 electric vehicle (EV) charging points in 5 car parks in South Oxfordshire, as part of the Oxfordshire wide “Park and Charge” project. It is envisaged that the Park and Charge project will unlock the possibility of EV ownership for residents across Oxfordshire, by providing a convenient, affordable and user-friendly EV charging solutions.

A review of the Milton Park Local Development Order to provide a balanced response to any demands for new office, lab space and job creation with sustainable travel modes was also undertaken.

Investment and innovation that rebuilds the Councils financial viability

In order to invest, save and act responsibly with our financial resources, this year the Council agreed the transformation delivery programme and its priorities for the next 12 to 18 months, which were identified through the budget challenge process. Progress has also been made in establishing the team that will undertake this work.


Following South’s approval of the Strategic Property Review, the Council’s focus during 2021/22 has been on potential housing sites and their promotion via the Housing and Economic Land Availability Assessment (HELAA).


An assessment of land availability identifies a future supply of land which is suitable, available and achievable for housing and economic development uses over a plan period. Additionally, the South Oxfordshire Asset Management Group was created this year. The aim of the Group is to assess the Council’s land ownerships in a holistic manner and consider opportunities for their development, usage or disposal.


With the ambition of improving its effectiveness as an organisation, the Council completed the baselining of its services against the six principles set out in the Council’s Customer Services Strategy that was adopted during 2021/22.  Significant work has also been undertaken in relation to the Customer Relationship Management (CRM) project with the award of a contract for the successful solution expected in 2022/23.

 

In recent years the level of Council tax has been kept low, from £123 for a band ‘D’

property in 2011/12 to £131.24 in 2021/22. This is the eighth lowest of all shire district

Councils.

 

The Council measures a number of key income streams, to ensure that both maximising income and understanding early where external factors might impact on budgets. During 2021/22:

 

•           Planning income totalled £1.69 million against a budget of £2.18 million, this

compared to income of £2.35 million in 2020/21.

 

•           Land charges income totalled £307,000 compared to £330,000 in the previous year.

 

•           Car parking income totalled £838,000 compared to £688,000 in the previous year.

 

•           The New Homes Bonus paid to the Council for 2022/23 will be £2.03 million,

compared to an average of £1.092 million, putting it twenty fourth out of all 181

shire district Councils.

 

South Oxfordshire’s Council Tax collection rate of 97.51 per cent put it joint 84th with two other

Councils when ranked against all 188 shire district Councils existing at the end of March

2022 (the latest national data available).

 

An innovative Transformation Strategy is being developed to diversify revenue streams, improve effectiveness and secure on-going viability. It is exploring scope for improved IT systems including for finance, accounting and payment solutions. These will improve efficiencies, leverage digital opportunities and meet requirements for modern government and planning processes.

It is also exploring new revenue streams including for renewable energy and other land projects, such as exploring revenue generation opportunities from a Wind Solar Farm.

 

The Councils new corporate focus on securing external funding will be implemented

through the further development of its External Funding Framework. This

framework builds on its track record of partnership working to successfully secure

external funding such as the £218 million of Housing Infrastructure Funding (HIF)

which is being used to improve local transport links.

 

The Council ‘s Strategic Property Review, is developing an enhanced property and asset

Database. The review has taken longer than anticipated, all assets have been reviewed thoroughly, including looking for any opportunities for environmental upgrades.

 

Financial Performance 2021/22

 

The paragraphs below show the Council’s financial performance for 2021/22 in the following areas:

 

·         revenue expenditure;

 

·         capital expenditure; and

 

·         treasury management activities.

It also discusses the Comprehensive Income and Expenditure Statement (CIES) for the year and its balance sheet at the end of the year.

 

Revenue outturn 2021/22

 

The Council’s funding requirement for 2021/22, including parish precepts, was £17.4 million, after accounting for the use of reserves and investment income.  Direct Service Expenditure for the year was £6.3 million below budget as shown in the table below, analysed across the Council’s service areas

 

Direct Service expenditure excludes the Year End items, asset depreciation and pension fund movements.  Consequently, the figures reported below differ to those in the Consolidated Income and Expenditure Account on page 23.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service expenditure

Budget
£000

Actual
£000

Variance
£000

Strategic Management Board

1,343

879

(464)

Corporate Services

2,634

2,532

(103)

Development & Corporate Landlord

2,015

1,698

(317)

Finance

454

368

(85)

Housing & Environment

6,535

5,724

(811)

Legal Services

1,246

1,236

(10)

Partnership & Insight

2,674

2,398

(276)

Planning

411

956

545

Policy & Programmes

5,867

2,326

(3,541)

Managed Vacancy Factor

0

0

0

Contingency

1,085

(379)

(1,464)

Direct service expenditure

24,263

17,738

(6,256)

Interest

(1,847)

(1,999)

(152)

Government grant income

(2,549)

(2,549)

(0)

Transfer to/from reserves

(8,335)

(7,507)

828

Net revenue spend

11,532

5,682

(5,850)

Transfer of Surplus to Reserves

 

506

506

Net revenue spend

 

5,580

5,580

Government Funding

0

1,366

1,366

Budget requirement set by council

11,532

13,404

1,872

Parish precepts

5,879

5,879

0

Total funding requirement

17,411

19,283

1,872

Rural Service Delivery Grant (RSDG)

44

44

0

Council tax income

14,117

14,255

137

Retained business rates

3,250

4,984

1,734

Total funding

17,411

19,283

1,872

 

 

 

 

 

Of the £5.9 million net revenue underspend above, £3.4 million represents slippage in one-off budgets that have been carried forward to 2022/23.  The largest carry forwards are in Policy & Programmes  and include £1.0 million for the Berinsfield Regeneration project  and £0.3 million Didcot Growth Point

 

Capital outturn 2021/22

 

Capital expenditure totalled £2.6 million in 2021/22 and was £6.4 million below the working budget. Material capital expenditure projects include over £1.0 million in disabled facilities grants.

 

The main source of funding for the programme was the Council’s own reserves with the balance made up by government grants and other contributions.

 

Further details on both revenue and capital expenditure for 2021/22 will be considered in an outturn report to Scrutiny Committee in October 2022.

 

 

 

 

 

Treasury Management 2021/22

 

In accordance with the Treasury Management Strategy, by actively managing its investments, the Council earned interest and investment income of £2.0 million against a budget of £1.8 million.  Of this income, £0.7 million represents dividends accumulated on the Council’s unit trust holdings, which are distributed as additional units. The remaining income will fund revenue expenditure during 2022/23.

 

Further details on treasury management for 2021/22 will be provided in an outturn report for  consideration in September 2022 by the Joint Audit and Governance Committee and Cabinet, and by Council in October 2022.

 

Comprehensive Income and Expenditure Statement (CIES) 2021/22

 

The CIES presents the Council’s income and expenditure for the year based on accounting standards, rather than the amount to be funded from taxation.  Councils raise taxation to cover expenditure in accordance with regulations, but this is different to the accounting cost.  These adjustments are detailed in notes 2 to 5. After the total financing from government grants and local taxpayers of £26.4 million, the Council had a deficit on provision of services of £4.5 million. 

 

This deficit is then adjusted for items, that are not expected to materialise for many years due to their nature, to produce the total comprehensive income and expenditure figure for the year which is a surplus of £16.4 million.  This figure corresponds to the total movement on the balance sheet for the year.

 

Balance Sheet

 

The reported net worth of the Council increased from £151.3 million to £166.9 million at 31 March 2022, an increase of £15.6 million due mainly to the reduction in the pension deficit of £19.8 million

 

Revenue reserves have decreased by £5.2 million due to expenditure of grants. The capital receipts reserve has fallen by £3.6 million during the year due to funding for capital expenditure exceeding receipts. The capital grants reserve has increased by £1.8 million, primarily due to in year receipts of CIL. Unusable reserves have increase by £23.4 million principally due to the decrease in the pension deficit. 

 

Collection Fund

 

The Collection Fund is an agent’s statement that reflects the statutory obligation of billing authorities to maintain a separate Collection Fund.  The statement shows the transactions of the billing authority in relation to the collection from local taxpayers of Council tax and Non-Domestic Rates (NDR) and its distribution to precepting bodies.  For the Council, the major Council tax precepting bodies are Oxfordshire County Council (OCC) and the Police and Crime Commissioner for Thames Valley.

 

On Council tax, income of £125.4 million was received and £125.4 million was paid out in precepts and demands.  After taking the provision for bad debts and balance brought forward into account, the surplus on the Council tax collection fund balance at the end of the year was £3.0 million.  This will be re-distributed to all major precepting authorities.

 

On Non-Domestic Rates (NDR), £38.5 million was received and £19.9 million was paid out to the Council, central government and Oxfordshire County Council (OCC).  After taking the balance

 brought forward, provision for bad debts and the provision for appeals into account, the deficit on the NDR collection fund balance at the end of the year was £1.8 million.  This will be shared between the Council, central government and OCC, the SODC share being £0.2 million.

 

Future prospects

 

As part of the annual budget setting process for 2022/23, Council agreed its Medium-Term Financial Plan (MTFP) for 2022/23 to 2026/27.  The MTFP provides a forward budget model for the next five years, highlighting known estimated budget pressures for new responsibilities and changes in legislation, predicted investment and capital receipts.

 

The MTFP highlights significant challenges ahead for the Council.  This reflects the fact that revenue expenditure is expected to exceed revenue income each year. In light of the reserves and balances available to the Council, it can set a balanced revenue budget during the MTFP period by drawing heavily on reserves. 

 

Although the budget is sustainable across the MTFP period, the forecast shows a continuing reduction in revenue reserves which can not continue far beyond the medium term based on current projections of government funding.  These projections are themselves subject to uncertainty pending further information on the outcome of the fair funding review, the review of New Homes Bonus, and the spending review.  To identify ways to address the projected funding shortfall the Council is carrying out a thorough review of its Medium Term Financial Strategy (MTFS) when there is greater certainty around future government funding, and in the next few years will take steps to reduce the gap between its income and its expenditure to ensure its longer term financial viability.

 

As part of budget setting for 2022/23, Council also agreed a capital programme to 2026/27 costing £41.7 million.  This will be funded from a combination of the Council’s usable capital receipts and other contributions. 

 

 

 

 

 

 

 

Simon Hewings

Head Of Finance and Section 151 Officer

30 October 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Statement of responsibilities for the statement of accounts

 

  1. The authority's responsibilities

 

The authority is required to:

 

·         make arrangements for the proper administration of its financial affairs and to secure that one of its officers has the responsibility for the administration of those arrangements.  In this Council, that officer is the head of finance and chief finance officer;

·         manage its affairs to secure economic, efficient and effective use of resources and safeguard its assets; and

·         approve the statement of accounts.

 

  1. Responsibilities of the chief finance officer

 

The chief finance officer’s responsibilities include the preparation of the Council's statement of accounts, which, in terms of the CIPFA/LASAAC code of practice on local authority accounting in the United Kingdom (the Code) is required to present a true and fair view of the financial position of the Council at the accounting date and its income and expenditure for the year ended 31 March 2022.

 

In preparing this statement of accounts, the chief finance officer has:

 

·         selected suitable accounting policies and then applied them consistently

·         made judgements and estimates that were reasonable and prudent

·         complied with the local authority code.

 

The chief finance officer has also:

 

·         kept proper accounting records which were up to date

·         taken reasonable steps for the prevention and detection of fraud and other irregularities.

 

I certify that this statement of accounts presents a true and fair view of the financial position of the authority at 31 March 2022 and its income and expenditure for the year ended 31 March 2022.

 

 

 

 

            Simon Hewings

Head Of Finance and  Section 151 Officer

30 October 2023

 

 

 

 

 

 

 

 

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF SOUTH OXFORDSHIRE DISTRICT COUNCIL

 

Opinion

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core financial statements

The following pages show the Council’s core financial statements, and the notes to the accounts. The core statements are as follows:

Comprehensive Income and Expenditure Statement (CIES) (page 22-23). This 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 (Council tax) 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 and the Movement in Reserves Statement. 

Movement in Reserves Statement (MiRS) (page 24). The MiRS 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. expenditure or reduce local taxation) and other ‘unusable reserves’. It 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 net increase/decrease line shows the statutory general fund balance in the year following those adjustments.

Balance Sheet (BS) (page 25). This shows the value (as at the balance sheet date) of the assets and liabilities recognised by the Council. The net assets of the Council (being assets less liabilities) are matched by the reserves held by the Council. Reserves are reported in two categories. The first category of reserves are usable reserves, i.e. those that the Council may use to provide services, subject to the need to maintain a prudent level of reserves and any statutory limitations on their use (e.g. the capital receipts reserve that may only be used to fund capital expenditure or repay debt).  The second category of reserves includes reserves that hold unrealised gains and losses (e.g. the revaluation reserve), where amounts would only become available to provide services if the assets are sold; and reserves that hold timing differences shown in the MiRS line ‘adjustments between accounting basis and funding basis under regulations’.

Cash Flow Statement (CFS) (page 26).  This shows the changes in cash and cash equivalents of the Council 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 Council are funded by way of taxation and grant income or from the recipients of services provided by the Council.  Investing activities represent the extent to which cash outflows have been made for resources which are intended to contribute to the Council’s future service delivery.  Cash flows arising from financing activities are useful in predicting claims on future cash flows by providers of capital (e.g. borrowing) to the Council.          

Notes to the core financial statements (pages 27-65).  The core statements are supported by comprehensive notes to the accounts.

Accounting policies (pages 71-86).These are the accounting policies adopted in compiling the Council’s accounting statements which explain the basis on which the figures in the accounts have been prepared.

 

Supplementary financial statements

In addition to core financial statements and notes the Council, as an authority that issues Council tax and business rates bills, maintains a separate income and expenditure account, the collection fund, showing transactions in relation to this income and how the demands on the fund from central government, Oxfordshire County Council, Police and Crime Commissioner for Thames Valley and town and parish Councils have been satisfied.  This is shown on pages 66 to 70.

 

 

 

 

 

Comprehensive income and expenditure statement

2020/21

 

2021/22

Exp

Inc

Net

Exp

Inc

Net

£000

£000

£000

 

£000

£000

£000

1,513

(527)

984

Strategic Management Board

1,710

(575)

1,135

3,112

(1,129)

1,983

Corporate Services

3,698

(1,185)

2,513

8,760

(3,538)

5,222

Development & Corporate Landlord

10,402

(4,176)

6,226

22,657

(22,221)

437

Finance

22,011

(21,300)

710

11,333

(4,454)

6,879

Housing and Environment

12,731

(5,009)

7,722

3,061

(1,783)

1,278

Legal and Democratic

4,028

(2,303)

1,725

3,393

(164)

3,231

Partnership and Insight

2,769

(273)

2,496

5,114

(4,205)

909

Planning

6,506

(3,504)

3,002

4,889

(1,694)

3,195

Policy & Programme

5,831

(2,309)

3,523

63,832

(39,714)

24,118

Cost of services

69,686

(40,634)

29,052

5,524

5,524

Parish council precepts and other grants

5,879

0

5,879

5,524

0

5,524

Other operating expenditure

5,879

0

5,879

(1,886)

(1,886)

Interest receivable and similar income

 

(1,266)

(1,266)

(727)

(727)

Other investment income (dividends)

 

(733)

(733)

(322)

(322)

Other investment income (long leases)

 

(676)

(676)

 

(2,397)

(2,397)

(Surplus)/Deficit on Financial Instruments valued through P&L

 

(2,733)

(2,733)

 

 

 

Gains/loss on disposal of investments

 

419

419

304

(1,496)

(1,192)

Income and expenditure in relation to investment properties

230 

(608)

(378)

1,034

1,034

Net Interest on defined benefit liability

1,284

0

1,284

1,338

(6,828)

(5,490)

Financing and investment income and expenditure

1,514

(5,597)

(4,083)

(8,799)

(8,799)

Recognised capital grants and contributions

0

(3,194)

(3,194)

 

(2,589)

(2,589)

Covid Grant

 

(1,236)

(1,236)

 

 

 

Lower tier Servcies Grant

0

(130)

(130)

(13,222)

(13,222)

Council tax

0

(14,255)

(14,255)

(20,082)

(20,082)

Retained business rates

0

(21,374)

(21,374)

16,390

16,390

Business rates tariff

16,390

 

16,390

 

 

 

Rural services delivery grant

0

(44)

(44)

(2,747)

(2,747)

Non-ringfenced government grants

0

(2,549)

(2,549)

16,390

(47,482)

(31,092)

Taxation and non-specific grant income

16,390

(42,782)

(26,392)

 

 

                                                     

                                                                                                                                    Continued…

Continued

87,084

(94,024)

(6,940)

(Surplus)/deficit on provision of services

93,469

(89,013)

4,456

89

89

Total (Gain)/loss on revaluation of non-current assets

 

989

989

15,153

15,153

Remeasurement of net defined benefit liability

 

(26,295)

(26,295)

15,153

89

15,242

Total other comprehensive income and expenditure

0

(25,306)

(25,306)

102,237

(93,935)

8,302

Total Comprehensive Income and Expenditure

93,469

(114,319)

(20,850)

*The 2020/21 cost of services figures have been restated following a restructure.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Movement in reserves statement

 

General

Capital

Capital

Total

Unusable

Total

 

fund

receipts

grants

usable

reserves

authority

 

Balance

Restated

reserve

unapplied

Reserves

 

reserves

 

£000

£000

£000

£000

£000

£000

Balance - 31 Mar 2021

(63,550)

(30,770)

(47,371)

(141,691)

(9,633)

(151,324)

Total comprehensive income and expenditure

4,456

 

 

4,456

(25,306)

(20,850)

Adjustments between accounting basis and funding basis under regulations (note 5)

1,213

2,221

(1,024)

2,409

(2,409)

0

Net increase/decrease before transfers to other reserves

5,668

2,221

(1,024)

6,865

(27,713)

(20,850)

Transfers to/from other reserves

0

 

 

 

 

 

Increase/decrease (movement) in year

5,668

2,221

(1,024)

6,865

(27,713)

(20,850)

Balance - 31 Mar 2022

(57,882)

(28,549)

(48,395)

(134,826)

(37,346)

(172,172)

For the year ended 31 March 2022

 

For the year ended 31 March 2021

 

General fund balance

Restated

Capital receipts reserve

Capital grants unapplied

Total usable reserves

Unusable reserves

Total authority reserves

 

£000

£000

£000

£000

£000

£000

Balance - 31 Mar 2020

(55,440)

(30,831)

(39,886)

(126,157)

(33,467)

(159,624)

Total comprehensive income and expenditure

(6,940)

0

0

(6,940)

15,241

8,301

Adjustments between accounting basis and funding basis under regulations (note 5)

(1,170)

61

(7,485)

(8,594)

8,594

0

Net increase/decrease before transfers to other reserves

(8,110)

61

(7,485)

(15,534)

23,834

8,302

Transfers to/from other reserves

0

0

0

0

0

0

Increase/decrease (movement) in year

(8,110)

61

(7,485)

(15,534)

23,834

8,302

Balance - 31 Mar 2021

(63,548)

(30,770)

(47,371)

(141,689)

(9,632)

(151,323)

 

 

The general fund balance includes earmarked revenue reserves which have been disclosed separately in prior years.

Transfers between these two funds are detailed in note 6.

Balance sheet

1 April 2020 Restated

31 March 2021

Restated

 

31 March 2022

 

 

£000

 

£000

£000

Notes

33,224

33,808

Property, plant & equipment

 

31,051

6

7,763

8,067

Investment Property

 

8,008

7

20

124

Intangible assets

 

106

 

42,905

26,306

Long term investments

 

36,180

8

27,483

25,906

Long term debtors

 

26,002

9

111,396

94,211

Long term assets

 

101,347

 

97,833

128,253

Short term investments

133,692

 

21,723

22,729

Short term debtors

21,467

 

9

9,021

11,188

Cash and cash equivalents

25,634

 

10

128,577

162,170

Current assets

 

180,793

 

(24,706)

(30,498)

Short term creditors

(56,386)

 

11

(3,119)

(3,361)

Provisions

(1,834)

 

12

(8,337)

(9,245)

Capital grants receipts in advance

(10,280)

 

 

(36,162)

(43,104)

Current liabilities

 

(68,500)

 

 

 

 

 

 

 

(44,187)

(61,956)

Long term Liabilities

 

(41,469)

17f

 

 

 

 

 

 

1 59,624

151,321

Net assets

 

172,171

 

(40,634)

(47,753)

Non-earmarked revenue reserves

(49,290)

 

 

(14,805)

(15,795)

Earmarked revenue reserves

(8,591)

 

 

(30,831)

(30,770)

Usable capital receipts reserve

(28,549)

 

 

(39,886)

(47,371)

Capital grants unapplied

(48,396)

 

 

(126,157)

(141,689)

Usable reserves

 

(134,826)

See MIRS

(11,219)

(11,110)

Revaluation reserve

(10,026)

 

13a

905

(1,492)

Financial instrument revaluation reserve

(4,225)

 

13b

(39,839)

(40,939)

Capital adjustment account

(39,188)

 

13c

44,187

61,956

Pensions reserve

41,469

 

13d

(27,575)

(25,998)

Deferred capital receipts reserve

(26,094)

 

13e

(114)

7,762

Collection Fund Adjustment Account

426

 

13f

188

188

Short-term accumulating compensated absences

292

 

13g

(33,467)

(9,633)

Unusable reserves

 

(37,346)

 

 

 

 

 

 

(159,623)

(151,322)

Total reserves

 

(172,172)

 

 

 

 

 

 

 

*2021 Restated due to an error fund in 19/20

Cash flow statement

 

2020/21

 

2021/22

Notes

£'000

 

£'000

 

6,941

 Net surplus/(deficit) on the provision of services

(4,456)

 

723

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

24,547

 

(8,799)

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

(3,194)

 

(1,135)

Net Cash flows from operating activities

16,897

 

Investing Activities

 

 

(746)

Purchase of property, plant and equipment, investment property and intangible assets

(626)

 

 

(108,500)

Purchase of short-term and long-term investments

(91,450)

 

(55)

Other payments for investing activities

(74)

 

96,639

Proceeds from short-term and long-term investments

78,020

 

11,337

Other receipts from investing activities

4,359

 

(1,325)

Total Investing Activities

(9,771)

 

Financing Activities

 

 

4,628

Billing authorities - council tax and NDR adjustments

7,320

 

Total Financing Activities

 

 

2,167

Net increase/(decrease) in cash and cash equivalents

14,446

 

9,021

Cash and cash equivalents at the beginning of the reporting period

11,188

 

11,188

Cash and cash equivalents at the end of the reporting period

25,634

10

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

Notes to the accounts 2021/22

1.            Statement of accounting policies

Accounting policies are the specific principles, bases, conventions, rules and practices

applied by the Council in preparing and presenting these financial statements.  These can be reviewed in detail on pages 71-86.

2.            Expenditure and funding analysis

The expenditure and funding analysis shows how annual expenditure is used and funded from resources (government grants, rents, Council tax and business rates) by local authorities in comparison with those resources consumed or earned by authorities in accordance with generally accepted accounting practices. It also shows how this expenditure is allocated for decision making purposes between the Council’s directorates/services/departments. Income and expenditure accounted for under generally accepted accounting practices is presented more fully in the Comprehensive Income and Expenditure Statement.

2020/21

 

2021/22

Net Expenditure Chargeable to the General Fund Balance

Adjustments between the funding and Accounting Basis

Net Expenditure in the Comprehensive Income and Expenditure Statement

 

Net Expenditure Chargeable to the General Fund Balance

Adjustments between the funding and Accounting Basis

Net Expenditure in the Comprehensive Income and Expenditure Statement

£000

£000

£000

 

£000

£000

£000

836

149

985

Strategic Management Board

879

256

1,135

2,358

(375)

1,983

Corporate Services

2,523

(10)

2,513

4,752

470

5,222

Development & Corporate Landlord

2,360

3,867

6,227

327

109

437

Finance

402

309

709

5,584

1,295

6,879

Housing and Environment

5,650

2,072

7,722

1,048

230

1,278

Legal and Democratic

1,244

480

1,724

3,221

9

3,230

Partnership and insight

2,398

98

2,496

430

479

909

Planning

1,915

1,087

3,002

2,494

700

3,195

Policy & Programmes

2,602

921

3,523

21,049

3,067

24,117

Net cost of services

19,972

9,080

29,051

(29,160)

(1,897)

(31,057)

Other Income and Expenditure

(14,302)

(10,293)

(24,595)

(8,111)

1,170

(6,941)

(Surplus) or deficit on provision of services

5,670

(1,213)

4,456

(55,441)

 

 

Opening General Fund Balance

(63,551)

 

 

(8,108)

 

 

Surplus or (deficit) on general fund balance in year

5,670

 

 

0

 

 

Transfers to/from non-general fund balance reserves

 

 

 

(63,551)

 

 

Closing general fund balance at 31 March

(57,881)

 

 

 

 

 

 

 


 

2020/21

 

2021/22

Adjustments for Capital Purposes (note 1)

Net change for the Pensions Adjustments (Note 2)

Other Differences (Note 3)

Total Adjustments

 

Adjustments for Capital Purposes (note 1)

Net change for the Pensions Adjustments (Note 2)

Other Differences (Note 3)

Total Adjustments

£000

£000

£000

£000

 

£000

£000

£000

£000

0

149

0

149

Strategic Management Board

5

251

0

256

47

(423)

0

(375)

Corporate Services

34

(44)

0

(10)

132

338

0

470

Development & Corporate Landlord

3,068

799

0

3,867

3

106

0

109

Finance

44

265

0

309

921

375

0

1,295

Housing and Environment

1,208

864

0

2,072

18

212

0

230

Legal and Democratic

25

455

0

480

0

9

0

9

Partnership and insight

1

97

0

98

0

479

0

479

Planning

21

1,066

0

1,087

364

337

 

700

Policy & Programmes

149

772

 

921

1,484

1,582

0

3,067

Net cost of services

4,556

4,524

0

9,080

(10,981)

1,034

8,050

(1,897)

Other income and expenditure from the Expenditure and Funding Analysis

(4,240)

1,284

(7,337)

(10,293)

(9,497)

2,616

8,050

1,170

Difference between general fund surplus or deficit and Comprehensive Income and Expenditure Statement surplus or deficit on the provision of services

316

5,808

(7,337)

(1,213)

3.             Note to the expenditure and funding analysis

*2020/21 restated due to missrepresentation of figures in other differences column

The adjustments above are for transactions included in the CIES which cannot be charged to the general fund under statute. They include:

1) Adjustments for capital purposes – this column adds in depreciation and impairment and revaluation gains and losses in the services line, and for other operating expenditure, capital grants received in year where there is no repayment condition.

2) Net change for the pension adjustment relates to the removal of pension contributions and the addition of IAS 19 Employee Benefits pension related expenditure and income

3) Other differences are for reanalysis of items between services and in other income and expenditure, the difference between what is chargeable under statutory regulations for Council tax and NDR that was projected to be received at the start of the year and the income recognised under generally accepted accounting practices in the Code.

 

 

 

 

 

 

4.            Adjustments between accounting basis and funding basis under regulations

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

31 March 2021

 

31 March 2022

Usable Reserves

Movement in unusable reserves

 

Usable Reserves

Movement in unusable reserves

Gen fund bal & earmarked

Capital receipts reserve

Capital grants unapplied

 

Gen fund bal & earmarked

Capital receipts reserve

Capital grants unapplied

£000

£000

£000

£000

 

£000

£000

£000

£000

 

 

 

 

Adjustments primarily involving the capital adjustment account:

 

 

 

 

(519)

519

Charges for depreciation and impairment of non-current assets

(844)

 

 

844

561

(561)

Revaluation gains on property, plant and equipment

(1,523)

 

 

1,523

(1,568)

1,568

Movements in fair value of long-term leases

168

 

 

(168)

304

(304)

Movement of Fair Value or Investment Properties

(60)

 

 

60

(14)

14

Amortisation of intangible assets

(45)

 

 

45

(1,514)

1,514

Revenue expenditure funded from capital under statute

(1,981)

 

 

1,981

Adjustments primarily involving the capital grants unapplied account:

 

 

 

0

8,884

(8,709)

(175)

Capital grants and contributions unapplied credited to the CIES

3,032

 

 

(3,032)

0

(420)

420

Expenditure funded by developers contributions

(936)

 

936

0

Adjustments primarily involving the capital receipts reserve:

 

 

 

0

1,333

122

804

(2,259)

Use of the capital receipts reserve to finance new capital expenditure

(831)

2,366

 

1,072 

(2,607)

Adjustments primarily involving the deferred capital receipts reserve:

 

 

 

 

52

(61)

9

Repayment of loans

           74

(146) 

 

72

2,397

(2,397)

Reversal of Surplus on Financial Instruments valued through the profit and loss

2,733

 

 

(2,733)

(2,616)

2,616

Adjustments primarily involving the pensions reserve:

(5,808)

 

 

5,808

Adjustments primarily involving the Collection fund adjustment account:

 

 

 

 

(8,050)

8,050

Amount by which council tax and NDR income credited to the CIES is different from income calculated for the year in accordance with statutory requirements

7,337

 

 

(7,337)

 

 

 

 

Adjustment primarily involving the Accumulated Absences Account:

 

 

 

 

 

 

 

 

 

Amount by which officer remuneration charged to the comprehensive income and expenditure statement on an accruals basis is different from remuneration chargeable in the year in accordance with statutory requirements

 

(104)

 

 

104

(1,170)

61

(7,485)

8,594

Total adjustments

1,212

2,221

(1,024)

(2,409)

 

 

5.            Transfers to/from general fund balance and earmarked reserves

This note details all movements in the reserves that comprise the general fund balance and earmarked reserves.

 

01 Apr. 2020 to 31 Mar. 2021

 Restated

 

01 Apr. 2021 to 31 Mar. 2022

Balance brought forward

Transfers in

Transfers out

Balance carried forward

 

Balance brought forward

Transfers in

Transfers out

Balance carried forward

£000

£000

£000

£000

 

£000

£000

£000

£000

 

 

 

 

General Fund balances

 

 

 

 

(750) 

19

 (731)

General Fund

(731)

(19)

0

(750)

(29,275)

  (16,799)

7,153

(38,921)

Enabling fund (b)

(38,921)

(9,338)

10,328

(37,931)

(10,609)

0

0

(10,609)

Interest allocated as principal (c)

(10,609)

0

0

(10,609)

(40,634)

(16,799)

7,172

(50,261)

Total general fund balance

(50,261)

(9,357)

10,328

(49,290)

 

 

 

 

Earmarked reserves

 

 

 

 

(2,408)

(1,886)

2,408

(1,886)

Revenue funding (d)

(1,886)

(1,266)

1,886

(1,266)

0

0

0

0

ARR – Carry Forward (a)

0

0

0

0

(536)

0

0

(536)

Building control (e)

(536)

0

0

(536)

  (3,517)

(944)

550

(3,911)

Revenue grants reserve (f)

(3,912)

(223)

1,460

(2,675)

(4,705)

(2,747)

4,697

(2,755)

New homes bonus (g)

(2,755)

(2,549)

3,573

(1,732)

   (2,426)

(456)

130

(2,752)

Unit trust dividend reinvested reserve (h)

(2,751)

(471)

2,419

(803)

(1,214)

(234)

0

(1,448)

Didcot reserve (i)

(1,448)

(132)

0

(1,580)

(14,806)

(6,267)

7,785

(13,288)

Total earmarked reserves

(13,288)

(4,641)

9,338

(8,591)

 

After analysis of the use of ear marked reserves during the 2022/23 budget round, 2021/22 reserve balances were restated: the carry forward reserve was merged with the enabling fund and small balances were moved between the enabling fund and earmarke reserves.  The amendment to funds were:

 

Reserve

Movement In 2020/21 cfwd

£000

Enabling Fund

7,075

Revenue funding

337

ARR Carried Forward

(7,412)

Total

0

 

 

 

 

 

 

 

 

 

 

 

 

 

The purpose of each reserve is as follows:

(a)

To hold sums received from the sale of capital assets and which have now been recycled into the equivalent amount of interest and thus could be used to meet any future costs.

(b)

To hold interest distributed on balances for capital expenditure.

(c)

By departments from underspends to cover future specific costs.

(d)

Accumulated surpluses in previous years, which have not yet been earmarked. Enabling fund balances and movements shown for 2020/21 include carry forwards.

(e)

From ring fencing the building control trading account.

(f)

To fund revenue expenditure from grants received in advance.

(g)

To hold receipts of new homes bonus funding.

(h)

To hold the dividends re-invested in the council’s unit trust investments.

(i)

To hold rental income received from land in Didcot for future investment in Didcot.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6.            Property, plant and equipment

Table 6a Movements in property, plant and equipment 2021/22

 

 

 

Other land & buildings

Vehicles, plant & equipment

Infrastructure assets

Community assets

Assets under construction

Total PP&E

 

£000

£000

£000

£000

£000

£000

Cost or valuation

 

 

 

 

 

 

At 01 Apr 2021

32,289

2,913

930

1,137

796

38,065

Additions

94

45

 

0

460

599

Revaluation increases/(decreases) to RR

(989)

0

0

0

0

(989)

Revaluation increases/(decreases) to SDPS

(1,523)

0

0

0

0

(1,523)

Depreciation written back on revaluation

(402)

0

0

0

0

(402)

Reclassification

0

0

0

0

0

0

Disposals

0

0

0

0

0

0

Other movements

3

0

0

0

0

3

31 Mar 2022

29,472

2,958

930

1,137

1,256

35,753

 

At 01 Apr 2021

(1,116)

(2,671)

(472)

0

0

(4,259)

Depreciation charge for 2020/21

(467)

(60)

(318)

0

0

(845)

Depreciation written back on revaluation

402

0

0

0

0

402

Disposals

0

0

0

0

0

0

Impairment losses/reversals to SDPS

0

0

0

0

0

0

At 31 Mar 2022

(1,181)

(2,731)

(790)

0

0

(4,702)

Balance sheet at 31 Mar 2022

28,291

227

140

1,137

1,256

31,051

Balance sheet at 31 Mar 2021

31,173

242

458

1,137

796

33,806

Notes

 

 

 

 

 

 

RR = Revaluation reserve

 

 

 

 

 

 

SDPS = Surplus or deficit on provision of services

 

 

 

 

 

 

 

 

Table 6b Movements in property, plant and equipment 2020/21

 

 

Other land & buildings

Vehicles, plant & equipment

Infrastructure assets

Community assets

Assets under construction

Total PP&E

 

£000

£000

£000

£000

£000

£000

Cost or valuation

 

 

 

 

 

 

At 01 Apr 2020

31,891

2,760

584

1,162

673

37,070

Additions

0

155

346

0

123

624

Revaluation increases/(decreases) to RR

(64)

0

0

(25)

0

(89)

Revaluation increases/(decreases) to SDPS

561

0

0

0

0

561

Depreciation written back on revaluation

(100)

0

0

0

0

(100)

Reclassification

0

0

0

0

0

0

Disposals

0

0

0

0

0

0

Other movements

0

(2)

0

0

0

(2)

31 Mar 2021

32,289

2,913

930

1,137

796

38,065

At 01 Apr 2020

(821)

(2,585)

(439)

0

0

(3,845)

Depreciation charge for 2020/21

(471)

(86)

(33)

0

0

(590)

Depreciation written back on revaluation

176

0

0

0

0

176

Disposals

0

0

0

0

0

0

Impairment losses/reversals to SDPS

0

0

0

0

0

0

At 31 Mar 2021

(1,116)

(2,671)

(472)

0

0

(4,259)

Balance sheet at 31 Mar 2021

31,173

242

458

1,137

796

33,806

Balance sheet at 31 Mar 2020

31,070

175

145

1,162

673

33,225

Notes

 

 

 

 

 

 

RR = Revaluation reserve

 

 

 

 

 

 

SDPS = Surplus or deficit on provision of services

 

 

 

 

 

 

Depreciation

 

The following useful lives and depreciation rates have been used in the calculation of depreciation:

·         Other land and buildings – on an individual basis as assessed by the valuer

·         Vehicles, plant, furniture and equipment – 1 to 24 years

·         Infrastructure –on an individual basis as assessed by the valuer

 

Capital commitments

As at the end of March 2022 the Council had capital commitments on a number of contracts in 2021/22 and future years, budgeted to cost £0.6 million.  The commitments are:

·         Capital grants - £0.3 million

·         Leisure contracts - £0.3 million

Revaluations

The Council has a rolling programme that ensures that all property, plant and equipment required to be measured at current value or fair value as appropriate is revalued every five years.  Any assets that may be subject to special conditions will be valued more often, as required.

The Council’s operational assets have been valued as at 31 January 2022 by Lambert Smith Hampton in accordance with the methodologies and bases for estimation set out in the professional standards of the Royal Institution of Chartered Surveyors (RICS Red Book, UK Appendix 5).

The significant assumptions applied in estimating the 2021/22 values are that:

·         There is no contamination problem nor deleterious/hazardous substance present;

·         Good title can be shown and that the properties comply with all legal and statutory requirements regarding either the structure or its existing /past usage,

·         There will be an adequate level of expenditure on repairs and maintenance

Table 6c Revaluations property, plant and equipment

 

Other land & buildings

Vehicles, plant & equipment

Infrastructure assets

Community assets

Assets under construction

Total

 

£000

£000

£000

£000

£000

£000

Carried at historical cost

0

2,958

930

1,137

1,256

6,281

Valued at:

 

 

 

 

 

 

31 January 2022

7,399

0

0

0

0

7,399

31 January 2021

2,401

0

0

0

0

2,401

31 January 2020

4

0

0

0

0

4

31 January 2019

15,777

0

0

0

0

15,777

31 January 2018

3,890

0

0

0

0

3,890

Total value

29,471

2,958

930

1,137

1,256

35,752

 

 

 

 

 

 

 

 

All operational PPE assets are measured at current value with surplus assets at fair value. Assets under construction are valued at cost.

The Council has no material surplus assets.

 

 

7.            Investment properties

Income and expenditure in respect of investment properties is shown on the face of the CIES.

There are no restrictions on the Council’s ability to realise the value inherent in its investment property or on the Council’s right to the remittance of income and the proceeds of disposal.  The Council has no contractual obligations to purchase, construct or develop investment property or repairs, maintenance or enhancement.

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

2020/21

£000

 

2021/22

£000

7,763

Balance at 1 April

8,067

304

Changes in fair value

(59)

8,067

Balance at 31 March

8,008

Fair value hierarchy

All the Council’s investment properties have been value assessed as level 2 on the fair value hierarchy for valuation purposes (see accounting policy xxii for an explanation of fair value levels).0

Valuation techniques used to determine level 2 for values for investment property

The fair value of investment property has been measured using a market approach, which takes into account quoted prices for similar assets in active markets, existing lease terms and rentals, research into market evidence including market rentals and yields, the covenant strength for existing tenants, and data and market knowledge gained in managing the Council’s investment asset portfolio.  Market conditions are such that similar properties are actively purchased and sold and the level of observable inputs are significant, leading to the properties being categorised as level 2 on the fair value hierarchy.

There has been no change in the valuation techniques used during the year for investment properties.

Highest and best use

In estimating the fair value of the Council’s investment properties, the highest and best use is their current use.

Valuation process for investment properties

The Council’s investment property has been valued as at 31 March 2022 by Lambert Smith Hampton in accordance with the methodologies and bases for estimation set out in the professional standards of the Royal Institution of Chartered Surveyors. Lambert Smith Hampton has confirmed that there has been no material change in the value of properties from 31 January 2022 to 31 March 2022.

 

 

8.            Financial instruments

The borrowings and investments disclosed in the balance sheet are made up of the following categories of financial instruments:

 

Table 8a Categories of financial instrument

 

Long term

Current

 

2020/21

2021/22

2020/21

2021/22

 

£000

£000

£000

£000

Investments

 

 

 

 

Amortised costs

7,010

16,092

139,442

159,327

Fair value through profit and loss

19,296

20,088

0

Total financial assets (investments)

26,306

36,180

139,442

159,327

Debtors

 

 

Financial assets carried at contract amount

25,241

26,002

21,024

 19,188

Total financial assets 

25,241

26,002

21,024

19,188

Creditors

 

 

Financial liabilities carried at contract amount

0

0

30,165

44,503

Total financial liabilities

0

0

30,165

44,503

 

(1)  Under accounting requirements, the carrying value of the financial instrument value is shown in the balance sheet which includes the principal amount borrowed or lent and further adjustments for breakage costs including accrued interest.  Accrued interest is shown separately in current assets/liabilities where payments/receipts are due within one year.  The effective interest rate is accrued interest receivable under the instrument, adjusted for the amortisation of any premiums or discounts reflected in the purchase price.

(2)  Financial assets at fair value through profit and loss – the Council holds £12.42 million in unit trusts with Legal & General and £7.6 million in the CCLA pooled property fund.  The Council has applied a statutory override to these which results in the charge to the CIES being reversed out, via the MiRS and into the Financial Instruments Revaluation Reserve.

 

 

 

 

 

 

 

 

 

 

Financial instrument gains/losses

The gains and losses recognised in the CIES in relation to financial instruments are made up as follows:

 

Table 8b Financial instrument gains and losses 2021/22

 

Financial assets

 

Amortisied Costs

Fair value through profit and loss

Total

 

£000

£000

£000

Interest receivable and similar income

1,266

0

1,266

Other investment income (dividends)

0

733

733

Total income in surplus or deficit on the provision of services

1,266

733

1,999

Gain/(loss) on revaluation

0

2,733

2,733

Surplus arising on revaluation of financial assets

0

2,733

2,733

Net gain/(loss) for the year

1,266

3,466

4,732

 

 

Table 8c Financial instrument gains and losses 2020/21

 

Financial assets

 

Loan and receivables

Amortised costs

Financial assets at fair value through Profit and Loss

Total

 

£000

£000

£000

Interest receivable and similar income

1,877

0

1,877

Other investment income (dividends)

0

597

597

Total income in surplus or deficit on the provision of services

1,877

597

2,474

Gain/(loss) on revaluation

0

2,397

2,397

Surplus arising on revaluation of financial assets

0

2,397

2,397

Net gain/(loss) for the year

1,877

2,994

4,871

 

 

 

 

 

 

 

 

 

 

Fair values of assets and liabilities

Except for financial assets carried at fair value as described in table 8d below, all other financial liabilities and assets held by the Authority are carried in the Balance Sheet at amortised cost.  The fair values calculated are as follows:

 

Table 8d Fair value of assets and liabilities carried at amortised cost

31-Mar-21

 

31-Mar-22

Carrying

Fair value

 

Carrying

Fair value

amount

 

 

amount

 

£000

£000

 

£000

£000

139,442

139,442

Short term investments

159,327

159,327

26,301

26,306

Long term investments

36,089

36,180

21,024

21,024

Short term debtors

19,188

19,188

27,646

27,646

Long term debtors

26,002

26,002

214,413

214,418

Total financial assets

240,606

240,697

(30,165)

(30,165)

Short term creditors

(44,503)

(44,503)

(30,165)

(30,165)

Total financial liabilities

(44,503)

(44,503)

 

Some of the Council’s financial assets are measured at fair value on a recurring basis. Including the valuation techniques used to measure them. The fair value hierarchy for categorising instruments is as follows:

 

 

The fair values for loans and receivables include accrued interest.

The comparator market rates prevailing have been taken from indicative investment rates at the balance sheet date.  In practice rates will be determined by the size of the transaction and the counterparty, but it is impractical to use these figures and the difference is likely to be immaterial.

Financial assets at fair value through other comprehensive income are carried in the balance sheet at their fair value.  These fair values are based on public price quotations where there is an active market for the instrument.

Short term debtors and creditors are carried at cost as this is a fair approximation of their value.

 

 

 

 

 

 

9.            Debtors

31-Mar-21

 

31-Mar-22

Long

Short

 

Long

Short

term

term

term

term

£000

£000

 

£000

£000

 

676

Central government bodies

 

       322

 

6,897

Other local authorities

 

    4,387

25,906

15,156

Other entities and individuals

   26,002

16,759

25,906

22,729

Total debtors

   26,002

 21,468

10.         Cash and cash equivalents

The balance of cash and cash equivalents is made up of the following elements:

31 Mar 2021 Restated

 

31-Mar-2022

£000

 

£000

2

Cash held by the Council

4

2,496

Bank current and instant access accounts

540

8,690

Money market funds

25,090

11,188

Total cash and cash equivalents

25,634

Bank overdraft has been represented from prior year to better reflect the nature of the balances with our custodians.

11.         Short–term creditors

31 Mar 2021

 

31-Mar-2022

£000

 

£000

(13,086)

Central government bodies

(39,839)

(14,357)

Other local authorities

(9,148)

(3,055)

Other entities and individuals

(7,399)

(30,498)

 

(56,386)

 

12.         Provisions

The provision in 2021/22 represents amounts set aside to meet future potential business rate appeals liabilities.

31-Mar-2021

Provisions

31-Mar-2022

£000

£000

(3,119)

Balance at 01 Apr 2021

(3,361)

(242)

Movement in year

1,527

(3,361)

Balance at 31 Mar 2022

(1,834)

13.         Unusable reserves

Revaluation reserve

The revaluation reserve contains the gains made by the Council arising from increases in the value of its property, plant and equipment.  The balance is reduced when assets with accumulated gains are:

·         revalued downwards or impaired and the gains are lost;

·         used in the provision of services and the gains are consumed through depreciation; or

·         disposed of and the gains are realised.

The reserve contains only revaluation gains accumulated since 1 April 2007, the date that the reserve was created.  Accumulated gains arising before that date are consolidated into the balance on the capital adjustment account.

Table 13a Revaluation reserve

 

 

 

2020/21

 

2021/22

£000

 

£000

(11,219)

Balance at 1 April 21

(11,110)

(229)

Upward revaluation of assets

(437)

318

Downward revaluation of assets and impairment losses not charged to the surplus/deficit on the provision of services

1,426

89

Surplus or deficit on revaluation of non-current assets not posted to the surplus or deficit on the provision of services

989

20

Difference between fair value depreciation and historical cost depreciation

94

0

Other

1

(11,110)

Balance at 31 March 22

(10,026)

 

 

Financial instruments revaluation reserve

 

The financial instruments revaluation reserve contains the gains made by the Council arising from increases in the value of its investments that have quoted market prices or otherwise do not have fixed or determinable payments.  The balance is reduced when investments with accumulated gains are:

·         Revalued downwards or impaired and the gains are lost;

·         Disposed of and the gains are realised.

 

 

 

 

 

Table 13b Financial instruments revaluation reserve

 

2020/21

 

2021/22

£000

£000

905

Balance at 1 April

(1,492)

(2,397)

Revaluation of investments

(2,733)

(1,492)

Balance at 31 March

(4,225)

 

Capital adjustment account

The capital adjustment account absorbs the timing differences arising from the different arrangements for accounting for the consumption of non-current assets and for financing the acquisition, construction or enhancement of those assets under statutory provisions.  The account is debited with the cost of acquisition, construction or enhancement as depreciation, impairment losses and amortisations are charged to the CIES (with reconciling postings from the revaluation reserve to convert fair value figures to a historical cost basis).  The account is credited with the amounts set aside by the Council as finance for the costs of acquisition, construction and enhancement.

Table 13c Capital adjustment account

 

 

2020/21

 

2021/22

 

 

 

 

£000

 

£000

 

(39,839)

Balance at 1 April

(40,937)

 

 

Reversal of items relating to capital expenditure debited or credited to the CIES:

 

495

Charges for depreciation and impairment of non-current assets

749

(561)

Revaluations (gains)/losses on property, plant and equipment

1,523

17

Amortisation of intangible assets

45

1,514

Revenue expenditure funded from capital under statute

1,981

(304)

Movement in the fair value of investment properties

59

0

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

0

0

Adjusting amounts written out to the revaluation reserve

0

Capital financing applied in the year:

 

(123)

Use of the capital receipts reserve to finance new capital expenditure

(1,090)

(804)

Capital grants and contributions credited to the CIES that have been applied to capital financing

(1,517)

(1,333)

Capital expenditure charged against earmarked reserves

0

1

Other adjustments

1

(40,937)

Balance at 31 March

(39,188)

The account contains accumulated gains and losses on investment properties and gains recognised on donated assets that have yet to be consumed by the Council.

The account also contains revaluation gains accumulated on property, plant and equipment before 1 April 2007, the date that the revaluation reserve was created to hold such gains.

 

 

Pensions reserve

The pensions reserve absorbs the timing differences arising from the different arrangements for accounting for post-employment benefits and for funding benefits in accordance with statutory

provisions.  The Council accounts for post-employment benefits in the CIES as the benefits are earned by employees accruing years of service, updating the liabilities recognised to reflect inflation, changing assumptions and investment returns on any resources set aside to meet the costs.  However, statutory arrangements require benefits earned to be financed as the Council makes employer’s contributions to pension funds or eventually pays any pensions for which it is directly responsible.  The debit balance on the pensions reserve therefore shows a substantial shortfall in the benefits earned by past and current employees and the resources the Council has set aside to meet them.  The statutory arrangements will ensure that funding will have been set aside by the time the benefits come to be paid.

 

Table 13d Pensions reserve

 

2020/21

2021/22

£000

£000

44,187

Balance at 1 April

61,956

15,153

Remeasurement of the net defined benefit liability/(asset)

(26,295)

Actuarial Gain/(loss)

 

5,205

Reversal of items relating to retirement benefits debited or credited to the surplus or deficit on the provision of services in the comprehensive income and expenditure statement

8,564

(2,589)

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

(2,756)

61,956

Balance at 31 March

41,469

 

Deferred capital receipts reserve

The deferred capital receipts reserve holds the gains recognised on the disposal of non-current assets but for which cash settlement has yet to take place.  Under statutory arrangements, the Council does not treat these gains as usable for financing new capital expenditure until they are backed by cash receipts.  When the deferred cash settlement eventually takes place, amounts are transferred to the capital receipts reserve.

 

Table 13e Deferred capital receipts reserve

 

2020/21

 

2021/22

£000

 

£000

(27,575)

Balance at 1 April

(25,998)

(55)

New deferred capital receipts raised in year

(242)

1,632

Transfer to the capital receipts reserve upon receipt of cash

146

(25,998)

Balance at 31 March

(26,094)

 

 

 

 

 

 

 

Collection fund adjustment account

The collection fund adjustment account manages the differences arising from the recognition of Council tax income in the CIES as it falls due from Council taxpayers compared with the statutory arrangements for paying across amounts to the general fund from the collection fund.

 

Table 13f Collection fund adjustment account

 

2020/21

2021/22

£000

£000

(114)

Balance at 1 April

7,762

7,876

Amount by which Council tax and non-domestic rates income credited to the CIES is different from Council tax income and non-domestic rates calculated for the year in accordance with statutory requirements

(7,336)

7,762

Balance at 31 March

426

 

Accumulated absences account

The accumulated absences account absorbs the differences that would otherwise arise on the general fund balance from accruing for compensated absences earned but not taken in the year, e.g. annual leave entitlement carried forward at 31 March.  Statutory arrangements require that the impact on the general fund balance is neutralised by transfers to or from the account.

 

Table 13g Accumulated absences account

2020/21

2021/22

£000

 

£000

188

Balance at 1 April

188

(188)

Settlement or cancellation of accrual made at the end of the preceding year

(188)

188

Amounts accrued at the end of the current year

292

188

Balance at 31 March

292

14.         Interest received, interest paid and dividends received

The cash flow for operating activities included within the cash flow statement includes the following items:

2020/21

 

2021/22

£000

 

£000

1,886

Interest received

1,266

727

Dividends received

733

2,613

Total interest received, interest paid and dividends received

1,999

 

 

 

 

15.         Expenditure and income analysed by nature

The authority’s expenditure and income are analysed as follows:

 

2020/21

 

2021/22

£000

 

£000

Expenditure

19,234

Employee benefits expenses

24,115

44,295

Other services expenses

44,912

607

Depreciation and amortisation

889

16,390

Business rates tariff

16,390

5,524

Precepts and levies

5,879

1,034

Net interest on net defined benefit liability or asset

1,284

87,084

Total expenditure

93,469

Income

 

(39,714)

Fees, charges and other service income

(40,634)

(4,431)

Interest, investment income and income from investment property

(3,283)

(33,305)

Income from Council tax and non-domestic rates

(35,629)

(5,378)

Government grants and contributions

(3,959)

(8,799)

Recognised capital grants and contributions

(3,194)

(2,397)

Gain on revaluation of assets

(2,314)

(94,024)

Total income

(89,013)

(6,940)

(Surplus)/deficit on the provision of services

4,456

 

 

 

 

16.         Members’ allowances

The Council paid the following amounts to members of the Council during the year:

2020/21

 

2021/22

£000

 

£000

179

Basic allowance

181

120

Special responsibility allowance

128

2

Expenses

2

301

 

311

 

 

17.         Employee benefits

Benefits payable during employment

South Oxfordshire District Council and Vale of White Horse District Council share a joint Senior Management Team.  The employees detailed below therefore work across the two authorities and the costs are shared with South Oxfordshire DC contributing 53 per cent and Vale of White Horse DC contributing 47 per cent towards the costs. The three senior officers shown in table 17a are employed by South Oxfordshire DC.

A senior employee is one who earns a salary in excess of £150,000, or holds a designated position (with a salary in excess of £50,000) – these are detailed in the table below:

Table 17a Senior officers’ emoluments statutory

Post title

Financial
year

Salary (including fees & allowances)

Expenses

Total remuneration excluding pension contributions

Pension contributions

Total remuneration including pension contributions

 

 

£

£

£

£

£

Head of paid service

2021/22

177,118

0

177,118

27,105

204,223

2020/21

179,348

0

179,348

27,105

206,453

Chief finance officer (section 151 officer)

2021/22

100,280

332

100,612

16,346

116,958

2020/21

98,314

450

98,764

16,025

114,789

Monitoring officer up to 31.07.2021

 

2021/22

39,382

0

39,382

5,449

44,831

2020/21

98,314

0

98,314

16,025

114,339

Monitoring officer (16.08.21-31.03.22)

2021/22

63,055

0

63,055

10,278

73,333

2020/21

0

0

0

0

0

 

 

The current chief finance officer, monitoring officer and two deputy chief executives are also heads of service. There are five other heads of service, two of whom are employed by Vale of White Horse District Council.

The spot point pay level for heads of service is as follows:

 

Table 17b Spot pay point - heads of service

Acting Deputy Chief Executive 1 April 2021 to 14 June 2021

2

121,911

Deputy Chief Executive 15 June 2021 to 31 March 2022

2

121,911

Heads of Service

 

 

Head of Service from 1 April 2021 to 31 July 2022

6

100,280

Heads of Service from 1 August 2021 to 30 September 2021

5

100,280

Heads of Service from 1 October 2021 to 31 March 2022

6

100,280

 

The Council is also obliged to disclose the numbers of other employees that were paid a salary in excess of £50,000 (these numbers do not include the senior officers detailed above).  Forty nine employees total remuneration, excluding employer’s pension contributions, was £50,000 or more.

 

 

 

 

 

 

Table 17c Employee remuneration over £50,000

 

Number of SODC/VOWH employees

2020/21

Remuneration band
£

2021/22

 

19

50,000-54,999

28

3

55,000-59,999

8

8

60,000-64,999

2

9

65,000-69,999

10

0

70,000-74,999

1

 

Under the shared working arrangements, the Council recharged a total of £8,109,582 of its salary costs to Vale of White Horse District Council, who in turn recharged £3,592,696 of its salary costs to this Council.

Termination benefits

The number of exit packages with total cost per band and total cost of the compulsory and other redundancies are set out in the table below:

 

Table 17d Exit packages agreed

Exit package cost band (including special payments)

Number of compulsory redundancies

Number of other departures agreed

Total number of exit packages by cost band

Total cost of exit packages in each band
 £

 

2020/21

2021/22

2020/21

2021/22

2020/21

2021/22

2020/21

2021/22

£0 - £20,000

0

0

0

0

0

0

0

0

£20,001 - £40,000

0

1

0

1

0

2

0

52,934

£60,001 - £80,000

0

0

1

0

1

0

69,635

0

Total

0

1

1

1

1

2

69,635

52,934

 

 

The total value of exit packages paid in 2021/22 was £52,934.

 

Post-employment benefits - defined benefit pension schemes

Participation in pension schemes

As part of the terms and conditions of employment of its officers, the Council makes contributions towards the cost of post-employment benefits.  Although these benefits will not actually be payable until employees retire, the Council has a commitment to make the payments that need to be disclosed at the time that employees earn their future entitlement.

The Council participates in The Local Government Pension Scheme (LGPS).  The LGPS is a defined statutory scheme administered in accordance with the Local Government Scheme regulations 2013, is contracted out of the State Second Pension and currently provides benefits based on career average revalued salary and length of service on retirement. 

The administering authority for the Fund is Oxfordshire County Council.  The Pension Fund Committee oversees the management of the Fund whilst the day to day fund administration is undertaken by a team within the administering authority.  Where appropriate some functions are delegated to the Fund’s professional advisers.

As administering authority to the Fund, Oxfordshire County Council, after consultation with the Fund Actuary and other relevant parties, is responsible for the preparation and maintenance of the Funding Strategy Statement and the Statement of Investment Principles.  These should be amended when appropriate based on the Fund’s performance and funding.

Contributions are set every three years as a result of the actuarial valuation of the Fund required by the Regulations.  The actuarial valuation of the Fund has been carried out as at 31 March 2020 and sets contributions for the period 1 April 2020 to 31 March 2023.  There are no minimum funding requirements in the LGPS but the contributions are generally set to target a funding level of 100 per cent using the actuarial valuation assumptions.

On the employer’s withdrawal from the Fund, a cessation valuation will be carried out in accordance with Regulation 64 of the LGPS Regulations 2013 which will determine the termination contribution due by the employer, on a set of assumptions deemed appropriate by the Fund Actuary.

This is a funded defined benefit career scheme, meaning that the Council and employees pay contributions into a fund, calculated at a level intended to balance the pension’s liabilities with investment assets.  The fund has an independent global custodian, BNP Paribas, whose main duties include the safekeeping of the fund's investments, the collection of income and the execution of corporate actions, such as company mergers or takeovers.

In addition, arrangements for the award of discretionary post-retirement benefits are awarded upon early retirement. This is an unfunded defined benefit arrangement under which liabilities are recognised when awards are made.  However, there are no investment assets built up to meet these pension liabilities, and cash has to be generated to meet actual pension’s payments as they fall due.

In general, participating in a defined benefit pension scheme means that the employer is exposed to a number of risks:

·         Investment risk. The Fund holds investment in asset classes, such as equities, which have volatile market values and while these assets are expected to provide real returns over the long-term, the short-term volatility can cause additional funding to be required if a deficit emerges.

·         Interest rate risk. The Fund’s liabilities are assessed using market yields on high quality corporate bonds to discount future liability cashflows.  As the Fund holds assets such as equities the value of the assets and liabilities may not move in the same way.

·         Inflation risk. All of the benefits under the Fund are linked to inflation and so deficits may emerge to the extent that the assets are not linked to inflation.

·         Longevity risk. In the event that the members live longer than assumed a deficit will emerge in the Fund. There are also other demographic risks.

In addition, as many unrelated employers participate in the Oxfordshire County Council Pension Fund, there is an orphan liability risk where employers leave the Fund but with insufficient assets to cover their pension obligations so that the difference may fall on the remaining employers.

 

All of the risks above may also benefit the employer e.g. higher than expected investment returns or employers leaving the Fund with excess assets which eventually get inherited by the remaining employers.

 

Table 17e Transactions relating to retirement benefits

2020/21

 

2021/22

£000

£000

 

Cost of Services:

 

4,171

Current service cost

7,249

0

Past Service Cost

31

Financing and investment income and expenditure

 

1,034

Net interest expense

1,284

5,205

Total post-employment benefit charged to the surplus or deficit on the provision of services

8,564

Other post-employment benefit charged to the CIES

 

Remeasurement of the net defined benefit liability comprising:

 

(18,946)

Return on plan assets (excluding the amount included in the net interest expense)

(9,169)

1,826

Actual (gain) and losses arising on changes in demographic assumptions

(1,544)

33,560

Actual (gain) and losses arising on changes in financial assumptions

(8,862)

(1,287)

Other

(6,720)

15,153

Total post-employment benefit charges to the comprehensive income and expenditure statement

(26,295)

Movement in Reserves Statement

 

5,200

Reversal of net charges made to the surplus or deficit for the Provision of Services for post-employment benefits in accordance with the code

8,564

Actual amount charged against the general fund balance for pensions in the year:

 

2,589

Employers’ contributions payable to scheme

2,756

These risks are also mitigated to a certain extent by the statutory requirements to charge to the general fund the amounts required by statute.

 

 

 

 

 

 

 

 

 

Transactions relating to retirement benefits

The cost of retirement benefits is recognised in the reported cost of services when they are earned by employees, rather than when the benefits are eventually paid as pensions.  However, the charge made against Council tax is based on the cash payable in the year, so the real cost of post-employment / retirement benefits is reversed out of the general fund via the movement in reserves statement.  The following transactions have been made in the CIES and the general fund balance via the movement in reserves statement during the year:

Pensions assets and liabilities recognised in the balance sheet

The amount included in the balance sheet arising from the authority’s obligation in respect of its defined benefit plans is as follows:


 

17f Pension assets and liabilities recognised in the balance sheet

2020/21

2021/22

£000

 

£000

109,516

Fair value of employer assets

109,078

(167,391)

Present value of funded liabilities

(146,767)

(4,081)

Present value of unfunded liabilities

(3,780)

(61,956)

Net liability arising from defined benefit obligation

(41,469)

 

17g Reconciliation of the movements in the fair value of the scheme assets

2020/21

 

2021/22

£000

£000

89,786

Opening balance at 1 April

109,516

2,049

Interest on assets

2,176

18,946

Return on assets less interest

9,169

2,589

Employer contributions

2,756

845

Contributions by scheme participants

927

(4,699)

Benefits paid

(4,927)

0

Remeasurement - other experience

(10,539)

109,516

Closing present value of scheme assets

109,078

 

 

17h Reconciliation of the movements in the fair value of the scheme liabilities

Funded and Unfunded liabilities

Funded and Unfunded liabilities

2020/21

 

2021/22

£000

£000

(133,973)

Opening balance at 1 April

(171,472)

(4,171)

Current Service Cost

(7,249)

(3,083)

Interest cost

(3,460)

(845)

Contributions by scheme participants

(927)

(1,826)

Actual (gains) and losses arising on changes in demographic assumptions

8,862

(33,560)

Actual (gains) and losses arising on changes in financial assumptions

1,544

1,287

Other

17,259

0

Past service costs

(31)

4,699

Benefits paid

4,927

(171,472)

Closing present value of liabilities

(150,547)

 

 

The discretionary benefits arrangements have no assets to cover its liabilities. The LGPS’ assets consist of the following categories:

 

 

 

 

 

 

Table 17i Breakdown of fund assets at fair value

2020/21

 

2021/22

Quoted

Non quoted

Total

 

 

Quoted

Non quoted

Total

 

£000

£000

£000

%

 

£000

£000

£000

%

Equities

 

 

 

 

Bonds:

 

 

 

 

8,956

8,956

10

    Government bonds

2,240

 

2,240

2

2,819

2,819

2

    Other

593

 

593

1

4,759

4,759

4

Private equity

5,362

1

5,363

5

88,979

88,979

81

Other investment funds

 

98,520

98,520

90

124

124

0

Foreign exchange

(8)

 

(8)

0

3,879

3,879

3

Cash and cash equivalents

2,370

 

2,370

2

20,537

88,979

109,516

100

Total

10,557

98,521

109,078

100

 

 

Basis for estimating assets and liabilities

 

In order to assess the value of the Council’s liabilities in the Fund as at 31 March 2022, it has rolled forward the value of the Council’s liabilities calculated at the latest formal valuation date of 31 March 2020, allowing for the different financial assumptions required under the Accounting Standard at the reporting date.

In calculating the current service cost, it has allowed for changes in the Council’s pensionable payroll as estimated from the contribution information provided. In calculating the asset share it has rolled forward the Council’s share of the assets calculated at the latest formal valuation date allowing for investment returns, the effect of contributions paid into, and estimated benefits paid from, the Fund by the Council and its employees.

In preparing the balance sheet at 31 March 2022 and the revenue account to 31 March 2022 no allowance is made for the effect of changes in the membership profile since the last formal valuation date. The principal reason for this is that insufficient information is available to allow for any such adjustment. However, the effect is likely to be immaterial in actual terms.

Whilst the liabilities calculated under the Accounting Standard include an allowance for some premature retirements on the grounds of ill-health, there is no allowance for early retirements on grounds of redundancy or efficiency other than those actual cases notified.

It is not possible to assess the accuracy of the estimated rolled-forward liability without conducting a full valuation using updated individual member data. Such a valuation is generally not practical in the time available to meet the Council’s reporting requirements. The estimated rolled-forward liability as at 31 March 2022 will therefore not reflect differences in demographic experience from that assumed (e.g. pensioner longevity) or the impact of differences between aggregate changes in salary/pension or changes for specific individuals.

It has no reason to believe that the approximations used in rolling forward the valuation to 31 March 2022 will introduce any undue distortion in the results.

The Employer currently participates in the South Oxfordshire District Council pool with other employers in order to share experience of risks they are exposed to in the Fund. At the 2020 valuation, the deficit for the whole pool was calculated and allocated to each employer in proportion to their value of liabilities. The next reallocation will be carried out at the 2023 valuation, should the Employer remain in the pool. Each employer within the pool pays a contribution rate based on the cost of benefits of the combined membership of the pool.

It has adopted a set of demographic assumptions that are consistent with those used for the most recent Fund valuation, which was carried out as at 31 March 2020.  The post retirement mortality tables adopted are the S2PA tables with a multiplier of 90 per cent.  These base tables are then projected using the CMI 2015 Model, allowing for a long-term rate of improvement of 1.5 per cent per annum.

 

Table 17j Principal actuarial assumptions

 

2020/21

 

2021/22

 

Long-term expected rate of return on assets in the scheme

 

Mortality assumptions

 

Longevity at 65 for current pensioners:

 

22.4yrs

Men

22.3yrs

24.7yrs

Women

24.9yrs

Longevity at 65 for future pensioners:

 

23.4yrs

Men

23yrs

26.3yrs

Women

26.3yrs

Other assumptions

 

2.85%

Inflation - CPI

3.20%

2.85%

Rate of general increase in salaries

3.20%

2.85%

Rate of increase to pensions

3.20%

2.00%

Discount rate

2.70%

 

 

The estimation of the defined benefit obligations is sensitive to the actuarial assumptions set out in the table above.  The sensitivity analyses below have been determined based on reasonably possible changes of the assumptions occurring at the end of the reporting period and assumes for each change that the assumption analysed changes, while all the other assumptions remain constant.  The assumptions in longevity, for example, assume that life expectancy increases for men and women. In practice this is unlikely to be correct, and changes in some of the assumptions may be interrelated.  The estimates in the sensitivity analysis have followed the accounting policies for then scheme, i.e. on an actuarial basis using the projected unit method.  The methods and types of assumptions used in preparing the sensitivity analysis below did not change from those used in the previous period.

Other assumptions are that:

·         Members will exchange half of their commutable pension for cash at retirement;

·         Members will retire at one retirement age for all tranches of benefit, which will be the pension weighted average tranche retirement age; and

The proportion of members that had taken up the 50:50 option at the previous valuation date will remain the same.

 

 

Table 17k Sensitivity analysis

 

 

Change in assumption at 31 Mar 2022

Approximate increase in employer liability

%

£000

0.1% decrease in real discount rate

2

2,507

1 year increase in member life expectancy

4

6,022

0.1% increase in the salary increase rate

0

291

0.1% increase in the pension increase rate *

2

2,198

 

 

In order to quantify the impact of a change in the financial assumptions used it has calculated and compared the value of the scheme liabilities as at 31 March 2022 on varying bases. The approach taken is consistent with that adopted to derive the IAS 19 figures provided.

The principal demographic assumption is the longevity assumption (i.e. member life expectancy). For sensitivity purposes it has estimated that a one-year increase in life expectancy would approximately increase the employer’s Defined Benefit Obligation by around 3-5 per cent.  In practice the actual cost of a one-year increase in life expectancy will depend on the structure of the revised assumption (i.e. if improvements to survival rates predominantly apply to younger or older ages).

The above figures have been derived based on the membership profile of the employer as at the date of the most recent actuarial valuation.

Impact on the Council’s cash flows

The objectives of the scheme are to keep employers’ contributions at as constant a rate as possible, at a reasonable cost to the scheme employers and taxpayers, whilst ensuring the overall solvency of the fund.  There are no minimum funding requirements, but contributions are generally set to target a funding level of 100 per cent.  Funding levels are monitored regularly, and the next triennial valuation is due to be completed on 31 March 2022.

The scheme will need to take account of the national changes to the scheme under the Public Pensions Services Act 2013.  Under the Act, the Local Government Pension Scheme in England and Wales may not provide benefits in relation to service after 31 March 2014.  The Act provides for scheme regulations to be made within a common framework, to establish new career average revalued earnings schemes to pay pensions and other benefits.

The actuarial estimate of the duration of the Council’s liabilities is 19 years.  The Council paid £2.09 million in contributions to the scheme in 2022/23.

Mcloud Judgement

An estimated McCloud judgement allowance has been added to the formal valuation results so the impact is continued to be included within the balance sheet at 31 March 2022 (as per the 2021 accounting approach)

 

 

 

18.         External audit costs

The Council has incurred the following costs in relation to the audit of the statement of accounts, certification of grant claims and statutory inspections and to non-audit services provided by the Council’s external auditors.

In 2021/22 external audit services were provided by Ernst & Young LLP.

2020/21

 

2021/22

£000

£000

58

Fees payable with regard to external audit services carried out by the appointed auditor for the year

62

10

Fees payable to external auditor for the certification of grant claims and returns for the year

11

68

 

73

19.         Grant income

The Council credited the following grants, contributions and donations to the CIES in 2021/22.

 

2020/21
£000

 

2021/22
£000

 

Credited to taxation and non-specific grant income

 

20,082

Retained business rates

21,374

(16,390)

Business Rates Tariff

(16,390)

17

Council tax family annexe

18

13,205

Council tax income

14,237

7,202

Developers and other contributions

1,643

0

Lower tier serivice grant

130

0

Rural Services Delivery Grant

44

1,640

Disabled facilities grant

1,551

2,747

New homes bonus

2,549

2,589

Covid grant

1,236

31,092

Total

26,392

Credited to services

 

125

Didcot Garden Town

(1)

150

Berinsfield Regeneration

50

360

Homelessness Support Grant

502

361

Housing benefit - admin

367

19,636

Housing benefit - subsidy

18,366

31

Leader

23

80

Neighbourhood planning

40

185

New burdens revenue and other grants

36

187

NNDR collection allowance

178

69

Partnership & community safety

204

30

Universal Credit

3

386

Community Hub ( Covid Grants)

262

21,598

Total

20,030

 

 

20.         Related parties

The Council is required to disclose material transactions with related parties – bodies or individuals that have the potential to control or influence the Council or to be controlled or influenced by the Council.  Disclosure of these transactions allows readers to assess the extent to which the Council might have been constrained in its ability to operate independently or might have secured the ability to limit another party’s ability to bargain freely with the Council.

Related parties include:

Central Government: Central government has effective control over the general operations of the Council – it is responsible for providing the statutory framework, within which the Council operates, provides a large proportion of its funding in the form of grants and prescribes the terms of many of the transactions that the Council has with other parties (e.g. housing benefits). Grants received from government are shown in note 19 above.

Precepts: Precept transactions in relation to Oxfordshire County Council, Police and Crime Commissioner for Thames Valley and the various town and parish Councils, are shown within a note to the collection fund.

Members of the Council: Members have direct control over the Council’s financial and operating policies. During the year no members have undertaken any declarable, material transactions with the Council. Details of any transactions would be recorded in the register of members’ interests, open to public inspection at the Council’s offices. This is in addition to a specific declaration obtained from all Councillors in respect of related party transactions. Members have declared an interest in one of the following organisations:

 

As at publication, the below elected member had yet to return their declarations:

 

Councillor Lorraine Hillier

A check of the Councillors’ register of interests has shown that none of the above named members had declared any related party transactions. 

Members represent the Council on various organisations. Appointments are reviewed annually, unless a specific termination date for the term of office applies. None of these appointments places the member in a position to exert undue influence or control.

Officers of the Council: The senior officers of the Council have control over the day to day management of the Council and all heads of service and management team members have been asked to declare any related party transactions. Officers have declared an interest in the following organisation:

·         Great Western Society (Didcot Railway Centre)

Other organisations: The Council awards grants to support a number of voluntary or charitable bodies and individuals, it does not attempt to exert control through this.

 

 

21.         Capital expenditure and capital financing

The total amount of capital expenditure incurred in the year is shown in the table below (including the value of assets acquired under finance leases), together with the resources that have been used to finance it. Where capital expenditure is to be financed in future years by charges to revenue as assets are used by the Council, the expenditure results in an increase in the Capital Financing Requirement (CFR), a measure of the capital expenditure incurred historically by the Council that has yet to be financed.

 

Table 21a Capital expenditure and financing

2020/21

2021/22

£000

 

£000

 

Capital investment:

 

625

Property, plant and equipment

599

121

Intangible assets

27

1,514

Revenue expenditure funded from capital under statute

1,981

2,260

Total capital investment

2,607

Sources of finance:

 

(123)

Capital receipts

(1,090)

(804)

Government grants and other contributions

(1,517)

(1,333)

Earmarked revenue reserves

0

(2,260)

Total financing

(2,607)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Council’s CFR is made up of certain balances on the balance sheet and for a Council with no debt should equal zero.

 

Table 21b Capital financing requirement

2020/21