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Statement of Accounts – 2014-15

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Statement of Accounts – 2014-15 Statement of Accounts 2014-15 www.norfolk.gov.uk Contents FOREWORD TO THE ACCOUNTS 5 STATEMENT OF RESPONSIBILITIES 15 INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF NORFOLK COUNTY COUNCIL 16 MOVEMENT IN RESERVES STATEMENT 18 COMPREHENSIVE INCOME AND EXPENDITURE STATEMENT 19 BALANCE SHEET 20 CASH FLOW STATEMENT 21 NOTES TO THE CASH FLOW STATEMENT 21 NOTES TO THE FINANCIAL STATEMENTS: 23 1. ACCOUNTING POLICIES 23 2. ACCOUNTING STANDARDS ISSUED , NOT ADOPTED 36 3. CRITICAL JUDGEMENTS IN APPLYING ACCOUNTING POLICIES 36 4. ASSUMPTIONS MADE ABOUT THE FUTURE AND OTHER MAJOR SOURCES OF ESTIMATION UNCERTAINTY 37 5. MATERIAL ITEMS OF INCOME AND EXPENSE 37 6. EVENTS AFTER THE BALANCE SHEET DATE 38 7. ADJUSTMENTS BETWEEN ACCOUNTING BASIS AND FUNDING BASIS UNDER REGULATIONS 38 8. TRANSFERS TO /FROM EARMARKED RESERVES 41 9. COMPREHENSIVE INCOME AND EXPENDITURE STATEMENT : OTHER OPERATING EXPENDITURE 45 10. COMPREHENSIVE INCOME AND EXPENDITURE STATEMENT : FINANCING AND INVESTMENT INCOME AND EXPENDITURE 45 11. COMPREHENSIVE INCOME AND EXPENDITURE STATEMENT : TAXATION AND NON -SPECIFIC GRANT INCOME 45 12. PROPERTY , PLANT AND EQUIPMENT 46 13. HERITAGE ASSETS 49 14. INVESTMENT PROPERTIES 51 15. FINANCIAL INSTRUMENTS 51 16. DEBTORS 53 17. CASH AND CASH EQUIVALENTS 54 18. ASSETS HELD FOR SALE 54 19. CREDITORS 54 20. PROVISIONS 55 21. BALANCE SHEET : USABLE RESERVES 55 22. BALANCE SHEET : UNUSABLE RESERVES 56 23. AMOUNTS REPORTED FOR RESOURCE ALLOCATION DECISIONS 59 24. TRADING OPERATIONS 62 25. AGENCY SERVICES 62 26. JOINT COMMITTEES 62 27. POOLED FUNDS 62 28. MEMBERS ALLOWANCES 63 29. OFFICERS REMUNERATION 63 30. EXTERNAL AUDIT COSTS 66 31. DEDICATED SCHOOLS GRANT 66 32. GRANT INCOME 67 33. RELATED PARTY TRANSACTIONS 69 34. CAPITAL EXPENDITURE AND CAPITAL FINANCING 70 35. LEASES 71 36. PFI AND SIMILAR CONTRACTS 73 37. IMPAIRMENT LOSSES 74 38. PENSION SCHEMES ACCOUNTED FOR AS DEFINED CONTRIBUTION SCHEMES 74 39. DEFINED BENEFIT PENSION SCHEMES 75 40. CONTINGENT LIABILITIES 81 41. NATURE AND EXTENT OF RISKS ARISING FROM FINANCIAL INSTRUMENTS 81 42. FOUNDATION SCHOOLS 84 43. FUNDS ADMINISTERED FOR THIRD PARTIES 85 Statement of Accounts 2014-15 - 3 - Norfolk County Council 44. TRUST FUNDS 85 NORFOLK FIRE FIGHTERS PENSION FUND ACCOUNTS 86 GROUP ACCOUNTS 88 GROUP MOVEMENT IN RESERVES STATEMENT 92 GROUP COMPREHENSIVE INCOME AND EXPENDITURE STATEMENT 94 GROUP BALANCE SHEET 95 GROUP CASH FLOW STATEMENT 96 NOTES TO THE GROUP CASH FLOW STATEMENT 96 NOTES TO THE GROUP ACCOUNTS 98 1. ACCOUNTING POLICIES 98 2. GROUP COMPREHENSIVE INCOME AND EXPENDITURE STATEMENT 99 3. TAX EXPENSES OF GROUP ENTITIES 99 4. PROPERTY , PLANT AND EQUIPMENT 100 5. INTANGIBLE ASSETS 102 6. INVENTORIES 102 7. DEBTORS 103 8. CASH AND CASH EQUIVALENTS 103 9. CREDITORS 103 10. DEFINED BENEFIT PENSION SCHEMES 103 11. RESERVES 106 12. LEASING 106 13. FINANCIAL INSTRUMENTS 107 NORFOLK PENSION FUND ACCOUNTS 109 INDEPENDENT AUDITOR’S REPORT ON NORFOLK PENSION FUND ACCOUNTS TO THE MEMBERS OF NORFOLK COUNTY COUNCIL 110 GLOSSARY OF TERMS 152 Statement of Accounts 2014-15 - 4 - Norfolk County Council Foreword to the Accounts Introduction This foreword provides a brief analysis of the Council’s performance and financial position during the year, and assists in the interpretation of the financial statements, including the Group Accounts. It contains a commentary on the major influences affecting the authority’s financial results. The foreword includes the following sections: • An introduction to Norfolk County Council • Financial highlights • Outlook for the future • Explanation of the financial statements • Further information An introduction to Norfolk County Council Key statistics Norfolk County Council is a large shire county representing the whole of Norfolk. The Council’s priorities are real jobs, good infrastructure, excellence in education and supporting vulnerable people, and key statistics include: • Population: 870,100 (mid 2013 estimate) • Gross Council expenditure £1.4bn (2014-15) • Council Tax: £308m (2014-15) • Miles of roads maintained: 6,116 • School children enrolled: 109,961 (as at 4/2/2015) • Community Care Assessments: 17,098 (2013-14) Council Services in Norfolk Local Government services in Norfolk are currently provided by the County Council, seven district/borough councils and numerous town and parish councils. Norfolk County Council is one of 27 Shire County Councils in England. County Council Services include Adult Social Services Environmental Policy Records Office Building Conservation Fire Service Registrars Children’s Services Highways (incl. Footpaths) Road and Footway Lighting Coroners Libraries Strategic Planning Countryside Museums Tourism County Farms Planning Trading Standards Economic Development Public Health Waste Management Emergency Planning Public Transport Support Youth Service Democracy Norfolk County Council has 84 elected members each representing an electoral division of up to 10,000 voters. Every four years the people of each division elect one councillor. Following the last election in May 2013, no one party has overall control. At its Annual General Meeting on 27 May 2014, the Council agreed to move from a Cabinet system to a Committee structure from that date. Under a committee system decisions are made by all-party committees with membership reflecting the overall political makeup of the Council. Unlike the previous cabinet system, there is no executive/scrutiny split. Instead, committees debate, challenge and make decisions. The five service committees are Adult Social Care, Children’s, Communities, Environment Development and Transport, and Policy and Resources, supported by sub- and specialist committees. Statement of Accounts 2014-15 - 5 - Norfolk County Council The Council’s ambition is for everyone in Norfolk to succeed and fulfil their potential achieving a better, safer future, based on education, economic success and listening to local communities. The Council aims to fulfil this Ambition through four Priorities: • Real jobs • Good infrastructure • Excellence in education • Supporting vulnerable people The following section looks at progress within each of these priority areas. Excellence in education Latest figures show that Norfolk tops the region for the number of eligible two year olds getting free early years education. The “Good School for Every Norfolk Learner” strategy has continued to deliver improvements and the proportion of schools judged by Ofsted to be ‘good’ and ‘outstanding’ has risen from 59% in autumn 2012 to 76% in May 2015. Norfolk rose almost 20 places in the national GCSE league tables, up 19 places from last year in the Gold Standard measure of pupils achieving 5+ A* - C, including English and maths. But educational standards in Norfolk are not yet good enough and there’s plenty more to do – especially at Key Stages 2 and 4. “Norfolk to Good and Great” (“N2GG”) has been the flagship school improvement strategy and has drawn in local, national and international expertise. 83% of schools inspected since joining N2GG have been judged ‘Good’ in Ofsted inspections. The Compass Approach - Norfolk County Council, Norfolk and Suffolk NHS Foundation Trust, the Benjamin Foundation and the Short Stay School for Norfolk have been awarded more than £1m from the Department for Education for a pioneering project that could prevent up to 180 children coming into care each year with significant benefits, financial and otherwise in an area of continuing financial pressure. Real jobs The €315m France Channel England Interreg VA Programme is a great achievement. Norfolk County Council is the first English Authority to ever have been awarded the management of this programme. Following significant progress over the past 12 months the first call for projects was launched in March 2015, with 200 projects in the pipeline. The first phase of a solar farm on the Norfolk County Council-owned Scottow Enterprise Park, located on the former RAF Coltishall airbase, is now up and running. Generating 32 Megawatts (MW) of renewable energy, the first phase of the solar farm is big enough to power 10,000 homes. Hethel Innovation opened its third extension to Hethel Engineering Centre in April 2014.. Hethel Engineering Centre has grown into an internationally renowned centre for engineering excellence, with new tenants coming from across the UK, Canada, Germany, Nigeria and Sweden. The 16,300 acre County Farms Estate is leased to over 260 primarily agricultural tenants. County farms generate revenue income and capital receipts for the Council, as well as giving aspiring farmers the chance to run their own farms, enhancing the natural environment and extending public access where possible. Other important initiatives include the Apprenticeships Norfolk Network set up to work together to increase the number, range and quality of apprenticeships in Norfolk, and Norfolk’s membership of a new Joint Committee set up to cement and strengthen links between Jiangsu, China, and the East of England. Good infrastructure Completing the dualling of the A11 in December 2014 sent out the positive signal that, more than ever before, Norfolk is a great place to do business and to visit. It has been calculated that this will deliver £700m in economic benefits for our county over the next 60 years. Work is well underway on constructing the Postwick Hub. Granted £19m of government funding, the scheme will increase the capacity of the A47 Postwick junction and provide access to new business and housing developments in the area. The improved junction will also provide
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