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Draft Statement of Accounts 2020/21

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Draft Statement of Accounts 2020/21 LINCOLNSHIRE COUNTY COUNCIL 2020-21 STATEMENT OF ACCOUNTS CONTENTS Notes supporting the Balance Sheet: Note 15. Property, Plant & Equipment 62 Note 16. Heritage Assets 65 Note 17. Investment Properties 68 Note 18. Intangible Assets 69 Note 19. Financial Instruments 71 Note 20. Debtors 84 Note 21. Assets Held For Sale 85 Note 22. Cash and Cash Equivalents 85 Note 23. Creditors 86 Note 24. Provisions 86 Note 25. Other Long Term Liabilities 87 Note 26. Private Finance Initiatives (PFI) and Similar Contracts 88 Note 27. Leases 90 Note 28. Pension Schemes Accounted for as Defined Contribution 93 Schemes Note 29. Defined Benefit Pension Schemes (LGPS) 94 Notes supporting the Cash Flow Statement: 105 Note 30. Operating Activities 106 Note 31. Investing Activities 106 Note 32. Financing Activities Other Notes supporting the Financial Statements: 108 Note 33. Pooled Budgets 111 Note 34. Members' Allowances 111 Note 35. Officers' Remuneration 114 Note 36. Exit Packages 114 Note 37. Termination Benefits 115 Note 38. External Audit Costs 115 Note 39. Dedicated Schools Grant 116 Note 40. Related Parties Lincolnshire County Council / Statement of Accounts / 2020-2021 3 CONTENTS Note 41. Capital Expenditure & Capital Financing 119 Note 42. Contingent Liabilities 120 Note 43. Contingent Assets 120 Note 44. Statement of Accounting Policies 121 Lincolnshire Fire and Rescue Pension Fund 154 Lincolnshire County Council Pension Fund 158 Audit Opinions 201 Annual Governance Statement 203 Glossary of Terms 237 Lincolnshire County Council / Statement of Accounts / 2020-2021 4 INTRODUCTION TO THE ACCOUNTS The Statement of Accounts for the year 2020-21 is set out on pages 28 to 31. The purpose of the published Statement of Accounts is to give electors, local tax payers and service users, elected members, employees and other interested parties clear information about the Council’s finances. It should answer such questions as: What did the Council’s services cost in the year of account? Where did the money come from? What were the Council’s assets and liabilities at the year-end? The Narrative Report provides a general introduction to the Accounts that focus on explaining the more significant features of the Council’s financial activities during the period 1 April 2020 to 31 March 2021. It includes a review of non-financial performance indicators and an assessment of future financial and economic developments that could affect the Council, as well as a summary of the impacts of the coronavirus pandemic. Together these statements provide evidence of the economy, efficiency and effectiveness of the Council's use of resources over the financial year. The Statement of Responsibilities for the Statement of Accounts details the financial responsibilities of the Council and the Executive Director of Resources. The Comprehensive Income and Expenditure Statement for the period 1 April 2020 to 31 March 2021 shows the accounting cost of providing services throughout the year in accordance with generally accepted accounting practices, rather than the amount to be funded from taxation. Authorities raise taxation to cover expenditure in accordance with statutory requirements; this may be different from the accounting cost. The taxation position is shown in both the Expenditure and Funding Analysis and the Movement in Reserves Statement. The Movement in Reserves Statement for the period 1 April 2020 to 31 March 2021 shows the movement from the start of the year to the end on the different reserves held by the Council. Reserves are analysed into ‘usable reserves’ (i.e. those that can be applied to fund expenditure or reduce local taxation) and other ‘unusable reserves’. The Statement shows how the movements in year are broken down between gains and losses incurred in accordance with generally accepted accounting practices and the four statutory adjustments required to return to the amounts chargeable to council tax for the year. The Net Increase/Decrease line shows the statutory General Fund Balance and movement in the year following those adjustments. The Balance Sheet as at 31 March 2021 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 are usable reserves Lincolnshire County Council / Statement of Accounts / 2020-2021 5 INTRODUCTION TO THE ACCOUNTS money that the Council may use to provide services, subject to the need to maintain a prudent level of reserves and any statutory limitations on their use (for example, the Capital Receipts Reserve may only be used to fund capital expenditure or repay debt). The second category of reserves is those that the Council cannot use to provide services. This category includes reserves that hold unrealised gains and losses (for example, the Revaluation Reserve); where amounts would only become available to provide services if the assets are sold; and reserves that hold timing differences shown in the Movement in Reserves Statement line ‘Adjustments between accounting basis and funding basis under regulations’. The Cash Flow Statement for the period 1 April 2020 to 31 March 2021 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 (i.e. borrowing) to the Council. The Notes to the Accounts summarise significant accounting policies, further information and detail of entries in the prime Statements named above and other explanatory information. The Audit Opinions contain the External Auditor’s report and opinion and covers the Council's Financial Statements, Lincolnshire County Council Pension Fund and the Lincolnshire Fire and Rescue Pension Fund. The Annual Governance Statement identifies the systems that the Council has in place to ensure that its business is conducted in accordance with the law and proper standards, and that public money is safeguarded and properly accounted for. The Lincolnshire Pension Fund shows the operation of the Fund run by the Council for its own employees and employees of the seven District, City and Borough Councils in Lincolnshire along with other scheduled and admitted bodies. The Lincolnshire Fire and Rescue Pension Fund Account shows the operation of the Pension Fund run by the Council for its own Fire-fighter employees. Lincolnshire County Council / Statement of Accounts / 2020-2021 6 NARRATIVE REPORT 1. Introduction Welcome to Lincolnshire County Council's Statement of Accounts for the financial year 1st April 2020 to 31st March 2021. This Narrative Report to the accounts provides background information about Lincolnshire County Council, highlights key non-financial information, financial information in the accounts, reviews performance in the year and explains any significant areas of risk and opportunity for us. It then looks forward to the future to give a flavour of what to expect in 2021-22 and beyond, including information about how the coronavirus pandemic has affected both our communities and the Council, and how we have responded to this crisis as well as its wider impact going forwards. The accounts themselves, which follow this Narrative Report, provide information about the Council's financial performance during 2020-21 and about our financial position as at 31st March 2021. The Statement of Accounts is prepared in accordance with the Code of Practice on Local Authority Accounting in the United Kingdom 2020-21 and the main elements of the accounts are shown in the table of contents on pages 2 to 4. This means that almost all of the information reported in these accounts follows generally accepted accounting principles and provides a consistent basis upon which to compare 2020-21 with 2019-20. In addition to this, the Council reports internally to its leadership team on financial performance against the annual budget. Information about performance against the annual budget is included in this Narrative Report within section three and is also shown in the Expenditure and Funding Analysis within the Statement of Accounts on page 46. 2. About Lincolnshire County Council Lincolnshire is an English county council in the East Midlands region. It is one of the largest counties in the UK in terms of its area but has a relatively low population of around 756,000. There is one city in Lincolnshire, which is Lincoln, seven districts and a number of towns. Lincolnshire is a predominantly rural county, with a North Sea coast of over 50 miles, and is mainly flat with rich arable land. In terms of its economy, Lincolnshire is predominantly agricultural and produces around one eighth of the UK's food, and processes 70% of its fish. Due to its historic sites, extensive countryside and seaside resorts Lincolnshire also has a thriving visitor economy. Lincolnshire County Council is a local government body within a two tier system. We are an "upper tier" council with responsibility for services such as education; children's social care; adult care and community wellbeing; highways; economic development; libraries, heritage sites; fire and rescue and emergency planning. We have seventy elected members and operate a "Leader and Executive" model of decision making. The Executive makes the decisions that deliver the budget and policy framework of the Council and there are a number of committees which scrutinise decisions made by the Executive and hold members of the Executive to account.
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