STATEMENT OF ACCOUNTS 2008/2009 OF THE COUNTY COUNCIL OF THE CITY AND COUNTY OF CARDIFF AND CARDIFF PORT HEALTH AUTHORITY CONTENTS STATEMENT OF ACCOUNTS 2008/09 OF THE COUNTY COUNCIL OF THE CITY AND COUNTY OF CARDIFF Page No Foreword 5 Guide to the Financial Statements 10 The Statement on Internal Control 12 Statement of Responsibilities for the Financial Statements 26 Auditor’s Report 27 Statement of Main Policies Adopted in Compiling the Financial Statements 30 The Core Financial Statements: Income and Expenditure Account for the year ended 31 March 2009 38 Statement of Movement on the Council Fund Balance 39 Statement of Total Recognised Gains and Losses (STRGL) 40 Balance Sheet as at 31 March 2009 41 Cash Flow Statement 43 Notes to the Core Financial Statements 45 The Supplementary Financial Statements: Housing Revenue Account 93 Cardiff and Vale of Glamorgan Pension Fund Accounts 98 Group Accounts 111 Trust Funds 132 Glossary of Local Government Accountancy Terms 135 STATEMENT OF ACCOUNTS 2008/09 OF CARDIFF PORT HEALTH AUTHORITY Foreword 140 Revenue Account and Balance Sheet 141 Certificate of the Chief Finance Officer and Auditor’s Report 142 1 of 143 2 of 143 STATEMENT OF ACCOUNTS 2008/09 OF THE COUNTY COUNCIL OF THE CITY AND COUNTY OF CARDIFF 3 of 143 4 of 143 FOREWORD Introduction The financial statements presented here are published in accordance with the Chartered Institute of Public Finance and Accountancy/Local Authority (Scotland) Accounts Advisory Committee (CIPFA / LASAAC) Code of Practice on Local Authority Accounting in the United Kingdom 2008 ‘A Statement of Recommended Practice’ (the 2008 SORP). The 2008 SORP sets out proper accounting practices required for Statements of Accounts by section 21(2) of the Local Government Act 2003 prepared in accordance with the Accounts and Audit (Wales) Regulations 2005 (as amended) and by sections 41 and 42 of the Local Government and Housing Act 1989. The Financial Statements The Council’s financial statements are set out on pages 30 to 134 and comprise: Statement of Main Policies Adopted in Compiling the Financial Statements Income and Expenditure Account Statement of Movement on Council Fund Balance Statement of Total Recognised Gains and Losses (STRGL) Balance Sheet Cash Flow Statement Notes to the Core Financial Statements Housing Revenue Account Cardiff & Vale of Glamorgan Pension Fund Accounts Group Accounts Trust Funds 5 of 143 FOREWORD The Outturn for the Year Cardiff Council at its meeting on 28 February 2008 set a cash limit budget of £492.734 million for 2008/09. In addition a budget of £230,000 was set for discretionary rate relief which is outside the Budget Requirement. The outturn for the year compared to the budget is set out below. These figures are exclusive of Community Council precepts. Budget Outturn Variance £000 £000 £000 Financing: Revenue Support Grant (RSG) (280,721) (280,721) 0 Non-domestic Rates (NDR) (84,030) (84,030) 0 Council Tax (112,190) (112,461) (271) Other central grants (13,268) (13,268) 0 Budgeted transfers from balances/reserves (2,755) (2,755) 0 (492,964) (493,235) (271) Net Expenditure Net budgeted expenditure 492,964 Net operating expenditure as per Income & Expenditure a/c 1,007,752 Net additional amount to be credited to Council Fund (518,349) Balance (incl. transfers to/(from) reserves) Less budgeted transfers from reserves 2,755 Less Community Council precepts (200) 492,964 491,958 (1,006) Net (surplus)/deficit for year transferred to Council Fund (1,277) Balance The Council Fund Balance brought forward at 31 March 2008 was £10.04 million. The balance at 31 March 2009 has increased by £1.28 million to £11.32 million. Strategic Transformational Change Programme The Strategic Transformational Change Programme was agreed in December 2008 and will increasingly impact on the financial and organisational structure of the Council as projects begin to deliver savings and functions are aligned to new areas. Capital Programme Expenditure was incurred on improving, acquiring and enhancing assets used for the provision of services such as buildings and roads. The capital programme for the year was £137.3 million with actual expenditure in the year totalling £113.1 million including: • Major investment continued towards achievement of the Welsh Quality Housing Standard with capital expenditure on Public Housing totalling £18.1 million during the course of the year. • A further £9.1 million was spent within Private Sector Housing on targeted elderly grants, disabled facilities grants and renewal area improvements. 6 of 143 FOREWORD • £9.9 million was invested in schools during the course of the year, supported through utilisation of Schools Building Improvement Grant and continued Council commitment to property renewal. • Investment in Highways and Transportation totalled £13.9 million which facilitated highways reconstruction and maintenance, street lighting and other road safety improvements. • £8 million was invested in Culture, Leisure and Parks with the re-opening of the recently refurbished Western Leisure Centre and installation of Radio Frequency Identification in Libraries, as well as progression of Penylan Library / Roath Community Hall. • Waste Management improvements totalled £5.2 million including expenditure in relation to Household Waste Recycling Facilities, Transfer Station, In Vessel Composter, Food Waste Collection and capping and restoration works at Lamby Way. • Continued investment in major regeneration projects totalled £38 million. The Castle Interpretation Centre and New Central Library are now operational and significant progress was made during the year in relation to the Leckwith Development. The £38 million investment also enabled progression of schemes in relation to the public realm infrastructure enhancement (£1.1 million), the Olympic Standard Canoe Slalom (£5.3 million) and the Pentwyn Park and Ride scheme (£1.3 million), which slipped during 2008/09 but is on course for completion in Autumn 2009. • £1.2 million was invested in Social Care, including the procurement of telecare equipment to facilitate independent living. £3.3 million was invested within the area of Strategic Planning notably in respect of regeneration schemes including those at Clifton Street and Cowbridge Road East. £1.2 million was spent to cover Cardiff Council’s contribution toward the new Glamorgan Record Office and £1.5 million was spent within Economic Development, mainly in relation to Cardiff Business Technology Centre (CBTC) Phase 2. • The capital programme is funded from a number of sources including borrowing, which must ultimately be repaid via the revenue account. The following table shows how the capital spent during the year was financed:- £m Borrowing 26.4 Grants and Contributions 49.4 Direct Revenue Financing 10.5 Capital Receipts 26.8 Total 113.1 A number of major projects are undertaken by the Council which are both complex in their accounting requirements and also in the financial risks they represent. These risks are monitored regularly. These projects will continue into 2009/10 and future years along with a significant level of capital expenditure in new and existing assets approved in the Council budget of February 2009. This includes investment in schools as part of the Schools Organisational Plan; food waste processing facilities; completion of the Glamorgan Records Office for which the Council will be the host authority from April 2009; significant investment in Transportation and Highway Infrastructure as part of the Sustainable Travel City Scheme; 7 of 143 FOREWORD provision of an Olympic Canoe Slalom Course and an ongoing programme to upgrade kitchens and bathrooms in Council Housing Stock. Capital Receipts The sale of surplus assets including council dwellings and the recoupment of house renovation grants during the year generated receipts of £8.015 million. Fixed Assets Revaluation Operational Land and Buildings were revalued during 2008/09 as part of a rolling programme, resulting in any downward revaluations being shown as impairments. The significant amount of impairment in relation to Council Dwellings relates to the use of an alternative valuation technique, which is Existing Use Value - Social Housing. This does not have any impact on the Council Tax as all such adjustments to fixed assets are required to be neutralised from capital reserves. Financial Instruments The Council can raise funding from many sources including the Public Works Loan Board (PWLB) and the Market. Long term borrowing is £399.2 million at the end of the year which includes £5.3 million accrued interest. During the year loans totalling £10.0 million were repaid to the PWLB. Investments are predominantly represented by temporary cash balances deposited for various maturities with Financial Institutions. In a year of extreme financial turbulence, the significant risks continue to be monitored. The notes to the accounts provide information on the Council’s Financial Assets and Liabilities and the nature and extent of risks involved. Equal Pay During 2007/08, the Council made and capitalised payments in respect of its Equal Pay liability totalling £9.2 million. Of this figure, £5.4 million was funded through the temporary use of finance in relation to slipped capital schemes. This arrangement necessitated the generation of additional capital receipts during 2008/09 in order to cover existing commitments. Whilst the £5.5 million was not made good via capital receipts during the year, the Council secured a VAT refund of £5.6 million, net of fees, in respect of cultural services income between 1990-1996. This has been used to finance capital expenditure during 2008/09, in effect ensuring that the financing of the Equal Pay liability has no additional impact on the Council Tax. Pensions Assets and Liabilities As a result of Financial Reporting Standard 17 “Retirement Benefits”, local authorities are required to account for the costs of pension entitlements earned in the year rather than the costs of contributions paid to the fund. Further details are given in Note 21 to the Core Financial Statements.