Agenda item

2021/22

2020/21

Service Delivery

30,391

32,645

The cost-of-Service Delivery showed a decrease when compared with the previous year, due to the impact of the ISAS19 pension accounting adjustment which was partly offset by Prevention & Protection moving to the Service Delivery Directorate from the Strategy & Planning Directorate.

Strategy & Planning

10,928

12,415

The cost of Strategy & Planning showed a decrease when compared with the previous year, due to Prevention & Protection moving from the Strategy & Planning Directorate to the Service Delivery Directorate.

People & Development

1,920

1,611

The cost of People & Development was broadly comparable with last year.

Corporate Services

4,653

4,821

The cost of Corporate Services was broadly comparable with last year.

Fire Fighters Pensions

1,239

1,285

These were the ongoing pension costs relating to previous ill health or injury retirements, which had remained at a similar level to the previous year.

Overheads

1,217

1,574

This heading included all capital financing charges, refunds made in respect of the LGPS surplus, and depreciation and impairment charges made in respect of assets.

Gain On Disposals of Fixed Assets

(3)

(17)

This related to the sale of surplus vehicles.

Interest Payable

1,408

1,439

This heading included the interest payable in respect of current loans, and the interest charges associated with the PFI scheme and finance leases, which were in line with the previous year’s charges.

Pension Interest Cost and Expected Return on Assets

17,648

18,207

This related to adjustments required under IAS 19 requirements and was designed to show the expected increase in costs of the scheme less the expected increase in asset values. As the Fire-fighters pensions’ scheme was unfunded there was no increase in asset value to offset the increase in scheme costs resulting in the charge to the Income and Expenditure Account.

Interest Receivable

(206)

(253)

This was broadly comparable with last year.

Council Tax*

(33,160)

(31,055)

Amounts raised through council tax, including the Authority’s element of council tax collection fund surplus accumulated during the preceding year by the billing authorities.

Revenue Support Grant

(8,570)

(8,523)

The level of Revenue Support Grant allocated to the Authority by the Government.

Non-Domestic Rates Redistribution*

(14,786)

(13,565)

Amounts raised through non-domestic rates, including the Authority’s element of business rates collection fund surplus/deficit accumulated during the preceding year by the billing authorities, in addition to top up grant receivable from the Government as part of the localisation of business rates. The change between years reflected the changes in the collection fund for this.

Business rates S31 grant

(1,360)

(1,284)

This grant was allocated to the Authority by the Government and related to small business rates reliefs allowed by the Government as part of the localisation of business rates.

Business rates additional reliefs S31 grant

(1,101)

(1,925)

The balances related to additional business rates relief funding.

Local Taxation Income guarantee

(4)

(132)

This grant was allocated to the Authority by the Government and offset losses in local taxation that were attributable to the pandemic.

Capital grant income

(253)

(253)

This grant was the Authority’s 25% share of the capital grant received by NWFC.

Covid 19 S31 grant

-

(1,346)

This reflected the S31 grant received during 2020/21.

Deficit On the Provision of Services

9,962

15,643

The overall deficit showed that expenditure incurred exceeded income generated over the last twelve months and was measured in terms of the resources consumed and generated. However, this included a number of accounting entries which did not impact on council tax levels, most notably those relating to the pension’s schemes. As such this did not show the actual surplus when comparing spend against council tax.

(Surplus)/Deficit on Revaluation of Non-Current Assets

(10,610)

(2,523)

This was a notional change in the value of fixed (non-current) assets, based on changes in market conditions etc. No actual change in value would be achieved until such time as the asset was disposed of.

Actuarial (Gains)/ Losses on Pensions Assets and Liabilities

(13,400)

61,444

This was a notional charge arising from the Actuary changing their assumptions on which future pensions liabilities were calculated, such as mortality rates, future interest rates, pay and pension increases, return on assets etc.

Total Comprehensive Income and Expenditure

(14,047)

74,564

This showed the total cost of providing services, presented in accordance with generally accepted accounting practices, rather than showing the amount funded from taxation.

£m

Revenue Outturn

(0.332)

NWFC Outturn

(0.073)

Accounting for pensions under IAS19

9.130

Revenue Contributions to Capital Outlay

(2.373)

Adjustments between accounting basis and funding basis under regulations

3.610

Deficit on the provision of services

9.962

Surplus on revaluation of non-current assets

(10.610)

Actuarial loss on pensions assets and liabilities

13.400

Total Comprehensive Income and Expenditure

14.047

Usable Reserves

Unusable Reserves

Total Reserves

Balance at 1 April

36,979

(804,713)

(767,734)

Deficit on the provision of service

(9,962)

-

(9,962)

This showed the true economic cost of providing the Authority’s services, more details of which were shown in the Comprehensive Income and Expenditure Statement. As set out earlier it was not accounted for on the same basis as the Service account for council tax and hence did not tie into the actual revenue position set out in the Year End Revenue Outturn report.

Other Comprehensive Income and Expenditure

-

24,009

24,009

This related to the surplus on revaluation of non-current assets and the actuarial loss on pensions assets and liabilities.

Charges for depreciation and impairment of non-current assets

4,863

(4,863)

This showed the costs charged to the revenue budget for the utilisation of fixed assets in the year.

Amortisation of intangible assets

158

(158)

This showed the costs charged to the revenue budget for the utilisation of intangible assets (Software) in the year.

Statutory provision for the repayment of debt

(458)

458

-

This was the charge made against the revenue budget to reduce future borrowing requirements, and included an element relating to debt associated with PFI and finance leases

Capital expenditure charged against General Fund Balance

(2,373)

2,373

-

This was the level of capital expenditure which had been funded from contributions from the 2021/22 revenue budget, as agreed as part of the budget setting process and as shown in the Year End Capital Outturn report.

Amount by which the Code and the statutory pension costs differ

9,130

(9,130)

This showed the difference between the change in pension liability from one year to the next and the level of employer pension contributions and retirement benefits allowed for in the revenue budget/council tax calculation.

Amount by which collection fund income in the comprehensive income and expenditure statement is different from collection fund income calculated for the year in accordance with statutory requirements

(1,585)

1,585

-

This showed the difference in value between the amount due to be raised from council tax and business rates, as agreed as part of the budget setting process, and the amount collection authorities have actually collected on the Service’s behalf in the year, i.e., the difference between the assumed collection rate and the actual collection rate.

Net increase / decrease before transfers to earmarked reserves

(228)

14,275

14,047

This showed the Usable Reserves Balance change in year before any discretionary transfers to or from Earmarked Reserves undertaken by the Authority.

Transfers (to) / from capital funding reserves

(977)

977

-

These represented the transfers from the capital funding reserve referred to in the Year End Capital Outturn report and the Year End Usable Reserves and Provisions report.

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

(102)

(102)

-

This represented the movements on the Accumulated Absences Adjustment Account, which reflected the decrease in the amount of leave owed to staff at the year end.

Increase / Decrease in the year

(1,306)

15,351

14,047

This was the net change to reserves, comprising the Surplus/Deficit on provision of services, less any adjustments for items which did not affect council tax and any transfers to/from earmarked reserves and tied into the overall change in Usable reserves included in the Year End Usable Reserves and Provisions Outturn report.

Balance at 31 March

35,673

(789,359)

(753,686)

These were the final reserve balances which were reflected in the balance sheet in the statement of accounts, and which tied into the values shown in the Year End Usable Reserves and Provisions Outturn report.

2021/22

2020/21

Long Term Assets

Property, Plant & Equipment

108,637

99,538

The value of property, plant & equipment had increased by £9m, due to the level of capital expenditure (£3m as shown in the Year End Capital Outturn report) and the net revaluation gains of £11m compared with depreciation charges of £5m.

Intangible   assets

523

639

Intangible assets were assets which did not have a physical form, such as software, the reduction in value reflecting the level of amortisation of these assets, representing their usage in year.

Long Term Investments

5,000

10,000

The Authority held one investment with Local Government bodies which was classed as long-term investments, i.e., over 12 months in duration, as shown in the Year End Treasury Management Outturn report.

Current Assets

Inventories

257

279

The value of stock held had remained broadly in line with last year.

Short-Term Investments

10,000

5,000

The Authority held two investments with Local Government bodies which were classed as short-term investments, i.e., under 12 months in duration, as shown in the Year End Treasury Management Outturn report.

Short-Term Debtors*

12,888

10,885

Debtors represented monies owed to the Authority on 31st March 2021. In order to improve cash flow this figure should be as low as possible; however, it was inevitable that there would always be a balance on this due to the timing of invoices and the debt recovery process.

The main debt related to Council Tax, Business Rates (which represented our share of debts that billing authorities hold) and amounts owed to the Authority by the FF pension fund in the form of top up grant due.

The level of debtors at the year-end had increased reflecting the increase in both of these.

Cash & Cash Equivalents

17,896

22,603

This represented the cash book balance at the year end, which was held in a call account by Lancashire County Council (LCC) as shown in the Year End Treasury Management Outturn report. The reduction reflected the investment in fixed assets, the increase in debtors (referred to earlier) and a reduction in creditors (referred to below).

Current Liabilities

Other Short-Term Liabilities

(492)

(452)

This related to short term liabilities in respect of the Authorities PFI contracts with PFF Lancashire Ltd and Balfour Beatty Fire and Rescue NW Ltd and in addition the short-term element of finance leases.

Short-Term Creditors*

(9,296)

(12,621)

This figure represented the amount of money the Service owed to other bodies at 31st March 2022. The overall balance had reduced mainly due to the payment of costs associated with the pensionability of allowances.

Long Term Liabilities

Provisions*

(1,447)

(1,398)

This showed the outstanding provisions, relating to the potential cost of outstanding insurance claims, which would have to be met by the Authority in future years, the remaining balance of the Authorities share of billing authorities’ business rates outstanding appeals.

Long-Term Borrowing

(2,000)

(2,000)

This represented the amount of long-term debt that the Authority held which did not mature within the next 12 months. The balance of £2.0m was due to mature between 2035-2037.

Other Long-Term Liabilities

(895,652)

(900,205)

The majority of this related to adjustments required under IAS 19 and showed the extent to which the authority’s liability to pay pension benefits in the future exceeded the value of assets held. This was particularly significant for the Fire Authority due to the unfunded nature of the fire-fighters pension scheme, resulting in a net liability of £883m.

This also included liabilities covering the remainder of the contract associated with the two PFI contracts;

·     PFF Lancashire Ltd for the provision of two fire stations,

·     Fire and Rescue NW Ltd for the provision of four fire stations within Lancashire, as part of the joint contract to provide sixteen stations across Lancashire, Cumbria, and Merseyside.

In addition, this also included liabilities relating to an outstanding finance lease.

Total Assets Less Liabilities

(753,686)

(767,732)

Financed By

Usable Reserves:

Revenue Reserves

(16,278)

(17,233)

This was the level of reserves that the Authority currently held which could be utilised to offset future revenue expenditure, subject to the need to maintaining a prudent level of reserves and any statutory limitations on their use. It included the general reserves as well as any earmarked reserves.

The reduction in year represented the usage of Covid and Business Rate Relief grants, as referred to in the Year End Revenue Outturn report, and the Usable Reserves and Provisions Outturn report.

Capital Funding Reserve

(17,672)

(17,967)

This reserve held £18.0m of balances to fund future capital expenditure, as referred to in the Year End Capital Outturn and Usable Reserves and Provisions Outturn reports.

Capital Grant Unapplied

(40)

(101)

The capital grant unapplied related to the Authority’s share of the NWFC end of year balances.

Usable Capital Receipts Reserve

(1,683)

(1,680)

This represented the proceeds from the sale of fixed assets which was used to finance capital investment. The increase in value representing the sale proceeds for vehicles, as referred to in the Year End Usable Reserves and Provisions Outturn reports.

Unusable Reserves:

Revaluation Reserve

(56,221)

(47,400)

This account held unrealised revaluation gains, or losses, from holding fixed assets, as such any revaluations that had taken place since 1 April 2007 were reflected in this reserve. These reserves were matched by fixed assets within the Balance Sheet and were not resources available to spend.

Capital Adjustment Account

(39,469)

(38,893)

The Capital Adjustment Account provided a balancing mechanism between the different rates at which assets were depreciated under the Code and were financed through the capital controls system. These reserves were matched by fixed assets within the Balance Sheet and were not resources available to spend.

Pensions Reserve

883,434

887,704

This related to adjustments required under IAS 19, and was a notional reserve required in order to offset the net liability of the Authority in respect of the pension schemes.

Collection Fund Adjustment Account*

776

2,361

This account reflected the net effect of the adjustments required to show the service’s share of each billing authority’s council tax and business rates debtors and creditors at year end.

Accumulated Absences Adjustment Account

839

941

This account represented the value of leave accrued at the year end, but which had not yet been taken, and hence had been carried forward into the new financial year. However, given that the leave year for Fire Fighters ran from January to December leave entitlement was calculated on a pro-rata basis which could distort the overall position. The reduction reflected the increase in leave taken.

753,686

767,732

2021/22

2020/21

Net Cash Flows Arising from Operating Activities

1,162

3,388

This showed the level of net cash generated by revenue activities, i.e., the level of income received in the form of grant, council tax etc., offset by payments made in respect of employee costs and non-pay costs etc.

Investing Activities

(4,032)

(6,874)

This showed the cash outflows which had been made for resources that were intended to contribute to the Authority’s future service delivery, such as expenditure on capital assets.

Financing Activities

(1,837)

(1,833)

This related to the repayment of long-term debt, including that associated with PFI and finance leases.

Net increase/(decrease) in cash and cash equivalents

(4,707)

(5,319)

This showed the movement in the net cash immediately available within the Authority in a call account with LCC.