VALE OF WHITE HORSE

DISTRICT COUNCIL

 

STATEMENT OF ACCOUNTS

 

2021/22

     


 

     CONTENTS

 


 

 

Page

Narrative statement

3

Statement of responsibilities for the statement of accounts

17

Audit opinion

18

The core financial statements:

21

 

Comprehensive income and expenditure statement

23

 

Movement in reserves statement

25

 

Balance Sheet

26

 

Cash flow statement

27

Notes to the accounting statements

28

Collection fund account

63

 

Notes to the collection fund account

64

Statement of accounting policies

68

Glossary of terms

84

Annual governance statement

92

 

Vale of White Horse District Council

Abbey House Abbey Close

Abingdon

Oxfordshire

OX14 3JE


 

Narrative statement

Introduction

This narrative statement provides a commentary on Vale of White Horse 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 84-91.                                                                      

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 Vale of White Horse district

Vale of White Horse is the eleventh most rural district in the south east region, with an average of 2.4 persons per hectare.[1] Around 42.0 per cent of the population live in rural areas, outside the main towns of Abingdon, Faringdon, Grove and Wantage – and the Oxford Belt [2] The population in June 2020 was 137,910; of this figure, 20.2 per cent (or 27,911 people) were aged 65 or over and 2.9 per cent (or 3,976 people) were aged 85 or over.[3]

 

The Office for National Statistics projects that in 2032 the population of Vale of White Horse will increase to 155,379 (an extra 17,469 people when compared to the June 2020 population estimate).[4] It is expected that there will be 36,495 people aged 65+ in 2032, comprising 23.5 per cent of the population.  There are also projected to be 6,315 people aged 85+ (4.1 per cent of the population) – this is higher than the projection for England (3.4 per cent).[5]

 

As of 31 March 2021, there were 57,500 occupied households in the Vale of White Horse. Between 2011 and 2021, the total number of households in the district increased by 8,100 (16.4 per cent).[6]

 

Employment within the Vale of White Horse is high: the resident population aged 16 to 64 only 2.1 per cent were in receipt of out of work benefits in March 2022. This compared favourably with the average for the southeast region (3.2 per cent) and for United Kingdom (4.1 per cent).[7]

 

In 2021, the ratio of lower quartile house prices to lower quartile workplace- based earnings in Vale of White Horse was 10.29 – 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]

 

Corporate priorities

The Council’s Corporate Plan 2020–2024 contains strategic objectives and corporate priorities for the period, the focus is:

 

How performance is measured

The council’s activities are based on our four-year corporate plan for 2020-2024 and 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 overseen by the council’s senior management team, Scrutiny Committee, Climate Emergency Advisory Committee, 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.

Many of our services are provided through contractors, and the performance of our five major contractors will be monitored through a separate annual review and report to the council’s Joint Scrutiny Committee with South Oxfordshire District Council.

2021/22 has seen the council introduce a Performance Management Framework. The Council’s approach to Performance management was become an inherent part of the Council’s culture and is fundamental to the achievement of our priorities set out in the Corporate Plan 2020-24.

It also places our residents at the centre of what we do, how well we are doing and how we can improve.

Performance management is about having the information needed to allow us to take action if service delivery, or outcomes against the Council’s themes, as set out in the Corporate Plan 2020-24 are not as expected. This action may be at individual, service, or thematic level.

Everyone within the council has a role in improving performance. Our performance Management Framework helps to show how individual activities contribute to the strategic themes in the Corporate Plan 2020-24 and in turn, the overall performance of the council.

COVID-19 – Community Hub and roadmap


The continuing impact of the pandemic on the Council’s performance is outlined 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 its services deliver to support communities
during this time.


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. In addition, a range of information
and advice is available for the public and businesses on the Council website, for instance, how to book a vaccination and how to obtain financial support.


As well as dedicating significant officer resource to the pandemic, the Council has also
made its buildings available, including for the creation and operation of the community
hub. The Beacon in Wantage from February 2021 is being used as a Covid-19 testing
site for public-facing workers and volunteers who are not displaying symptoms. The Council worked closely with partners across Oxfordshire to help set up this rapid
symptom-free testing site to help stop the spread of the virus, protect the NHS and vital
social care services, and ultimately saving lives.


The Council is also working with partners at the county and district Councils, local GPs and the
Oxfordshire Clinical Commissioning Group (CCG) on a COVID-19 vaccination outreach
scheme. Officers provide people with help to book an appointment, arrange
transport, or simply offer information and advice in a format agreed with NHS
colleagues. Feedback from residents and the outcomes of visits helped build up a detailed picture of why people may not be taking up the opportunity of vaccination.


268 people across South Oxfordshire and the Vale of White Horse who the NHS test and trace national system was unable to reach were visited and the employment of two Government funded COVID-19 Compliance Marshals enabled the Council to encourage and support businesses to trade in a ‘COVID-19 secure’ manner, and to provide further advice to the public.

 

During the year £28.7 million was paid in financial support to businesses in Vale of White Horse, 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 the Council we will soon be developing its own Plan that will
provide a route map for recovery from the COVID-19 pandemic and assess the impact it has
had on residents, the Council and local businesses.

 

Providing the homes people need

To support the Vale of White Horse’s aim to find ways to provide more genuinely affordable housing in the Vale of White Horse 298 new affordable homes were delivered during 2021/22 exceeding the target of 250. 

 

An updated Community Infrastructure Level spending strategy is now in place to accelerate the delivery of local infrastructural improvements. Systems have been implemented to enable real time monitoring and reporting on income generation, spend and infrastructure projects. In February 2022 the Council agreed to fund over £3 million of its budgeted capital expenditure from its retained Community Infrastructure Levy (CIL) receipts over the next five years. In March the first meeting of the newly constituted member/officer working group to consider CIL spending was held, which will inform infrastructure investments for 2022/23.

A revised Vale CIL Charging Schedule was adopted, and a Section 106 Supplementary Planning Document has progressed and is subject to formal approval – both include mechanisms for securing developer contributions for affordable housing and community infrastructure, and adoption.  A Section 106 affordable housing fund and application process is now operational. Contracts were exchanged for two major affordable housing projects funded by commuted Section 106 sums and grants from the Oxfordshire Housing and Growth Deal.

Furthermore, during 2021/22, Homes England have been working with land agents to accelerate the development of 800 homes in Dalton Barracks and North-West Valley Park. Following a successful public consultation, the Dalton Barracks Supplementary Planning Document (which creates the core principles for the site) was developed for approval by Vale Cabinet in April 2022 and will support the council’s commitment to deliver innovative housing to meet its aims for high quality, low energy, zero-carbon homes.

An application for 4,254 new dwellings in Valley Park, Didcot has been approved with healthcare and environmental provisions assured from developers, including upgrading active travel infrastructure with an innovative use of traffic lights to prioritise cycling over motorised vehicles.  Over £3million for local healthcare provision in the area surrounding Valley Park or dedicated land for a health care centre on the site and £2.8million to be provided towards its construction has also been secured.

The Oxfordshire Community Land Trust and Heylo Housing will be receiving £304,000 and £366,400 respectively. Officers have also made plans to promote new applications for grant funding and are intending to update both the funding criteria and application process.

Over the year the Vale of White Horse continued to explore the creation of a Council-owned holding company or vehicle with developers, this will identify sites for development in the Vale and enable the delivery of regeneration and community benefits including housing, community facilities, land maintenance and health.

A refreshed Housing Strategy continues to be developed to outline the types of housing, provide, the mix of design and for what demographic and tenure. It will also include affordable housing aspirations and environmental policies. This strategy will inform the Council’s Local Plan and the work going forward.  It is anticipated that the realignment of services within Housing & Environment (including the creation of a Housing Delivery Manager role) will help to drive this work forward during 2022/23. 

A public consultation on the new Joint Design Guide (JDG) was launched in January 2022. The JDG incorporates new guidance on zero and low carbon construction.  The Vale’s Climate Action Plan (CAP) was adopted by the Cabinet and includes measures designed to encourage lower-carbon construction within the district. 

A new policy framework is being developed through the Joint Local Plan and the Oxfordshire Plan 2050 to help deliver homes in a way that supports peoples’ wellbeing and the environment.  Scoping of new policies for inclusion in the Joint Local Plan has been undertaken, including a Councillor Roundtable on the issue of climate change which was held in January. Work also continues on developing an agreed definition of true housing affordability, with the first major public consultation on the Joint Local Plan expected in Q1 2022/23.


Tackling the climate emergency

A significant piece of the Council’s internal policy framework has been adopted this year in the Vale of White Horse Climate Action Plan 2022-24 (CAP). This is intended to play a pivotal role in steering the Council’s work in achieving its objective of becoming carbon neutral by 2030. 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 Climate Emergency Advisory Committee (CEAC) and to Cabinet. Moreover, to ensure that the CAP has the greatest possible impact – and is also seen as an integral part of the Vale’s operations – work has commenced on aligning it with the Council’s Strategic Performance Management Framework.

 

The Council has focused its endeavours on decarbonising its leisure centres – which are responsible for almost half of the Vale’s total greenhouse gas emissions – as part of a wider programme of work to cut emissions from its own operations. During 2021/22, the Council secured £361,000 of funding from the Public Sector Decarbonisation Scheme to fully refurbish the heating system at Faringdon Leisure Centre -with the work expected to be completed in 2022/23. In addition, the Vale has commissioned surveys and assessments for the decarbonisation of its other leisure centres.

 

While the emphasis has been on decarbonising the Council’s buildings, efforts have also been made in reducing carbon emissions from other areas. For example, the Vale’s waste contractor has been trialling an electric waste collection vehicle within the district – performance feedback is expected later this year.

 

The Policy for Planting Trees on Council Land is intended to not only protect, plant and manage trees on land owned by the Vale but also help to support community tree planting initiatives. Since its launch this year, 1,500 trees have been planted at Rye Meadow Farm.

 

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 CEAC. Their findings and recommendations were circulated to neighbouring authorities through the Future Oxfordshire Partnership Environment Advisory Group and to HM Government. The Vale have also lobbied for HM Government to create a national scheme for domestic retrofitting.

 

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.

 

After securing funding from DEFRAs Natural, Environment and Readiness Fund, the Vale – in collaboration with partners – are in the process of establishing a Habitat Bank. This will help the Council deliver biodiversity offsetting requirements.

As part of the Oxfordshire ‘Park and Charge’ project, electric vehicle charging points are being installed in five car parks across the Vale. They are due to become operational in early 2022/23 and are intended to encourage people to make the switch to electric by providing accessible charging infrastructure.

The Vale has initiated numerous communication campaigns and activities designed to encourage individuals to change their behaviours. These have included the promoting Food Waste Action Week, the Great British Spring Clean and the Green Homes Grant Scheme. In addition, the Communications team have revamped the climate action pages on the Council’s website.


By joining the Oxfordshire Greentech network, the Vale have also taken action to support local businesses in their response to the climate emergency. Oxfordshire Greentech is a valuable resource that provides advice and assistance to companies seeking to reduce their carbon.

Building healthy communities

 

Vale of White Horse District Council continued to deliver a range of services to eliminate homelessness across the district. The Housing Needs team, by using targeted prevention and early intervention measures, has helped to save hundreds of households from becoming homeless. In addition, by providing support and assistance to vulnerable individuals, the Vale was able in Q3 2021/22 to record zero rough sleepers for the first time since 2013.

 

The Council, nevertheless, appreciates that more work is needed to help ensure that nobody if faced with the prospect of being homeless. They have, therefore, adopted the Oxfordshire Homelessness and Rough Sleeping Strategy which 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. 


Through the development of a draft Active Communities Strategy, the Vale aims to provide and promote opportunities for residents to increase their activity levels. A key focus of this work is on promoting active travel and creating healthier communities through walking and cycling.

 

The Vale recognises that providing the appropriate transport infrastructure is vitally important in encouraging active travel. They have, therefore, completed their work on a Local Cycling and Walking Investment Plan for Didcot Garden Town. Work on Phase 1 of the Science Vale Active Travel Network has also finished. 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.

 

The Council, as part of its commitment to improving health and wellbeing, has continued to expand the range of cultural and physical activities that it provides. In partnership with Active Oxfordshire, the Vale has received funding to launch a new project (You Move) which will target families on low incomes to help engage them in exercise. Following the success of Active Reach projects in Abingdon and Faringdon, the Council is also now looking to deliver similar schemes in other locations within the district.

 

Specific areas within the Vale have distinct and specific health and wellbeing issues which need to be addressed. The Council has, therefore, started work on a project to better understand the challenges facing Abingdon Caldecott, the most deprived ward in the district.

 

Work has continued on promoting the use of the Vale’s public green spaces for exercise and activity through Xplorer events, Litterbug trails etc. A review of potential sites for additional orienteering routes and trails in the district has also been undertaken and the identification of suitable venues for community gardens is underway.

Public art has the ability to create a sense of place, improve the local environment, generate local pride and raise the quality of life. During 2021/22, the Vale, therefore, produced a strategy for commissioning public art in the district through Section 106 revenues. 

The Community Hub has proven to be a real asset during the pandemic. The Council, working closely together, with community partners have been able to deliver much-needed support to residents (particularly those with vulnerabilities). Officers involved in the Community Hub are now in the process of reviewing the assistance provided and are sharing relevant information to support the voluntary sector in its recovery from the impact of the pandemic.

Building stable finances

Vale of White Horse is a lean and efficient Council which uses its resources to provide value for money to all its residents. Through sound financial management it has consistently kept costs low, while continuing to provide high quality services. Nevertheless, years of austerity followed by the significant – and sustained – economic costs of the pandemic have continued to place substantial additional pressures on the Council’s budgets. Despite these challenges, however, Council tax levels in the Vale have remained consistently below those in many other comparable local authorities (for 2022-23 Band D Council tax will be £146.69, the sixteenth lowest of all shire district Councils).

 

The Strategic Property Review, by providing an overview of the Vale’s property assets, is designed to ensure that these are optimised to meet the Council’s corporate plan objectives. During its development this year, the Vale was able to identify opportunities to enhance, redevelop or transfer assets to maximise income and/or benefit the district.


The Council has continued to work on the design and implementation of a Corporate Landlord model. This is intended to provide an improved understanding of the Vale’s asset base and enable a proactive corporate ‘asset challenge’ process (a rolling programme of review intended to confirm that only those buildings providing best value are retained in the future).

 

Through the creation of a Property Investment Strategy, the Vale aims to help build its financial resilience and to protect against future uncertainties. It is intended to give the Council a greater ability to invest in a wider range of assets and, therefore, maximise its returns and improve its income.


A new Procurement Policy, reflecting the Vale’s corporate aims and goals, has been approved. This will give the Council clear direction and guidance when purchasing goods, services and works.

 

Changes have been agreed to the Vale’s Capital Strategy to allow for the consideration of investments in property, loans to companies and renewable energy.

 

The Council also approved a Treasury Management Strategy which gives more flexibility in counterparties. In addition, work has continued on a review of funds to provide options for treasury investments.

 

The Vale is looking to diversify the instruments that it can invest in to seek better returns whilst still complying with the Treasury Management code of practice requirements. To build upon their previous successes in securing external funding, the Council have enhanced their ability to identify and obtain third party income by providing additional staffing resources in this area. 

 

The Vale have also continued to work across the public sector to influence and maximise funding for local government. Lobbying campaigns were launched regarding the one-year Local Government Finance Settlement and the lack of flexibility regarding Council tax increases.

 

Working in partnership

To realise the Council’s commitment to provide support to businesses in order to help them succeed, the Vale issued £5,264,778 of Additional Restriction Grants to businesses during 2021/22.

A Reopening High Streets Safely Fund, grant funding agreement was signed in June 2021.  The Council also used Contain Outbreak Management Funding to undertake activities that were previously scheduled to take place under the auspices of the Reopening High Streets Safely Fund.

South and Vale finalised a contract for the Virtual High Street Initiative which will enable the consolidation of South and Vale based independent retailers on a single e-commerce platform.  The project will officially be launched during Q1 2022/23.

 

The Vale’s Economic Development team provided weekly business intelligence reports and feedback to OxLEP which feeds into both the Oxfordshire and the Department for Business, Energy & Industrial Strategy economic recovery plans. Early-stage meetings were held between the Council and HM Government’s Cities and Local Growth Unit - intended to establish connections and lines of communication.

 

The Council also launched other initiatives to provide support to businesses in the Vale including a virtual ‘Networking in South and Vale’ event, to support local businesses in making vital links and connections. 

 

In 2021/22 a total of 57 Neighbourhood plans were adopted.

This furthers the Council’s commitment to strongly support neighbourhood planning groups in developing a shared vision for their area. In addition, the Vale designated the Abingdon Neighbourhood Area. This will help enable the Town Council to exercise neighbourhood planning rights and access both funding and technical support. They also provided advice – focused on climate action, regeneration, infrastructure, and design quality – to Faringdon Town Council to help them initiate a review of their current Neighbourhood Plan.

The Vale (in conjunction with South Oxfordshire) secured £45,000 to pilot a simpler approach to neighbourhood planning.

 

This should help to provide communities with an additional tool to effect and enable change – the Council has sought expressions of interest from those wishing to take part in testing this new method – and is a reaffirmation of the Vale’s commitment to neighbourhood planning.

 

The Council have responded to a range of external consultations including the Government’s Oxford-Cambridge Arc Spatial Framework to mould both regional and national policy in a way that reflects the Vale’s ambitions. Officers shared work on the mapping of the health policy and partnership landscape with system partners. The feedback received from this exercise has helped to prompt further work in this area.

 

In September 2021, the Vale also launched a community lottery to support the districts residents and organisations.  The Council have continued to promote and register new causes to the White Horse Community Lottery Scheme – with five “good causes” being approved by the end of 2021/22.

Working in an open and inclusive way

During 2021/22 the Vale 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 by implementing this new approach they will be able to 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.


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

 

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


Progress was also made on the Vale’s social media review. Officers continue to experiment with different styles, formats and content to improve the Council’s presence across a variety of platforms (Facebook, Twitter, Instagram).

 

While face-to-face committee meetings have returned following the pandemic, the Vale 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.

 

In addition, the Vale has been trialling new approaches to help residents better understand its processes. In Q4, a short video explaining the Council’s approach to planning enforcement was published. After its success, the Vale is now hoping to provide more of these guides in the future.

 

The Council also undertook a marketing exercise to encourage people safely back to the district’s towns and villages after lockdown restrictions to promote the opportunity for people to participate equally.  


This campaign was shortlisted for the Best Covid Campaign award by the Chartered Institute of Public Relations.

 

During 2021/22, work continued on the creation of a policy and strategy library for the Vale. This will not only allow the Council to identify any gaps in its policy/strategy framework but also provide a central directory where officers, Councillors and residents can find further information.

As part of the Vale’s commitment to strengthening the Council’s governance framework, the Constitution Review Group agreed a work plan prioritising work to review the Articles of the Constitution and the Scheme of Delegation. 

In addition, the Monitoring Officer has been providing training to officers on local government law and process – with a particular focus on governance, delegation of powers, report writing/content and decision making.

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, before parish precepts, was £10.8 million, after accounting for the use of reserves and investment income.  Direct service expenditure for the year was £3.8 million below budget as shown in the table below, analysed across the Council’s service areas

 

 

 

 

 

 

 

 

 

Service expenditure

Budget
£000

Actual
£000

Variance
£000

Corporate Management Team

1,235

          804

(430)

Corporate Services

2,855

       2,529

(325)

Development & Corporate Landlord

2,484

       3,586

1,102

Finance

465

          776

310

Housing & Environment

5,745

       5,377

(368)

Legal & Democratic

1,378

       1,295

(83)

Partnership & Insight

2,754

       1,077

(1,677)

Planning

395

             99

(295)

Policy & Programmes

2,866

       1,716

(1,150)

Contingency

241

(337)

(579)

Direct service expenditure

20,418

16,923

(3,495)

Interest Income

(558)

(744)

(187)

Government grant income

(4,562)

(4,562)

0

Net revenue spend

15,299

11,617

(3,682)

Transfer of surplus/(deficit) to reserves:

(4,016)

1,539

5,555

Net Revenue Spend

11,283

3,682

(7,601)

Government Funding

(525)

(1,510)

(985)

Budget requirement set by Council

10,758

15,328

(6,714)

Parish precepts

4,456

4,456

0

Total funding requirement

15,214

19,784

(6,714)

Council tax income

12,396

12,939

543

Retained business rates

2,819

6,844

4,025

Total funding

15,215

19,783

4,568

 

Of the £3.7 million variance to budget, £0.8 million represents slippage in one-off budgets that have been agreed as budget carry forwards to 2022/23 and £0.2 million of unbudgeted grants transferred to reserves for future expenditure.

Capital outturn 2021/22

Capital expenditure totalled £4.6 million in 2021/22 and spend for the year was £13.5 million below the working budget.  £1.3 million was spent on disabled facilities grants.

The main source of funding for the programme was the Council’s own reserves of capital receipts (money we have set aside from the sale of assets), with the balance made up by government grants and other contributions.

Further details on both revenue and capital expenditure for 2021/22 was considered in an outturn report to Scrutiny Committee in September 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 £0.7 million against a budget of £0.6 million.  In accordance with the Council’s Medium-Term Financial Plan (MTFP) income from interest on investments is applied in year to support the revenue account. 

Further details on treasury management for 2021/22 that will be provided in an outturn report to be considered 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 may be different to the accounting cost.  These adjustments are detailed in notes 2 to 4.  After the total financing from government grants and local taxpayers of £34.6 million, the Council’s deficit on provision of services was £4.3 million. 

This deficit is then adjusted for items, that are not expected to materialise for many years due to their nature, produce the total comprehensive income and expenditure figure for the year which is a surplus of £17.7 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 £62.7 million to £80.4 million at 31 March 2022, an increase of £17.7million. This is primarily due to the defined benefit pension liability decrease of £13.4m offset by a £4m deficit on the provision of services.

This movement is also detailed in the Movement in Reserves Statement (MiRS). 

At the balance sheet date, the Council had usable reserves of £54.4 million, made up of £21.1 million general fund balance (including earmarked reserves), £13.4 million in capital receipts and £19.8 million in unapplied capital grants.

Collection fund

The collection fund is an agent’s statement reflecting 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 and the Police and Crime Commissioner for Thames Valley, and with Central Government replacing Thames Valley for NDR.

On Council tax, income of £114.8 million was received and £111.7 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 £6.0 million.  This will be re-distributed to all major precepting authorities.

On NDR, £53.1 million was received and £29.4 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 surplus on the NDR collection fund balance at the end of the year was £8.8 million. This will be shared between the Council, central government and OCC.

The Council is acting as the accountable body for the Oxfordshire Local Enterprise Partnership (OxLEP) and is retaining additional business rates collected from within the Science Vale, Didcot Growth Accelerator and Milton Park Extension Enterprise Zones on their behalf.  As at 31 March 2022, the amount of business rates retained by the Council on behalf of OxLEP was in excess of £17 million.

Future prospects

As part of the annual budget setting process for 2021/22, 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 identifies challenges for the Council.  Based on current assumptions and estimates, the Council can set a balanced budget for the five-year period of the MTFP period by drawing on reserves. Releasing revenue reserves to balance the budget is not sustainable in the long term as the reserves become depleted.  The MTFP is based on current estimates of government funding, which 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.  Although this is not an immediate problem, based on current projections the budget is not sustainable over the long term. 

Officers are continuing to carry out significant work on the Council’s revenue budgets and income streams to ensure that a balanced revenue budget can be set throughout the MTFP period and beyond that does not rely so heavily on reserves. 

As part of budget setting for 2022/23, Council also agreed a capital programme to 2026/27 costing £14.8 million.  This will be funded from a combination of the Council’s usable capital reserves and other contributions.  It is anticipated that by 31 March 2027 the Council’s capital receipts balance will be £2.5 million. 

 

                

 

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 VALE OF WHITE HORSE DISTRICT COUNCIL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 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 25).  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 26).  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 27).  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 28 to 62).  The core statements are supported by comprehensive notes to the accounts. 

Accounting policies (pages 68 to 83).  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, the Police and Crime Commissioner for Thames Valley and town and parish Councils have been satisfied.  This is shown on pages 63 to 66.

Comprehensive income and expenditure statement

2020/21

 

2021/22

Exp

Inc

Net

 

Exp

Inc

Net

£000

£000

£000

 

£000

£000

£000

956

(189)

768

Corporate management team

1,174

(230)

945

2,015

(311)

1,704

Corporate services

2,298

(436)

1,862

8,317

(3,468)

4,849

Development & Corporate Landlord

8,739

(2,950)

5,790

21,941

(21,079)

862

Finance

21,259

(20,107)

1,152

10,258

(3,481)

6,777

Housing and environment

11,897

(4,043)

7,854

2,338

(960)

1,378

Legal and democratic

2,708

(1,177)

1,531

3,216

(169)

3,046

Partnership and insight

1,847

(727)

1,120

4,024

(2,056)

1,967

Planning

6,809

(2,631)

4,178

2,583

(696)

1,886

Policy & programmes

3,299

(1,218)

2,081

55,649

(32,410)

23,238

Cost of services

60,032

(33,519)

26,513

   4,242

0

4,242

Parish Council precepts and other grants

4,456

0

4,456

0

(631)

(631)

(Gain)/loss on the disposal of non-current assets

0

(14)

(14)

4,242

(631)

3,611

Other operating expenditure

4,456

(14)

4,442

0

(956)

(956)

Interest receivable and similar income

0

(644)

(644)

0

(115)

(115)

Other investment income (dividends)

0

(100)

(100)

19

0

19

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

 

(454)

(454)

15

0

15

Changes in fair values of investment properties

0

(155)

(155)

0

(238)

(238)

Income and expenditure in relation to investment properties

 

(286)

(286)

785

0

785

Net Interest on net defined benefit liability or asset

918

0

918

819

(1,310)

(491)

Financing and investment income and expenditure

918

(1,639)

(721)

0

(7,767)

(7,767)

Recognised capital grants and contributions

0

(8,716)

(8,716)

0

(3,494)

(3,494)

COVID grants

0

(1,226)

(1,226)

0

(11,794)

(11,794)

Council tax

0

(12,939)

(12,939)

0

(24,101)

(24,101)

Retained business rates

0

(27,617)

(27,617)

20,773

0

20,773

Business rates tariff

20,773

 

20,773

 

 

 

Lower tier service grant

 

(284)

(284)

0

(5,299)

(5,299)

Non-ringfenced government grants

0

(4,562)

(4,562)

20,773

(52,455)

(31,682)

Taxation and non-specific grant income

20,773

(55,345)

(34,572)

81,483

(86,807)

(5,325)

(Surplus) or deficit on provision of services

86,180

(90,517)

(4,337)

0

(2,913)

(2,913)

Surplus or deficit on revaluation of non-current assets

104

 

104

10,079

0

10,079

Remeasurement of net defined benefit liability

 

(4,022)

(4,022)

 

 

7,167

Other Comprehensive Income and Expenditure

 

 

(3,918)

 

 

1,842

Total Comprehensive Income and Expenditure

 

 

(8,255)

*The 2021/22 cost of services figures have been restated following a restructure.

 

 


 

Movement in reserves statement

For the year ended 31 March 2022

 

General

Capital

Capital

Total

Unusable

Total

 

fund

receipts

grants

usable

reserves

reserves

 

balance

reserve

unapplied

reserves

 

 

 

£000

£000

£000

£000

£000

£000

Balance - 31 Mar 2021

(26,943)

(13,880)

(17,300)

(58,123)

(4,606)

(62,729)

Total comprehensive income and expenditure

 

(4,337)

 

0

 

0

 

(4,337)

 

(3,918)

 

(8,255)

Adjustments between accounting basis and funding basis under regulations (note 4)

 

 

10,183

 

 

446

 

 

(2,556)

 

 

8,073

 

 

(8,073)

 

0

Net increase/decrease before transfers to other reserves

 

5,846

 

446

 

(2,556)

 

3,736

 

(11,991)

 

(8,255)

Transfers to/from other reserves

0

0

0

0

0

0

Increase/decrease (movement) in year

 

5,846

 

446

 

(2,556)

 

3,736

 

(11,991)

 

(8,255)

Balance - 31 Mar 2022

(21,097)

(13,434)

(19,856)

(54,387)

(16,597)

(70,984)

For the year ended 31 March 2021

 

General

Capital

Capital

Total

Total

Total

 

fund

receipts

grants

usable

unusable

authority

 

balance

reserve

unapplied

reserves

reserves

reserves

 

£000

£000

£000

£000

£000

£000

Balance - 31 Mar 2020

(19,022)

(12,985)

(11,746)

(43,753)

(20,817)

(64,570)

Total comprehensive income and expenditure

(5,325)

0

0

(5,325)

7,166

1,841

Adjustments between accounting basis and funding basis under regulations (note 4)

(2,596)

(895)

(5,554)

(9,045)

9,045

0

Net increase/decrease before transfers to other reserves

(7,921)

(895)

(5,554)

(14,370)

16,211

1,841

Transfers to/from other reserves

0

0

0

0

0

0

Increase/decrease (movement) in year

(7,921)

(895)

(5,554)

(14,370)

16,211

1,841

Balance - 31 Mar 2021

(26,943)

(13,880)

(17,300)

(58,123)

(4,606)

(62,729)

*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 5.

Balance sheet

 

31 March 2021

 

31 March 2022

£000

 

£000

£000

Notes

48,247

Property, plant & equipment

46,946

6

4,716

Investment Property

4,871

7

133

Intangible assets

111

 

17,587

Long term investments

26,041

8

1,874

Long term debtors

1,880

9

72,557

Long term assets

79,849

 

83,000

Short term investments

105,000

 

8

1

Inventories

4

 

 

12,257

Short term debtors

17,825

 

9

20,159

Cash and cash equivalents

24,559

 

10

115,417

Current assets

 

147,388

 

(38,351)

Short Term Creditors

(69,100)

 

12

(4,218)

Provisions

(1,408)

 

13

(37,518)

Capital grants and receipts in advance

(42,084)

 

 

(80,087)

Current liabilities

 

(112,592)

 

 (45,158)

Other long-term liabilities

(43,659)

 

 

(45,158)

Long term Liabilities

 

(43,659)

18f

 

 

 

 

 

73,856

Net assets

 

70,986

 

(14,144)

Non-earmarked revenue reserves

(11,290)

 

 

(12,799)

Earmarked revenue reserves

(9,806)

 

 

(13,880)

Usable capital receipts reserve

(13,434)

 

 

(17,300)

Capital grants unapplied

(19,856)

 

 

(58,123)

Usable reserves

 

(54,386)

MiRs

(18,710)

Revaluation reserve

(18,161)

 

14a

(587)

Financial instrument revaluation reserve

(1,041)

 

14b

(34,399)

Capital adjustment account

(33,781)

 

14c

45,158

Pensions reserve

43,659

 

14d

(1,811)

Deferred capital receipts reserve

(1,819)

 

14e

5,623

Collection fund adjustment account

(5,711)

 

14f

120

Short-term accumulating compensated absences

256

 

 

(4,606)

Unusable reserves

(16,598)

 

(62,729)

Total reserves

(70,984)

 


 

Cash flow statement

31 March
2021

 

31 March
2022

Notes

£000

£000

 

5,325

Net surplus or (deficit) on the provision of services

4,337

 

(631)

Adjust net surplus for profit on disposal

(14)

 

13,218

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

53,606

 

(7,767)

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

(8,716)

 

10,145

Net Cash flows from operating activities

49,213

Investing activities

 

 

(159)

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

(539)

 

(92,500)

Purchase of short and long term investments

(65,500)

 

0

Other payments for investing activities

0

 

1,301

Proceeds from the sale of property, plant and equipment, investment property and intangible assets

14

 

78,000

Proceeds from short-term and long-term investments

35,500

 

18,004

Other Receipts from investing activities

13,276

 

4,646

Total investing activities

(17,249)

 

Financing activities

 

 

0

Cash receipts of short and long-term borrowing

0

 

(3,413)

Billing Authorities - Council tax and NDR adjustments

(27,564)

 

Other receipts from financing activities

0

 

(3,413)

Total financing activities

(27,564)

 

11,378

Net increase / (decrease) in cash and cash equivalents

4,400

 

8,781

Cash and cash equivalents at the beginning of the reporting period

20,159

 

20,159

Cash and cash equivalents at the end of the reporting period

24,559

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 68 to 83.

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

710

58

768

Corporate management team

804

140

945

3,500

(575)

2,924

Corporate services

2,529

(668)

1,862

3,174

271

3,445

Development & Corporate Landlord

3,920

1,870

5,790

695

121

816

Finance

776

377

1,152

6,638

1,657

8,295

Housing & Environment

5,392

2,463

7,854

944

56

1,000

Legal & democratic

1,295

236

1,531

3,026

20

3,046

Partnership & Insight

1,077

43

1,120

2,181

278

2,458

Planning

1,531

2,647

4,178

450

33

483

Policy & Programmes

1,716

365

2,081

21,318

1,919

23,237

Net cost of services

19,041

7,473

26,513

(29,240)

(21)

(29,262)

Other Income and Expenditure

(13,194)

(17,657)

(30,851)

(7,922)

1,898

(6,025)

(Surplus) or deficit on provision of services

5,846

(10,183)

(4,337)

(19,022)

Opening General Fund Balance

(26,943)

 

 

(7,922)

 

 

(Surplus) or Deficit on General Fund Balance in year

5,846

 

 

(26,943)

 

 

Closing General Fund Balance at 31 March

(21,097)

 

 

 

3.            Note to the expenditure and funding analysis

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

58

58

Corporate management Team

7

134

 

140

54

(818)

(763)

Corporate services

21

(689)

 

(668)

1046

145

1,191

Development & Corporate Landlord

1,521

349

 

1,870

3

142

145

Finance  

55

322

 

377

1,332

325

1,657

Housing & Environment

2,018

445

 

2,463

9

110

119

Legal & democratic

15

221

 

236

0

20

20

Partnership & Inside

2

41

 

43

(11)

228

217

Planning

2,196

451

 

2,647

27

163

 

190

Policy & programmes

33

332

 

365

2,356

263

2,619

Net cost of services

5,868

1,605

0

7,473

(6,583)

785

5,777

(21)

Other Income and Expenditure from the Expenditure and Funding Analysis

(6,632)

0

(11,025)

(17,657)

(4,928)

1,047

5,777

,598

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

(764)

1,605

(11,025)

(10,184)

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.

 

 

31 Mar 2021

 

31 Mar 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:

 

 

 

 

 

 

 

 

Reversal of items debited or credited to the CIES:

 

 

 

 

(1,661)

1,661

Charges for depreciation and impairment of non-current assets

(1,736)

0

0

1,736

(45)

45

Revaluation gains on property, plant and equipment

103

0

0

(103)

(15)

15

Movement in the fair value of investment properties

155

0

0

(155)

(149)

149

Movements in fair value of long-term leases

7

0

0

(7)

Capital grants and contributions applied

 

0

0

0

(1,145)

(133)

1,277

Revenue expenditure funded from capital under statute

(4,107)

0

0

4,107

(30)

30

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

 

 

 

0

Adjustments primarily involving the capital grants unapplied account:

 

0

0

0

6,652

(5,554)

(1,099)

Capital grants and contributions unapplied credited to the comprehensive income and expenditure statement

6,632

(80)

(2,559)

(3,993)

Adjustments primarily involving the capital receipts reserve:

 

 

0

0

646

(1,316)

670

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

1

(1)

0

0

(69)

584

(515)

Use of capital receipts reserve to finance new capital expenditure

0

527

3

(530)

Adjustments primarily involving the deferred capital receipts reserve:

 

0

0

0

Transfer of deferred capital receipt relating to equity loan issued in year

0

0

0

0

Adjustments primarily involving the financial instruments revaluation reserve

0

0

0

0

(19)

19

Reversal of surplus on Financial Instruments valued through Profit and Loss)

454

0

0

(454)

Adjustments primarily involving the pensions reserve:

 

0

0

0

(1,048)

1,048

Pensions costs (transferred to (or from) the Pensions Reserve)

(2,523)

 

 

2,523

Adjustments primarily involving the collection fund adjustment account:

0

 

 

0

(5,743)

5,743

Council tax and NDR (transfers to or from Collection Fund Adjustment Account)

11,334

0

0

(11,334)

 

 

 

 

Adjustment primarily involving the accumulated absences account:

 

 

 

0

 

 

 

 

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

(137)

 

 

137

(2,595)

(896)

(5,554)

9,045

Total adjustments

10,183

446

(2,556)

(8,073)

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.

 

 

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

 

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

(6,693)

(13,017)

5,566

(14,144)

General fund balance

(14,144)

(7,597)

10,453

(11,288)

(6,693)

(13,017)

5,566

(14,144)

Total general fund balance

(14,144)

(7,597)

10,453

(11,288)

Earmarked reserves

 

 

 

 

0

0

0

0

(a) Community grants

0

 

0

0

(14)

(14)

(e) Building regulations

(14)

 

 

(14)

(10,974)

(5,722)

5,515

(11,181)

(i) Service & infrastructure grants

(11,181)

(4,562)

6,800

(8,943)

(1,341)

(504)

241

(1,604)

(k) Revenue grants reserve

(1,604)

(43)

797

(850)

(12,329)

(6,226)

5,756

(12,799)

Total earmarked reserves

(12,799)

(4,605)

7,597

(9,807)

 

 

 

The purpose of each reserve is as follows:

 

(a)

Grants awarded in previous years that have not yet been taken up

 

(b)

District Council elections are held every four years and this reserve is used so that all the costs are not met in one year but spread over the term of the Council

 

(c)

To meet the cost of any inquiries that have to be set up as a result of the updating of the local development framework

 

(d)

To meet any costs associated with Thames Water's proposal for a new reservoir

 

(e)

The building control trading account

 

(f)

To cover contributions to the management costs of Besselsleigh Wood

 

(g)

To guarantee rent deposits for private tenants

 

(h)

To provide matched funding to organisations

 

(i)

Fund to provide revenue support to service and infrastructure projects

 

(j)

To cover the excess payable on insurance claims

 

(k)

To fund revenue expenditure from grants received in advance

 

(l)

Covid

 

 

 

 

 

 

 

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

Surplus assets

Assets under construction

Total PP&E

 

£000

£000

£000

£000

£000

£000

£000

Cost or valuation

At 01 Apr 2021

49,939

6,357

149

906

0

0

57,351

Additions

0

324

62

 

 

 

386

Revaluation
increases/(decreases) to RR

(104)

 

 

0

 

 

(104)

Revaluation
increases/(decreases) to SDPS

103

 

 

 

 

 

103

Write out balances on revalued assets

(547)

 

 

 

 

 

(547)

Reclassifications

 

 

 

 

 

 

 

At 31 Mar 2022

49,391

6,681

211

906

0

0

57,189

 

At 01 Apr 2021

(3,449)

(5,518)

(138)

0

0

0

(9,105)

Depreciation charge

(1,504)

(179)

(2)

 

 

 

(1,685)

Write out balances on revalued assets

547

 

 

 

 

 

547

At 31 Mar 2022

(4,406)

(5,697)

(140)

0

0

0

(10,243)

Balance sheet at 31 Mar 2022

44,985

984

71

906

0

0

46,946

Balance sheet at 31 Mar 2021

46,490

839

11

906

0

0

48,246

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

Surplus assets

Assets under construction

Total PP&E

 

£000

£000

£000

£000

£000

£000

£000

Cost or valuation

At 01 Apr 2020

47,473

6,191

142

861

0

(0)

54,667

Additions

0

166

7

0

0

0

173

Revaluation
increases/(decreases) to RR

2,858

0

0

45

0

0

2,903

Revaluation
increases/(decreases) to SDPS

(45)

0

0

0

0

0

(45)

Write out balances on revalued assets

(348)

0

0

0

0

0

(348)

Reclassifications

0

0

0

0

0

0

0

At 31 Mar 2021

49,938

6,357

149

906

0

0

57,350

Depreciation and impairments

At 01 Apr 2020

(2,388)

(5,297)

(137)

0

0

0

(7,822)

Depreciation charge

(1,409)

(221)

(1)

0

0

0

(1,631)

Write out balances on revalued assets

350

0

0

0

0

0

350

At 31 Mar 2021

(3,447)

(5,518)

(138)

0

0

0

(9,103)

Balance sheet at 31 Mar 2021

46,491

839

11

906

0

0

48,247

Balance sheet at 31 Mar 2020

45,085

894

5

861

0

0

46,845

Notes

 

 

 

 

 

 

 

RR = Revaluation reserve

 

 

 

 

 

 

 

SDPS = Surplus or deficit on provision of services

 

 

 

 

 

 

 

Depreciation

Where required, assets are depreciated in equal annual amounts over the assumed life of the asset.  The following useful lives have been used:

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

·         Vehicles, equipment, CCTV, computer hardware – 5 years

·         Parks equipment, running track, boilers, large plant – 10 years

·         Infrastructure assets (sewage treatment works) – 10 years

·         Special items individually assessed (including heritage assets)

 

 

 

Capital commitments

At the end of March 2022, the Council had capital commitments on a number of contracts in 2022/23 and future years, budgeted at £1.1 million relating to Leisure contracts. 

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 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 (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

Carried at historical cost

0

6,681

211

861

0

7,753

Valued at:

 

 

 

 

 

 

31 January 2022

9,987

0

0

0

0

9,987

31 January 2021

4,828

0

0

45

0

4,873

31 January 2020

0

0

0

0

0

0

31 January 2019

9,583

0

0

0

0

9,583

31 January 2018

24,992

0

0

0

0

24,992

Total cost or valuation

49,390

6,681

211

906

0

57,188

 

 

 

 

 

 

 

 

 

The Council has no 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

 

2021/22

£000

 

£000

5,402

Balance at 1 April

4,716

(671)

Disposals

0

(15)

Changes in fair value

155

4,716

Balance at 31 March

4,871

 

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).

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 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.

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

15,000

23,000

103,161

129,563

Fair value through profit and loss

2,587

3,041

0

0

Total financial assets (investments)

17,587

26,041

103,161

129,563

Debtors

 

 

 

 

Financial assets carried at contract amount

2,726

1,880

11,688

14,953

Total financial assets

2,726

1,880

11,688

14,953

Creditors

 

 

 

 

Financial liabilities carried at contract amount

0

0

11,017

13,895

Total financial liabilities

0

0

11,017

13,895

(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 effectively 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 £3.0 million in the CCLA pooled property fund. The Council has applied a statutory override to this fund 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 income and expenditure account in relation to financial instruments are made up as follows:

Table 8b Financial instrument gains and losses 2020/21

 

2020/21

 

2021/22

£000

 

£000

1,072

Investment income (interest, dividends, gains/loss on disposal)

744

(19)

Net increase/(decrease) in fair value

454

1,053

Net gain/(loss) for the year

1,198

 

 

Fair values of assets and liabilities

Financial liabilities and financial assets represented by loans and receivables, long-term debtors and creditors are carried in the balance sheet at amortised cost (in long term assets / liabilities with accrued interest in current assets / liabilities).  Their fair value can be assessed by calculating the present value of the cash flows that will take place over the remaining term of the instruments, using the following assumptions:

·         For loans receivable, prevailing benchmark rates have been used to provide the fair value.

·         where an instrument will mature within the next 12 months, the fair value is taken to be the carrying amount.

·         no early repayment or impairment is recognised.

·         the fair value of trade and other receivables is taken to be the invoiced or billed amount.

 The fair values calculated are as follows:

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

31-Mar-21

 

31-Mar-22

Carrying amount

Fair value

 

Carrying amount

Fair value

£000

£000

 

£000

£000

97,220

97,465

Short term investments

129,500

129,691

17,587

17,613

Long term investments

26,041

26,126

11,688

11,688

Short term debtors

14,953

14,953

2,726

2,726

Long term debtors

1,880

1,880

129,221

129,492

Total financial assets

172,374

172,650

(11,017)

(11,017)

Short term creditors

(13,895)

(13,895)

(11,017)

(11,017)

Total financial liabilities

(13,895)

(13,895)

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.

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

Table 8d Financial Assets Fair Value Hierarchy-Fair value through profit and loss

Fair Value Hierarchy

Amount £’000

CCLA Pooled Funds

Level 1

3,041

 

 

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 Financial Assets held at Amortised Cost 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.

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

0

(285)

Central government bodies

 

362

0

2,259

Other local authorities

 

4,397

1,874

10,283

Other entities and individuals

1,881

13,065

1,874

12,257

Total debtors

1,881

17,824

 

10.         Cash and cash equivalents

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

31 March 2021

 

31 March 2022

£000

 

£000

2

Cash held by the Council

2

5,937

Bank current and instant access accounts

8,057

14,220

Money market funds

16,500

20,159

Total cash and cash equivalents

24,559

 

11.         Assets held for sale

At the balance sheet date, the Council has no material assets held for sale.

12.         Short–term creditors

31-Mar-21

 

31-Mar-22

£000

 

£000

(14,677)

Central government bodies

(37,236)

(18,062)

Other local authorities

(24,784)

(5,612)

Other entities and individuals

(7,081)

(38,351)

Total short-term creditors

(69,101)

 

 

 

 

 

13.         Provisions

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

Provisions

£000

Balance at 01 Apr 2021

(4,218)

Business rate appeals - movement in year

2,810

Balance at 31 Mar 2022

(1,408)

 

14.         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 (including intangible assets).  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.

·         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 14a Revaluation reserve

 

2020/21

2021/22

£000

 

£000

(16,299)

Balance at 1 April

(18,710)

(3,474)

Upward revaluation of assets

(773)

561

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

877

0

Transfer to Capital Adjustment Account

0

150

Disposals

0

(2,763)

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

104

352

Difference between fair value depreciation and historical cost depreciation

446

352

Amount written off to the capital adjustment account

446

0

Other

0

(18,710)

Balance at 31 March

(18,160)

Financial instrument revaluation reserve

The financial instrument 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 14b Financial instrument revaluation reserve

 

2020/21

 

2021/22

£000

£000

(606)

Balance at 1 April Financial instrument revaluation reserve

(587)

19

Revaluation of investments

(454)

(587)

Balance at 31 March Available for sale financial instruments reserve

(1,041)

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.

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.  Note 4 provides details of the source of all the transactions posted to the account, apart from those involving the revaluation reserve.

 

 

 

 

 

 

 

 

 

2020/21

 Table 14c Capital adjustment account

2021/22

£000

 

£000

(35,983)

Balance at 1 April

(34,399)

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

 

1,289

Charges for depreciation and impairment of non-current assets

1,239

45

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

(103)

20

Amortisation of intangible assets

52

1,292

Revenue expenditure funded from capital under statute

4,107

15

Movement in the fair value of investment properties

(155)

505

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

 

Capital financing applied in the year:

 

(585)

Use of the capital receipts reserve to finance new capital expenditure

(529)

(1,067)

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

(4,075)

70

Other adjustments

81

(34,399)

Balance at 31 March

(33,781)

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 14d Pensions reserve

 

2020/21

2021/22

£000

£000

34,031

Balance at 1 April

45,158

10,079

Remeasurement of the net defined benefit liability/(asset)

(4,022)

Actuarial gain/loss

 

2,865

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

4,403

(1,817)

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

(1,880)

45,158

Balance at 31 March

43,659

 

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 14e Deferred capital receipts reserve

 

2020/21

2021/22

£000

 

£000

(1,960)

Balance at 1 April

(1,811)

0

New deferred capital receipts raised in year

0

149

Movement in valuation of property

(7)

(1,811)

Balance at 31 March

(1,818)

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 14f Collection fund adjustment account

 

2020/21

2021/22

£000

£000

(120)

Balance at 1 April 2021

    5,623

5,743

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

(11,334)

5,623

Balance at 31 March 2022

(5,711)

 

15.         Interest received and interest paid

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

2020/21

 

2021/22

£000

 

£000

956

Interest received

644

115

Dividends received

100

1,071

Total interest received, interest paid and dividends received

          744

 

16.         Expenditure and income analysed by nature

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

2020/21

 

2021/22

£000

 

£000

 

Expenditure

 

8,896

Employee benefits expenses

11,290

45,091

Other services expenses

47,008

1,661

Depreciation and amortisation

1,735

20,773

Business rates tariff

20,773

4,242

Precepts and levies

4,456

785

Net interest on net defined benefit liability or asset

918

0

Loss on disposal of assets

0

34

Loss on revaluation of assets

0

81,482

Total expenditure

86,180

Income

 

(32,411)

Fees, charges and other service income

(33,519)

(1,310)

Interest, investment income and income from investment property

(1,640)

(35,895)

Income from Council tax and non-domestic rates

(40,557)

(8,793)

Government grants and contributions

(6,071)

(7,767)

Recognised capital grants and contributions

(8,716)

(631)

Gain on the disposal of assets

 

 

Gain on the disposal of assets

(14)

(86,807)

Total income

(90,517)

(5,325)

(Surplus)/deficit on the provision of services

(4,337)

 

17.         Members’ allowances

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

2020/21

Members' allowance

2021/22

£000

£000

189

Basic allowance

196

123

Special responsibility allowance

125

0

Expenses

1

312

 

322

 

18.         Employees benefits

Officers’ remuneration

Vale of White Horse District Council and South Oxfordshire District Council share a joint Senior Management Team.  The employees detailed below therefore work across the two authorities, the costs are shared with South Oxfordshire DC contributing 50 percent and Vale of White Horse DC contributing 50 percent towards the costs. All senior officers 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 18a Senior officer’s 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

The chief finance officer and monitoring officer are also heads of service.

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

Table 18b Spot pay point - heads of service non-statutory 21-22

 

 

 

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).  Eighteen employees whose remuneration, excluding employer’s pension contributions, was £50,000 or more are as follows:

Table 18c Employee remuneration over £50,000

 

Number of SODC/VOWH employees

2020/21

Remuneration band

2021/22

£

6

50,000-54,999

11

4

55,000-59,999

2

5

60,000-64,999

2

0

65,000-69,999

3

1

70,000-74,999

0

Under the shared working arrangements, the Council recharged a total of £3,592,696 of its salary costs to South Oxfordshire District Council, which in turn recharged £8,109,582 of its salary costs to this Council.

Termination benefits

18d No termination payments were made either during 2021/22 or the prior year 2020/21.

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.

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 at 31 March 2022 and sets contributions for the period 1 April 2021 to 31 March 2022.  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, 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 must be generated to meet actual pension 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 cash flows.  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 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 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.

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:

 

Table 18e Transactions relating to retirement benefits

2020/21

 

2021/22

£000

£000

 

Cost of Services:

 

2,080

Service Cost

3,485

Financing and investment income and expenditure

 

785

Net interest expense

918

2,865

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

4,403

Other post-employment benefit charged to the CIES

 

Remeasurement of the net defined benefit liability comprising:

 

(12,065)

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

5,838

1,195

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

1,022

21,913

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

8,454

(964)

Actual (gain) and losses arising from other experience

(11,292)

10,079

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

(4,022) 

Movement in Reserves Statement

 

(2,865)

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

(4,403) 

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

 

1,817

Employers’ contributions payable to scheme

1,880

 

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:

18f Pension assets and liabilities recognised in the balance sheet

2020/21

2021/22

£000

 

£000

69,729

Fair value of employer assets

90,068

(113,084)

Present value of funded liabilities

(132,072)

(1,803)

Present value of unfunded liabilities

(1,655)

(45,158)

Net liability arising from defined benefit obligation

(43,659)

 

 

 

 

 

18g Reconciliation of the movements in the fair value of the scheme assets

 

LGPS

 

LGPS

2020/21

 

2021/22

£000

 

£000

57,196

Opening balance at 1 April

69,729

1,305

 Interest on assets

1,386

12,065

 Return on assets less interest

5,838

1,817

 Employer contributions

1,880

395

 Contributions by scheme participants

432

(3,049)

 Benefits paid

(3,100)

0

Remeasurement - other experience

13,903

69,729

Closing present value of scheme assets

90,068

 

18h 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

(91,227)

Opening balance at 1 April

(114,887)

(2,080)

Current Service Cost

(3,485)

(2,090)

Interest cost

(2,304)

(395)

Contributions by scheme participants

(432)

(21,913)

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

8,454

(1,195)

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

1,022

964

Other

(25,195)

3,049

Benefits paid

3,100

(114,887)

Closing present value of liabilities

(133,727)

 

The discretionary benefits arrangements have no assets to cover its liabilities. The Local Government Pension Scheme’s assets consist of the following categories

Table 18i 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

%

0

0

0

 

Equities

 

 

 

 

 

 

 

 

Property

 

 

 

 

 

 

 

 

Bonds:

 

 

 

 

5,702

5,702

8

Government bonds

1,850

 

1,850

2

1,795

1,795

3

    Other

490

 

490

1

3,030

3,030

4

Private equity

4,427

1

4,428

5

56,653

56,653

81

Other investment funds

 

81,350

81,350

90

79

79

0

Foreign exchange

(7)

 

(7)

0

2,470

2,470

4

Cash and cash equivalents

1,957

 

1,957

2

13,076

56,653

69,729

100

Total

8,717

81,351

90,068

100

 

Basis for estimating assets and liabilities

In order to assess the value of the Council’s liabilities in the Fund at 31 March 2022, we have rolled forward the value of the Council’s liabilities calculated at the latest formal valuation date of 31 March 2021, allowing for the different financial assumptions required under the Accounting Standard at the reporting date.

In calculating the current service cost, we have allowed for changes in the Council’s pensionable payroll as estimated from the contribution information provided. In calculating the asset share, we have 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 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.

We have 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 Vale of White Horse District Council pool with other employers in order to share experience of risks they are exposed to in the Fund. At the 2019 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 2022 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.

We have adopted a set of demographic assumptions that are consistent with those used for the most recent Fund valuation, which was carried out at 31 March 2021.  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

 

 

 

 

Tabl