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Notes to the Consolidated Balance Sheet
The following statement shows the progress of the Council’s rolling programme for the revaluation of fixed assets. The basis for valuation is set out in the statement of accounting policies. These values differ from note 1 above as these represent the gross values of the Fixed Assets as at the last revaluation whereas Note 1 includes depreciation since the last valuation.
Foundation schools remain vested
in the Governing Bodies of the individual Foundation School, therefore these assets have not been included
in the consolidated balance sheet. In this authority, there are four Foundation Schools with a fixed
asset valuation of £7.598m as at 31 March 2003. Church and other schools, which
are not owned by the authority have not been included in the balance sheet, and therefore no capital
charges will have been applied to the accounts.
The County Council has acquired a variety of assets, principally
industrial properties, vehicles, IT equipment and telephones in the past, by means of finance leases.
The capital value of assets acquired under such agreements, less accumulated depreciation, is as follows:
The County Council allocates and controls its available
resources for capital expenditure via a rolling three year capital programme. The extent to which payments
to contractors remain outstanding for schemes in the various annual programmes is as follows:
Major
contracts entered into during 2002/03 and earlier, where significant payments remain to be made to contractors,
include:
This represents the premiums payable upon the premature
repayment of debt. This sum is charged to the revenue account over the lifetime of the replacement debt.
i) The County Council is a member of the Eastern Shires Purchasing Organisation (ESPO) involved in the negotiation of contracts for supplies to its members and the provision of a central warehouse for the supply of items in common use. During 2002/03 a net surplus of £1.1m (2001/02 £521,000) was reported on income, net of cost of sales, of £9.8m (2001/02 £8.7m). ii) The County Council has been a member of BLN, which is a Consortium that contracts with the Highways Agency for the maintenance of trunk roads in Leicestershire, Nottinghamshire and part of South Yorkshire. This contract was terminated at the end of June 2002. iii) The County Council has been a member of PLAN (Parkman, Leicestershire and Nottinghamshire), a Consortium carrying out design and consultancy on trunk roads in parts of the East Midlands on behalf of the Highways Agency. This contract also terminated at the end of June 2002. iv)
The County Council is a constituent member of Leicester, Leicestershire and Rutland Combined Fire Authority. During 2002/3 the turnover was £23.5m (2001/2 £22.3m).
Surplus cash balances are invested in short term
deposits with a range of banks and other financial institutions. Included within this amount is £3.628m
which is invested on behalf of Eastern Shires Purchasing Organisation and £1.855m on behalf of the Combined
Fire Authority.
The
authority reached an out of court settlement of £673,000 with the legal representatives of a motor cyclist
over a claim which occurred during the period when insurance cover was provided by Independent Insurance
who subsequently went into liquidation. This value is included in the Insurance Provision balance as
at 31st March 2003 and was funded from the Insurance Reserve. Payment will be made in 2003/4.
The Property maintenance and Schools maintenance funds have been reclassified as a combination of revenue earmarked reserves or creditors in accordance FRS12.
Part IV of the
Local Government and Housing Act 1989 requires authorities to set aside certain sums each year as a
provision for redemption of outstanding debt. The financing of capital expenditure effectively avoids
the need for new borrowing.
See the ‘Statement of Total
Movements in Reserves’ and notes thereto for further details. i) Municipal Mutual Insurance
Limited, the County Council’s former insurers, ceased writing insurance business in September 1992.
They have made a scheme of arrangements with creditors in the event of the company becoming insolvent.
Claims are currently being paid in full and it is hoped that the Company’s assets will enable all liabilities
to be met. It should be noted that there is a contingent liability if the County Council is unable to
recover all of the outstanding claims in ensuing years but the amount of any such liability is unquantifiable.
ii) Independent Insurance Company Limited, the County
Council’s liability insurers for the period 1 November 1993 to 31 October 1998, went into provisional
liquidation in June 2001. There is a contingent liability if the County Council is unable to recover
all of the outstanding claims in ensuing years but the amount of any such liability is unquantifiable.
iii) Projects that have been awarded lottery funds; if
the assets provided are withdrawn from public use before the end of the agreed term, repayment of grant
may be necessary iv) In order to finance potential claims
in respect of uninsured losses arising prior to Local Government Reorganisation in 1997, a contingent
liabilities reserve was created in 1996/97 from which claims against the County Council could be financed.
Provisions
and reserves are operated to meet the self-insured deductibles for the following policies, however,
stop loss insurance applies to fire and public/employers’ liability policies.
Apart
from Museums, the Authority has no general insurance cover for the theft of contents from buildings.
Similarly the Authority has no insurance cover against storm damage, floods, burst pipes, malicious
damage, impact, earthquake and accidental damage. Schools, however, have the option to join a group
self insurance scheme to cover the above risks. The County Council acts
as trustee and/or administrator for approximately 40 prize funds, endowments, scholarships and bequests.
The original bequests are invested in either the Council’s trust fund pooling scheme or in a range of
other direct external investments. Trustees are nominated by Leicestershire
County Council, Leicester City Council and the National Trust to the Bradgate Park and Swithland Wood
charity. This is the largest Trust the County Council is involved with. To
the extent that income from these investments has not been utilised for prizes etc., the surplus funds
are invested in short term deposits with various financial institutions. Under
regulations issued under the Charities Act 1993, trust fund accounts where annual income exceeds £10,000,
require an independent examination. The main trust funds are as follows:
*
Not sole trustee. The authority administers the funds and is represented on the board of trustees. In accordance with Financial Reporting
Standard No 17 – Retirement Benefits, the County Council is required to disclose certain information
concerning assets, liabilities, income and expenditure related to pension schemes for its employees.
The Council participates in two formal schemes, the Local Government Superannuation Scheme, which is
administered by the County Council’s Pension Fund and the Teacher’s Scheme. The Council is not required
to record information related to the Teacher’s Scheme as the liability for payment of pension’s rest
ultimately with the Department for Education and Skills. In addition the Council has liabilities for
discretionary pension payments outside the main schemes. The Council’s assets
and liabilities amounted to:
The
Net pension liability is particularly sensitive to fluctuations in the stock market. Since March 2003
asset values have recovered somewhat since this low point. Assets in the County
Council Pension Fund are valued at fair value, principally market value for investments, and consist
of the following categories, by proportion:
Liabilities
are valued on an actuarial basis using the projected unit method, which assesses the future liabilities
of the fund discounted to their present value. The valuations are based on a valuation as of 31st March
2001 and updated for the following two years, by Hymans Robertson the independent actuaries to the County
Fund. The main assumptions used in the calculations are:
The
movement in the pension deficit for the year to 31 March 2003 is as follows:
The
movement in year figures exclude values for discretionary pensions of £22,792,000. A prior period adjustment
will be necessary in the 2003/04 accounts. The actuarial gain /loss can be
further analysed as follows:
Statement
of Accounts Contents
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