STATEMENT OF ACCOUNTS 2020/21 Draft unaudited version Hammersmith & Fulham Council [THIS PAGE IS INTENTIONALLY BLANK] London Borough of Hammersmith and Fulham 2 CONTENTS The Director of Finance’s Narrative Report, the Council's Statement of Accounts for the Year Ended 31 March 2021 and the Council's Annual Governance Statement are set out on the following pages. Independent auditor’s report to the members of the London Borough of Hammersmith and Fulham ........... 5 CERTIFICATION BY CHAIR OF THE AUDIT COMMITTEE ......................................................................... 6 THE DIRECTOR OF FINANCE’S NARRATIVE REPORT ...................................................................... 7 STATEMENT OF RESPONSIBILITIES FOR THE STATEMENT OF ACCOUNTS ............................................. 18 CORE FINANCIAL STATEMENTS ....................................................................................................... 19 Movement in Reserves Statement .................................................................................................... 20 Comprehensive Income and Expenditure Statement ........................................................................... 21 Balance Sheet ............................................................................................................................... 22 Cash Flow Statement ...................................................................................................................... 23 NOTES TO THE CORE FINANCIAL STATEMENTS ................................................................................. 24 1. Expenditure and Funding Analysis ................................................................................................ 24 1a. Note to the Expenditure and Funding Analysis .............................................................................. 26 2. Expenditure and Income Analysed by Nature ................................................................................. 28 3a. Adjustments between Accounting Basis and Funding Basis under Regulations .................................. 29 3b. Usable Reserves ....................................................................................................................... 32 3c Unusable Reserves ..................................................................................................................... 32 4. Transfers to/from Earmarked Reserves ......................................................................................... 35 4. Earmarked Reserves Description .................................................................................................. 37 5. Material Items of Income and Expense .......................................................................................... 38 6. Other Operating Expenditure ....................................................................................................... 39 7. Financing and Investment Income and Expenditure ........................................................................ 39 8. Taxation and non-specific grant income and expenditure ................................................................. 39 9. Property, Plant and Equipment ..................................................................................................... 40 10. Investment Properties ............................................................................................................... 43 11. Heritage Assets ........................................................................................................................ 44 12. Assets Held for Sale .................................................................................................................. 44 13. Capital Expenditure and Capital Financing .................................................................................... 44 14. Leases (Finance and Operating) ................................................................................................. 46 15. Private Finance Initiative ........................................................................................................... 47 16. Debtors ................................................................................................................................... 48 17. Cash and Cash Equivalents ........................................................................................................ 48 18. Creditors ................................................................................................................................. 49 19. Other Long-Term Liabilities ........................................................................................................ 49 20. Provisions ................................................................................................................................ 49 21. Financial Instruments ................................................................................................................ 50 22a. Cash Flow Statement - Net Cash Flow from Operating Activities.................................................... 56 22b. Cash Flow Statement - Operating Activities ................................................................................ 56 22c. Reconciliation of Liabilities Arising from Financing Activities .......................................................... 57 23. Agency Services ....................................................................................................................... 57 24. Members' Allowances ................................................................................................................ 57 25. Officers' Remuneration .............................................................................................................. 58 26. Pension Schemes Accounted for as Defined Contribution Schemes .................................................. 60 London Borough of Hammersmith and Fulham 3 27. Defined Benefit Schemes ........................................................................................................... 60 28. External Audit Costs ................................................................................................................. 64 29. Dedicated Schools Grant ........................................................................................................... 65 30. Grant Income ........................................................................................................................... 66 31. Related Parties ......................................................................................................................... 67 32. Better Care Fund Pooled Budget ................................................................................................. 69 33. Interest in Companies ............................................................................................................... 70 34. Contingent Assets and Contingent Liabilities ................................................................................ 71 35. Trust Funds ............................................................................................................................. 71 36. Assumptions Made About the Future and Other Major Sources of Estimation Uncertainty ................... 71 37. Events after the Reporting Period ............................................................................................... 72 38. Statement of Accounting Policies ................................................................................................ 73 39. Critical Judgements in Applying Accounting Policies ...................................................................... 85 40. Accounting Standards not yet adopted ........................................................................................ 86 SUPPLEMENTARY FINANCIAL STATEMENTS ....................................................................................... 87 Collection Fund Account .................................................................................................................. 88 Housing Revenue Account (HRA) ...................................................................................................... 90 Pension Fund Accounts ................................................................................................................... 94 OTHER INFORMATION ................................................................................................................... 116 DRAFT ANNUAL GOVERNANCE STATEMENT ...................................................................................... 117 GLOSSARY OF TERMS .................................................................................................................... 128 London Borough of Hammersmith and Fulham 4 Independent auditor’s report to the members of the London Borough of Hammersmith and Fulham Audit report, opinion and certificate to follow with final version of the 2020/21 accounts. London Borough of Hammersmith and Fulham 5 CERTIFICATION BY CHAIR OF THE AUDIT COMMITTEE Certificate to follow with final version of the 2020/21 accounts. London Borough of Hammersmith and Fulham 6 THE DIRECTOR OF FINANCE’S NARRATIVE REPORT Introduction from the Director of Finance – Emily Hill Hammersmith & Fulham is a dynamic, diverse and exciting place to live and work. Sitting alongside four and a half miles of the River Thames and nestled between one of the world’s busiest airports,