Statement of Accounting Policies

Mansfield District Council 31 March 2011

Mansfield District Council Annual Statement of Accounts

The Statement of Accounts for the financial year ended 31 March 2011, are published in accordance with the Code of Practice on Local Authority Accounting in Great Britain issued by the Chartered Institute of Public Finance and Accountancy (CIPFA).

I certify that the Statement of Accounts present a true and fair view of the financial position of the authority and its income and expenditure for the year ended 31 March 2011.

Signed………………………….. Mick Andrews CPFA – Head of Finance, Property and Revenue Services

Date 29 June 2011

The Statement of Accounts has been amended following the audit of the Statement by the Council’s External Auditors the Audit Commission. I certify that the Statement of Accounts present a true and fair view of the financial position of the authority and its income and expenditure for the year ended 31 March 2011.

Signed………………………….. Mick Andrews CPFA – Head of Finance, Property and Revenue Services

Date 1 September 2011

1 Mansfield District Council 31 March 2011 Contents

Explanatory Foreword 3

Executive Summary 5

Statement of Responsibility for the Statement of Accounts 21

Movement in Reserves Statement (MiRS) 22

Comprehensive Income and Expenditure Statement (CIES) 24

Balance Sheet 26

Cash Flow Statement 27

Notes to the Core Financial Statements 28

Supplementary Financial Statements:

Housing Revenue Account Income and Expenditure Statement 125

Movement on the HRA Statement 127

Notes to the Housing Revenue Account 128

Collection Fund 138

Annual Governance Statement 141

Auditor’s Report 150

Glossary of Financial and Accounting Terms 153

2 Mansfield District Council 31 March 2011 Explanatory Foreword

This section summarises the Council’s overall financial position and activities for the financial year 2010/2011, identifying any significant matters occurring during the year and explains the purpose and relationship of the statements included within the Accounts.

The following statements are included within these accounts:

The Core Statements

Movement in Reserves Statement – this statement shows the movement in the year on the different reserves held by the Council, analysed into ‘usable reserves’ (that is those that can be applied to fund expenditure or reduce local taxation (such as, Council Tax)) and other reserves. The surplus or (deficit) on the Provision of Services line shows the true economic cost of providing the Council’s services, more details of which are shown in the Comprehensive Income and Expenditure Statement. These are different from the statutory amounts required to be charged to the General Fund Balance and the Housing Revenue Account for council tax setting and dwellings rent setting purposes. The Net Increase/Decrease before Transfer to Earmarked Reserves line shows the statutory General Fund and Housing Revenue Account Balance before any discretionary transfers to or from earmarked reserves undertaken by the Council.

Comprehensive Income and Expenditure Statement – this statement shows the accounting cost in the year of providing services in accordance with generally accepted accounting practices, rather than the amount to be funded from taxation. The Council raises taxation to cover expenditure in accordance with regulations; this maybe different from the accounting cost. The taxation position is shown in the Movement in Reserves Statement.

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

3 Mansfield District Council 31 March 2011 Cash Flow Statement – shows the changes in cash and cash equivalents of the Council during the reporting period. The statement shows how the Council 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 (that is borrowing) to the Council.

Supplementary Statements

Housing Revenue Account (HRA) Income and Expenditure Statement – this statement shows the economic cost in the year of providing housing services in accordance with generally accepted accounting practices, rather than the amount to be funded from rents and government grants. The Council charge rents to cover expenditure in accordance with regulations; this may be different from the accounting cost. The increase or decrease in the year, on the basis of which rents are raised, is shown in the Movement on the HRA Statement.

Collection Fund Statement– this account reflects the expenditure and income in relation to the collection of Council Tax and Business Rates on behalf of Mansfield District Council and authorities which raise a precept that is Nottinghamshire County Council, Nottinghamshire Police Authority, Nottinghamshire Fire and Rescue Service and Warsop Parish Council.

Any material or unusual credits or charges have been disclosed on the face of the accounts where applicable.

4 Mansfield District Council 31 March 2011 Executive Summary Summary of Financial Position and Activities 2010/2011

General Comments

The 2010/2011 Statement of Accounts is the first year under which Local Authorities have been required to prepare their accounts on an International Financial Reporting Standards (IFRS) basis.

Adoption of the Chartered Institute of Public Finance and Accountancy (CIPFA) IFRS based Code of Practice has resulted in the restatement of various balances and transactions, which has led to some of the amounts presented in the financial statement and notes for 2009/2010 being different from their equivalent amounts shown in the 2009/2010 Statement of Accounts.

The CIPFA IFRS Code requires Local Authorities to restate their figures from 2009/2010 where there has been a change to IFRS from the previous Financial Reporting Standards (FRS) which were based on UK GAAP (Generally Accepted Accounting Practices). This is to allow the reader of the accounts to be able to compare the figures from 2010/2011 to the previous year.

The move to IFRS from UK GAAP should enable the reader of Local Authority accounts to be able to compare them with their counterparts in other countries which have also signed up to preparing their accounts under IFRS.

There have been no changes in the statutory functions carried out by the Council during the year.

During the 2010/2011 financial year the Council did not acquire any material assets or incur any material liabilities, the Council however, did undertake the construction of new council houses (these are currently included in assets under construction). The Council also made enhancements to existing assets.

General Fund

2010/2011 General Fund Net Revenue Expenditure Compared to Budget

The following tables show the financial position at 31 March 2011 (Table 1) and impact on the General Fund reserve balance (Table 2).

The information contained within Table 1 is based on the Council’s reporting structures for its financial management information, and compares the outturn position to the approved budget. Further information relating to the outturn

5 Mansfield District Council 31 March 2011 position can be found in Note 9 (Amounts Reported for Resources Allocation Decision) which analyses the income and expenditure over more headings, such as employee costs.

Table 1

Revised Out-turn Variance budget 2010/2011 Underspend(-) / 2010/2011 overspend (+) 2010/2011 £000 £000 £000

General Fund: Corporate Management 1,205 1,263 58 Customer Services and Partnerships 1,427 3,048 1,621 Finance and Revenue Services -13,019 -14,703 -1,684 Housing and Property Services -1,185 -1,907 -722 Legal and Member Services 1,386 1,354 -32 Operations 7,076 8,099 1,023 Planning, Community Safety and 2,713 2,690 -23 Regulatory Services Policy, Performance and Research 397 480 83 0 324 324

The current economic climate has had a significant impact on the financial position during the 2010/2011 financial year. Income raised through fees and charges continues to be lower than in previous years, especially in the areas of leisure usage, property rents, planning applications, search fees and car parking. The budgets for these areas were reviewed as part of the Council’s budget setting process for the 2010/2011 financial year, and were reduced down to anticipated levels, however income received in the financial year continued to fall.

Investment income levels remained low in 2010/2011 as the Bank of England kept interest rates at 0.5%. Although the budget had been reduced over the last couple of years to reflect the reduction in the interest rate (which was at 5.5% prior to October 2008) some growth in the interest rate had been anticipated by the Council towards the end of the financial year. As such, actual investment income received by the Council amounted to £286,000 compared to £576,000. The budget for investment income in 2011/2012 was adjusted accordingly.

At the same time, there has been a significant increase in certain services provided by the Council such as housing benefits, housing advice and economic regeneration which has put pressure on the Council’s financial resources.

6 Mansfield District Council 31 March 2011 The General Fund and Housing Revenue Account Outturn Report 2010/2011 provides further explanations as to variances between actual spend and budget. This report was submitted to Council on 26 July 2011.

General Fund Reserve

Revenue Reserves are at a level which provides a stable platform to enable quality services to be delivered in future years.

Based on its revenue account, the Council incurred a deficit amounting to £324,000, which has decreased General Fund balances to £8.116million.

Table 2

Variance 2010/2011 underspend (-) /overspend (+) £000

Opening Balance at 1 April 2010 -8,440 Movement in year (Surplus)/Deficit 324 Closing Balance at 31 March 2011 -8,116

Within the General Fund balances there are a number of items which are committed for expenditure in 2010/2011; these items have been previously approved at Council.

General Fund balances at the end of 2010/2011 stand at £8.116million, of which £4.345million are earmarked before the approval of any or all carry forward requests, bringing the unallocated balance to £3.771million. This amount is above the minimum level specified in the Medium Term Financial Strategy (approved by Council 14 September 2010, agenda item 10/106) which was set at £3.75million.

Some of the earmarked amounts have been utilised during the 2010/2011 financial year, as highlighted in Table 3 below.

7 Mansfield District Council 31 March 2011

Table 3

Earmarked Approved Opening Amount Closing New Comment originally Balance used Balance Balances Amount 2010/2011 2010/2011 2010/2011 to be Earmarked for 2011/2012 £000 £000 £000 £000 £000

Shared Services / Business 200 72 -44 28 0 Expenditure incurred in respect of Transformation staff time and consultancy Balance of Equal Pay 50 50 0 50 0 No movement, balance still liability required Management Development 100 64 0 64 0 No movement, balance still required CEDLO Equipment Renewal 40 5 0 5 0 No movement Energy /fuel contingency and 630 630 -4 626 0 Expenditure incurred with further consumption reduction plans in place approved to spend measures this resource Local Authority Business 769 769 0 769 0 No movement, balance still Growth Initiative (LABGI) required to meet future approved Grant capital expenditure Leisure Transfer Option 100 100 -56 44 0 No movement, balance still Appraisal required Feasibility Study 77 77 0 77 0 No movement, balance still required

Earmarked (continued) Approved Opening Amount Closing New Comment originally Balance used Balance Balances Amount 2010/2011 2010/2011 2010/2011 to be Earmarked for 2011/2012 £000 £000 £000 £000 £000 Revenue Contribution to 300 300 -135 165 0 Expenditure incurred during year, Four Seasons and Walkden balance still required Street Car Parks Meden Baths 35 35 -35 0 0 Allocated resources spent in 2010/2011 financial year Hardship Relief 62 62 -62 0 0 Allocated resources spent in 2010/2011 financial year Grant Carry Forwards 1,225 1,225 -1,225 0 0 Carry forwards used in the year, 2010/2011 any budget not utilised during the year or where additional grant has been received a new balance has been included at the bottom of this table General Fund Carry into 355 355 -355 0 0 Carry forwards used in the year, Forwards 2010/2011 (from where budget was not utilised in 2009/2010) year these amounts have been returned to General Fund Balances Improvement to toilet 0 0 0 0 500 Approved on 14 December 2010 facilities at the Four Seasons Shopping Centre

Earmarked (continued) Approved Opening Amount Closing New Comment originally Balance used Balance Balances Amount 2010/2011 2010/2011 2010/2011 to be Earmarked for 2011/2012 £000 £000 £000 £000 £000 Stockwell Gate 0 0 0 0 110 Approved by Council on 26 January 2011 Capital programme 0 0 0 0 492 Earmarked for the future capital programme Grant Carry Forwards 0 0 0 0 1,209 New carry forwards to 2011/2012 in from 2010/2011 into relation to grant funding. If this money 2011/2012 is not carried forward, then it is possible that the money will need to be returned because the expenditure isn’t being incurred in line with the grant requirements Financial Management 0 0 0 0 96 Contract for new Financial System Management System entered into during 2010/2011, balance of payment still to make Planning policy System 0 0 0 0 19 Contract for new system entered into during 2010/2011, balance of payment still to make Asset Management 0 0 0 0 41 Contract for new system entered into System during 2010/2011, balance of payment still to make

Earmarked (continued) Approved Opening Amount Closing New Comment originally Balance used Balance Balances Amount 2010/2011 2010/2011 2010/2011 to be Earmarked for 2011/2012 £000 £000 £000 £000 £000 Grant in Aid 0 0 0 0 50 Review of decision made during Budget 2010/2011 to cut Grant in Aid (agreed at Council 4 March 2011)

3,943 3,744 -1,916 1,828 2,517

Taking account of amounts which were previously earmarked for spend in 2010/2011 and later budgets, the actual position of the Council at the end of the financial year is shown within Table 4:

Table 4

2010/2011 out-turn (Surplus) / 324 Deficit Amounts to be offset from -1,916 General Fund Balances Carry forward required in 2,517 respect of commitments (including grant income) in 2010/2011 not yet spent Balance at 31 March 2011 925 (Surplus) / Deficit before carry forward requests

Carry forwards requested from 149 2010/2011 approved at Council on 26 July 2011 Balance at 31 March 2011 1,074 (Surplus) / Deficit including carry forward requests

The table above shows that overall the Council made a deficit of £1,074,000 when the necessary adjustments have been taken account of from within earmarked reserves.

Housing Revenue Account

2010/2011 Housing Revenue Account (HRA) Net Revenue Expenditure Compared to Budget

The Council sees the provision of Decent Homes as a priority. The Council has undertaken significant renovation works to its housing stock, in conjunction with Bullocks Construction Ltd (BCL), with significant resources being directed from the Housing Revenue Account and Capital Programme. The Council achieved the national Decent Homes Standard during the 2010/2011 financial year in line with the deadlines placed upon it by Central Government. The Council is now working towards the Mansfield Standard, which will see further renovation works to some of its housing stock.

The following tables show the financial position at 31 March 2011 (Table 5) and impact on the Housing Revenue Account reserve balance (Table 6).

Table 5

Budget Actual Variance 2010/2011 2010/2011 2010/2011 Underspend (-) /overspend (+) £000 £000 £000

Expenditure: Supervision and Management 2,867 2,736 -131 Housing Repairs 6,194 5,995 -199 Services 5,093 5,173 80 Housing Subsidy 2,114 2,009 -105 Other Expenditure (including 8,699 10,857 2,158 impairment, depreciation, bad debt provision) Total Expenditure 24,967 26,770 1,803

Income: Dwelling Rents -20,184 -19,300 884 Rents from Land and Buildings -1,082 -3,177 -2,095 Supporting People -1,226 -2,190 -964 General Fund Contributions -703 -704 -1 Other Income -2,031 -1,875 156 Total Income -25,226 -27,246 -2,020

-259 -476 -217

The Housing Revenue Account out-turn was a surplus of £476,000. The approved budget included an anticipated surplus of £259,000 to be

13 Mansfield District Council 31 March 2011 earmarked in respect of the anticipated loss of Supporting People grant as a result of reductions made by Nottinghamshire County Council. Based on this there is therefore an additional surplus of £217,000, increasing the Housing Revenue Account reserves.

Housing Revenue Account Reserves

Table 6 below shows the impact of the 2010/2011 revenue out-turn on the Housing Revenue Account reserve levels.

Table 6

Balance at 1 April 2010 -2,917 2010/2011 out-turn -476 (surplus) / deficit Balance at 31 March 2011 -3,393

The level of balances held by the Housing Revenue Account is felt to be sufficient to meet unforeseen circumstances. However, the Council faces an ongoing need to identify resources to ensure balanced budgets in the future, as well as meeting its obligation to deliver the Decent Homes, Mansfield Standard initiative.

From the Housing Revenue Account balance above there needs to be a sum of £853,000 earmarked (see table 7 below)

Table 7

£000 Job evaluation / pay and 500 grading review Pleasley Hill Regeneration 43 Scheme Bellamy Road Master Plan 50 Grant carry forward into 215 2011/2012 Homelessness grant 45 853

Unusual Credits or Debits Charged to Revenue (including General Fund and Housing Revenue Account)

During the financial year, the Council made payments in respect of its employee’s pension contributions to the Nottinghamshire Pension Scheme. At the end of the year, the Actuary reviewed these contributions and calculated that the increase in liabilities as a result of years of service earned was greater than the total contribution made.

As such, the value of this contribution was increased by an additional £983,000, which is included within the Council’s net cost of service line in the Comprehensive Income and Expenditure Statement.

These adjustments represents technical accounting entries and are reversed out through the Statement of Movement in General Fund Balances so that there is no overall impact.

In the UK budget statement on 22 June 2010 the Chancellor announced that with effect from 1 April 2011 public service pensions would be up-rated in line with the Consumer Prices Index (CPI) rather than the Retail Prices Index (RPI).

This has the effect of reducing Mansfield District Council’s liabilities in the Local Government Pension Scheme by £12,590,000 and has been recognised as a past service gain in accordance with guidance set down in UITF Abstract 48, since the change is considered to be a change in benefit entitlement. There is no impact upon the General Fund or Housing Revenue Account.

In 2010/2011, the Existing Use Value of Council Dwellings was reduced from 50% to 34%, meaning that only 34% of the open market value of the council housing stock is reflected in the Balance Sheet. This reduction in value to 34% is to reflect the fact that as the housing stock is tenanted it is valued less than the open market.

The affect of this change in the Existing Use Value has resulted in the value of Council Dwellings falling in the Balance Sheet by £70million, which has been treated as impairment in the Housing Revenue Account.

Impact on Future Budgets

The Council is constantly reviewing its budget through budget monitoring processes that it has in place. Any areas that are not meeting their approved budget either through increase in demand putting pressure on the Council to incur additional expenditure, or through reduced income are being monitored closely. Where it is expected that there are trends which will impact on future

15 Mansfield District Council 31 March 2011 years, this is being reflected in the Council’s Medium Term Financial Strategy and the final Budget Reports for the following year.

The Medium Term Financial Strategy for 2012/2013 will be presented to Council on 20 September 2011, and the Council’s draft budget will be presented to Cabinet on 7 November for scrutiny by the Council’s Select Commission 3 (for Corporate Items).

Provisions

The Council has increased its Grant Provision at the 31 March 2011 by £327,000 in respect of a grant repayment due to the cessation of a funding body. Further details of this can be found in Note 24.

Contingencies

The Council has not recognised any new contingent assets or liabilities in the 2010/2011 Statement of Accounts, nor have there been any significant changes to existing items.

For details of existing contingencies, please see note 50.

Material Write Offs

There have not been any material write offs during the financial year, due to the impairment or revaluation of Council debtors (that is, people or organisations owing the Council money).

All write offs relating to debt that the Council has been unable to recover have been done in line with the Council Debt Recovery Policy, where there is a very low likelihood of the Council recovering that money. This does not mean that the Council will not pursue any debt written off in the future if it thinks it is able to recover it at a later date.

Note 19 discloses the value of write offs made in the 2010/2011 financial year.

Material Events After the Reporting Date

The reporting date for the 2010/2011 Statement of Accounts was 29 June 2011, the date on which the Council’s Chief Finance Officer, the Head of Finance, Property and Revenue Services signed the Accounts for issue.

Any events occurring after this date which have a material impact on the figures contained within the Statement of Accounts have been added as appropriate. Please also see Note 6 to the Core Statements.

Borrowing Facilities

The Council borrows and lends money on a daily basis in order to finance its operations. This is done within the borrowing limits set by the authority and the Local Government Act 2003 and within the 2009 CIPFA Code of Practice on Treasury Management in the Public Services.

During 2010/2011 the Council did not borrow resources to finance future capital expenditure.

In 2011/2012 there is a potential that Mansfield District Council may need to borrow to support its Capital Programme for the New Build Scheme at Bellamy Road. The Council received grant from the Government amounting to 50% of the value of the scheme, aimed at encouraging Local Authorities to build new homes where there is an identified need for more housing. Mansfield District Council will need to contribute £2.577million (50%) of the value of the scheme.

The Council will look at potential funding options available when it needs to make this contribution into the scheme (as resources are primarily being drawn down from the Central Government grant), this will include looking at whether the Council can use its Housing Revenue balances (which stand at £2.796million (unallocated) at 31 March 2011).

The £2.577million potential borrowing was identified within the Council’s Treasury Management and Investment Strategy (which was approved at Council on 3 March 2011, agenda item 11/21) as there is a commitment from the Council to make this contribution, and as such there is a possibility that a loan might need to be secured.

As part of its Treasury Management Strategy the Council continued to investigate ways in which it could maximise the benefits of its investments within the prudent limits of the CIPFA Code of Practice.

Capital

Capital Programme

The Council’s Capital Programme includes major schemes within the district’s Town Centres, housing renewal and the Decent Homes Programme with a total of £12.9million being spent during the year. This has been funded through grants from a number of sources and by the Council’s own resources generated through the sale of surplus land or other assets.

Capital Investment

Table 8 below shows the major areas of capital expenditure during 2010/2011 and the way in which this expenditure was financed. Note 43 to the Core Financial Statements and Note 20 to the Housing Revenue Account provide more detail.

Table 8

Capital Expenditure: Financing: Service Area £000 Source £000

Revenue contributions from 140 HRA 9,172 General Fund Revenue contribution from 2,485 General Fund 3,691 Housing Revenue Account Grants and other Contributions 4,503 Capital Receipts 993 Major Repairs Reserve 3,873 Earmarked Reserves 638 Internal borrowing – increase in 231 Capital Financing Requirement 12,863 12,863

The Council has not entered into any material financial commitments.

Pension Liability

Mansfield District Council is a member of the Nottinghamshire County Council pension fund, and the assets and liabilities of the fund attributable to the Council are evaluated on an annual basis by an independent actuary. The actuary estimated that the Mansfield District Council’s fund was in deficit by £47.7million (Note 49 to the Core Financial Statements provides more detail). This value has fallen from the previous year (2009/2010) when the deficit was predicted to be £90million.

Further Information

The Annual Statement of Accounts is an important document. It explains the financial position of the Council at 31 March 2011 and its activities during the financial year.

The Explanatory Foreword provides an outline of the position and the Financial Statements; their accompanying notes give further details. These are shown in a standardised and statutory format to help comparison with previous years and other authorities.

The document contains a number of technical and accounting terms; these have been explained within the Glossary.

Anyone wishing further explanation of any aspect of the Statement of Accounts can contact the Council’s Finance department directly on 01623 463495 or 01623 463031, by e-mail on [email protected], or in writing to:

Head of Finance, Property and Revenue Services Mansfield District Council Civic Centre Chesterfield Road South Mansfield Nottinghamshire NG19 7BH

Although the Statement of Accounts must contain statutory information, the Council would be pleased to receive any comments or suggestions for improvement. Please direct these as explained above.

Members of the Public are able to examine the accounts during normal office hours 8.30am – 5.00pm at the Civic Centre or by arrangement with the Financial Services Section of the Finance, Property and Revenues Department if outside these times.

Members of the Public have the opportunity to discuss the Statement of Accounts with the Council’s external auditor at any time after 27 June 2011.

Audited copies will be available at local Council offices, Civic Centre, Mansfield Library and on the Mansfield District Council Web Site www.mansfield.gov.uk.

We can also copy this document into large print for you if you have sight difficulties.

We have a signer who can help people with hearing problems. Contact us so that we can arrange an appointment for you at the Civic Centre. Minicom (Text Phone) – we have a text phone facility at the Civic Centre for the deaf or hard of hearing. If you wish to contact us by this method the number is 01623 463444.

Interpreter - We can arrange for an interpreter for most languages. Contact our Customer Services Officer on 01623 463398 so that we can arrange an appointment for you. The Council has an arrangement with “EITI” to provide a telephone or face to face interpreting service, which can be accessed from Council facilities.

20 Mansfield District Council 31 March 2011 Statement of Responsibility for The Statement of Accounts

The Council’s responsibilities:

 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 affairs. At Mansfield District Council, that officer is the Head of Finance, Property and Revenue Services  Manage its affairs to secure economic, efficient and effective use of resources and safeguard its assets  Approve the Statement of Accounts

The Head of Finance, Property and Revenue Services’ responsibilities:

The Head of Finance, Property and Revenue Services is responsible for the preparation of the Council’s Statement of Accounts in accordance with proper practices as set out in the CIPFA/LASAAC Code of Practice on Local Authority Accounting in the United Kingdom (the Code).

In preparing this statement, the Head of Finance, Property and Revenue Services 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 of Practice.

The Head of Finance, Property and Revenue Services has also:  Kept proper accounting records which were up to date  Taken reasonable steps for the prevention and detection of fraud and other irregulars.

The Head of Finance, Property and Revenue Services has signed and dated the Statement of Accounts for the 2010/2011 financial year, stating that it presents 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 2011.

Movement in Reserves Statement (MiRS)

2010/2011

General Earmarked Housing Capital Major Capital Total Unusable Council’s Fund General Revenue Receipts Repairs Grants Usable Reserves Total Balance Fund Account Reserve Reserve Unapplied Reserves Reserves Reserves

£000 £000 £000 £000 £000 £000 £000 £000 £000

Balance at 31 March 2010 8,440 11,777 2,917 4,285 2,406 1,700 31,525 224,275 255,800 Movement in reserves during 2010/2011: Surplus / (Deficit) on the 7,027 138 -51,142 0 0 0 -43,977 0 -43,977 provision of services Other Comprehensive Income 0 -7 0 0 0 0 -7 28,098 28,091 and Expenditure Total Comprehensive Income 7,027 131 -51,142 0 0 0 -43,984 28,098 -15,886 and Expenditure Adjustments between -7,561 0 51,618 108 0 232 44,397 -44,397 0 accounting basis and funding basis under regulations (see Note 7) Net increase/decrease before -534 131 476 108 0 232 413 -16,299 -15,886 transfers to earmarked reserves Transfers to/from Earmarked 210 -210 0 0 0 0 0 0 0 Reserves (see Note 8) Increase/Decrease in -324 -79 476 108 0 232 413 -16,299 -15,886 2010/2011 Balance at 31 March 2011 8,116 11,698 3,393 4,393 2,406 1,932 31,938 207,976 239,914

2009/2010

General Earmarked Housing Capital Major Capital Total Unusable Council’s Fund General Revenue Receipts Repairs Grants Usable Reserves Total Balance Fund Account Reserve Reserve Unapplied Reserves Reserves Reserves Restated Restated £000 £000 £000 £000 £000 £000 £000 £000 £000

Balance at 31 March 2009 8,362 12,037 2,044 9,042 2,406 1,450 35,341 240,123 275,464 Movement in reserves during 2009/2010: Surplus / (Deficit) on the -3,375 109 6,434 0 0 0 3,168 0 3,168 provision of services Other Comprehensive Income 0 5 0 0 0 0 5 -22,825 -22,820 and Expenditure Total Comprehensive Income -3,375 114 6,434 0 0 0 3,173 -22,825 -19,652 and Expenditure Adjustments between 3,079 0 -5,561 -4,757 0 262 -6,977 6,977 0 accounting basis and funding basis under regulations (see Note 7) Grant received in advance 0 0 0 0 0 -12 -12 0 -12 Net increase/decrease before -296 114 873 -4,757 0 250 -3,816 -15,848 -19,664 transfers to earmarked reserves Transfers to/from Earmarked 374 -374 0 0 0 0 0 0 0 Reserves (see Note 8) Increase/Decrease in 78 -260 873 -4,757 0 250 -3,816 -15,848 -19,664 2009/2010 Balance at 31 March 2010 8,440 11,777 2,917 4,285 2,406 1,700 31,525 224,275 255,800

Comprehensive Income and Expenditure Statement (CIES)

2009/10 2009/10 2009/10 2010/11 2010/11 2010/11 Gross Gross Net Gross Gross Net Cost Income Cost Cost Income Cost Restated Restated Restated £000 £000 £000 Note £000 £000 £000

General Fund continuing operations 9 10,695 -10,822 -127 Central Services to the Public 11,720 -10,138 1,582 24,270 -13,622 10,648 Cultural, Environmental and Planning 24,672 -13,675 10,997 5,243 -3,992 1,251 Highways, Roads and Transport 5,746 -4,261 1,485 31,691 -27,898 3,793 Housing Services 33,450 -32,664 786 4,267 -1,566 2,701 Corporate and Democratic Core 4,491 -1,696 2,795 0 0 0 Non-Distributed Costs 177 0 177 0 0 0 Acquired operations 0 0 0 0 0 0 Discontinued operations 0 0 0 15,541 -24,794 -9,253 Housing Revenue Account 27,368 -25,144 2,224 0 0 0 Exceptional Items 9 39,080 0 39,080 91,707 -82,694 9,013 Net Cost of Service 146,704 -87,578 59,126

2009/10 2009/10 2009/10 2010/11 2010/11 2010/11 Gross Gross Net Gross Gross Net Cost Income Cost Cost Income Cost Restated Restated Restated £000 £000 £000 Note £000 £000 £000

946 0 946 Other Operating Expenditure 10 323 0 323 7,493 -1,158 6,335 Financing and Investment Income and Expenditure 11 6,116 -2,665 3,451 0 0 0 Surplus / deficit of discontinued operations 0 0 0 0 -19,462 -19,462 Taxation and Non-Specific Grant Income 12 0 -18,923 -18,923 100,146 -103,314 -3,168 (Surplus) / deficit on Provision of Services 153,143 -109,166 43,977

-15,574 Surplus / deficit on revaluation of non-current assets 5,360 0 Surplus / deficit on revaluation of available for sale financial assets 0 38,399 Actuarial gains / losses on pension assets and liabilities 49 -33,497 -5 Other 46 22,820 Other comprehensive Income and Expenditure -28,091 19,652 Total comprehensive Income and Expenditure 15,886

25 Mansfield District Council 31 March 2011 Balance Sheet

1 April 2009/2010 2010/2011 2009 Restated Restated £000 £000 Note £000

326,102 349,232 Property, Plant and Equipment 13 287,874 17,433 17,161 Investment Property 14 19,362 299 198 Intangible Assets 15 94 0 0 Assets Held for Sale 21 0 825 819 Long Term Debtors 53 828 344,659 367,410 Long Term Assets 308,158

38,042 31,041 Short Term Investments 16 28,081 466 511 Inventories 17 437 8,471 8,302 Short Term Debtors 19 11,499 571 876 Cash and Cash Equivalents 16/20 1,318 47,550 40,730 Current Assets 41,335

-6,664 -1,579 Short Term Borrowing 16 -6,433 -8,081 -7,058 Short Term Creditors 22 -8,813 -357 -913 Provisions 24 -1,258 -15,102 -9,550 Current Liabilities -16,504

-49,896 -49,838 Long Term Borrowing 16 -44,682 -50,805 -90,323 Other Long Term Liabilities 49 -47,718 -942 -2,629 Capital Grants Receipts in Advance 38 -675 -101,643 -142,790 Long Term Liabilities -93,075

275,464 255,800 Net Assets 239,914

35,341 31,525 Usable Reserves 31,938 240,123 224,275 Unusable Reserves 25 207,976

275,464 255,800 Total Reserves 239,914

26 Mansfield District Council 31 March 2011 Cash Flow Statement

2009/10 2010/11 Restated £000 Note £000

3,168 Net surplus or (deficit) on the provision of -43,977 services -208 Adjustments to net surplus / deficit on the 53,329 provision of services for non-cash movements 1,234 Adjustments for items in the net surplus / -3,592 deficit on the provision of services that are investing and financing activities 4,194 Net cash flows from Operating Activities 26 5,760 -5,498 Investing Activities 27 -5,532 1,609 Financing Activities 28 214 305 Net Increase / decrease in cash and cash 442 equivalents

571 Cash and cash equivalents at the beginning of 876 the reporting period 876 Cash and cash equivalents at the end of 1,318 the reporting period (Note 20)

Notes to the Core Financial Statements

Transition to International Financial Reporting Standards (IFRS)

The Statement of Accounts for 2010/2011 is the first to be prepared on an IFRS basis. Adoption of the IFRS based Code has resulted in the restatement of various balances and transactions, with the result that some amounts presented in the financial statements are different from the equivalent figures presented in the Statement of Accounts for 2009/2010.

The following tables explain the material differences between the amounts presented in the 2009/2010 financial statements and the equivalent amounts presented in the 2010/2011 financial statements.

Short-Term Accumulating Compensated Absences

Short-term accumulating compensated absences refers to benefits that employees receive as part of their contract of employment, entitlement to which is built up as they provide service to the Council. The most significant benefit covered by this heading is paid annual leave.

Employees build up their entitlement to paid holidays as they work. Under the Code, the cost of providing paid annual leave and similar benefits such as lieu time is required to be recognised when employees render service that increases their entitlement to future compensated absences. As a result, the Council is required to accrue for any paid annual leave and similar benefits earned but not taken by 31 March each year. Under the previous accounting arrangements, no such accrual was required. The accrual in the accounts recognises the cost to the Council in monetary terms of any untaken leave at year end, (31 March), and similarly any other benefit owing.

The Government has issued regulations that mean Local Authorities are only required to fund paid annual leave and similar benefits when they are used, rather than when employees earn the benefits. Amounts are transferred to the Accumulated Absences Account until the benefits are used.

Accruing for short-term accumulating compensated absences has resulted in the following changes being made to the 2009/2010 financial statements:

Balance Sheet:

Opening 1 April 2009 Balance Sheet

2009/2010 Adjustment Made £000 £000

Provisions 234 234 Accumulated Absences Account -234 -234

31 March 2010 Balance Sheet

Provisions 229 229 Accumulated Absences Account -229 -229

Comprehensive Income and Expenditure Statement:

2009/2010 Comprehensive Income and Expenditure Statement

Cost of Services (Net):

Internal Support Service Account -5 -5

The value shown in the Balance Sheet represents the value of benefits owing to employees where as the figure shown in the Comprehensive Income and Expenditure Statement represents the movement in the benefit owing.

Government Grants

Under the Code, grants and contributions for capital schemes are recognised as income when they become receivable. Previously, grants were held in a grants deferred account and recognised as income over the life of the assets which they were used to fund. This means grant income will be released into the revenue account in one lump sum when it becomes receivable compared to an annual amount over the life of the asset.

As a consequence of adopting the accounting policy required by the Code, the financial statements have been amended as follows:

 the balance on the Government Grants Deferred Account at 31 March 2009 has been transferred to the Capital Adjustment Account in the opening 1 April 2009 Balance Sheet as the Government Grants Deferred Account is not recognised under the new Code.  a proportion of government grants deferred were previously recognised as income in 2009/2010; this income has been removed from the Comprehensive Income and Expenditure Statement in the comparative figures, as the income is no longer credited to the Comprehensive

Income and Expenditure Statement (it is kept within the Balance Sheet under IFRS).  a grant was received in 2009/2010 but not used. Previously, no income was recognised in respect of this grant, which was shown in the Grants Unapplied Account within the liabilities section of the balance sheet. Following the change in accounting policy, the grant has been recognised in full, and transferred to the Capital Grants Unapplied Account within the reserves section of the balance sheet.

This has resulted in the following changes being made to the 2009/2010 financial statements:

Opening 1 April 2009 Balance Sheet

Government Grants Deferred Account 10,011 10,011 Capital Adjustment Account -10,011 -10,011 Capital Grants Unapplied Account 1,450 1,450

The Code requires classes of fixed assets within property, plant and equipment to be valued on the same measurement basis as under the SORP (Statement of Recommended Practice) therefore there is no impact on transition to IFRS (International Financial Reporting Standard’s). There is an impact on transition with regards to the measurement basis of the following:

 investment property reclassified as property, plant and equipment (for example where the Code definition of investment property is not met)  assets held for disposal reclassified as property, plant and equipment or investment property (for example where the Code definition of assets held for disposal is not met)

The Code requires specific criteria to be met for assets to be categorised as either investment property or assets held for disposal; this criteria was not applied under the Statement of Recommended Practice (SORP). As such, when the criteria has been applied some assets have been re-classified.

Balance Sheet:

Opening 1 April 2009 Balance Sheet:

Property, plant and equipment 37,595 37,595 Investment property -36,226 -36,226 Surplus assets -116 -116 Revaluation reserve 3,578 3,578 Capital Adjustment Account -4,831 -4,831 Capital Grants Unapplied Account 1,450 1,450

1. Accounting Policies

General Principles

The Statement of Accounts summarises the Council’s transactions for the 2010/2011 financial year and its position at the year end, dated 31 March 2011.

The Council is required to prepare an annual Statement of Accounts under the Accounts and Audit Regulations 2003. These Regulations require the Statement of Accounts to be prepared in accordance with proper accounting practices.

These practices primarily comprise of the Code of Practice on Local Authority Accounting in the United Kingdom 2010/2011 and the Best Value Accounting Code of Practice 2010/2011, supported by International Financial Reporting Standards (IFRS) and statutory guidance issued under section 12 of the 2003 Act. Prior to the 2010/2011 Statement of Accounts, the Council’s accounts were prepared under the Statement of Recommended Practice (SORP).

The accounting convention adopted in the Statement of Accounts is principally historical cost, modified by the revaluation of certain categories of non-current assets and financial instruments.

Accrual of Income and Expenditure

Activity is accounted for in the year that it takes place, not simply when cash payments are made or received.

Revenue from the sale of goods is recognised when the Council transfers the significant risks and rewards of ownership to the purchaser and it is probable that economic benefits or service potential associated with the transaction will flow to the Council.

Revenue from the provision of services is recognised when the Council can measure reliably the percentage of completion of the transaction and it is probable that economic benefits or service potential associated with the transaction will flow to the Council.

Supplies are recorded as expenditure when they are consumed. For material items where there is a gap between the date supplies are received and their consumption, they are carried as inventories (stock) on the Balance Sheet.

Interest payable on borrowings and interest receivable on investments is accounted for respectively as income and expenditure on the basis of the effective interest rate for the relevant financial instrument rather than the cash flows fixed or determined by the contract.

Where income or expenditure has been recognised but cash has not been received or paid, a debtor or creditor for the relevant amount is recorded in the Balance Sheet. Where it is doubtful that debts will be settled, the balance of the debtor is written down and a charge made to revenue for the income that might not be collected.

Expenditure in relation to services received are recorded as expenditure when the services are received rather than when payments are made.

Creditors

Payments to creditors are included in the accounts where the payment relates to goods and services received prior to 1 April 2011. Any payments in advance (before 1 April 2011), which relate to the 2011/2012 financial year are shown as prepayments.

Exceptions to this include electricity and similar periodic payments. These are included at the date of meter readings rather than apportioned between two financial years. This policy is consistently applied each year and therefore does not have a material effect on the accounts.

Debtors

Income from debtors is included in the accounts where the income relates to goods and services provided by the Council prior to 31 March 2011. Any income received before 1 April 2011, which relates to the 2011/2012 financial year is shown as receipts in advance.

An exception to this relates to rent due for retail, commercial and industrial premises where rent is due at the quarter date in March. This policy is consistently applied each year and therefore does not have a material effect on the accounts.

Non-Current Assets

Investment Properties

Investment properties are those that are used solely to earn rentals and/or capital appreciation. The definition is not met if the property is used in any way to facilitate the delivery of services or production of goods by the Council or is held for sale.

Investment properties are measured initially at cost and subsequently at fair value, based on the amount at which the asset could be exchanged between knowledgeable parties at arm’s length. Properties are not depreciated but are re-valued annually according to market conditions. Gains and losses on revaluation are posted to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement. The same treatment is applied to gains and losses on disposal.

Rentals received in relation to investment properties are credited to the Financing and Investment Income line and result in a gain for the General Fund Balance. However, revaluation and disposal gains and losses are not permitted by statutory arrangements to have an impact on the General Fund Balance. The gains and losses are therefore reversed out of the General Fund in the Movement in Reserve Statement and posted to the Capital Adjustment Account and the Capital Receipts Reserve.

Property, Plant and Equipment

Assets that have a physical substance and are held for use in the provision of service or for administrative purposes on a continuing basis and that are expected to be used during more than one financial year are classified as property, plant and equipment.

Acquisition of assets which are less than £10,000 (the Council’s de minimus level) are debited to the Comprehensive Income and Expenditure Statement.

Recognition

Expenditure on the acquisition, creation or enhancement of property, plant and equipment is capitalised on an accruals basis, provided that it is probable that the future economic benefits or service potential associated with the item flow to the Council and the cost of the item can measure reliably yields. Expenditure that maintains but does not add to an asset’s potential to deliver future economic benefits (for example repairs and maintenance) is charged to revenue as it is incurred.

Assets are initially measured at cost, comprising all expenditure that is attributable to bringing the asset into working condition for its intended use. Assets are then carried on the Balance Sheet on the following measurement basis:

Asset Category Basis of Valuation

Council dwellings Existing use value for social housing less depreciation. Property, Plant and Equipment Net current replacement cost less depreciation which is depreciated replacement cost (DRC) for specialised assets and existing use value (EUV) for non specialised. Community assets and Historic cost. infrastructure Investment Properties Fair value. Vehicles, plant and equipment The lower of net current replacement cost or net realisable value in existing use. Assets acquired under finance Fair value of outstanding obligation. leases Assets acquired for other Appropriate fair value. than a cash consideration

Assets included in the Balance Sheet at fair value are revalued sufficiently regularly to ensure that their carrying amount is not materially different from their fair value at the year end, but as a minimum every five years.

Increases in valuations are matched by credits to the Revaluation Reserve to recognise unrealised gains. Exceptionally, gains might be credited to the Comprehensive Income and Expenditure Statement where they arise from the reversal of an impairment loss previously charged to a service revenue account.

The Revaluation Reserve contains revaluation gains recognised since 1 April 2007 only, the date of its formal implementation. Gains arising before that date have been consolidated into the Capital Adjustment Account.

During the 2010/2011 financial year the Council did not acquire any material assets or incur any material liabilities, the Council however, did undertake the construction of building new council houses (these are currently included in assets under construction). The Council also made enhancements to existing assets.

Charges to Revenue for Non-Current Assets

Service revenue accounts, central support services and trading accounts are charged with depreciation / amortisation and where required, any related impairment loss (due to a clear consumption of economic benefits), on all fixed assets used in the provision of the service.

Depreciation

Depreciation is applied to all property, plant and equipment assets on a ‘straight line’ basis over their useful life as determined by the Council’s valuers, as set out below:

Asset life

Non HRA dwelling 21 years Workshops 20-50 years Community centres 50-99 years Vehicles and plant 2-10 years Other 99 years

Land is not depreciated as this is deemed as having an infinite life.

The one exception to this relates to the Council’s housing stock where the depreciation charged is equal to the Major Repairs Allowance (as per the Government’s Subsidy Determination Guidelines). This is permissible under CIPFA guidance as it is a more accurate calculation of depreciation.

Where an item of property, plant and equipment has major components whose cost is significant in relation to the total cost of the item, the components are depreciated separately.

Revaluation gains are also depreciated, with an amount equal to the difference between current value depreciation charged on assets and the depreciation that would have been chargeable based on their historical cost being transferred each year from the Revaluation Reserve into the Capital Adjustment Account.

Impairment

The values of each category of assets and of material individual assets that are not being depreciated are reviewed at the end of each financial year for evidence of reductions in value. Where impairment is identified as part of this review or as a result of a valuation exercise, this is accounted for by:

 where there is a balance of revaluation gains for the asset in the Revaluation Reserve, the carrying amount of the asset is written down against this balance (up to the amount of the accumulated gains)  where there is no balance in the Revaluation Reserve or an insufficient balance, the carrying amount of the asset is written down against the relevant service line(s) in the Comprehensive Income and Expenditure Statement.

Where an impairment loss is reversed subsequently, the reversal is credited to the relevant service line(s) in the Comprehensive Income and Expenditure

Statement, up to the amount of the original loss, adjusted for depreciation what would have been charged if the loss had not been recognised.

Disposals

When an asset is disposed of, or decommissioned, the value of the asset in the Balance Sheet (whether property, plant and equipment or assets held for sale) is written off to the Operating Expenditure line in the Comprehensive Income and Expenditure Statement as part of the gain or loss on disposal. Receipts from disposals are credited to the same line in the Comprehensive Income and Expenditure Statement as part of the gain or loss on disposal (that is, netted off against the carrying value of the asset at the time of disposal). Any revaluation gains in the Revaluation Reserve are transferred to the Capital Adjustment Account.

Amounts received for a disposal in excess of £10,000 (the Council’s de- minimus level) are categorised as capital receipts.

A proportion of receipts relating to housing disposals (75% for dwellings, 50% for land and other assets, net of statutory deductions and allowances) is payable to the Government. The balance of receipts is required to be credited to the Capital Receipts Reserve, and can then only be used for new capital investment or set aside to reduce the council’s underlying need to borrow (the capital financing requirement). Receipts are appropriated to the Reserve from the General Fund Balance in the Movement in Reserves Statement.

The written-off value of disposals is not a charge against council tax, as the cost of fixed assets is fully provided for under separate arrangements for capital financing. Amounts are appropriated to the Capital Adjustment Account from the General Fund Balance in the Movement in Reserves Statement.

Receipts Arising from the Sale of Fixed Assets

Income from the disposal of fixed assets is shown in the Balance Sheet as a useable capital receipt. A proportion of some of the capital receipts received for the disposal of housing assets has to be paid across to Central Government. This is included in the Net Operating Expenditure section of the Comprehensive Income and Expenditure Statement.

Receipts from the sale of assets which are less than £10,000 (the Council’s de minimus level) are credited to the Comprehensive Income and Expenditure Statement.

Intangible Fixed Assets

Expenditure on assets that do not have a physical substance but are identifiable and controlled by the Council (for example software licences and patents) is capitalised when it will bring economic benefit to the Council for

37 Mansfield District Council 31 March 2011 more than one financial year. The balance is amortised to the relevant service revenue account over the economic life of the investment to reflect the pattern of consumption and benefit.

Where expenditure on intangible assets qualifies as capital expenditure for statutory purposes, amortisation, impairment losses and disposal gains and losses are not permitted to have an impact on the General Fund Balance. The gains and losses are therefore reversed out of the General Fund Balance in the Movement in Reserves Statement and posted to the Capital Adjustment Account and the Capital Receipts Reserve.

The main intangible asset owned by the Council is software licences, which are shown in the Balance Sheet at historic cost less amortisation. Software licences are amortised using the ‘straight line’ basis over 5 years.

Financial Instruments

Financial Liabilities

Financial liabilities are initially measured at fair value and carried at their amortised cost. Annual charges to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement for interest payable are based on the carrying amount of the liability, multiplied by the effective rate of interest for the instrument. The effective interest rate is the rate that exactly discounts estimated future cash payments over the life of the instrument to the amount at which it was originally recognised.

For most of the borrowings that the Council has, this means that the amount presented in the Balance Sheet is the outstanding principal repayable and interest charged to the Comprehensive Income and Expenditure Account is the amount payable for the year in the loan agreement.

Gains and losses on the repurchase or early settlement of borrowing are credited and debited to the Financing and Investment line in the Comprehensive Income and Expenditure Statement in the year of repurchase or settlement. However, where repurchase has taken place as part of a restructuring of the loan portfolio that involves the modification or exchange of existing instruments, the premium or discount is respectively deducted from or added to the amortised cost of the new or modified loan and the write-down to the Comprehensive Income and Expenditure Statement is spread over the life of the loan by an adjustment to the effective interest rate.

Where premiums and discounts have been charged to the Comprehensive Income and Expenditure Statement, regulations allow the impact on the General Fund Balance to be spread over future years.

During the 2010/2011 financial year the Council did not reschedule any of its borrowings. The Council no longer holds any premiums or discounts from debt that has been re-scheduled in the past.

Financial Assets

Financial assets are classified into two types:

 loans and receivables – assets that have fixed or determinable payments but are not quoted in an active market  available-for-sale assets – assets that have a quoted market price and/or do not have fixed or determinable payments

Loans and Receivables

Loans and receivables are initially measured at fair value and carried at their amortised cost. Annual credits to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement for interest receivable are based on the carrying amount of the asset multiplied by the effective rate of interest for the instrument. For most of the loans that the Council has made, this means that the amount presented in the Balance Sheet is the outstanding principal receivable and interest credited to the Comprehensive Income and Expenditure Statement is the amount receivable for the year in the loan agreement.

Where assets are identified as impaired because of a likelihood arising from a past event that payments due under the contract will not be made, the asset is written down and a charge made to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement.

Any gains and losses that arise on the de-recognition of the asset are credited/debited to the Comprehensive Income and Expenditure Statement

Available-for-Sale Assets

Available-for-sale assets are initially measured and carried at fair value. Where the asset has fixed or determinable payments, annual credits to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement for interest receivable are based on the amortised cost of the asset multiplied by the effective rate of interest for the instrument. Where there are no fixed or determinable payments, income (for example, dividends) is credited to the Comprehensive Income and Expenditure Statement when it becomes receivable by the Council.

Financial assets are maintained in the Balance Sheet at fair value. Values are based on the following principles:

Instruments with quoted market Market price prices Instruments with fixed and Discounted cash flow analysis determinable payments Equity shares with no quoted Independent appraisal of market prices company valuations

Changes in fair value are balanced by an entry in the Available-for-sale Reserve and the gain/loss is recognised in the surplus/deficit on Revaluation of Available-for-sale Financial Assets. The exception is where impairment losses have been incurred – these are debited to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement, along with any net gain/loss for the asset accumulated in the Available-for-sale Reserve.

Where assets are identified as impaired because of a likelihood arising from a past event that payments due under the contract will not be made, the asset is written down and a charge made to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement.

Any gains and losses that arise on the de-recognition of the asset are credited/debited to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement, along with any accumulated gains/losses previously recognised in the Available-for-sale Reserve.

Where fair value cannot be measured reliably, the instrument is carried at cost (less any impairment losses).

During the 2010/2011 financial year, the Council did not hold any available-for sale assets.

Inventories (previously referred to as Stock)

Inventory is valued at current price which is not in accordance with Code of Practice requirements nor International Financial Reporting Standard (IFRS) 2, however this is consistently applied from year to year.

Work in progress is subjected to an interim valuation at the year end and is recorded in the Balance Sheet at the lower of cost or net realisable value.

Employee Benefits

Benefits Payable During Employment

Short-term employee benefits are those due to be settled within 12 months of the year end. They include such benefits as wages and salaries, paid annual leave and paid sick leave, bonuses for current employees and are recognised as an expense for services in the year in which employees render service for the Council. An accrual is made for the cost of holiday entitlements (or any form of leave, for example time off in lieu) earned by employees but not taken before the year end which employees can carry forward into the next financial year. The accrual is charged to surplus/deficit on the Provision of Services, but then reversed out through the Movement in Reserves Statement so that holiday benefits are charged to revenue in the financial year in which the holiday absence occurs.

Termination Benefits

Termination benefits are amounts payable as a result of a decision by the Council to terminate an officer’s employment before the normal retirement date or an officer’s decision to accept voluntary redundancy and are charged on an accruals basis to the Non Distributed Costs line in the Comprehensive Income and Expenditure Statement when the Council is demonstrably committed to the termination of the employment of an officer or group of officers or making an offer to encourage voluntary redundancy.

Where termination benefits involve the enhancement of pensions, statutory provisions require the General Fund Balance to be charged with the amount payable by the Council to the pension fund or pensioner in the year, not the amount calculated according to the relevant accounting standards. In the Movement in Reserves, appropriations are required to and from the Pension Reserve to remove the notional debits and credits for pension enhancement termination benefits as replace them with debits for the cash paid to the pension fund and pensioners and any such amounts payable but unpaid at the year end.

Post Employment Benefits

The Council contributes to the Nottinghamshire County Council Pension Fund. The Pension Fund’s Actuary undertakes a valuation every three years and determines the rate of contribution the Council needs to make.

The liabilities of the County Council’s pension scheme attributable to the Council are included in the Balance Sheet on an actuarial basis using the projected unit method, that is an assessment of the future payments that will be made in relation to retirement benefits earned to date by employees, based on assumptions about mortality rates, employee turnover rates (and so forth), and projections of projected earnings for current employees.

Liabilities are discounted to their fair value at current prices, using a discount rate of 5.5%.

The assets of the Nottinghamshire County Council Pension Fund attributable to the Council are included in the Balance Sheet at their fair value:

Quoted Securities Current bid price Unquoted Securities Professional estimate Property Market value Unitised Securities Current bid price

The change in the net pension liability is analysed into seven components:

 Current Service Cost - the increase in liabilities as a result of years of service earned this year (allocated in the Comprehensive Income and Expenditure Statement to the revenue accounts of services for which the employees worked)  Past Service Cost - the increase in liabilities arising from current year decisions whose effect relates to years of service earned in earlier years (debited to the Net Cost of Service in the comprehensive Income and Expenditure Statement, as part of non-distributed costs)  Interest Costs - the expected increase in the present value of liabilities during the year as they move one year closer to being paid (debited to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement)  Expected Return on Assets – the annual investment return on the fund assets attributable to the Council, based on an average of the expected long term return (credited to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement)  Gains/Losses on Settlement and Curtailment – the result of actions to relieve the Council of liabilities or events that reduce the expected future service or accrual of benefit of employees (debited/credited to the Provision of Services in the Comprehensive Income and Expenditure Statement, as part of non-distributable costs)  Actuarial Gains and Losses – change in the net pension liability that arise because events have not coincided with assumptions made at the last actuarial valuation or because the actuaries have updated their assumptions (debited to the Pensions Reserve)  Contributions paid to the County Pension Fund – cash paid as employer’s contributions to the pension fund

In relation to retirement benefits, statutory provisions require the General Fund Balance to be charged with the amount payable by the Council to the pension fund or directly to pensioners in the year, not the amount calculated

42 Mansfield District Council 31 March 2011 according to the relevant accounting standards. In the Movement in Reserves Statement, this means that there are appropriations to and from the Pension Reserve to remove the notional debits and credits for retirement benefits and replace them with debits for the cash paid to the pension fund and pensioners and any such amounts payable but unpaid at the year end. The negative balance that arises on the Pension Reserve thereby measures the beneficial impact to the General Fund of being required to account for retirement benefits on the basis of cash flows rather than as benefits are earned by employees.

Discretionary Benefits

The Council also has restricted powers to make discretionary awards of retirement benefit in the event of early retirement. Any liabilities estimated to arise as a result of an award to any member of staff are accrued in the year of the decision to make the award and accounted for using the same policies as are applied to the Local Government Pension Scheme.

Provisions

Provisions are made where an event has taken place that gives the Council a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation. For instance, the Council may be involved in a court case that could eventually result in the making of a settlement or the payment of compensation.

Provisions are charged to the appropriate service revenue account in the year that the Council becomes aware of the obligation, based on the best estimate of the likely settlement. When payments are eventually made, they are charged to the provision set up in the Balance Sheet. Estimated settlements are reviewed at the end of the financial year – where it becomes more likely than not that a transfer of economic benefit will not be required (or lower settlement anticipated) the provision is reversed and credited back to the relevant service revenue account.

Where some or all of the payment required to settle a provision is expected to be met by another party (for example, an insurance claim), this is only recognised as income in the relevant service revenue account if it is virtually certain that reimbursement will be received if the obligation is settled.

Prior Period Adjustments, Changes in Accounting Policies and Estimates and Errors

Prior period adjustments may arise as a result of a change in accounting policies or to correct a material error. Changes in accounting estimates are accounted for prospectively, for example in the current and future years affected by the change and do not give rise to a prior period adjustment.

Changes in accounting policies are only made when required by proper accounting practices or the change provides more reliable or relevant information about the effect of transactions, other events and conditions on the Council’s financial position or financial performance. Where a change is made, it is applied retrospectively (unless stated otherwise) by adjusting opening balances and comparative amounts for the prior period as if the new policy had always been applied.

FRS 30 Heritage Assets will require an accounting policy change in respect of the treatment of heritage assets from 1 April 2011.

Reserves

The Council sets aside specific amounts as revenue for future policy purposes or to cover potential liabilities. Reserves are created by appropriating amounts in the General Fund Balance in the Movement in Reserves Statement. When expenditure to be financed from a reserve is incurred, it is charged to the appropriate service revenue account in that year against the net cost of services in the Comprehensive Income and Expenditure Statement. The reserve is then appropriated back into the General Fund Balance in the Movement in Reserve Statement so that there is no net charge against council tax for the expenditure.

Certain reserves are kept to manage the accounting processes for non- current assets, financial instruments, retirement and employee benefits and do not represent usable resources for the Council.

Leases

The Council accounts for leases as finance leases where the terms of the lease transfer substantially all the risks and rewards to ownership of the property; plant or equipment from the lessor to the lessee. All other leases are classified as operating leases.

The Council as a Lessee

Finance Leases

Property, plant and equipment held under finance leases is recognised on the Balance Sheet at the commencement of the lease at its fair value measured at the lease’s inception (or the present value of the minimum lease payments, if lower). The asset recognised is matched by a liability for the obligation to pay the lessor. Initial direct costs of the Council are added to the carrying amount of the asset. Premiums paid on entry into a lease are applied to writing down the lease liability. Contingent rents are charged as expenses in the periods in which they are incurred.

Lease payments are apportioned between:

 a charge for the acquisition of the interest in the property, plant or equipment – applied to write down the lease liability, and  a finance charge (debited to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement).

Property, plant and equipment recognised under finance leases is accounted for using the policies applied generally to such assets, subject to depreciation being charged over the lease term if this is shorter than the asset’s estimated useful life (where ownership of the asset does not transfer to the authority at the end of the lease period).

The Council is not required to raise council tax to cover depreciation or revaluation and impairment losses arising on leased assets. Instead, a prudent annual contribution is made from revenue funds towards the deemed capital investment in accordance with statutory requirements. Depreciation, revaluation and impairment losses are therefore substituted by a revenue contribution in the General Fund Balance, by way of an adjusting transaction with the Capital Adjustment Account in the Movement in Reserves Statement for the difference between the two.

The Council has a limited number of finance leases, mainly for plant within the Civic Centre and a small number of vehicles. These assets have been capitalised in accordance with accounting standards.

Operating Leases

Rentals paid under operating leases are charged to the Comprehensive Income and Expenditure Statement as an expense of the services benefiting from use of the leased property, plant or equipment. Charges are made on a straight-line basis over the life of the lease, even if this does not match the pattern of payments (for example there is a rent-free period at the commencement of the lease).

The Council holds operating leases for computer equipment.

The Council as Lessor

Finance Leases

Where the Council grants a finance lease over a property or an item of plant or equipment, the relevant asset is written out of the Balance Sheet as a disposal. At the commencement of the lease, the carrying amount of the asset in the Balance Sheet (whether property, plant and equipment or assets held for sale) is written off to the Other Operating Expenditure line in the Comprehensive Income and Expenditure Statement as part of the gain or loss on disposal. A gain, representing the Authority’s net investment in the lease,

45 Mansfield District Council 31 March 2011 is credited to the same line in the Comprehensive Income and Expenditure Statement also as part of the gain or loss on disposal (ie netted off against the carrying value of the asset at the time of disposal), matched by a lease (long- term debtor) asset in the Balance Sheet.

Lease rentals receivable are apportioned between:

 a charge for the acquisition of the interest in the property – applied to write down the lease debtor (together with any premiums received), and  finance income (credited to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement).

The gain credited to the Comprehensive Income and Expenditure Statement on disposal is not permitted by statute to increase the General Fund Balance and is required to be treated as a capital receipt. Where a premium has been received, this is posted out of the General Fund Balance to the Capital Receipts Reserve in the Movement in Reserves Statement. Where the amount due in relation to the lease asset is to be settled by the payment of rentals in future financial years, this is posted out of the General Fund Balance to the Deferred Capital Receipts Reserve in the Movement in Reserves Statement. When the future rentals are received, the element for the capital receipt for the disposal of the asset is used to write down the lease debtor. At this point, the deferred capital receipts are transferred to the Capital Receipts Reserve.

The written-off value of disposals is not a charge against council tax, as the cost of fixed assets is fully provided for under separate arrangements for capital financing. Amounts are therefore appropriated to the Capital Adjustment Account from the General Fund Balance in the Movement in Reserves Statement.

Operating Leases

Where the Council grants an operating lease over a property or an item of plant or equipment, the asset is retained in the Balance Sheet. Rental income is credited to the Other Operating Expenditure line in the Comprehensive Income and Expenditure Statement. Credits are made on a straight-line basis over the life of the lease, even if this does not match the pattern of payments (for example, where there is a premium paid at the commencement of the lease). Initial direct costs incurred in negotiating and arranging the lease are added to the carrying amount of the relevant asset and charged as an expense over the lease term on the same basis as rental income.

Long Term Contracts

Long term contracts are accounted for on the basis of charging the surplus or deficit on the provision of services with the value of work and services received under the contract during the financial year.

Government Grants and Contributions

Whether paid on account, by instalments or in arrears, government grants and third party contributions and donations are recognised as due to the Council when there is reasonable assurance that:

 the Council will comply with the conditions attached to the payments and  the grant or contributions will be received.

Amounts recognised as due to the Council are not credited to the Comprehensive Income and Expenditure Statement until conditions attached to the grant or contributions have been satisfied. Conditions are stipulations that specify that the future economic benefits or service potential embodied in the asset acquired using the grant or contribution are required to be consumed by the recipient as specified, or future economic benefits or service potential must be returned to the transferor.

Monies advanced as grants and contributions for which conditions have not been satisfied are carried in the Balance Sheet as creditors. When the conditions are satisfied, the grant or contributions is credited to the relevant service line (attributable revenue grants and contributions) or Taxation and Non-Specific Grant Income (non-ring fenced revenue grants and all capital grants) in the Comprehensive Income and Expenditure Statement.

Where capital grants are credited to the Comprehensive Income and Expenditure Statement, they are reversed out of the General Fund Balance in the Movement in Reserves Statement. Where the grant has yet to be used to finance capital expenditure, it is posted to the Capital Grants Unapplied Reserve. Where it has been applied, it is posted to the Capital Adjustment Account. Amounts in the Capital Grants Unapplied Reserve are transferred to the Capital Adjustment Account once they have been applied to fund capital expenditure.

Area Based Grant (ABG) is a general grant allocated by central government directly to local authorities as additional revenue funding. ABG is non-ring fenced and is credited to Taxation and Non-Specific Grant Income in the Comprehensive Income and Expenditure Statement.

Overheads and Support Services

The cost of support services and overheads are charged to those that benefit from the supply or service in accordance with the costing principles of the CIPFA Best Value Accounting Code of Practice 2010/2011 (BVACOP). Allocation is based on either internally agreed Service Level Contracts or on a pro rata basis for items such as shared costs of buildings.

There are two exceptions to this:

 Non Distributed Costs which relate to discretionary pension benefits awarded to employees retiring early and impairment losses chargeable on Assets Held for Sale  Corporate and Democratic Core which relate to the Council’s status as a multi-functional, democratic organisation

These two cost categories are defined in BVACOP and accounted for as separate headings in the Comprehensive Income and Expenditure Statement, as part of Net Expenditure on Continuing Services.

Only irrecoverable VAT is included in the service revenue accounts.

Revenue Expenditure Funded from Capital under Statute

Expenditure incurred during the year that may be capitalised under statutory provisions but does not result in the creation of non-current assets has been charged as expenditure to the relevant service revenue account in the year.

Where the Council has determined to meet the cost of this expenditure from existing capital resources or by borrowing, a transfer in the Movement in Reserves Statement from the General Fund Balance to the Capital Adjustment Account then reverses out the amounts charged so there is no impact on the level of council tax.

Events After the Balance Sheet Date

Events after the Balance Sheet date are those events, both favourable and unfavourable, that occur between the end of the reporting period and the date when the Statement of Accounts is authorised for issue. Two types of events can be identified:

 those that provide evidence of conditions that existed at the end of the reporting period – the Statement of Accounts is adjusted to reflect such events

 those that are indicative of conditions that arose after the reporting period – the Statement of Accounts is not adjusted to reflect such events, but where a category of events would have a material effect, disclosure is made in the notes of the nature of the events and their estimated financial effect

Events taking place after the date of authorisation for issue are reflected in the Statement of Accounts.

Interest in Companies and Other Entities

If the Council has material interest in companies and other entities that have the nature of subsidiary, associates and joint ventures, it is required to prepare group accounts. In its own accounts, the Council would be required to disclose this interest and record it as an investment.

During the 2010/2011 financial year, the Council did not have a financial relationship with any company.

The Council has a joint arrangement along with Ashfield District Council and Newark and Sherwood District Council. Together the three Council’s operate the Mansfield and District Joint Crematorium.

Contingent Liabilities

A contingent liability arises where an event has taken place that gives the Council a possible obligation whose existence will only be confirmed by the occurrence or otherwise of uncertain future events not wholly within the control of the Council. Contingent liabilities also arise in circumstances where a provision would otherwise be made but either it is not probable that an outflow of resources will be required or the amount of the obligation cannot be measured reliably.

Contingent liabilities are not recognised in the Balance Sheet but disclosed in the notes to the Accounts.

Contingent Assets

A contingent asset arises where an event has taken place that gives the Council a possible asset whose existence will only be confirmed by the occurrence of uncertain future events not wholly within the control of the Council.

Contingent assets are not recognised in the Balance Sheet but disclosed in the notes to the Accounts where it is probable that there will be an inflow of economic benefits on service potential.

Collection Fund

From 2009/2010 billing authorities, for council tax include in the Council Tax income the Comprehensive Income and Expenditure Statement for the year based on the accrued income for the year. The difference between the income included in the Comprehensive Income and Expenditure Statement and the amount required by regulation to be credited to the General Fund shall be taken to the Collection Fund Adjustment Account and included as a reconciling item in the Movement in Reserve Statement.

As the collection of Council Tax is in substance an agency arrangement, the cash collected by the billing authority from Council Tax debtors belongs proportionally to the billing authority and the major preceptors. There will therefore be a debtor/creditor position between the billing authority and each major preceptor to be recognised since the net cash paid to each major preceptor in the year will not be its share of cash collected from Council Taxpayers. The effect of this change has no overall effect on the previous year’s surplus.

For the National Non-Domestic Rate (NNDR) (that is, business rates) taxpayers’ debtor and creditor balances and impairment allowance for doubtful debts are not Balance Sheet items of the billing authority since its acts as an agent of the Government when collecting NNDR.

The correct debtor or/and creditor position that needs to be recognised in the billing authority’s Balance Sheet is the amount of cash collected from NNDR taxpayers (less the amount retained in respect of the billing authority’s cost of collection allowance in England) that has not yet been paid to the Government or has been overpaid to the Government on the Balance Sheet date. This is to be recognised as either a debtor or creditor accordingly.

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are held for the purpose of meeting short term commitments rather than for investment or other purposes. The Council classifies short term investments with immediate call back or instant access as cash equivalents.

Fundamental Accounting Concepts

This Statement of Accounts has been prepared according with the International Accounting Standards Board (IASB) Framework for the Preparation and Presentation of Financial Statements (the IASB Framework) as interpreted by the Code.

Relevance - The objective of the Statement of Accounts is to provide information about the Council’s financial performance and position that is useful for assessing the stewardship of public funds and for making economic decisions.

Reliability - The key requirement of this statement is that users are able to rely on the information contained within the Statement of Accounts. A number of fundamental accounting concepts are applied in order to ensure this reliability:

 the Statement of Accounts have been prepared to reflect the reality or substance of each transaction rather than their formal legal character  the Statement of Accounts are free from deliberate or systematic bias. The financial analyses contained within the accounts are based on fact, and do not support any particular view point  the Statement of Accounts are free from material error, containing no misstatement that would influence the conclusions of any user  the Statement of Accounts have been produced within the bounds of materiality, meaning that nothing has been omitted that may have assisted users in gaining an understanding of the Council’s activities

Where uncertainty exists, the statements have been prepared prudently and caution has been applied with exercising judgement and making necessary estimates.

Comparability - One of the key purposes of regulating the means by which local authority accounts are produced is to ensure that a user is able to compare an authority’s performance between financial years and with other organisations.

This is an important mechanism for ensuring the usefulness of financial information and is an essential element of the best value accounting framework. The Code assists comparability in many areas by making particular accounting policies mandatory.

Understandability - The accounting principles of the Code includes accounting concepts, treatments and terminology which require reasonable knowledge of accounting and local government, and reasonable diligence in reading the Statement of Accounts if they are to be properly understood. However all reasonable efforts have been taken in the preparation of the Statement of Accounts to ensure they are as easy to understand as possible.

Going Concern - This statement has been prepared on a ‘going concern’ basis, under the assumption that the Council will continue to exist and operate on its current basis for the foreseeable future.

Primacy of Legislative Requirements - Local authorities derive their powers from statute and their financial and accounting framework is closely controlled by primary and secondary legislation. To the extent that treatments are

51 Mansfield District Council 31 March 2011 prescribed by law the accounting concepts outlined above may not apply in all cases. It is a fundamental principle of local authority accounting that, where specific legislative requirements and accounting principles conflict, legislative requirements shall apply.

2. Accounting Standards Issues, Not adopted

The Council is required to disclose information relating to the impact of an accounting change that will be required by a new standard that has been issued but not yet adopted. This requirement applies to accounting standards that come into effect for financial years commencing on or before 1 January of the financial year in question ( for example on or before 1 January 2011 for 2010/2011).

The 2011/2012 Code had confirmed that disclosure will be required in relation to the Code’s adoption of FRS 30 Heritage Assets. Heritage assets will be recognised as a separate class of assets for the first time in the 2011/2012 financial statements, in accordance with FRS 30 Heritage Assets.

3. Critical Judgements in Applying Accounting Policies

In applying the accounting policies set out in Note 1, the Council has had to make certain judgements about complex transactions or those involving uncertainty about future events.

The critical judgements made in the Statement of Accounts are:

 there is a high degree of uncertainty about future levels of funding for local government. However, the Council has determined that this uncertainty is not yet sufficient to provide an indication that the assets of the Council might be impaired as a result of a need to close facilities and reduce levels of service provision.  the reform of council housing finance to be implemented in April 2012, in order to give local authorities the resources, incentives and flexibility needed to manage the council hose stock for the long term.

4. Assumptions Made about the Future and Other Major Sources of Estimation Uncertainty

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

The items in the Council’s Balance Sheet at 31 March 2011 for which there is a significant risk of material adjustment in the forthcoming financial year are as follows:

Item Uncertainties Effect if Actual Results differ from assumptions

Property, Plant Assets are depreciated over If the useful life of assets and Equipment useful lives that are is reduced depreciation dependent on assumptions increases and the about the level of repairs carrying amount of the and maintenance that will assets falls. be incurred in relation to It is estimated that the individual assets. The annual depreciation current economic climate charge for buildings would makes it uncertain that the increase by £4,000 for Authority will be able to every year that useful sustain its current spending lives had to be reduced. on repairs and maintenance, bringing into doubt the useful lives assigned to assets

Council dwellings The valuation for Council If the uplift in the valuation dwellings is based on a percentage is reduced by percentage obtained from 1% this would reduce the the land registry and is uplift valuation of council is applied to calculate the dwellings by £1.186 valuation. million

5. Material Items of Income and Expense

There are no material amounts of income or expenditure during the year that requires further explanation.

6. Events After the Balance Sheet Date

The Accounts have been updated since initially being authorised for issue to include the items below:

A provision was made for a potential repayment of a Section 106 scheme which had exceeded its time limit for being spent. Since the accounts were approved by the responsible financial officer, further correspondence has taken place with the developer and as a result of this the original contribution including interest has been repaid to the developer. This amounted to £384,541.57. This has been adjusted in the financial statements and is now shown as a creditor.

The Council delivers group repair schemes across the district. The purpose of the schemes is to provide grant to householders to improve the external fabric of their properties. The householders are required to contribute to the cost of the work themselves with the Council providing a grant for the difference. Householders sign documentation to agree to pay their contribution on completion of the works. It has come to light that for a number of years householders’ contributions have not been systematically collected. The amount not collected is £471,587.66. This has been adjusted in the financial statements as a debtor and a corresponding bad debt provision made in line with the Council’s policy based on the number of days overdue.

7. Adjustments between Accounting Basis and Funding Basis under Regulations

2010/2011

General Housing Capital Major Capital Movement Fund Revenue Receipts Repairs Grants in Balance Account Reserve Reserve Unapplied Unusable Reserve £000 £000 £000 £000 £000 £000

Adjustments primarily involving the Capital Adjustment Account:

Reversal of items debited or credited to the Comprehensive Income and Expenditure Statement: Charges for depreciation and impairment of non-current assets -1,213 -58,466 0 0 0 59,679 Revaluation losses on Property, Plant and Equipment -1,217 0 0 0 0 1,217 Amortisation of intangible assets -104 0 0 0 0 104 Movements in the market value of Investment Properties -560 2,888 0 0 0 -2,328 Capital grants and contributions applied 2,697 2,075 0 0 -2,721 -2,051 Revenue expenditure funded from capital under statute -2,235 -257 0 0 0 2,492 Insertion of items not debited or credited to the Comprehensive Income and Expenditure Statement: Statutory provision for the financing of capital investment 698 0 0 0 0 -698 Voluntary provision for the repayment of debt -63 0 0 0 0 63 Capital expenditure charged against the General Fund and HRA balances 777 2,486 0 0 0 -3,263 Adjustments primarily involving the Capital Grants Unapplied Account:

Application of grants to capital financing transferred to the Capital Adjustment 0 0 0 0 2,489 -2,489 Account

Adjustments primarily involving the Capital Receipts Reserve: Transfer of cash sale proceeds credited as part of the gain/loss on disposal to 14 56 -1,639 0 0 1,569 the Comprehensive Income and Expenditure Statement Use of the Capital Receipts Reserve to finance new capital expenditure 0 993 0 0 -993 Contributions from the Capital Receipts Reserve to finance the payments to -382 0 382 0 0 0 the Government capital receipts pool Transfer from Usable Capital Receipts equal to the amounts payable to -156 0 156 0 0 0 Government Departments Adjustments primarily involving the Major Repairs Reserve: Reversal of Major Repairs Allowance credited to the HRA 0 -159 0 0 0 159 Adjustment primarily involving the Financial Instruments Adjustment Account: Amount by which finance costs charged to the Comprehensive Income and 0 0 0 0 0 0 Expenditure Statement are different from finance costs chargeable in the year in accordance with statutory requirements Adjustments primarily involving the Pension Reserve: Reversal of items relating to retirement benefits debited or credited to the 5,225 0 0 0 0 -5,225 Comprehensive Income and Expenditure Statement Employer's pensions contributions and direct payments to pensioners payable 4,125 -241 0 0 0 -3,884 in the year Adjustments primarily involving the Collection Fund Adjustment Account: Amount by which council tax income credited to the Comprehensive Income -34 0 0 0 0 34 and Expenditure Statement is different from council tax income calculated for the year in accordance with statutory requirements Adjustment primarily involving the Accumulated Absences Account: Amount by which officers remuneration charged to the Comprehensive Income -13 0 0 0 0 13 and Expenditure Statement on an accruals basis is different from remuneration chargeable in the year in accordance with statutory requirements Rounding 2 0 0 0 0 -2 Total Adjustments 7,561 -51,618 -108 0 -232 44,397

2009/2010

General Housing Capital Major Capital Movement Fund Revenue Receipts Repairs Grants in Balance Account Reserve Reserve Unapplied Unusable Reserve

£000 £000 £000 £000 £000 £000

Adjustments primarily involving the Capital Adjustment Account:

Reversal of items debited or credited to the Comprehensive Income and Expenditure Statement: Charges for depreciation and impairment of non-current assets -2,055 3,731 0 0 0 -1,676 Revaluation losses on Property, Plant and Equipment -774 -39 0 0 0 813 Amortisation of intangible assets -103 0 0 0 0 103 Capital grants and contributions applied 3,002 88 0 0 -679 -2,411 Revenue expenditure funded from capital under statute -1,976 0 0 0 0 1,976 Insertion of items not debited or credited to the Comprehensive Income and Expenditure Statement: Statutory provision for the financing of capital investment 727 0 0 0 0 -727 Voluntary provision for the repayment of debt -65 0 0 0 0 65 Capital expenditure charged against the General Fund and HRA balances 633 2,199 0 0 0 -2,832 Adjustments primarily involving the Capital Grants Unapplied Account: Application of grants to capital financing transferred to the Capital Adjustment -477 0 0 0 417 60 Account

Adjustments primarily involving the Capital Receipts Reserve: Transfer of cash sale proceeds credited as part of the gain/loss on disposal to 155 -486 -2,481 0 0 2,812 the Comprehensive Income and Expenditure Statement Use of the Capital Receipts Reserve to finance new capital expenditure 0 0 6,490 0 0 -6,490 Contributions from the Capital Receipts Reserve to finance the payments to -648 0 648 0 0 0 the Government capital receipts pool Transfer from Usable Capital Receipts equal to the amounts payable to -100 0 100 0 0 0 Government Departments Adjustments primarily involving the Major Repairs Reserve: Reversal of Major Repairs Allowance credited to the HRA 0 -157 0 0 0 157 Adjustment primarily involving the Financial Instruments Adjustment Account: Amount by which finance costs charged to the Comprehensive Income and -20 0 0 0 0 20 Expenditure Statement are different from finance costs chargeable in the year in accordance with statutory requirements Adjustments primarily involving the Pension Reserve: Reversal of items relating to retirement benefits debited or credited to the -5,044 0 0 0 0 5,044 Comprehensive Income and Expenditure Statement Employer's pensions contributions and direct payments to pensioners payable 3,700 225 0 0 0 -3,925 in the year Adjustments primarily involving the Collection Fund Adjustment Account: Amount by which council tax income credited to the Comprehensive Income -39 0 0 0 0 39 and Expenditure Statement is different from council tax income calculated for the year in accordance with statutory requirements Adjustment primarily involving the Accumulated Absences Account: Amount by which officers remuneration charged to the Comprehensive Income 5 0 0 0 0 -5 and Expenditure Statement on an accruals basis is different from remuneration chargeable in the year in accordance with statutory requirements Total Adjustments -3,079 5,561 4,757 0 -262 -6,977

8. Transfers To / (From) Earmarked Reserves

This note sets out the amounts set aside from the General Fund and Housing Revenue Account (HRA) balances in earmarked reserves to provide financing for future expenditure plans and the amounts posted back from earmarked reserves to meet General Fund and HRA expenditure.

Revenue and capital reserves, and the levels they are held at, are reviewed as part of the preparation of the Statement of Accounts and during the budget setting process. If a reserve is no longer required, funds will be returned to the Income and Expenditure Account, likewise if the level held in a reserve is deemed to be higher than necessary.

Below is a summary of the Revenue and Capital Reserves split between General Fund and HRA.

Balance Income in Expenditure Balance at 31 the year in the year at 31 March £000 £000 March 2010 2011 £000 £000 General Fund Capital 3,847 66 -405 3,508 Revenue 6,808 1,602 -1,473 6,937 HRA Capital 0 0 0 0 Revenue 0 0 0 0 Legacies 3 0 0 3 Crematorium 1,119 138 -7 1250 Total 11,777 1,806 -1,885 11,698

The following tables show the movement in the Council’s revenue and capital reserves:

Revenue Balance Income Expenditure Balance at 31 in the in the year at 31 March year March 2010 2011 £000 £000 £000 £000

Statutory Election Costs 85 25 0 110 Insurance Retained 2,020 977 -809 2,188 Premiums Community Development 20 0 0 20 Fund Restructure Pension 561 0 0 561 Costs Grant changes 885 0 0 885 ICT Renewal Fund 169 0 -72 97 Building Renewal Fund 464 0 -492 -28 Trading Account Renewal 262 0 0 262 CEDLO Remedial Works 89 0 0 89 Job Evaluation 1,937 600 -63 2,474 Other Funds 316 0 -37 279 Total 6,808 1,602 -1,473 6,937

Statutory Election Costs – is a fund built up from annual revenue contributions to meet the cost of local elections.

The Insurance Retained Premiums Fund – is used to meet any payments falling within the Council’s excess of £10,000. It is also used as a holding account to meet expenditure on claims until they are resolved. It is estimated that the value of claims currently outstanding totals £888,000.

The Community Development Fund – set up from General Fund reserves for training and development to aid the economic regeneration of the district.

Restructure Pension Cost Fund – has been set up to meet the costs of departmental and management restructures resulting from service reviews.

Grant Changes – This reserve relates to the possible and uncertain impact of changes to the Housing Benefit and Council Tax Benefit regulations.

Energy Efficiencies – 50% of the energy savings identified during the year are earmarked for further energy efficiency work.

The ICT Renewal Fund – has been set up towards meeting the planned replacement of ICT equipment within the authority.

The Building Renewal and Repairs Fund – is aimed at providing resources to allow planned maintenance of the Council’s properties.

Trading Account Renewal Fund – is for the replacement of equipment used within the Council Leisure facilities and Engineering depot.

Oak Tree Lane Floodlights – is for the installation of floodlights within the new leisure centre currently planned.

Job Evaluation – this reserve has been set up to meet any additional monies required following the nationally agreed Job Evaluation exercise.

Other funds include smaller reserves which are not significant enough to be shown separately. These reserves are used to cover expenditure on leisure facilities and environmental schemes.

Capital Balance Income Expenditure Balance at 31 in the in the year at 31 March year March 2010 2011 £000 £000 £000 £000

Capital Fund 3,044 0 -60 2,984 Leisure equipment 357 1 -185 173 and Plant Wheeled Bins 254 52 0 306 Shop Mobility 18 0 0 18 Vehicles and Plant 174 13 -160 27 Total 3,847 66 -405 3,508

The Capital Fund – is used to finance expenditure on the Council’s capital programme. This includes £66,000 to meet anticipated ‘after-value payments’ (repayment of grants as a result of the sale of associated land).

The Leisure Equipment and Plant fund is used to finance equipment at the Council’s leisure facilities.

Replacement of Wheeled Bins – is used to finance the major replacement of bins within the district and towards providing new bins as part of the Council’s recycling programme.

The Shop Mobility Fund – finances the replacement of scooters for town centre shopping. As well as revenue contributions, this fund also receives donations.

The Vehicles and Plant Fund – receives an annual revenue contribution in order to finance the replacement of the Council’s vehicles and plant in line with an approved programme.

In addition to the Reserves mentioned above, £3,101 is held in respect of Trust Funds (see Note 42).

9. Service Expenditure Analysis

The table below shows the net cost to the Council of providing its services; the information has been presented based on the requirements of the Best Value Accounting Code of Practice (BVACOP).

2009/10 2009/10 2009/10 2010/11 2010/11 2010/11 Gross Gross Net Gross Gross Net Cost Income Cost Cost Income Cost £000 £000 £000 £000 £000 £000 Central Services to the Public 587 -426 161 Local Tax Collection 589 -358 231 229 -13 216 Elections 284 -31 253 92 -106 -14 Local Land Charges 85 -114 -29 116 0 116 General Grants and Bequests 67 0 67 9,362 -9,450 -88 Council Tax Benefit Payments 9,633 -9,635 -2 264 0 264 Contribution to Bad and 949 0 949 Doubtful Debts 45 0 45 Support Services Charged to 41 0 41 Capital 0 -827 -827 Balance on Internal Support 72 0 72 Service Accounts 10,695 -10,822 -127 11,720 -10,138 1,582

Cultural, Environmental and Planning 1,637 -872 765 Cultural and Heritage 1,768 -927 841 4,696 -2,842 1,854 Recreation and Sport 4,881 -2,883 1,998 1,753 -170 1,583 Open Spaces 1,768 -261 1,507 41 0 41 Tourism 0 0 0 749 -653 96 Cemetery, Cremation and 784 -663 121 Mortuary Services 1,541 -370 1,171 Environmental Health 1,613 -251 1,362 1,653 -841 812 Community Safety 1,787 -802 985 2,966 -944 2,022 Waste Collection 3,141 -975 2,166 1,520 -42 1,478 Street Cleansing 1,645 -76 1,569 647 -402 245 Building Control 714 -459 255 598 -532 66 Development Control 753 -478 275 352 -28 324 Planning Policy 399 -9 390 1,711 -343 1,368 Environmental Initiatives 1,712 -310 1,402 4,169 -5,505 -1,336 Economic Development 3,525 -5,508 -1,983 237 -78 159 Civic Centre Banqueting Suite 182 -73 109 24,270 -13,622 10,648 24,672 -13,675 10,997

Highways, Roads and Transport 755 -693 62 Maintenance of Roads and 740 -615 125 Motorways 2,526 -2,865 -339 Parking Services 3,022 -2,913 109 1,962 -434 1,528 Contribution to Public Transport 1,984 -733 1,251 5,243 -3,992 1,251 5,746 -4,261 1,485

Housing Services 20 -11 9 Mortgages and Improvement 16 -7 9 Grant Admin. 2,935 -3 2,932 Private Sector Housing 2,451 -2,548 -97 Renewal 26,463 -26,734 -271 Housing (Rent Allowance) 28,513 -29,036 -523 Payments 1,586 -1,150 436 Housing Benefits 1,767 -1,073 694 Administration 687 0 687 Contribution to the HRA for 703 0 703 Shared Services 31,691 -27,898 3,793 33,450 -32,664 786

Corporate and Democratic Core 1,554 -305 1,249 Democratic Representation 1,538 -341 1,197 2,713 -1,261 1,452 Corporate Management 2,953 -1,355 1,598 4,267 -1,566 2,701 4,491 -1,696 2,795

0 0 0 Non-Distributed Costs 177 0 177

76,166 -57,900 18,266 General Fund Continuing 80,256 -62,434 17,822 Operations

15,541 -24,794 -9,253 HRA 27,368 -25,144 2,224

Exceptional Items

General Fund

The £12,590,000 has been shown within the Comprehensive Income and Expenditure Statement as an Exceptional Item.

Housing Revenue Account

There has been a change in the East Midlands social housing adjusting factor on the valuation of the Council’s housing stock. This has been reduced to 66% from 50%. This has resulted in the impairment of the housing stock of £51.67million.

10. Other Operating Expenditure

The following table contains corporate items of income and expenditure that cannot reasonably be allocated or apportioned to services:

2009/2010 2010/2011 £000 £000

Parish Council precepts 60 70 Payments to the Government Housing Capital 648 382 Receipts Pool Gains/losses on the disposal of non-current -248 -73 assets – General Fund Gains/losses on the disposal of non-current 486 -56 assets – Housing Revenue Account Total 946 323

11. Financing and Investment Income and Expenditure

The following table contains corporate items of income and expenditure arising from the Council’s involvement in financial instruments and similar transactions involving interest:

2009/2010 2010/2011 £000 £000

Interest payable and similar charges 3,882 3,494 Pensions interest cost and expected return on 3,517 2,610 pensions assets Interest receivable and similar income -819 -396 Income and expenditure in relation to 94 -2,269 investment properties and changes in fair value Surplus / deficit on trading undertakings -339 12 Total 6,335 3,451

12. Taxation and Non-Specific Grant Income

The following table consolidates all the grants and contributions receivable that cannot be identified to particular service expenditure:

2009/2010 2010/2011 £000 £000

Council tax income -5,765 -5,921 Distribution from non-domestic rate pool -8,380 -9,052 Non-ring fenced government grants -1,934 -1,315 Area Based Grant (ABG) -857 -97 Capital grants and contributions -2,526 -2,538 Total -19,462 -18,923

13. Property, Plant and Equipment

Cost or Valuation Council Other Surplus Vehicles Infrastructure Communit Assets Total Dwellings Land and Assets Plant and y Assets Under Property, Buildings Equipment Construction Plant and Equipment £000 £000 £000 £000 £000 £000 £000 £000

At 1 April 2010 218,775 130,230 0 5,256 2 376 0 354,639 Additions 6,795 1,084 0 346 0 26 2,119 10,370 Revaluation 0 6,622 0 0 0 0 0 6,622 increases/ (decreases) recognised in the revaluation reserve Revaluation 0 0 0 0 0 0 0 0 increases/ (decreases) recognised in the surplus/deficit on the provision of services Derecognition – -744 -1,012 0 -21 0 0 0 -1,777 disposals Impairment 0 -336 0 0 0 0 0 -336 Other movements in 0 0 0 0 0 0 0 0 cost or valuation Reclassification 0 0 0 0 0 0 0 0 At 31 March 2011 224,826 136,588 0 5,581 2 402 2,119 369,518

Accumulated Depreciation and Impairment At 1 April 2010 0 -3,134 0 -2,273 0 0 0 -5,407 Depreciation charge -3,873 -668 0 -704 0 0 0 -5,245 Depreciation written 0 212 0 0 0 0 0 212 out to Revaluation Reserve Depreciation written 0 0 0 0 0 0 0 0 out to the Surplus/Deficit on the Provision of Services Impairment -12,143 -51 0 0 0 0 0 -12,194 losses/(reversals) recognised in the Revaluation Reserve Impairment -58,464 -854 0 0 0 -26 0 -59,344 losses/(reversals) recognised in the Surplus/Deficit on the Provision of Services Derecognition – 0 324 0 10 0 0 0 334 disposals At 31 March 2011 -74,480 -4,171 0 -2,967 0 -26 0 -81,644

NBC At 31 March 150,346 132,417 0 2,614 2 376 2,119 287,874 2011

Cost or Valuation Council Other Surplus Vehicles Infrastructure Communit Assets Total Dwellings Land and Assets Plant and y Assets Under Property, Buildings Equipment Construction Plant and Equipment £000 £000 £000 £000 £000 £000 £000 £000

At 1 April 2009 200,942 122,766 74 4,823 2 104 0 328,711 Additions 7,334 4,789 0 543 0 0 0 12,666 Revaluation 12,142 3,340 0 0 0 0 0 15,482 increases/ (decreases) recognised in the revaluation reserve Revaluation 10,979 1,397 0 0 0 0 0 12,376 increases/ (decreases) recognised in the surplus/deficit on the provision of services Derecognition – -1,413 -1,101 -74 -110 0 -1 0 -2,699 disposals Impairment 0 -608 0 0 0 -80 0 -688 Other movements in 0 0 0 0 0 0 0 0 cost or valuation Reclassification 0 -353 0 0 0 353 0 0 At 31 March 2010 229,984 130,230 0 5,256 2 376 0 365,848

Accumulated Depreciation and Impairment At 1 April 2009 0 -2,475 0 -1,694 0 0 0 -4,169 Depreciation charge -3,875 -819 0 -656 0 0 0 -5,350 Depreciation written 0 163 0 0 0 0 0 163 out to Revaluation Reserve Depreciation written 0 0 0 0 0 0 0 0 out to the Surplus/Deficit on the Provision of Services Impairment 0 0 0 0 0 0 0 0 losses/(reversals) recognised in the Revaluation Reserve Impairment -7,334 -8 0 0 0 0 0 -7,342 losses/(reversals) recognised in the Surplus/Deficit on the Provision of Services Derecognition – 0 5 0 77 0 0 0 82 disposals At 31 March 2010 -11,209 -3,134 0 -2,273 0 0 0 -16,616

NBC At 31 March 218,775 127,096 0 2,983 2 376 0 349,232 2010

Council Other Assets Vehicles, Communit Infrastructure Surplus Total Dwellings Land and Under Plant and y Assets Assets Assets Buildings Construction Furniture and Equipment £000 £000 £000 £000 £000 £000 £000 £000

Carried at 0 0 0 0 376 0 0 376 historical cost Valued at fair value: 31 March 2007 0 17,566 0 520 0 0 0 18,086 31 March 2008 0 0 0 758 0 0 0 758 31 March 2009 0 54,916 0 525 0 2 0 55,443 31 March 2010 0 16,696 0 465 0 0 0 17,161 31 March 2011 150,346 43,239 2,119 346 0 0 0 196,050 Total Cost or Valuation 150,346 132,417 2,119 2,614 376 2 0 287,874

The Council carried out a rolling programme that ensures that all property, plant and equipment required to be measured at fair value is re-valued at least every five years. All valuations were carried out internally. Valuations of land and buildings were carried out in accordance with the methodologies and bases for estimation set out in the professional standards of the Royal Institution of Chartered Surveyors.

14. Investment Properties

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

2009/2010 2010/2011 £000 £000

Rental Income from investment property 541 539 Direct operating expenses arising from -69 -84 investment property Net gain/(loss) 472 455

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:

2009/2010 2010/2011 Restated £000 £000

Balance at start of the year 17,433 17,161 Additions 0 0 Disposals -271 -127 Impairment -1 -719 Revaluation 0 3,047 Transfers: (To)/from property, plant and equipment 0 0 Other changes 0 0 Balance at end of the year 17,161 19,362

The disposals on investment properties resulted in a loss on disposal of £59,000 in 2010/2011 and a loss of £93,000 in 2009/2010.

15. Intangible Assets

The Council accounts for its software as intangible assets, to the extent that the software is not an integral part of a particular IT system and accounted for as part of the hardware item of property, plant and equipment.

Software licences are held by IT, Payroll, Town Centre and Revenues system. The cost is being written off over the five year life of the licences on a straight line basis.

There were no additions in software licences in 2010/2011 (2009/2010 relates to the costs of the replacement electronic management and workflow system, and the replacement software in the Revenues and Benefits service).

Purchased Licences, Patent Total Software Trademarks and s Licences Artistic Originals £000 £000 £000 £000

Certified valuation at 31 March 753 0 0 753 2010 Amortisation to 1 April 2010 -555 0 0 -555 Balance at 1 April 2010 198 0 0 198

Movement in 2010/2011 Additions 0 0 0 0 Disposals 0 0 0 0 Transfers 0 0 0 0 Amortisation -104 0 0 -104 Revaluation 0 0 0 0 Impairment 0 0 0 0 Reversal of past impairment 0 0 0 0 Balance at 31 March 2011 94 0 0 94

16. Financial Instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another. The term ‘financial instrument’ covers both financial assets and financial liabilities and includes both the most straightforward financial assets and liabilities such as trade receivables (debtors) and trade payables (creditors) and the most complex ones such as derivatives.

At Mansfield District Council, the most typical financial instruments include:

Financial Assets:  Trade receivables (debtors)  Bank deposits  Investments

Financial Liabilities:  Trade payables (creditors)  Borrowings

Within this note, Financial Instruments are disclosed on the following basis:

Nominal Cost – This is the actual amount that the Council has either borrowed or lent.

Amortised Cost / Carrying Amount – Financial instruments (whether borrowing or investment) have been valued on an amortised costs basis using the effective interest rate (EIR) method where appropriate.

For Mansfield District Council, the basis of calculating the Amortised Cost / Carrying Amount is:

Basis of EIR method applied

Financial Asset: Trade receivables - Not applicable – valued at nominal amount Bank deposits - Not applicable – valued at nominal amount Investments - Nominal value of the investment plus any interest still to be paid to the Council relating to the 2010/2011 financial year (calculated on a daily basis)

Financial Liability: Trade payables - Not applicable – valued at actual amount Borrowings - Nominal value of the borrowing plus any interest still to be paid by the Council relating to the 2010/2011 financial year (calculated on a daily basis)

Fair Value – Fair value is defined as the amount for which an asset could be exchanged or a liability settled, assuming that the transaction was negotiated between parties knowledgeable about the market in which they are dealing and willing to buy/sell at an appropriate price, with no other motive in their negotiations other than to secure a fair price.

Mansfield District Council has complied with the following: -  it has adopted the Chartered Institute of Public Finance and Accountancy (CIPFA) Code of Practice on Treasury Management in the Local Authorities 2009  set treasury management indicators to control key financial instrument risks in accordance with CIPFA’s Prudential Code, which were approved at Council on the 4 March 2010

Types of Financial Instruments

The following table shows the different types of financial instruments held by Mansfield District Council at the 31 March 2011, analysed on an Amortised Costs basis.

Trade receivables (debtors) and trade payables (creditors) have been excluded from this table, as further analysis has been provided in Notes 19 and 22.

Long-Term Current At 31 At 31 At 31 At 31 March March March March 2010 2011 2010 2011 £000 £000 £000 £000

Borrowings Financial liabilities at 49,838 44,682 1,579 6,433 amortised cost Financial liabilities at fair 0 0 0 0 value through profit and loss Other borrowing 0 0 0 0

Total borrowings 49,838 44,682 1,579 6,433

Investments Loans and receivables 0 0 31,917 29,399 Available-for-sale 0 0 0 0 financial assets Fair value through Profit 0 0 0 0 and Loss Unquoted equity under 0 0 0 0 available for sale Total investments 0 0 31,917 29,399

Gains and Losses on Financial Instruments

The gains and losses recognised in the Comprehensive Income and Expenditure Statement in relation to financial instruments are made up as follows:

2010/2011 2010/2011 Financial Financial Assets Liabilities Liabilities Loans and Available- Fair Value Through Total Measured At Receivables For-Sale Comprehensive Amortised Assets Income and Cost Expenditure Statement £000 £000 £000 £000 £000

Interest expense -3,391 0 0 0 -3,391 Losses on derecognition 0 0 0 0 0 Impairment losses 0 0 0 0 0 Interest payable and similar -3,391 0 0 0 -3,391 charges

Interest income - 286 0 0 286 Gains on derecognition 0 0 0 0 0 Interest and investment income 286 0 0 286

Gains on revaluation 0 0 0 Losses on revaluation 0 0 0 Amounts recycled to the Income 0 0 0 and Expenditure Account after impairment Surplus arising on revaluation of 0 0 0 financial assets

Net gain/(loss) for the year -3,391 286 0 0 -3,105

2009/2010 2009/2010 Financial Financial Assets Liabilities Liabilities Loans and Available- Fair Value Through Total Measured At Receivables For-Sale Comprehensive Amortised Assets Income and Cost Expenditure Statement £000 £000 £000 £000 £000

Interest expense -3,810 0 0 0 -3,810 Losses on derecognition 0 0 0 0 0 Impairment losses 0 0 0 0 0 Interest payable and similar -3,810 0 0 0 -3,810 charges

Interest income - 678 0 0 678 Gains on derecognition 0 0 0 0 0 Interest and investment income 678 0 0 678

Gains on revaluation 0 0 0 Losses on revaluation 0 0 0 Amounts recycled to the Income 0 0 0 and Expenditure Account after impairment Surplus arising on revaluation of 0 0 0 financial assets

Net gain/(loss) for the year -3,810 678 0 0 -3,132

Fair Value of Assets and Liabilities Carried at Amortised Cost

The fair value of each class of financial assets and liabilities which are carried in the Balance Sheet at amortised cost are disclosed below.

The fair value of an instrument is determined by calculating the Net Present Value of future cash flows, which provides an estimate of the value of payments in the future in today's terms. The discount rate used in the Net Present Value calculation is the rate applicable in the market on the date of valuation for an instrument with the same structure, terms and remaining duration. For debt, this will be the new borrowing rate since premature repayment rates include a margin which represents the lender's profit as a result of rescheduling the loan; this is not included in the fair value calculation since any motivation other than securing a fair price should be ignored.

The rates quoted in this valuation were obtained by the Council’s treasury management consultants from the market on 31 March 2011 using bid prices where applicable.

The calculations are made with the following assumptions:  for PWLB debt, the discount rate used is the rate for new borrowing as per rate sheet number 126/11  for other market debt and investments the discount rate used is the rates available for an instrument with the same terms from a comparable lender  the Council has used interpolation techniques between available rates where the exact maturity period was not available  no early repayment or impairment is recognised  the Council has calculated fair values for all instruments in the portfolio, but only disclose those which are materially different from the carrying value  the fair value of trade and other receivables is taken to be the invoiced or billed amount

The fair values are calculated as follows:

31 March 2010 31 March 2011 Carrying Fair Carrying Fair Amount Value Amount Value £000 £000 £000 £000

PWLB - maturity 44,501 50,171 44,500 47,498 PWLB - EIP 790 894 731 803 LOBOs 4,606 6,171 4,606 5,979 Short term borrowing 1,520 1,520 1,278 1,278 Financial liabilities 51,417 58,756 51,115 55,558

Fair value is more than the carrying amount because the Council’s portfolio of loans includes a number of fixed rate loans where the interest rate payable is higher than the rates available for similar loans at the Balance Sheet date. The commitment to pay interest below current market rates reduces the amount that the Council would have to pay if the lender requested or agreed to early repayment of the loans.

31 March 2010 31 March 2011 Carrying Fair Carryin Fair Amount Value g Value Amount £000 £000 £000 £000

Cash 876 876 1,318 1,318 Deposits with banks and building 31,041 31,068 28,081 28,121 societies Financial assets 31,917 31,944 29,399 29,439

The fair value is lower than the carrying amount because the Council’s portfolio of investments includes a number of fixed rate deposits where the interest rate receivable is higher than the rates available for similar loans at the Balance Sheet date. This guarantee to receive interest above current market rates increases the amount that the authority would receive if it agreed to early repayment of loans.

17. Inventories

The following two tables show the breakdown of inventories (stock) and work in progress carried in the Balance Sheet:

At 31 Purchases Recognised Written At 31 Marc as expense off March h in the year balances 2011 2010 £000 £000 £000 £000 £000 Inventories : Hermitage Lane depot 205 1,420 -1,418 -18 189 Vale Road depot 197 672 -703 0 166 Leisure Centres 30 94 -94 -8 22 432 2,186 -2,215 -26 377 Work in progress : Civil Engineering Trading 79 60 Account Total 511 437

18. Construction Contracts

The Council has achieved the Decent Homes initiative which was to renovate all its council housing stock to the predetermined standard by 2011. The Council has set a programme to exceed the minimum standard referred to as the “Mansfield Standard.” At the 31 March 2011 there were no construction contracts in place, although the Council is currently looking at the options available for completing the work to achieve the “Mansfield Standard.”

19. Debtors

The following table identifies the breakdown of debtors owing the Council at the 31 March 2011 and 31 March 2010:

Debtors At 31 At 31 March March 2010 2011 £000 £000

Other local authorities 1,078 1,448 Other public bodies 4 1 Housing rent arrears 1,207 1,057 Collection Fund 353 348 Government departments and agencies 2,844 4,314 Customs and Excise 343 417 Lease cars to employees 59 4 Car loans to employees 159 250 Service prepayments 257 83 Sundry debtors 4,091 6,437 Total 10,395 14,359

Less provision for bad debt: Housing rent arrears -811 -735 Collection Fund -160 -160 Highways agency -196 -196 Sundry debtors -852 -1,679 Court costs -74 -90 Total 8,302 11,499

20. Cash and Cash Equivalents

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

2009/2010 2010/2011 £000 £000

Cash held by the Council 10 10 Bank current accounts 866 1,308 Short-term deposits with building societies 0 0 Total 876 1,318

21. Assets Held for Sale

The Council has no assets held for sale at the 31 March 2011 nor at 31 March 2010.

22. Creditors

The following table identifies the breakdown of the Council’s creditors at the 31 March 2011 and 31 March 2010:

Creditors At 31 At 31 March March 2010 2011 £000 £000

Council tax prepayment -35 -23 Other local authorities -726 -452 Other public bodies -89 0 Housing rent prepayment -379 -368 Government departments and agencies -1,500 -2,130 Grants to Government Departments -2,082 -2,238 Sundry creditors -2,247 -3,602 Total -7,058 -8,813

23. Insurance Provisions

The balance on the Council’s insurance fund for retained premiums stands at £2.188 million. There are sufficient resources available to meet the following potential commitments:

 to meet any payments falling within the Council’s £10,000 excess and as a holding account to meet expenditure until claims are resolved. It is estimated that the value of claims currently outstanding totals £888,000. It should be noted that this does not include claims yet to be received e.g. Industrial Disease claims.

 as from 1 April 2005 the Council lost responsibility for Highways insurance claims under the new Highways Partnership Agreement.  to meet the liability for outstanding claims estimated to be £100,000 in respect of the Independent Insurance Company; this ceased to trade in June 2001.

The Council’s assets are generally insured, however, Council Houses (excluding blocks of flats) are not. This is because the cost of replacing or repairing individual properties when damaged is lower than the cost of the insurance premiums.

24. Movement in Provisions

The Council has the following provisions:

Balance Increase Expenditur Reduction Balance at 1 in e in year in at 31 April Provision Provision March 2010 required 2011 Restated £000 £000 £000 £000 £000

Berry Hill track -60 -10 0 0 -70 Health and safety -7 0 0 0 -7 Child protection policy -17 0 0 0 -17 Rental bonds -83 -24 19 0 -88 Neighbourhood 25 0 10 0 35 Renewal Fund Single Regeneration 40 0 0 0 40 Budget Highways Act deposits -17 0 0 0 -17 Concessionary Travel -65 0 0 0 -65 Grant Repayment -500 -327 0 0 -827 Accumulated -229 -13 0 0 -242 Absences Total -913 -374 29 0 -1,258

Berry Hill Track – Annual amount set aside for the future maintenance of the Berry Hill track.

Health and Safety – Replacement of equipment and additional training as a result of Health and Safety issues and legislation.

Child Protection Policy – Additional costs identified as a result of changes in the Child Protection Act.

Rental Bonds – Deposits made with the Council which will be repaid as contractual obligations are completed.

Neighbourhood Renewal Fund – Provision to meet payments for which grant is to be re-claimed from funded bodies.

Single Regeneration Budget – Provision to meet payments for which grant is to be re-claimed from funded bodies.

Highways Act Deposits – Deposits made with the Council which will be repaid as contractual obligations are completed. This was previously classed as a short term creditor.

Concessionary Travel – Provision to meet future asset replacement costs.

Grant Repayment – The Council has in the past, received grant funding to deliver schemes. Where the terms and conditions of the grant are currently under review, as the Council may not be fully compliant with the grant requirements. Discussions are currently taking place with the grant providers, but a provision has been set up in anticipation of repayment.

Accumulated Absences – The Council is required to make a provision for the cost of paid annual leave (or any form of leave, for example time off in lieu) earned by employees but not taken before the year end which employees can carry forward into the next financial year.

25. Unusable Reserves

The table below shows the unusable reserves held by the Council:

2009/2010 2010/2011 Restated £000 £000

Revaluation Reserve 43,311 37,569 Available for Sale Financial Instruments 0 0 Reserve Capital Adjustment Account 270,712 217,660 Financial Instruments Adjustment Account 0 0 Deferred Capital Receipts Reserve 711 648 Pensions Reserve -90,323 -47,718 Collection Fund Adjustment Account 93 59 Unequal Pay Back Pay Account 0 0 Accumulated Absences Account -229 -242 Total Unusable Reserves 224,275 207,976

Revaluation Reserve

The Revaluation Reserve contains the gains by the Council arising from increases in the value of its property, plant and equipment and intangible assets. The balance is reduced when assets with accumulated gains are:  re-valued downwards or impaired and the gains are lost  used in the provision of services and the gains are consumed through depreciation, or  disposed of and the gains are realised.

The Reserve contains only revaluation gains accumulated since 1 April 2007, the date that the Reserve was created. Accumulated gains arising before that date are consolidated into the balance on the Capital Adjustment Account.

2009/2010 2009/2010 2010/2011 2010/2011 Restated Restated £000 £000 £000 £000

Balance at 1 April 28,037 43,311 Upward revaluations of 15,645 6,834 assets Downward revaluation of -71 -12,194 assets and impairment losses not charged to the Surplus / Deficit on the Provision of Services Surplus / (deficit) on 15,574 -5,360 revaluation on non-current assets not posted to the surplus / (deficit) on the Provision of Services Difference between fair value -287 -251 depreciation and historical cost depreciation Accumulated gains on assets -13 -131 sold or scrapped Amount written off to the -300 -382 Capital Adjustment Account Balance at 31 March 43,311 37,569

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

84 Mansfield District Council 31 March 2011 and amortisations are charged to the Comprehensive Income and Expenditure Statement (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.

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

2009/2010 2010/201 Restated 1 £000 £000

Balance at 1 April 262,198 270,712 Reversal of items relating to capital expenditure debited or credited to the Comprehensive Income and Expenditure Statement: Charges for depreciation and impairment of non- 1,516 -59,837 current assets Revaluation losses on Property, Plant and -813 -1,217 Equipment Movement in the market value of Investment 0 2,328 Properties Amortisation of intangible assets -103 -104 Revenue expenditure funded from capital under -1,976 -2,492 statute Amounts of non-current assets written off on -2,812 -1,570 disposal or sale as part of the gain / loss on disposal to the Comprehensive Income and Expenditure Statement Adjusting amounts written out of the Revaluation 300 383 Reserve Net written out amount of the cost of non-current assets consumed in the year Capital financing in the year: Use of the capital receipts reserve to finance new 6,490 993 capital expenditure Use of the Major Repairs Reserve to finance 0 0 capital expenditure Capital grants and contributions credited to the 2,353 4,503 Comprehensive Income and Expenditure Statement that have been applied to capital financing Application of grants to capital financing from 0 0 capital grants unapplied account Statutory provision for the financing of capital 727 698 investment charged against the General Fund and HRA balances Capital expenditure charged against the General 2,832 3,263 Fund and HRA balances Movement in the market value of Investment 0 0 Properties debited or credited to the Comprehensive Income and Expenditure Statement Balance at 31 March 270,712 217,660

Financial Instruments Adjustment Account

The Financial Instruments Adjustment Account absorbs the timing differences arising from the different arrangements for accounting for income and expenses relating to certain financial instruments and for bearing losses or benefiting from gains per statutory provisions. The Council uses the Account to manage premiums paid on the early redemption of loans. Premiums are debited to the Comprehensive Income and Expenditure Statement when they are incurred, but reversed out of the General Fund balance to the Account in the Movement in Reserves Statement. Over time, the expense is posted back to the General Fund Balance in accordance with statutory arrangements for spreading the burden on council tax. In the Council’s case, this period is the unexpired term that was outstanding on the loans when they were redeemed.

2009/2010 2009/2010 2010/201 2010/2011 £000 £000 1 £000 £000

Balance at 1 April 20 0 Premiums incurred in the 0 0 year and charged to the Comprehensive Income and Expenditure Statement Proportion of premiums -20 0 incurred in previous financial years to be charged against the General Fund Balance in accordance with statutory requirements Amount by which finance -20 0 costs charged to the Comprehensive Income and Expenditure Statement are different from finance costs chargeable in the year in accordance with statutory requirements Balance at 31 March 0 0

Pension Reserve

The Pension 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 Comprehensive Income and Expenditure Statement as the benefits are earned by employees accruing years of service,

87 Mansfield District Council 31 March 2011 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 the pension funds or eventually pays any pensions for which it is directly responsible. The debit balance on the Pension 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.

2009/2010 2010/2011 £000 £000

Balance at 1 April -50,805 -90,323 Actuarial gains or losses on pensions assets -38,399 33,497 and liabilities Reversal of items relating to retirement -5,044 5,225 benefits debited or credited to the Surplus or deficit on the provision of services in the Comprehensive Income and Expenditure Statement Employer’s pensions contributions and direct 3,925 3,884 payments to pensioners payable in the year Rounding 0 -1 Balance at 31 March -90,323 -47,718

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.

2009/2010 2010/2011 £000 £000

Balance at 1 April 776 711 Mortgages receipts in the year -13 -10 Capital receipts from Nottinghamshire County -52 -53 Council Balance at 31 March 711 648

Collection Fund Adjustment Account

The Collection Fund Adjustment Account manages the differences arising from the recognition of council tax income in the Comprehensive Income and

Expenditure Statement as it falls due from council tax payers compared with the statutory arrangements for paying across to the General Fund from the Collection Fund.

2009/2010 2010/2011 £000 £000

Balance at 1 April 132 93 Amount by which council tax income -39 -34 credited to the Comprehensive Income and Expenditure Statement is different from council tax income calculated for the year in accordance with statutory requirements Balance at 31 March 93 59

Accumulated Absences Account

Accumulated Absences Account absorbs the differences that would otherwise arise on the General Fund Balance from accruing for compensated absences earned but not taken in the year, for example annual leave entitlement carried forward at 31 March. Statutory arrangements require that the impact on the General Fund Balance is neutralised by transfers to or from the Account.

2009/2010 2010/2011 £000 £000

Balance at 1 April -234 -229 Settlement or cancellation of accrual made at 0 0 the end of the preceding year Amounts accrued at the end of the current 5 -13 year Amount by which officers remuneration 0 0 charged to the Comprehensive Income and Expenditure Statement on an accruals basis is different from remuneration chargeable in the year in accordance with statutory requirements Balance at 31 March -229 -242

26. Operating Activities

The cash flows for operating activities include the following items:

2010/2011 2010/2011 £000 £000

Net Surplus or (deficit ) on the -43,977 Provision of Service

Depreciation 64,925 Impairment and downward valuations -2,579 Amortisation 104 Increase / decrease in interest creditors -1 Increase / decrease in creditors 911 Increase / decrease in interest debtors 123 Increase / decrease in debtors -2,793 Increase / decrease in inventories 74 Pension liability -9,350 Contributions to / (from) provisions 345 Carrying amount of non-current assets 1,570 sold

Total 53,329

Adjust for items included in the net surplus or deficit on the provision of services that are investing or financing activities Capital grants credited to surplus or -1,962 deficit on the provision of services Proceeds from the sale of property plant -1,630 and equipment, investment property and intangible assets -3,592 Net cash flows from operating 5,760 activities

27. Investing Activities

The cash flows for investing activities include the following items:

2010/201 2009/2010 1 £000 £000

Purchase of property, plant and equipment, -13,270 -10,370 investment properties and intangible assets Purchase of short term and long term 0 0 investments Other payments for investing activities 0 -250 Proceeds from the sale of property, plant and 2,483 1,484 equipment, investment property and intangible assets Proceeds from short-term and long-term 0 3,000 investments Other receipts from investing activities 5,289 604 Total -5,498 -5,532

28. Financing Activities

The cash flows for financing activities include the following items:

2010/201 2009/2010 1 £000 £000

Cash receipts of short and long term borrowing 12 0 Other receipts from financing activities 6,654 515 Cash payments for the reduction of the 0 0 outstanding liabilities relating to finance leases and on balance sheet PFI contracts Repayments of short and long term borrowing -5,057 -301 Other payments for financing activities 0 0 Net cash flows from financing activities 1,609 214

29. Amounts Reported for Resource Allocation Decisions

2010/2011

Corporate Customer Finance Housing Legal and Operations Planning, Policy, HRA Total Mgt Services and and Members Community Performance and Revenue Property Services Safety and and Partnerships Services Services Regulatory Research Services £000 £000 £000 £000 £000 £000 £000 £000 £000 £000

Fees, charges and other -623 -3,544 -5,391 -3,026 -549 -7,299 -1,364 -103 -30,194 -52,093 service income Government grants 0 -447 -47,419 -2,052 -64 -1,047 -433 -4 -977 -52,443 Support service -481 -405 -2,548 -1,269 -448 -2,132 -648 -1,978 -1,225 -11,134 recharges Total Income -1,104 -4,396 -55,358 -6,347 -1,061 -10,478 -2,445 -2,085 -32,396 -115,670

Employee expenses 480 2,446 -9,811 1,052 837 5,495 3,059 1,501 6,520 11,579 Other operating expenses 1,349 -353 51,623 3,981 170 10,410 1,291 -1,216 16,054 83,309 Support service 481 404 2,394 1,269 448 2,117 648 2,220 1,225 11,206 recharges Total Expenditure 2,310 2,497 44,206 6,302 1,455 18,022 4,998 2,505 23,799 106,094

Net Cost of Service 1,206 -1,899 -11,152 -45 394 7,544 2,553 420 -8,597 -9,576

Reconciliation to Net Cost of Services in Comprehensive Income and Expenditure Statement £000

Cost of Services in Service Analysis -9,576 Add services not included in main analysis 0 Add amounts not reported to management 71,934 Remove amounts reported to management not included in Comprehensive Income and Expenditure Statement -3,232

Net Cost of Services in Comprehensive Income and Expenditure Statement 59.126

Reconciliation to Subjective Service Service Not Not Included Allocation Net Cost Corporate Total Analysis Analysis Not in Reported to In Income of of Amounts Analysis Management And Recharges Services Expenditure £000 £000 £000 £000 £000 £000 £000 £000

Fees, charges and other service -52,093 0 0 0 0 -52,093 0 -52,093 income Deficit on trading undertakings 0 0 0 0 0 0 12 12 Interest and investment income 0 0 0 0 0 0 -396 -396 Income from council tax 0 0 0 0 0 0 -16,385 -16,385 Support Services recharges -11,134 0 0 0 0 -11,134 0 -11,134 Government grants and contributions -52,443 0 0 0 0 -52,443 -2,538 -54,981 Total Income -115,670 0 0 0 0 -115,670 -19,307 -134,977

Employee expenses 11,579 0 4,091 -3,232 6,205 18,643 2,610 21,253 Other service expenses 83,309 0 0 0 -6,133 77,176 0 77,176 Support Services recharges 11,206 0 0 0 -72 11,134 0 11,134 Depreciation, amortisation and 0 0 67,843 0 0 67,843 0 67,843 impairment Interest payments 0 0 0 0 0 0 3,494 3,494 Precepts and Levies 0 0 0 0 0 0 70 70 Payments to Housing Capital 0 0 0 0 0 0 382 382 Receipts Pool Income and expenditure in relation to 0 0 0 0 0 0 -2,269 -2,269 investment properties and changes in fair value Gain or loss on Disposal of Fixed 0 0 0 0 0 0 -129 -129 Assets Total operating expenses 106,094 0 71,934 -3,232 0 174,796 4,158 178,954

Surplus or deficit on the provision -9,576 0 71,934 -3,232 0 59,126 -15,149 43,977 of services

2009/2010

Corporate Customer Finance Housing Legal and Operations Planning, Policy, HRA Total Mgt Services and and Members Community Performance and Revenue Property Services Safety and and Partnerships Services Services Regulatory Research Services £000 £000 £000 £000 £000 £000 £000 £000 £000 £000

Fee, charges and other -535 -1,746 -47,660 1,177 -395 62 -819 -82 -30,675 -80,673 service income Government grants -134 -2,306 -5,231 -4,071 -134 -7,781 -956 -6 211 -20,408 Support service -403 -366 -2,367 -1,595 -421 -2,571 -599 -1,789 -1,020 -11,131 recharges Total Income -1,072 -4,418 -55,258 -4,489 -950 -10,290 -2,374 -1,877 -31,484 -112,212

Employee expenses 589 2,392 2,593 1,089 829 5,952 3,016 1,612 6,729 24,801 Other operating expenses 1,181 4,299 46,409 5,971 1,107 8,978 1,292 -1,002 14,673 82,908 Support service 403 366 1,453 1,595 421 2,446 599 1,938 1,020 10,241 recharges Total Expenditure 2,173 7,057 50,455 8,655 2,357 17,376 4,907 2,548 22,422 117,950

Net Cost of Service 1,101 2,639 -4,803 4,166 1,407 7,086 2,533 671 -9,062 5,738

Reconciliation to Net Cost of Services in Comprehensive Income and Expenditure £000 Statement

Cost of Services in Service Analysis 5,738 Add services not included in main analysis 0 Add amounts not reported to management 6,838 Remove amounts reported to management not included in Comprehensive Income and Expenditure Statement -3,563

Net Cost of Services in Comprehensive Income and Expenditure Statement 9,013

Reconciliation to Subjective Analysis Service Service Not Reported Not Included Allocation Net Cost of Corporate Total Analysis Not in to In Income of Services Amounts Analysis Management And Recharges Expenditure £000 £000 £000 £000 £000 £000 £000 £000

Fees, charges and other service -80,673 0 0 0 0 -80,673 0 -80,673 income Interest and investment income 0 0 0 0 0 0 -819 -819 Income from council tax 0 0 0 0 0 0 -16,936 -16,936 Support Services recharges -11,131 0 0 0 0 -11,131 0 -11,131 Government grants and -20,408 0 0 0 0 -20,408 -2,526 -22,934 contributions Total Income -112,212 0 0 0 0 -112,212 -20,281 -132,493 0 Employee expenses 24,801 0 1,498 -3,563 5,696 28,432 3,517 31,949 Other service expenses 82,908 0 0 0 -6,586 76,322 0 76,322 Surplus / deficit of trading 0 0 0 0 0 0 -339 -339 undertakings Support Services recharges 10,241 0 0 0 890 11,131 0 11,131 Depreciation, amortisation and 0 0 5,340 0 0 5,340 0 5,340 impairment Interest payments 0 0 0 0 0 0 3,883 3,883 Precepts and Levies 0 0 0 0 0 0 60 60 Payments to Housing Capital 0 0 0 0 0 0 648 648 Receipts Pool Income and expenditure in relation to 0 0 0 0 0 0 93 93 investment properties and changes in fair value Gain or loss on Disposal of Fixed 0 0 0 0 0 0 238 238 Assets Total operating expenses 117,950 0 6,838 -3,563 0 121,225 8,100 129,325 Surplus or deficit on the provision of 5,738 0 6,838 -3,563 0 9,013 -12,181 -3,168 services

30. Acquired and Discontinued Operations

Acquired Operations

The Council did not acquire any new operations during the accounting period 1 April 2010 to 31 March 2011 either through the re-organisation of local government or new statutory responsibilities transferred from another entity.

Discontinued Operations and Outstanding Liabilities

During the 2010/2011 financial year, Mansfield District Council did not discontinue any of the services that were previously provided.

On 24 March 2010, Nottinghamshire County Council gave notice to terminate its Manage and Operate Partnership with Mansfield District Council. From 1 April 2012, the County Council will take over full responsibility for highways management and maintenance within Mansfield.

Under current arrangements, which date back to Local Government Re- organisation in 1974, work is carried out by the District Council on behalf of the County Council. The cost to Mansfield District Council of carrying out this work was then recharged to the County Council.

31. Trading Operations

The table below shows the turnover and the (surplus)/deficit on activities where the Council trades with the public and requires the operation to either break even or make a profit.

Trading Accounts are separately identified within the Comprehensive Income and Expenditure Statement within the financing and investment income and expenditure.

2009/201 2009/2010 2010/201 2010/2011 0 1 Turnover Surplus(-) Turnover Surplus(-) / Deficit / Deficit £000 £000 £000 £000

Trading Activity Leisure 2,874 -68 3,041 124 Management Civil Engineering 3,926 -271 3,979 -112 Total -339 12

32. Agency Income and Expenditure

Mansfield District Council has an agency agreement with Nottinghamshire County Council whereby Mansfield District Council is responsible for maintaining highways within the district on behalf of the County Council. The County Council reimburses the Council for this work, including a contribution towards administrative costs.

In 2010/2011 the total expenditure for this work was £1.737million (£1.532million in 2009/2010) which is not required to be shown within the accounts.

33. Schemes under the Transport Act 2000

This note covers the responsibility that Councils have under Schedule 12 of the Transport Act 2000 to include within their Statement of Accounts details in relation to any road charging schemes and workplace charging levies.

For the financial year 1 April 2010 to the 31 March 2011 there were no such schemes in place within the Mansfield District boundary.

34. Pooled Budgets

Section 31 of the Health Act 1999 and the NHS Bodies and Local Authorities Partnership Arrangements Regulations 2000 enables establishment of joint working arrangements between NHS bodies and local Councils. Under such arrangements, health bodies and local Councils can pool funds which allow the ‘partnership’ to work collaboratively to address specific local health issues.

During the 2010/2011 financial year, The Council did not pool any funding under the above mentioned Act.

35. Members’ Allowances

Under the Local Authority (Members’ Allowances) (England) Regulations 2003, the Council is required to disclose annually the total sum paid to members under the Council’s Members Allowances Scheme.

The Council makes payment to Councillors for work undertaken in the course of their duties. Total Allowances (consisting of Basic Allowance and Special Responsibility Allowances, including pension costs) during the 2010/2011 financial year amounted to £544,549 (£543,314 in 2009/2010). In addition to this, Members were reimbursed a total of £17,102 (£16,755 in 2009/2010) for expenses incurred on Council business.

36. Officers’ Remuneration

During the 2010/2011 financial year the number of employees whose remuneration was £50,000 or more in bands of £5,000 was:

Remuneration Band Number of Employees 2009/2010 2010/2011

£50,000 - £54,999 2 0 £55,000 - £59,999 2 4 £60,000 - £64,999 2 2 £65,000 - £69,999 2 2 £70,000 - £74,999 0 0 £75,000 - £79,999 0 2 £80,000 - £84,999 1 0 £85,000 - £89,999 0 0 £90,000 - £94,999 0 0 £95,000 - £99,999 0 0 £100,000 - £104,999 0 0 £105,000 - £109,999 0 1 £110,000 - £114,999 1 0

The above table is based on salaries paid and does not include pension contributions paid by Mansfield District Council.

The post of Corporate Director for Customer Services, Community Safety and Regulatory Services was part vacant during the 2009/2010, and as such the actual salary paid was less than £50,000 and therefore has not been disclosed within the above table.

As part of the budget setting process for 2011/2012 a review of the senior management requirement for Mansfield District Council was undertaken. From this a decision was taken to reduce the number of Head’s of Service from 7 to 6 from 1 April 2011. The above table includes the post removed from the establishment from the 1 April 2011 but does not include the redundancy amount as this is a one off item.

Note 2010/2011 2010/2011 2010/2011 2010/2011 2010/2011 Salary Expense Total Pension Total Allowances Remuneration Contributions Remuneration (Excluding Pension) £000 £000 £000 £000 £000 Managing Director 108 1 109 22 131 Corporate Director of Housing, 78 1 79 16 95 Property and Operational Services Corporate Director of Customer 76 2 78 15 93 Services, Community Safety and Regulatory Services Head of Finance, Property and 65 1 66 13 79 Revenue Services Head of Corporate Administration 65 2 67 13 80 Head of Policy, Performance and 59 0 59 12 71 Research Total 451 7 458 91 549

Note 2009/2010 2009/2010 2009/2010 2009/2010 2009/2010 Salary Expense Total Pension Total Allowances Remuneration Contributions Remuneration (Excluding Pension) £000 £000 £000 £000 £000 Managing Director 108 2 110 22 132 Corporate Director of Housing, 78 2 80 16 96 Property and Operational Services Corporate Director of Customer 1 46 0 46 9 55 Services, Community Safety and Regulatory Services Head of Finance, Property and 65 2 67 13 80 Revenue Services Head of Corporate Administration 65 2 67 13 80 Head of Policy, Performance and 59 0 59 12 71 Research Total 421 8 429 85 514

Note 1 – The post of Corporate Director of Customer Services, Community Safety and Regulatory Services was only filled part year, the full annual salary of this post would have been £73,500

37. External Audit Costs

In 2010/2011 Mansfield District Council incurred the following fees relating to external audit and inspection:

2010/201 2009/2010 1 £000 £000

Fees payable to the Audit Commission with 118 116 regard to external audit services Fees payable to the Audit Commission in 8 0 respect of statutory inspection Fees payable to the Audit Commission for the 25 26 certification of grant claims and returns Fees payable to the Audit Commission in 1 2 respect of other services 152 144

Fees payable in respect of other services include the National Fraud Initiative.

38. Grant Income

The Council credited the following grants, contributions to the Comprehensive Income and Expenditure Statement in 2010/2011

2009/2010 2010/2011 £000 £000

Section 106 contributions 168 170 Alliance SSP 75 0 European Regional Development Fund 10 28 (ERDF) Homes and Communities Agency (HCA) 71 0 Local Economic Growth Initiative (LEGI) 16 3 Liveability 29 0 Waste Recycling ENvironment (WREN) 0 40 Nottinghamshire County Council 37 27 Regional Housing Board 1,735 1,115 Performance Reward Grant 175 0 Homes and Communities Agency 0 2,734 Waste Infrastructure Grant 74 27 Contributions 224 628 Total 2,614 4,772

The above grant income represents the capital grants and contributions received during the year. Capital grants that have been used to finance revenue expenditure funded by capital under statue (REFCUS) have been included in the relevant service line along with the matching expenditure.

The Council has received a number of grants and contributions that have yet to be recognised as income as they have conditions attached to them that will require the monies to be returned to the giver if the conditions are not met. The balance at the year end are as follows:

2009/2010 2010/2011 £000 £000

Section 106 contributions 769 675 Homes and Communities Agency (HCA) 1,860 0 Total 2,629 675

39. Related Parties

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

Central Government has effective control over the general operations of the Council. It is responsible for providing the statutory framework within which the Council operates, providing the majority of its funding in the form of grants and prescribes the terms of many of the transactions that the Council has with other parties (for example, Housing Benefits). Grants received from government departments are set out in the subjective analysis in Note 19 on reporting for resources allocation decisions. Grant receipts outstanding at 31 March 2011 are shown in Note 38.

Nottinghamshire County Council, Nottinghamshire Police Authority and Nottinghamshire Fire and Rescue Service issue precepts on the Council; these are shown in Note 3 to the Collection Fund.

Members of the Council have direct control over the Council’s financial and operating policies. Council Members are asked to disclose any relevant interests and also have to make declarations on individual Cabinet or Council decisions. During the 2010/2011 financial year several Members were involved with voluntary bodies which received funding from the Council. The potential for influence to be exerted was not considered to be material.

Chief Officers were also asked to disclose any relevant interests; no matters of undue influence were identified in respect of related party transactions.

The Council did not have any interest in subsidiaries or associated companies.

Mansfield District Council is jointly responsible for the operation of the Mansfield and District Joint Crematorium Committee along with Ashfield District Council and Newark and Sherwood District Council. Note 40 provides additional information as to the amounts relating to the Mansfield and District Joint Crematorium which have been disclosed.

40. Mansfield and District Joint Crematorium

Mansfield District Council, along with Ashfield District Council and Newark and Sherwood District Council, operates the Mansfield and District Joint Crematorium.

The Mansfield and District Crematorium accounts for the year ended 31 March 2011 have been included the Mansfield District Council’s accounts; the basis for this inclusion is on usage. The Balance Sheet figures are based on the average usage over the last five years whilst the Income and Expenditure Statement is based on the usage within the year.

The following percentages have been applied for 2010/2011:

Mansfield Ashfield Newark Total District District and Council Council Sherwood District Council % % % %

Balance Sheet 42.09 45.19 12.72 100 Comprehensive Income and 41.47 46.57 11.96 100 Expenditure Statement

The following percentages were applied for 2009/2010:

Mansfield Ashfield Newark Total District District and Council Council Sherwood District Council % % % %

Balance Sheet 42.08 44.27 13.65 100 Comprehensive Income and 42.71 45.59 11.70 100 Expenditure Statement

The figures below show Mansfield District Council ‘share’ of the Mansfield and District Joint Crematorium income and expenditure, assets and liabilities which have been included in the Council’s Comprehensive Income and Expenditure Statement and Balance Sheet based on the proportions stated above.

Comprehensive Income and Expenditure Statement:

200920/10 2009/2010 2009/2010 2010/2011 2010/2011 2010/2011 Gross Gross Net Gross Gross Net Cost Income Cost Cost Income Cost £000 £000 £000 £000 £000 £000

306 -411 -105 General Fund continuing operations 312 -446 -134 306 -411 -105 Net Cost of Service 312 -446 -134

-4 Financing and Investment Income -4 and Expenditure -109 (Surplus) / Deficit on Provision of -138 Service -109 Total comprehensive income and -138 expenditure

Balance Sheet:

2009/2010 2010/2011 £000 £000

589 Property, Plant and Equipment 589 589 Long Term Assets 589

41 Short term Debtors 222 1,010 Short Tern Investments 833 68 Cash and Cash Equivalents 254 1,119 Current Assets 1,309

-5 Creditors -57 -5 Current Liabilities -57

1,703 Net Assets 1,841

Financed By: 589 Revaluation Reserve 589 1,114 Earmarked Reserves 1,252 1,703 Total Reserves 1,841

The Mansfield and District Crematorium has been included within the Cemetery, Cremation and Mortuary Services line of the Council’s General Fund continuing operations (in accordance with the Best Value Accounting Code of Practice (BVACoP)).

The earmarked reserves stated above of £1.252 million does not agree with the Crematorium Reserve balance of £1.250 million shown in Note 8. This difference has resulted from taking the average usage over the last five years figures of the Mansfield District Council’s share of the Crematorium Balance Sheet.

41. Analysis of the Collection Fund Balance

The total carry forward balance on the Collection Fund (please see the Collection Fund) has been disaggregated to show the balance belonging to Mansfield District Council, and the amounts owing to the other precepting bodies for whom Mansfield District Council collects on behalf of.

The following tables show the breakdown of the Collection Fund Balance for 2010/2011 and 2009/2010.

2010/2011:

2010/201 1 £000

Creditor Nottinghamshire County Council -382 Police Authority -51 Fire and Rescue Service -22

Financing Mansfield District Council -59 Balance on Collection Fund carried forward -514 (See Collection Fund)

2009/2010:

2009/201 0 £000

Creditor Nottinghamshire County Council -613 Police Authority -78 Fire and Rescue Service -35

Financing Mansfield District Council -93 Balance on Collection Fund carried forward -819 (See Collection Fund)

The amount retained by the Council is shown in the Balance Sheet within the Financing section, whilst the amounts owing to the other precepting authorities have been included within the creditors figure (please see Note 22).

42. Trust Funds and Legacies

The Council acts as a sole trustee for minor legacies left behind by inhabitants of the district; the current value of these is £3,101.

The Council acts as trustees for three charitable trusts:

 Yeoman Hill Park  Warsop Vale Miners Welfare Recreation Ground and Institute

 Racecourse Park

With the exception of the Racecourse Park, these charitable trusts have no significant assets at 31 March 2011.

Racecourse Trust

The Council acts as sole trustee for the charity known as the Allotment for Exercise in the Ancient Parish of Mansfield. The purpose of the trust is to provide facilities for leisure in the interests of social welfare for the inhabitants of Mansfield.

2010/201 2009/2010 1 £000 £000

Total expenditure 69 69 Total income -6 -6 63 63

The Trust also invests its permanent endowment with the Council. At 31 March 2011 the value of this investment was £130,169.

43. Capital Expenditure and Capital Financing

The total amount of capital expenditure incurred in the year is shown below, together with the resources that have been used to finance it.

2010/201 2009/2010 1 £000 £000

Opening Capital Financing Requirement 53,862 53,135 Capital investment Council Dwellings / Land and Other Property 7,335 8,915 (HRA) Urban Housing Regeneration 291 0 Industrial and Commercial Development 119 74 Environmental Schemes 4,876 969 Vehicles and Equipment 543 403 Other Schemes 105 10 Revenue Expenditure Funded from Capital Under 2,343 2,492 Statute

Sourcing of financing Capital Receipts -6,490 -993 Grants and Other Contributions -2,415 -4,503 Revenue Contributions -514 -140 Major Repairs Reserve - Major Repairs Allowance -3,875 -3,873 (MRA) Major Repairs Reserve - Revenue Contribution to -2,199 -2,485 Capital Outlay (RCCO) Earmarked Reserves -119 -638 Minimum Revenue Provision (MRP) -727 -698 Closing Capital Financing Requirement 53,135 52,668

Explanation of movements in year Increase in underlying need to borrowing 0 0 (supported by Government financial assistance) Increase in underlying need to borrowing 0 231 (unsupported by Government financial assistance) Less set aside -727 -698 Increase / (Decrease) in Capital Financing -727 -467 Requirement

44. Leases

Assets Held under Finance Lease, the Council as a Lessee

At 31 March 2011, Mansfield District Council had the following finance leasing arrangements and are held in property, plant and equipment and vehicle, plant and furniture in the Balance Sheet at the following net amounts:

2009/2010 2010/2011 Net Book Net Book Value Value £000 £000

Civic Centre Plant 0 0 Vehicles 0 0 Total 0 0

The value of the Civic Centre plant is included within the overall value of the Civic Centre as this is an intrinsic part of the building’s fabric. The capital value is the amount agreed in the finance leasing agreement in 1987. The Council is committed to making minimum payments under the leases. The outstanding obligations include all remaining payments up to and including 31 March 2014:

2009/2010 2010/2011 £000 £000 Finance lease liabilities (net present value of minimum lease payments): Current 14 14 Non-current 58 44 Finance costs payable in future years 0 0 Minimum lease payments 72 58

The minimum lease payments will be payable over the following periods:

2009/2010 2010/2011 £000 £000

Amounts payable within one year 14 14 Amounts payable between two and five 58 44 years Amounts payable over five years 0 0 Total 72 58

The historic cost value of vehicles which have been financed through a finance lease is £37,540; this is a secondary lease and thus the Council can cancel the lease at any time subject to notice requirements. The annual payment in respect of this lease is £375.

Assets held under Operating Leases

The Council has several operating leases for computer equipment. In 2010/2011, the Council paid £30,268 in respect of these leasing arrangements.

The following table shows the outstanding commitment in respect of operating leases held by Mansfield District Council at 31 March 2011, analysed by maturity of the contract:

2009/2010 2010/2011 £000 £000

Lease expiring within a year 0 2 Expires between two and five years 107 47 Expires over five years 0 0 Total 107 49

The expenditure charged to the Comprehensive Income and Expenditure Statement during the year in relation to these leases was:

2009/2010 2010/2011 £000 £000 Internal Support Service Accounts 33 33

The Council as a Lessor

Operating Leases

The Council leases out property and equipment under operating leases for the following purposes:

 for the provision of community services  for economic development purposes to provide suitable affordable accommodation for local businesses.

The future minimum lease payments receivable under non-cancellable leases in future years are:

2009/2010 2010/2011 £000 £000

Not later than one year 2,687 2,565 Later than one year and not later than 7,694 9,659 five years Later than five years 185,112 177,957 Total 195,493 190,181

45. Private Finance Initiative (PFI) and Similar Contracts

The Council has not entered into any PFI arrangements to date and therefore has no such assets to disclose.

46. Impairment Losses

During 2010/2011, the Council has recognised no impairment loss (in 2009/2010 there was £48,000 in relation to its other land and buildings). The impairment loss for 2009/2010 was charged to the Parking Services in the Highways, Roads and Transport line in the Comprehensive Income and Expenditure Statement.

47. Capitalisation of Borrowing Costs

The Council has not capitalised borrowing costs during the year.

48. Termination Benefits

The Council has not incurred any termination benefits during the year, as was the case in 2009/2010.

49. Defined Benefit Pension Schemes

Nature of the scheme: Defined Benefit

Participation in Pensions Schemes

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

The Local Government Pension Scheme for civilian employees, administered by Nottinghamshire County Council is a funded scheme, meaning that the Council and employees pay contributions into a fund, calculated at a level intended to balance the pension’s liabilities with investment assets.

Transactions Relating to Post-Employment Benefits

The cost of retirement benefits is recognised in the Net Cost of Services when they are earned by employees, rather than when the benefits are eventually

112 Mansfield District Council 31 March 2011 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 Comprehensive Income and Expenditure Statement and the General Fund Balance via the Movement in Reserves Statement during the year:

2009/2010 2010/2011 £000 £000

Comprehensive Income and Expenditure Statement

Net Cost of Services: Current service cost -1,527 -4,578 Past service cost 0 12,590 Curtailment loss 0 -177 -1,527 7,835

Financing and Investment Income and Expenditure: Interest costs -7,687 -8,417 Expected return on assets in the 4,170 5,807 scheme -3,517 -2,610 Total Post Employment Benefit -5,044 5,225 Charged to the Surplus / Deficit on the Provision of Services

Other Post Employment Benefit Charged to the Comprehensive Income and Expenditure Statement Actuarial gains and losses 38,399 -33,497 Total Post Employment Benefit 33,355 -28,272 Charged to the Comprehensive Income and Expenditure Statement

Movement in Reserves Statement Reversal of net charges made to the -5,044 5,225 Surplus / Deficit for the Provision of Services for post employment benefits in accordance with the Code

Actual amount charged against the General Fund Balance for pensions in the year: Employers' contribution payable to the 3,700 4,125 scheme

Assets and Liabilities in Relation to Post-Employment Benefits

The following table provides a reconciliation of present values of the schemes liabilities for Mansfield District Council during the 2010/2011 financial year:

At 31 March At 31 March 2010 2011 £000 £000

Opening Defined Benefit Obligation 115,960 176,930 Service cost 1,527 4,578 Interest cost 7,687 8,417 Actuarial losses / (gains) 55,810 -34,256 Losses / (gains) on curtailments 0 177 Liabilities extinguished on settlement 0 0 Liabilities assumed in a business 0 0 combination Estimated benefits paid (net of transfer -4,881 -5,277 in) Past service cost 0 -12,590 Contribution by scheme participants 1,122 1,120 Unfunded pension payments -295 -288 Closing Defined Benefit Obligation 176,930 138,811

The following table provides a reconciliation of fair values of the schemes assets for Mansfield District Council during the 2010/2011 financial year:

At 31 March At 31 March 2010 2011 £000 £000

Opening fair value of scheme 65,154 86,607 assets Expected return on scheme assets 4,170 5,807 Actuary gains / (losses) 17,411 -759 Contribution by employer including 3,896 3,883 unfunded benefits Contribution by scheme participants 1,122 1,120 Assets acquired in a business 0 0 combination Estimated benefits paid including -5,146 -5,565 unfunded benefits Receipt of bulk transfer value 0 0 Closing fair value of scheme assets 86,607 91,093

The expected return on scheme assets is determined by considering the expected returns available on the assets underlying the current investment policy. Expected yields on fixed interest investments are based on gross redemption yields as at the Balance Sheet date (31 March 2011). Expected returns on equity investments reflect long term rates of return experienced in the respective markets.

Scheme History

2006/2007 2007/2008 2008/2009 2009/2010 2010/2011 £000 £000 £000 £000 £000

Defined Benefit -127,686 -135,578 -115,960 -176,930 -138,811 Obligation Scheme Assets 80,777 78,693 65,154 86,607 91,093 Surplus/(Deficit) -46,909 -56,885 -50,806 -90,323 -47,718

The liabilities show the underlying commitments that the authority has in the long run to pay retirement benefits. The total liability of £48million has a substantial impact on the net worth of the authority as recorded in the Balance Sheet.

However, statutory arrangements for funding the deficit mean that the financial position of the authority remains healthy: the deficit on the local government scheme will be made good by increased contributions over the remaining working life of employees, as assessed by the scheme actuary.

The total contribution expected to be made to the Pension Scheme by the Council in the year to 31 March 2012 is £3.625million.

Basis for Estimating Assets and Liabilities

Liabilities have been assessed on an actuarial basis using the projected unit method, an estimate of the pensions that will be payable in future years is dependent on assumptions about mortality rates and salary levels. The County Council Fund liabilities have been assessed by Barnett Waddingham (Public Sector Consulting), an independent firm of actuaries, estimates for the County Council Fund being based on the latest full valuation of the scheme at 31 March 2010.

Under the projected unit method, the current service cost will increase as the members of the scheme approach retirement.

The main assumptions used by the Actuary in their calculations have been:

2009/2010 2010/2011 % %

Long term expected rate of return on assets in the scheme: Equities 7.4 7.3 Gilts 4.5 4.4 Bonds 5.5 5.5 Property 6.9 6.8 Cash 3.0 3.0

Mortality assumptions: Longevity at 65 for current pensioners: Men 20.30 18.50 Women 23.91 22.60

Mortality assumptions: Longevity at 65 for future pensioners: Men 21.22 20.50 Women 24.91 24.50

Rate of increase in retail price index (RPI) 3.9 3.5 Rate of increase in consumer price index (CPI) n/a 2.7 Rate of increase in salaries 5.4 5.0 Rate of increase in pensions 3.9 2.7 Rate for discounting scheme liabilities 5.5 5.5

The Fund's assets consist of the following categories, by value and proportion of the total assets held by the Fund attributable to Mansfield District Council:

Value At Proportion Value At Proportion 31 March of Total 31 March of Total 2010 Asset 2011 Asset £000 % £000 %

Equities 58,893 68 66,532 73 Gilts 7,795 9 6,380 7 Other Bonds 5,196 6 3,646 4 Property 12,991 15 10,937 12 Cash 1,732 2 3,598 4 86,607 91,093

Actuarial Gains and Losses

The actuarial gains identified as movements on the Pensions Reserve in 2010/2011 can be analysed into the following categories, measured as absolute amounts and as a percentage of assets or liabilities at 31 March 2011:

2006/07 2007/08 2008/2009 2009/10 2010/11 £000 % £000 % £000 % £000 % £000 %

Difference between expected and actual return on assets 1,730 2.1 -7,911 10.5 -19,873 30.5 17,411 20.1 -759 -0.83

Experience gains and losses on liabilities 0 0 4,855 3.6 0 0 -241 -0.13 4,998 3.60

50. Contingent Assets and Liabilities

The Council is in the process of reviewing its pay and grading structure in line with the national single status agreement. A key aspect of this review is to ensure equal pay is given to jobs of equal value.

There is the potential for individuals and employee groups to make equal pay claims. It is not however, possible to quantify the nature, value or number of any claims that may arise.

During 2008/2009 the Council asked LAVAT (the Council’s VAT advisors) to pursue two VAT cases under ‘Fleming’ for Bulky Waste VAT and Excess Parking Charges (fines) where the Council believed it has overpaid tax in the past. These claims were settled in favour of the Council during the 2009/2010 financial year, however there is a possibility that compound interest may be payable, and as such the Council is currently pursuing this. No amounts have been provided for in these Accounts, due to the uncertainty of the outcome of this claim and the value of payment which would be received, if the Council was successful.

51. Nature and Extent of Risks Arising from Financial Instruments

Nature and Extent of Risk Arising from Financial Instruments

The Council’s management of treasury risks actively works to minimise the Council’s exposure to the unpredictability of financial markets and to protect the financial resources available to fund services. The Council has fully adopted CIPFA’s Code of Treasury Management Practices and has written principles for overall risk management as well as written polices and procedures covering specific areas such as credit risk, liquidity risk and market risk.

Credit Risk - Credit risk arises from the short-term lending of surplus funds to banks, building societies and other local authorities as well as credit exposures to the Council’s customers.

It is the policy of the Council to place deposits only with a limited number of high quality banks and building societies whose credit rating is independently assessed as sufficiently secure by the Council’s treasury advisers and to restrict lending to a prudent maximum amount for each institution. The Council also has a policy of limiting deposits with institutions to a maximum of £7million. Each year the Council is required to approve a Treasury Management and Annual Investment Strategy which sets out the Council’s policies for managing its investments and for giving priority to the security and liquidity of those investments; the Treasury Management and Annual Investment Strategy for the 2010/2011 financial year was approved on the 4 March 2010.

The following analysis summarises the Council’s potential maximum exposure to credit risk, based on past experience and current market conditions. No credit limits were exceeded during the financial year and the Council expects full repayment on the due date of deposits placed with its counterparties.

Amounts Historical Historical Estimated at 31 experience experience maximum March of default adjusted for exposure to 2011 market default and conditions uncollectability as at 31 March 2011 £000 % % £000

Deposits with banks 29,416 0 0 0 and other financial institutions Customers 4,911 11.40 11.40 560 Total 34,327 560

Amounts Historical Historical Estimated at 31 experience experience maximum March of default adjusted for exposure to 2010 market default and conditions uncollectability as at 31 March 2010 £000 % % £000

Deposits with banks 31,917 0 0 0 and other financial institutions Customers 3,612 11.67 11.67 422 Total 35,529 422

The Council does not generally allow credit for customers, such that £2.665million of the £4.911million balance is past its due date for payment. The past due amount can be analysed by age as follows:

At 31 At 31 March March 2010 2011 £000 £000

Less than three months 388 893 Three to six months 220 213 Six months to one year 575 566

More than one year 780 993 Total 1,963 2,665

Liquidity Risk - The Council has access to a facility to borrow from the Public Works Loans Board (PWLB). As a result there is no significant risk that the Council will be unable to raise finance to meets its commitments under financial instruments. The Council has safeguards in place to ensure that a significant proportion of its borrowing does not mature for repayment at any one time in the future to reduce the financial impact of re-borrowing at a time of unfavourable interest rates. The Council’s policy is to ensure that not more than 20% of loans are due to mature within any financial year and 20% within any rolling five-year period through a combination of prudent planning of new loans taken out and, where it is economic to do so, making early repayments.

The maturity structure of financial liabilities is as follows (at nominal value):

At 31 At 31 March March 2010 2011 £000 £000

44,870 Public Works Loans Board 44,813 4,500 Market debt 4,500 1,520 Temporary borrowing 1,278 50,890 50,591

1,577 Less than 1 year 6,334 5,057 Between 1 and 2 years 57 6,671 Between 2 and 5 years 11,171 14,185 Between 5 and 10 years 9,685 23,400 More than 10 years 23,344 50,890 50,591

Market Risk - The Council is exposed to interest rate risk in two different ways; the first being the uncertainty of interest paid/received on variable rate instruments, and the second being the affect of fluctuations in interest rates on the fair value of an instrument.

The current interest rate risk for the authority is summarised below:  decreases in interest rates will affect interest earned on variable rate investments, potentially reducing income credited to the Comprehensive Income and Expenditure Statement  increases in interest rates will affect interest paid on variable rate borrowings, potentially increasing interest expense charged to the Comprehensive Income and Expenditure Statement  the fair value of fixed rate financial assets will fall if interest rates rise. This will not impact on the Balance Sheet for the majority of assets

held at amortised cost, but will impact on the disclosure note for fair value. It would have a negative effect on the Balance Sheet for those assets held at fair value in the Balance Sheet, which would also be reflected in Comprehensive Income and Expenditure Statement  the fair value of fixed rate financial liabilities will rise if interest rates fall. This will not impact on the Balance Sheet for the majority of liabilities held at amortised cost, but will impact on the disclosure note for fair value

The Council has a number of strategies for managing interest rate risk. Policy is to aim to keep a maximum of 20% of its borrowings in variable rate loans. During periods of falling interest rates, and where economic circumstances make it favourable, fixed rate loans will be repaid early to limit exposure to losses. The risk of loss is ameliorated by the fact that a proportion of government grant payable on financing costs will normally move with prevailing interest rates or the authority’s cost of borrowing and provide compensation for a proportion of any higher costs.

The Council’s treasury management team has an active strategy for assessing interest rate exposure that feeds into the setting of the annual budget and which is used to update the budget quarterly during the year. This allows any adverse changes to be accommodated. The analysis will also advise whether new borrowing taken out is fixed or variable.

According to this assessment strategy, at 31 March 2011, if interest rates had been 1% higher with all other variables held constant, the financial effect would be:

2009/2010 2010/2011 £000 £000

Increase in interest payable on variable rate borrowings 35 24 Increase in interest receivable on fixed rate investments that mature -340 -295 within 12 months Increase in government grant receivable for financing costs 0 0 Impact on Surplus / Deficit on the Provision of Services -305 -271 Share of overall impact debited to the HRA -36 -28

Decrease in fair value of ‘available for sale’ investment assets 0 0 Impact on Other Comprehensive Income and Expenditure 0 0

Decrease in fair value of fixed rate investment assets (no impact on 56 64 the surplus / deficit on the Provision of Services or other Comprehensive Income and Expenditure Account) Decrease in fair value of fixed rate borrowing liabilities (no impact on 4,264 3,696 the surplus / deficit on the Provision of Services or other Comprehensive Income and Expenditure Account)

The impact of a 1% fall in interest rates would be as above but with the movements being reversed.

Foreign Exchange Risk

The Council has no financial assets or liabilities denominated in foreign currencies and thus has no exposure to loss arising from movements in exchange rates.

52. Authorisation of Accounts for Approval

The Statement of Accounts for Mansfield District Council was signed by the responsible financial officer on the 29 June 2011.

53. Long Term Debtors

The following table lists, by type, Mansfield District Council’s long term debtors and shows the movement of each during the year:

Balance Expenditure Income Balance At At 1 April Incurred Received 31 March 2010 2010/2011 2010/2011 2011 £000 £000 £000 £000

Car loans 104 154 -81 177 NCC transferred 631 0 -53 578 Debt Council 80 0 -9 71 mortgages Improvement 4 0 -2 2 loans 819 154 -145 828

Car Loans to Employees – Advances to Mansfield District Council employees to purchase a vehicle, repayable over a period of up to five years.

NCC Transferred Debt – This represents debt incurred by Mansfield District Council whilst carrying out the functions of refuse disposal, street lighting and major road improvements which transferred to Nottinghamshire County Council as part of the 1974 local government reorganisation. The County Council reimburse Mansfield District Council who still services the debt.

Council Mortgages – Amounts outstanding on mortgages issues in respect of Council House Sales.

Improvement Loans – Amounts outstanding in respect of improvement loans to private individuals.

Supplementary Financial Statements

124 Mansfield District Council 31 March 2011 Housing Revenue Account Income and Expenditure Statement

2009/10 Restated 2010/11 2010/11 £000 Note £000 £000

Income -19,010 Dwelling rents 1 -19,300 -1,103 Non-dwelling rents 2 -1,100 -1,845 Charges for services and facilities 3 -1,850 -2,836 Contribution towards expenditure 4,5 -2,894 0 HRA subsidy receivable 6 0 0 Sums directed by the Secretary of State that 7 0 are income in accordance with proper practices -24,794 Total Income -25,144

Expenditure 5,987 Repairs and maintenance 5,996 7,233 Supervision and management 7,303 65 Rents, rates taxes and other charges 68 1,381 Negative HRA subsidy payable 6 2,009 0 Negative HRA subsidy transferable to the 0 General Fund under the transitional arrangement 0 Revenue Expenditure Funded from Capital 14 257 Under Statute Depreciation and impairment of Fixed Assets: 8,9 -3 Dwellings 10,669 342 Non-current assets 158 31 Debt management costs 29 146 Increase in bad debt provision 263 0 Sums directed by the Secretary of State that 7 0 are expenditure in accordance with the Code 15,182 Total Expenditure 26,752

Net Cost of HRA Services as included in the Comprehensive Income and Expenditure Statement -9,612 1,608

359 HRA share of Corporate and Democratic Core 616

Net Cost of HRA Services before Exceptional -9,253 Items 2,224

0 Exceptional Item 51,670

-9,253 Net cost of HRA Services 53,894

HRA share of the operating income and expenditure included in the Comprehensive Income and Expenditure Statement

486 (Gain) / loss on sale of HRA non-current assets -56 2,456 Interest payable and similar charges 13 2,296 -15 Amortisation of premiums and discounts 13 0 1 Revaluation and impairment of Investment Property 10 -2,888 -21 Interest and investment income 13 -28 0 Pension interest cost and expected return on 0 pensions assets -88 Capital grants and contributions receivable -2,076 -6,434 (Surplus) / Deficit for the Year on HRA Services 51,142

126 Mansfield District Council 31 March 2011 Movement on the HRA Statement

2009/10 2010/11 Restated £000 Note £000

-2,044 Balance on the HRA at the end of the previous year -2,917

-6,434 (Surplus) / deficit for the year on the HRA Income 51,142 and Expenditure Statement

5,561 Adjustments between accounting basis and funding 11 -51,618 basis under regulation

-873 Net increase / (decrease) before transfers to or -476 from reserves

0 Transfer to/ from reserves 0

-873 Increase / (decrease) in year on the HRA -476

-2,917 Balance on the HRA at the end of the current year -3,393

127 Mansfield District Council 31 March 2011 Notes to the Housing Revenue Account

1. Dwelling Rents

This represents the total rent due from council tenants excluding any empty properties. The average weekly rent during 2010/2011 was £56.27 (£55.01 in 2009/2010). Voids (empty properties) accounted for 2.94% of the total stock as at 31 March 2011 (2.55% at the 31 March 2010).

2. Non-Dwelling Rents

This represents rent received from the other HRA non-current assets which are not defined dwellings, for example shops and garages.

3. Charges for Services and Facilities

This includes charges for services provided by the Council in connection with the provision of property for occupancy, and comprises:

2009/2010 2010/201 1 £000 £000

District heating 1,663 1,669 Sheltered accommodation / warden aided 21 19 Service charges on leased flats 161 162 Other 0 0 Total 1,845 1,850

4. Supporting People

This grant is provided from the Government for services to vulnerable people such as homeless provision and care of the elderly. During 2010/2011 these services attracted a grant of £2.190million (£2.149million in 2009/2010) to finance the additional provision.

5. Transfers from General Fund for Shared Services

This income relates to services provided by the HRA for the General Fund.

2009/2010 2010/201 1 £000 £000

Tenants and residents participation 11 12 Grass cutting in communal areas 109 111 Warden services 116 122 Homeless and housing advice 451 459 687 704

6. Housing Subsidy

The Council pays subsidy to the Government based on annual assumptions made by the Government regarding the rent that the Council will charge and the expenditure it will incur. The Housing Subsidy payable in 2010/2011 is:

2009/2010 2010/201 1 £000 £000

Management and maintenance 10,687 10,743 Major Repairs Allowance 3,875 3,873 Charges for capital 3,094 2,887 Interest on receipts -7 -5 Guideline rent income -19,030 -19,451 Adjustment for previous year’s Subsidy -56 0 Total -1,437 -1,953

The Housing Subsidy payable for 2010/2011 in the Income and Expenditure Statement differs from the table as it includes the cost of the adjustment relating to 2009/2010 of £56,000. This means that the subsidy figure of £1.381million in 2009/2010 is understated by £56,000, and the subsidy figure of £2.009million shown in 2010/2011 is overstated by £56,000.

7. Sums Directed by the Secretary of State

This line in the HRA represents a reserve item which allows account to be taken of any future directions that the Secretary of State might make. During the 2010/2011 financial year there were no items required to be taken care of.

8. Depreciation

Depreciation calculated for HRA non-current assets during 2010/2011 was:

2009/2010 2010/2011 £000 £000

Council dwellings 3,875 3,873 Non-Current Assets (Other land and 158 159 buildings) Total 4,033 4,032

Depreciation is reversed out of the HRA Income and Expenditure Statement through the Movement on HRA Statement so that it does not impact on the rent chargeable for dwellings.

9. Impairment

During 2010/2011 £58.5million was charged to the Housing Revenue Account for impairment where there had either been a general fall in the value of the asset or whereby the Council incurred spend on assets for which the value of that expenditure did not lead to a pound for pound increase in that asset.

Of the £58.5million impairment, £51.67million is a result of the East Midlands social housing adjusting factor changing. This has been shown as an exceptional item see HRA note 22.

The following table shows how impairment was split between council dwellings and other HRA non current assets.

2009/2010 2010/2011 Restated £000 £000

Council dwellings -3,878 6,796 Non-Current Assets (Other land and 184 -1 buildings) -3,694 6,795 Exceptional item – impairment 0 51,670 Total -3,694 58,465

Impairment is charged directly to services within the “Net cost of HRA services.”

Impairment is reversed out of the HRA Income and Expenditure Statement through the Movement on the HRA Statement so that it does not impact on the rent chargeable for dwellings.

10. Revaluation and Impairment of Investment Property

Revaluation gains and losses, and impairment specific to investment property is shown on the face of the HRA Income and Expenditure Account separate to depreciation and impairment on council dwellings and other land and buildings (non-current assets).

The following table shows the revaluation and impairment amounts charges to the Income and Expenditure Accounts in respect of investment properties:

2009/2010 2010/2011 £000 £000

Revaluation (gains) and losses 0 -2,901 Impairment 1 13 Total 1 -2,888

Revaluation gains and losses and impairment on investment properties is charged under “HRA share of the operating income and expenditure included in the Comprehensive Income and Expenditure Statement,” and included within the surplus or deficit on the HRA for the year.

Both the revaluation amounts and impairment is reversed out of the HRA Income and Expenditure Statement through the Movement on the HRA Statement so that it does not impact on the rent chargeable for dwellings.

11. Note to the Movement on HRA Statement

2009/10 2010/11 Restated £000 £000

Items included in the HRA Income and Expenditure Statement but excluded from the movement on HRA Statement for the Year

0 Difference between amounts charged to income and 0 expenditure for amortisation of premiums and discounts and the charge for the year determined in accordance with statute

3,692 Difference between any other item of income and -55,578 expenditure determined in accordance with the Code and determined in accordance with statutory requirement

-486 (Gains) / loss on sale of HRA non-current assets 56

225 Net charges made for retirement benefits in -241 accordance with the Code

0 Sums directed by the Secretary of State to be debited 0 or credited to the HRA that are not income or expenditure in accordance with the Code

3,431 -55,763

Items not included in the HRA Income and Expenditure Statement but included from the movement on HRA Statement for the year

-157 Transfer to/(from) Major Repairs Reserve -159

0 Transfer to/(from) Housing Repairs Account 0

0 Employer's contribution payable to the County 0 Council's pension and retirement benefits payable direct to pensioners

0 Voluntary set aside for debt repayment 0

88 Government Grants 2,075

0 Amounts treated as revenue expenditure in -257 accordance with the Code but which are classifies as capital expenditure by statute

2,199 Capital expenditure funded by the HRA 2,486 2,130 4,145

5,561 Net additional amount required by statute to be -51,618 debited / (credited) to the HRA Statement for the year

12. Transfer from Housing Repairs Account

The Council does not operate a separate Housing Repairs Account.

13. Capital Charges

The HRA receives a proportion of the interest received by the Council in respect of its cash management. There is a statutory calculation (Item 8 Credit) which determines the amount received.

Conversely, the HRA also pays a proportion of the interest owed by the Council for loans that have been taken out. The Item 8 Debit, which is again a statutory calculation, determines the amount payable.

2009/2010 2010/2011 £000 £000

Item 8 debit 2,456 2,296 Item 8 credit -36 -28

14. Revenue Expenditure Funded from Capital Under Statute

During 2010/2011, £257,000 revenue expenditure funded from capital under statute has been charged to the HRA.

15. Rent Arrears

The arrears out-standing at the 31 March 2011 for rent not paid to the Council is shown in the table below. The figures in respect of rent due are shown separately to the debts out-standing in respect of the charges for the provision of services and facilities.

At 31 At 31 March March 2010 2011 £000 £000

Rent Arrears Former tenants 542 446 Current tenants 619 567 Service and Facilities Arrears Former tenants 11 14 Current tenants 35 30 1,207 1,057 Outstanding debts as a proportion of gross rent due (rent only) Former tenants 2.87% 2.34% Current tenants 3.28% 2.97%

Bad debts written off in the year amounted to £388,000. The total provision in respect of the £1.018million outstanding debts is £546,000. In 2009/2010 bad

133 Mansfield District Council 31 March 2011 debts of £49,000 were written off with the total provision being £1.157million with outstanding debts of £637,000.

16. Contribution to Pension Reserves

In order to reconcile the actual payments made to the Nottinghamshire County Council pension scheme to the reduced charges shown within the Housing Revenue Account in respect of the assessed value of employer’s contributions, it is necessary for a contribution to be made from the HRA to the Pensions reserve.

17. Housing Stock

At the 31 March 2011, the Council’s housing stock consisted of the following:

Number of Dwellings Houses Bungalows Flats and Total maisonettes

Bedsits 0 0 63 63 1 bedroom 4 1,274 1,080 2,358 2 bedroom 853 567 594 2,014 3 bedroom 2,075 27 22 2,124 4 or more bedrooms 115 2 1 118 Total dwellings 3,047 1,870 1,760 6,677 Hostel properties 40 Garages 1,129 Total 7,846

The movement in housing stock during the year is analysed as follow:

Stock at 31 March 2010 7,878 Sales, demolitions and disposals -32 Stock at 31 March 2011 7,846

18. Asset Values

The value of the non-current assets held by the HRA at the start of the year and at 31 March 2011 is:

Value At Value At 1 April 31 March 2010 2011 £000 £000

Council dwellings* 218,775 150,346 Operational land and buildings 16,831 16,528 Non-operational land and buildings 10,063 12,926 Total 245,669 179,800

* The value of Council Dwellings assuming vacant possession is £442,194,191 at 1 April 2010 (£437,550,879 at 1 April 2009). This is reduced by 66% in 2010/2011 (50% in 2009/2010) to reflect the economic cost to Government of providing council housing as dwellings are tenanted and therefore are valued at less than open market value.

19. Major Repairs Reserve

The following table shows the movement on the Major Repairs Reserve during the 2010/2011 financial year:

2009/2010 2010/2011 £000 £000

Opening Balance at 1 April 2010 -2,406 -2,406 Depreciation charged to HRA -3,875 -3,873 Financing of capital expenditure 3,875 3,873 Closing Balance at 31 March 2011 -2,406 -2,406

20. Capital Expenditure and Financing on HRA Non-Current Assets

The total amount of capital expenditure incurred in the year is shown in the table below, together with the resources that have been used to finance it:

2009/2010 2010/201 £000 1 £000

Expenditure: Land and other property 72 2,376 Council dwellings 7,263 6,796

Financed by: Capital receipts -1,173 -506 Major Repairs Reserve -3,875 -3,873 Revenue contribution to Capital -2,199 -2,229 Grants and contributions -88 -2,076 Borrowing 0 -231 Earmarked reserves 0 -257 Total 0 0

21. Capital Receipts

Capital Receipts received from the sale of HRA non-current assets were as follows:

2009/2010 2010/2011 £000 £000

Sale of council dwellings* 873 586 Repayment of mortgages 13 9 Disposal of land and other property 71 284 Total 957 879

* Not all of these receipts are available for use by the Council, £405,000 (£648,000 2009/2010) was paid across to the Government in respect of HRA capital receipts.

22. Exceptional Items

There has been a change in the East Midlands social housing adjusting factor on the valuation of the Council’s housing stock. This has been reduced to 66% from 50%. This has resulted in the impairment of the housing stock of £51.67million.

23. Prior Period Adjustments

No prior period adjustments have been made in the Housing Revenue Account.

137 Mansfield District Council 31 March 2011 Collection Fund Statement

2009/10 2010/11 £000 Note £000

Income -41,112 Income from council tax -41,457 Transfers from General Fund -9,375 Council tax benefits -9,631 0 Transitional relief 0 Discounts for prompt payments -27,784 Income Collectable from Business Ratepayers -24,269 Contributions

0 Towards previous year's Collection Fund deficit 0 Adjustment of previous year's Community 0 Charge 0 -78,271 -75,357

Expenditure 50,259 Precepts and demands 3 50,703 Business Rates 27,648 Payment to National Pool 24,138 136 Cost of collection 131 Bad and Doubtful Debts/Appeals 389 Write offs 220 -389 Provisions 0 Contributions Towards previous year's estimated Collection 578 Fund surplus 470 Adjustment of previous year's Community 0 Charge 0 78,621 75,662

350 Movement on Fund Balances 305

-1,169 Balance brought forward -819 -819 Balance Carried Forward -514

Notes to the Collection Fund Statement

1. National Non Domestic (Business) Rates

At 31 At 31 March March 2010 2011

Total Rateable Value – RV (£000) 66,588 68,997 Amount charged per RV (Multiplier) 48.5p 41.4p Small Business Multiplier 48.1p 40.7p a. The amount charged per RV (Multiplier) is determined by the Government. b. As from 1 April, 2005, a Small Business Multiplier was introduced for businesses with a rateable value of less than £15,000. c. All business properties were subject to being re-rated for NNDR purposes as from 1 April 2005. Rateable values are renewed every 5 years.

2. Council Tax

The numbers of chargeable dwellings in each valuation band, together with the Council Tax base, are shown below:

Band Number of Number of Ratio Chargeable Band D to Dwellings Equivalents Band D

A 22,304 14,869 6/9 B 8,277 6,438 7/9 C 5,653 5,025 8/9 D 3,266 3,266 9/9 E 1,274 1,557 11/9 F 326 471 13/9 G 155 258 15/9 H 9 18 18/9 41,264 31,902 Adjustment -408 31,494

The total of the Band D equivalent properties has been reduced by 408, which is the Authorities anticipated allowance for changes in voids, discounts, exemptions and potential bad debts.

3. Precepts and Demands

2009/2010 2010/2011 £000 £000

Nottinghamshire County Council 37,578 37,579 Mansfield District Council 5,675 5,817 Nottinghamshire Police Authority 4,813 5,042 Nottinghamshire Fire and Rescue Service 2,133 2,195 Warsop Parish Council 60 70 Total 50,259 50,703

Mansfield District Council

ANNUAL GOVERNANCE STATEMENT

2010/2011

1. Scope of Responsibility

1.1 Mansfield District Council is responsible for ensuring that its business is conducted in accordance with the law and proper standards, and that public money is safeguarded and properly accounted for, and used economically, efficiently and effectively. Mansfield District Council also has a duty under the Local Government Act 1999 to make arrangements to secure continuous improvement in the way in which its functions are exercised, having regard to a combination of economy, efficiency and effectiveness.

1.2 In discharging this overall responsibility, Mansfield District Council is responsible for putting in place proper arrangements for the governance of its affairs, facilitating the effective exercise of its functions, and which includes arrangements for the management of risk.

1.3 Mansfield District Council has approved and adopted a code of corporate governance, which is consistent with the principles of the CIPFA/SOLACE Framework Delivering Good Governance in Local Government. A copy of the code is on our website or can be obtained from the Civic Centre, Chesterfield Road South, Mansfield, NG19 7BH. This statement explains how Mansfield District Council has complied with the code and also meets the requirements of regulation 4(3) of the Accounts and Audit Regulations 2011 in relation to the publication of an annual governance statement.

2. The Purpose of the Governance Framework

2.1 The governance framework comprises the systems and processes, and culture and values, by which the authority is directed and controlled and its activities through which it accounts to, engages with and leads the community. It enables the authority to monitor the achievement of its strategic objectives and to consider whether those objectives have led to the delivery of appropriate, cost-effective services.

2.2 The system of internal control is a significant part of that framework and is designed to manage risk to a reasonable level. It cannot eliminate all risk of failure to achieve policies, aims and objectives and can therefore only provide reasonable and not absolute assurance of effectiveness. The system of internal control is based on an ongoing process designed to identify and prioritise the risks to the achievement of Mansfield District Council’s policies, aims and objectives, to evaluate the likelihood of those risks being realised and the impact should they be realised, and to manage them efficiently, effectively and economically.

2.3 The governance framework has been in place at Mansfield District Council for the year ended 31 March 2011 and up to the date of approval of the statement of accounts.

3. The Governance Framework

Vision and Priorities

3.1 The Council’s vision and priorities are contained in its Corporate Plan, which is reviewed and updated on an annual basis as part of the annual strategic planning and budget development process. All departments have service delivery plans which link to the Corporate Plan and are monitored on a regular basis.

The vision of Mansfield District Council is to:

“create a positive image of Mansfield District to develop people, businesses and investment in the area, and to improve confidence, pride and dignity, so that everyone can enjoy a good quality of life in their neighbourhoods”

The Council’s vision defines its priorities and what it is trying to achieve. How it will do this is defined by three broad corporate values of “Quality”, “Respect” and “Openness”.

Underpinning its values is the Council’s commitment to equality which is exemplified by its achievement of Level 3 of the Equality Standard (externally assessed) and currently self assessed at Level 4.

The priorities for 2010/2011 are to:

 Revitalise Our District, Town Centres and Neighbourhoods  Reduce Crime and Disorder  Achieve Decent Homes for All  Develop a High Quality, Clean, Green and Pleasant Environment  Ensure Effective Leadership and Management

3.2 The Council’s Medium Term Financial Strategy supports the Corporate Plan and identifies its financial implications. In carrying out its budget setting process, the Council aligns resources to priority services and ensures new developments of service are in line with its priorities.

3.3 The Council has also established a process to identify efficiencies and savings to achieve its corporate aims.

3.4 Mansfield’s Local Strategic Partnership (MASP) brings together a wide range of people and organisations in a single co-ordinated strategic framework for the development, implementation and monitoring of the Community Strategy which sets a shared vision and agreed priorities for the district of Mansfield.

Quality of Services

3.5 The Council has invested in establishing feedback mechanisms for service users in accordance with its Consultation Strategy. These take various forms including a Citizens’ Panel which is used to measure satisfaction and more detailed work involving them in service improvements and design. All aspects of customer feedback are used to shape strategy and service delivery including focus groups, customer experience feedback and more formal questionnaires. The Council has an ongoing commitment to community engagement and empowerment through initiatives such as participatory budgeting.

3.6 The Council has a performance management software package which brings together all the Council’s performance data in one place and enables effective monitoring of performance in respect of key indicators.

3.7 The Council has approved a Business Transformation Strategy which has the principal objective of supporting, across the whole Council, excellent value for money, customer satisfaction and outcome based performance underpinned by customer focused services. The strategy aims to provide direct intervention support, identified through health checks and an up to date diagnostic position statement of all services and where appropriate business cases that will recommend the most appropriate level and method of intervention. It is also required to support the Council’s Medium Term Financial Strategy by generating cash efficiencies through productivity improvements.

3.8 The Council’s Procurement Strategy aims to promote effective procurement across the whole organisation and ensures that procurement planning supports the Council’s Corporate Plan and Business Transformation Strategy. The Corporate Contracts Register assists in ensuring efficient contract management and contributes to the effective monitoring of Council spending and the delivery of value for money.

3.9 The Council has in place a corporate complaints system which ensures effective monitoring and action is taken where appropriate. Lessons learnt from the monitoring of complaints are also fed back to improve service delivery.

Constitutional Matters

3.10 The District Council has adopted a constitution, which sets out how the Council operates, how decisions are made and the procedures which are followed to ensure that these are efficient, transparent and accountable to local people.

3.11 The facilitation of policy and decision making is through the Executive Mayor and Cabinet. Meetings are open to the public except where exempt or confidential matters are being discussed. In addition portfolio holders and senior officers can make decisions under delegated powers. The Council publishes a Forward Plan which contains details of key decisions to be made by the Council.

3.12 The Managing Director as Head of Paid Service has a duty to monitor and review the operation of the Council’s Constitution to ensure its aims and principles are given full effect.

Codes of Conduct

3.13 The Council has adopted codes of conduct for both members and officers and also has a protocol for member/officer relationships. The codes include reference to the need to declare any interest which may conflict with the individual’s role at the Council, with registers maintained for any such interest to be recorded and monitored.

3.14 Compliance with the member and officer codes of conduct is monitored by the Council’s Standards and Audit Committees respectively.

3.15 The Council has in place a whistleblowing code which ensures that any referrals under the code are fully investigated, with findings reported to the Managing Director.

Policies, Procedures, Laws and Regulations

3.16 The Head of Corporate Administration is designated as the Council’s Monitoring Officer. It is the function of the Monitoring Officer to ensure compliance with established policies, procedures, laws and regulations. After consulting with the Head of Paid Service and Chief Finance Officer, the Monitoring Officer will report to Full Council if she considers that any proposal, decision or omission would give rise to unlawfulness or maladministration. Such a report will have the effect of stopping the proposal or decision being implemented until the report has been considered.

3.17 The financial management of the authority is conducted in accordance with the relevant provisions of the Constitution and the Council’s Financial Regulations. The Council has designated the Head of Finance, Property and Revenue Services as the Chief Finance Officer in accordance with Section 151 of the Local Government Act 1972.

3.18 The Council’s Local Code of Corporate Governance fully conforms with the governance requirements of the CIPFA Statement on the Role of the Chief Financial Officer in Local Government.

3.19 The Council maintains an Internal Audit Service, which operates in accordance with the Accounts and Audit Regulations 2011 and the CIPFA Code of Practice for Internal Audit in Local Government in the UK. The overall strategy of Internal Audit is to deliver a risk based audit plan in a professional, independent manner to provide the authority with an opinion on the level of assurance it can place upon the internal control environment and to make recommendations to improve it. One of its key objectives is to promote good corporate governance by raising awareness of best practice in respect of internal controls and the requirements of relevant Council strategies and regulations such as financial and contract regulations, anti-fraud strategy and whistleblowing code.

3.20 The Council has robust and effective policies and procedures relating to the use of resources and the corporate governance framework, including Financial Regulations and Contract Procedure Rules, Procurement Strategy, Scheme of Delegation, IT Strategy, Anti-Fraud Strategy and Whistleblowing Code. There is a mechanism in place for measuring the effectiveness of the Anti-Fraud Strategy with an annual report being presented to the Audit Committee. The Council’s Financial Regulations and Contract Procedure Rules have been revised during 2010/2011

Risk Management

3.21 The Council is committed to the effective management of risk. The Council’s employees, partners, stakeholders, assets and ability to deliver its objectives and services are constantly affected by risk. However, the Council recognises that risk can be both positive and negative. The Council accepts its legal, moral and fiduciary duties in taking informed decisions about how best to mitigate risk, whilst still maximising opportunity and benefits from positive risk.

3.22 The Council has a well established risk management process in place, including an approved Strategic Risk Policy, which outlines the methodology to be adopted to provide a comprehensive framework for the management of risk throughout the Council. In addition a strategic risk register is in place which identifies the risks and how they are to be effectively managed and mitigated.

3.23 The Council has a Strategic Risk Co-ordination Group which has defined terms of reference to develop a comprehensive performance framework for risk management and to embed risk management across the authority. In addition the Council’s Audit Committee is responsible for monitoring the effective development and operation of risk management.

Audit Committee

3.24 The Council has an Audit Committee which is fully compliant with the guidance provided in CIPFA’s Audit Committees – Practical Guidance for Local Authorities.

The Constitution states that:

“The purpose of the Audit Committee as a Sub-Committee of the Council, is to provide independent assurance of the adequacy of the risk management framework and the associated control environment, independent scrutiny of the authority’s financial and non-financial performance to the extent that it affects the authority’s exposure to risk and weakens the control environment, and to oversee the financial reporting process”

Development and Training Needs

3.25 There is an induction programme in place for newly appointed officers and members, with their ongoing training needs being determined by means of one to one discussions with members and annual interviews of staff in accordance with the Council’s personal development scheme.

3.26 There are opportunities for members and officers to update their knowledge on a regular basis by using the Council’s training and development programme, which includes training on corporate governance.

3.27 The Council also has a peer coaching and mentoring programme for members supported by IDeA and has introduced a management development programme for officers based upon the Council’s management competencies.

3.28 In 2010/2011, the Council was awarded the Member Development Charter for the East Midlands and there is a linked comprehensive member development programme in place.

3.29 The Council’s Employee Charter gives a commitment to embrace national training initiatives and details the rights and responsibilities of staff in relation to training and development.

Partnerships

3.30 The Council’s Partnership Protocol states that all members of any partnership should be responsible for ensuring that they meet the highest standards of governance and lists the key governance requirements that they should meet.

3.31 The Council maintains a partnership register as a comprehensive live record of its involvement in partnership working, demonstrating the linkage to Corporate Plan activities.

4. Review of Effectiveness

4.1 Mansfield District Council has responsibility for conducting, at least annually, a review of the effectiveness of its governance framework including the system of internal control. The review of effectiveness is informed by the work of the senior managers within the authority who have responsibility for the development and maintenance of the governance environment, the Head of Internal Audit’s annual report, and also by comments made by the external auditors and other review agencies and inspectorates.

4.2 The process that has been applied in reviewing the effectiveness of the Council’s governance framework includes:

 The Council has carried out a self assessment of its compliance with the CIPFA Statement on the Role of the Head of Internal Audit in Local Government and any areas identified where full compliance had not already been achieved were addressed during 2010/2011

 The Internal Audit Manager’s review of the Council’s level of compliance with its adopted Local Code of Corporate Governance, which was reported to the Audit Committee, concluded that it had achieved a high level with no significant issues being identified.

 The Council’s significant partnerships were evaluated during 2010/2011 by Internal Audit against the Partnerships Protocol with the findings and recommended action plan being reported to management.

 The Standards Committee regularly monitors members’ compliance with the Code of Conduct and considers any action required from this monitoring. No significant issues have been identified.

 The Council has a number of Select Commissions which provide an overview and scrutiny role. They can “call in” a decision which has been made by the Executive or an officer (where the decision is a key decision) but not yet implemented, to enable them to consider whether

they consider the decision is appropriate. They also enquire into issues which are of local concern.

 The Audit Committee received a variety of reports during 2010/2011 both from internal assurance providers and from external agencies in accordance with its terms of reference as detailed in the Council’s constitution and has proved to be effective in its role.

 Internal Audit is responsible for monitoring the quality and effectiveness of systems of internal control. It has undertaken planned reviews of internal control procedures across all departments and across a range of functions in the Council. A risk assessment model is used to formulate a three year audit plan from which the annual workload is identified. The plan is also aligned to the Council’s strategic risks. The reporting process for Internal Audit requires the findings and recommendations from each review, along with the agreed action plan to be reported to senior officers and members and to the Audit Committee. The process includes quarterly reviews of the agreed actions to ensure that they have been implemented.

 The Internal Audit Section is subject to regular inspection by the Council’s external auditors who place reliance on the work carried out by the section.

 In accordance with the Accounts and Audit Regulations the system of internal audit has to undergo an annual effectiveness review. It has been assessed against CIPFA standards and included a peer review element from a neighbouring authority. The review concluded that the system was performing to an excellent standard.

 The Audit Manager’s Annual Report for 2010/2011 concluded that the internal control environment was both robust and effective and therefore an unqualified opinion was given. This opinion was based upon a methodology which assigns assurance levels to individual review findings and standards that need to be achieved by the overall internal control environment.

 External Audit’s Annual Governance report, which summarises the findings from their 2009/2010 audit work gave an unqualified opinion on the financial statements and did not identify any material weaknesses in the design or operation of internal control.

 Any breaches of the Council’s IT policies are investigated, with the findings reported to ensure that appropriate corrective action has been carried out and to identify any corporate learning opportunities.

5. Significant Governance Issues

5.1 There are two significant issues identified from either the results of the review of the effectiveness of the governance framework undertaken and reported to the Audit Committee, or from other assurance work undertaken during 2010/2011. These are as follows:

 Group Repair Scheme Contributions – Between 2001 and 2004 a total of £187,000 of contributions in respect of 64 properties had not been collected due to the Council failing to issue invoices to the householders for the money to be repaid. The repayment of this amount is unlikely to be successfully pursued as it is now out of time in accordance with the statute of limitations which only provides for any outstanding debt to be pursued for a maximum of 6 years. There are also contributions totalling approximately £285,000 for the period 2005 – 2011 which also have not been invoiced but which are recoverable and will be pursued

 Due to the fact that the Council did not spend a commuted sum of £340,000 from a developer in respect of a S106 Planning Agreement within the specified period, the Council has been required to return the sum to the developer with interest

Both of the above issues are currently the subject of internal investigations and there will be action plans produced in respect of any control weaknesses identified to deliver improvements both within the specific areas and also corporately where appropriate.

Executive Mayor ……………………………….

Date ……………..

Managing Director ……………………………….

Date ………………

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF MANSFIELD DISTRICT COUNCIL

Opinion on the Authority accounting statements

I have audited the accounting statements of Mansfield District Council for the year ended 31 March 2011 under the Audit Commission Act 1998. The accounting statements comprise the Movement in Reserves Statement, the Comprehensive Income and Expenditure Statement, the Balance Sheet, the Cash Flow Statement, the Housing Revenue Account, the Movement on the Housing Revenue Account Statement and Collection Fund and the related notes. These accounting statements have been prepared under the accounting policies set out in the Statement of Accounting Policies.

This report is made solely to the members of Mansfield District Council in accordance with Part II of the Audit Commission Act 1998 and for no other purpose, as set out in paragraph 48 of the Statement of Responsibilities of Auditors and Audited Bodies published by the Audit Commission in March 2010.

Respective responsibilities of the Head of Finance, Property and Revenue Services and auditor

As explained more fully in the Statement of the Head of Finance, Property and Revenue Service’s Responsibilities, the Head of Finance, Property and Revenue Services is responsible for the preparation of the Authority’s Statement of Accounts in accordance with proper practices as set out in the CIPFA/LASAAC Code of Practice on Local Authority Accounting in the United Kingdom. My responsibility is to audit the accounting statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require me to comply with the Auditing Practice’s Board’s Ethical Standards for Auditors.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the accounting statements sufficient to give reasonable assurance that the accounting statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Authority’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Authority; and the overall presentation of the accounting statements. I read all the information in the explanatory foreword to identify material inconsistencies with the audited accounting statements. If I become aware of any apparent material misstatements or inconsistencies I consider the implications for my report.

Opinion on accounting statements

In my opinion the accounting statements:

 give a true and fair view of the state of Mansfield District Council’s affairs as at 31 March 2011 and of its income and expenditure for the year then ended; and  have been properly prepared in accordance with the CIPFA/LASAAC Code of Practice on Local Authority Accounting in the United Kingdom.

Opinion on other matters

In my opinion, the information given in the explanatory foreword for the financial year for which the accounting statements are prepared is consistent with the accounting statements.

Matters on which I report by exception

I have nothing to report in respect of the governance statement on which I report to you if, in my opinion the governance statement does not reflect compliance with ‘Delivering Good Governance in Local Government: a Framework’ published by CIPFA/SOLACE in June 2007.

Conclusion on Authority’s arrangements for securing economy, efficiency and effectiveness in the use of resources

Authority’s responsibilities

The Authority is responsible for putting in place proper arrangements to secure economy, efficiency and effectiveness in its use of resources, to ensure proper stewardship and governance, and to review regularly the adequacy and effectiveness of these arrangements.

Auditor’s responsibilities

I am required under Section 5 of the Audit Commission Act 1998 to satisfy myself that the Authority has made proper arrangements for securing economy, efficiency and effectiveness in its use of resources. The Code of Audit Practice issued by the Audit Commission requires me to report to you my conclusion relating to proper arrangements, having regard to relevant criteria specified by the Audit Commission.

I report if significant matters have come to my attention which prevent me from concluding that the Authority has put in place proper arrangements for securing economy, efficiency and effectiveness in its use of resources. I am not required to consider, nor have I considered, whether all aspects of the Authority’s arrangements for securing economy, efficiency and effectiveness in its use of resources are operating effectively.

Basis of conclusion

I have undertaken my audit in accordance with the Code of Audit Practice, having regard to the guidance on the specified criteria, published by the Audit

Commission in October 2010, as to whether the Authority has proper arrangements for:  securing financial resilience; and  challenging how it secures economy, efficiency and effectiveness.

The Audit Commission has determined these two criteria as those necessary for me to consider under the Code of Audit Practice in satisfying myself whether the Authority put in place proper arrangements for securing economy, efficiency and effectiveness in its use of resources for the year ended 31 March 2011.

I planned my work in accordance with the Code of Audit Practice. Based on my risk assessment, I undertook such work as I considered necessary to form a view on whether, in all significant respects, the Authority had put in place proper arrangements to secure economy, efficiency and effectiveness in its use of resources.

Conclusion

On the basis of my work, having regard to the guidance on the specified criteria published by the Audit Commission in October 2010, I am satisfied that, in all significant respects, Mansfield District Council put in place proper arrangements to secure economy, efficiency and effectiveness in its use of resources for the year ending 31 March 2011.

Certificate

I certify that I have completed the audit of the accounts of Mansfield District Council in accordance with the requirements of the Audit Commission Act 1998 and the Code of Audit Practice issued by the Audit Commission.

John R Cornett

Officer of the Audit Commission

Rivermead House

7 Lewis Court

Grove Park

Enderby

Leicestershire

LE19 1SU

XX September 2011

Glossary of Financial and Accounting Terms

PLEASE NOTE: This glossary provides an explanation of terms, not precise definitions. It should not be used as a substitute for the more detailed and specific definitions given in statute, codes of practice and technical guidance. It should be used in conjunction with explanations provided within and supporting the accounting statements.

ACCOUNTING PERIOD – the period of time covered by the accounts. Normally 12 months commencing on 1 April and finishing on 31 March the following year. The end of the accounting period is the Balance Sheet date.

ACCRUAL – an amount included in the accounts to cover income or expenditure relating to an accounting period but for which payment has not been received or made. This means that income and expenditure is recognised in the accounts when they are earned or incurred, not when money is exchanged.

AGENCY SERVICES – services, which are performed by a local authority, where the authority legally responsible for the service reimburses the agent (the authority doing the work) for the cost of the work, carried out. During 2010/2011, the Council acted as an agent for Nottinghamshire County Council for the maintenance of highways within the District.

BALANCE SHEET – a statement of the recorded assets, liabilities and other balances as they stand in monetary terms, at the end of an accounting period.

BILLING AUTHORITY – a local authority responsible for collecting the council tax and business rates from within its district boundaries (Mansfield is a billing authority).

BUDGET – a statement defining the Council’s policies over a specified period of time (usually an accounting period) in terms of finance.

BUSINESS RATES and the NATIONAL POOL – a fund controlled by central government which collects income from a levy (Business Rates) on local businesses. This levy is based on a national rate in the pound set by central government multiplied by the rateable value of the premises they occupy. This national rate is collected by local councils on behalf of central government and then redistributed among all local authorities on the basis of population. This “grant” is in addition to the main Revenue Support Grant.

CAPITAL RECEIPTS – the proceeds from the sale of council houses, buildings, land and other assets. Capital receipts can be used to finance new capital expenditure, within rules set down by central government, but they cannot be used to finance revenue expenditure.

CAPITAL EXPENDITURE – this includes expenditure on the acquisition of, or major enhancement of fixed assets such as land, property and other structures.

COMMUNITY ASSETS – assets that a local council holds which may have restrictions on their use and disposal. Examples include playing fields and parks.

COUNCIL TAX – the main source of local taxation to councils. It is levied on households within its area by the billing authority and distributed to the County Council, Police and Fire Authorities, and to meet the cost of its own general fund services.

COUNCIL TAX BANDS – each property in a local authority’s area is valued by Central Government’s Valuation Office Agency, and placed in one of 8 bands ranging from A to H. Each Band is averaged out in relation to Band D, bands A to C paying less, and bands E to H paying more on an increasing scale.

COUNCIL TAX BENEFIT – assistance provided by billing authorities to adults on low incomes to help them pay their council tax bill. The cost to authorities of council tax benefit is largely met by a government subsidy.

CREDITORS – an amount owed by a council for work done, goods received or services rendered relating to the accounting period, but for which payment has not yet been made.

CURRENT ASSETS – an amount held at the balance sheet date, which will be used within the following accounting period; for example, stock, cash and debtors.

CURRENT LIABILITY – an amount owing at the balance sheet date, which will be paid in the next accounting period; for example, creditors, cash and loan repayments.

DEBTORS – an amount owing to a council relating to the accounting period, but for which money has not yet been received.

DEPRECIATION – the reduction in value of a fixed asset due to age or deterioration through usage.

EARMARKED RESERVES – amounts put aside to meet specific liabilities in the future. The main Council reserves are its Capital and Insurance Funds.

FINANCE LEASE – a form of borrowing, usually for land and buildings, where the ownership of the fixed asset eventually passes over to the Council.

NON-CURRENT ASSETS – an asset, which has a value (usually large) to the Council over a number of years; for example, land, buildings and equipment. Such assets result from capital expenditure.

GENERAL FUND – the main revenue fund of the Council. Day-to-day spending on services is met from this fund. Mansfield’s general fund is split between its main service such as Leisure and Regulatory Services. Expenditure on the provision of Housing, however, must be charged to a separate Housing Revenue Account (HRA).

GENERAL RESERVES – amounts put aside, but not allocated to meet, any future spending commitments. The Council’s main general reserves are its General Fund and Housing Revenue Account Balances.

HOUSING BENEFIT – an allowance to persons on low income to meet, in whole or part, their rent. Local authorities pay benefit but central government refunds most of the cost of the benefits and of the running costs of administering the service. Benefit paid to the authority’s own tenants is known as rent rebate and that paid to private sector tenants as rent allowance.

HOUSING SUBSIDY – a government grant paid to housing authorities towards the cost of providing, managing and maintaining council dwellings.

IMPAIRMENT – this reflects a REDUCTION in the market value of a fixed asset due to significant changes in the market (i.e. introduction of new technology), obsolescence, or damage, etc.

MINIMUM REVENUE PROVISION – the minimum amount that must be charged against the Council’s revenue accounts each year, as a provision to repay borrowing and finance leases.

NET BOOK VALUE – the amount at which fixed assets are included (valued) in the balance sheet, i.e. their historic value or current valuation less depreciation.

NET CURRENT REPLACEMENT COST – the cost of replacing or recreating a fixed asset in its existing condition or existing use.

NET REALISABLE VALUE – the open market value of the asset in its existing use.

OPERATING LEASE – a type of rental agreement, usually for computer equipment, office furniture and equipment, where the Council never owns the asset.

PRECEPT – the levy made by precepting authorities on billing authorities, requiring the latter to collect income from council taxpayers on their behalf, for services they provide in the billing authorities area.

PRECEPTING AUTHORITIES – those authorities who are not billing authorities, e.g. “major” authorities such as the County Council and Police and Fire Authorities and “local precepting authorities” such as Parish, Town or Community Councils.

PROVISIONS – pre-determined amounts put aside in the accounts for liabilities or losses which are certain or very likely to occur, but the amounts involved or the date when they need to be settled are uncertain.

PUBLIC WORKS LOAN BOARD – a central government agency, which provides loans to local authorities.

REVENUE EXPENDITURE – running costs of services, which include employees, premises, transport, interest, supplies and services.

REVENUE SUPPORT GRANT – the main general grant paid by central government to aid general fund services.

WORK IN PROGRESS – the cost of work done on an uncompleted project at the balance sheet date.