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2021-05-01-accounts

THE BRITISH EMPIRE AND COMMONWEALTH COLLECTION

Charity registration number: 1148714

Annual Trustees Report 2020-21

  1. Use of BECM legacy monies

The Senior Curator post ceased from 31 March 2020 leaving two full time equivalent (fte) posts of archivist (job shared between two people) and Documentation Assistant.

Priority work in this period continued to be

The cataloguing of the photographic collections has resulted in film footage being used at many public events opening up the use of the collection and to stimulate debate on the legacy of Empire.

Ray Barnett Head of Collections & Archives June 2022

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Draft
Statement
of Accounts
Bristol City Council,
for the year ended
31 March 2021
(Subject to audit)
The Accounts and Audit
Regulations 2015 require the
city council to prepare a set of
Financial Statements. The Financial
Statements have been prepared
in accordance with the Code
of Practice on Local Authority
Accounting in the United Kingdom
2019/20 (the Code) published by
the Chartered Institute of Public
Finance and Accountancy (CIPFA).
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Contents

Page
ary of Terms 1
en Statements and Director of Finance Narrative Report
• Councillor Preface 6
• Director of Finance Narrative Report 8
• Statement of Responsibilities 22
• Auditor's Report - (to follow on completion of the audit) 23
• Annual Governance Statement 24

1. Glossary of Terms

2. Written Statements and Director of Finance Narrative Report

3. Core Financial Statements

4. Notes To The Accounts

Notes supporting the Core Statements

Notes supporting the Core Statements
Note 1 - Accounting Policies 46
Note 2 - Accounting Standards that have been issued but have not yet been adopted 60
Note 3 - Critical Judgements in applying Accounting Policies 61
Note 4 - Assumptions and Estimation Uncertainty 62
Note 5 - Events after the Balance Sheet Date 63
Note 6 - Other Items of Expenditure and Income 63
Notes supporting the Comprehensive Income and Expenditure Statement
Note 7 - Expenditure & Funding Analysis 64
Note 8 - Expenditure & Income Analysed by Nature 68
Note 9 - Other Operating Expenditure 69
Note 10 - Financing & Investment Income and Expenditure 69
Note 11 - Taxation and Non-Specific Grant Income 69
Note 12 - Pooled Budgets 70
Note 13 - Members' Allowances 71
Note 14 - Officers Remuneration and Exit Packages 72
Note 15 - External Audit Costs 75
Note 16 - Dedicated Schools Grant 76
Note 17 - Grant Income 77
Notes supporting the Movement in Reserves Statement
Note 18 - Adjustments between Accounting Basis and Funding Basis under Regulations 80
Note 19 - Usable Reserves 82

Notes supporting the Balance Sheet

Note 20 - Property, Plant and Equipment 84
Note 21 - Heritage Assets 88
Note 22 - Investment Properties 89
Note 23 - Intangible Assets 90
Note 24 - Financial Instruments 91
Note 25 - Nature and Extent of Risks from Financial Instruments 100
Note 26 - Capital Expenditure and Financing 105
Note 27 - Leases 106
Note 28 - Service Concessions 106
Note 29 - Debtors 109
Note 30 - Cash and Cash Equivalents 110
Note 31 - Creditors 110
Note 32 - Provisions 111
Note 33 - Unusable Reserves 112
Note 34 - Pensions 117

Notes supporting the Cash Flow Statemen t

Note 35 - Cash Flow Statement - Operating Activities 124
Note 36 - Cash Flow Statement - Investing Activities 125
Note 37 - Cash Flow Statement - Financing Activities 125

Other Notes

Note 37 Related Parties 126
Note 38 Transfer of Functions 128
Note 39 Contingent Liabilities 129

5. Supplementary Accounting Statements

• Housing Revenue Account 130
• Collection Fund 136

6. Group Accounts

GLOSSARY OF TERMS

ACCOUNTING PERIOD - This is the length of time covered by the accounts. This is normally a period of 12 months commencing on 1 April. The end of the accounting period is the Balance Sheet date.

ACCOUNTING POLICIES – The rules and practices adopted by the Council that determine how the transactions and events are reflected in the accounts.

ACCRUALS - The concept that income and expenditure are recognised as they are earned or incurred, not as money is received or paid.

ACTUARY - An independent consultant who advises on the financial position of the Pension Fund.

ACTUARIAL GAINS AND LOSSES - For a defined benefit pensions scheme, the changes in actuarial deficits or surpluses that arise because either:

Events have not coincided with the actuarial assumptions made for the last valuation; or

The actuarial assumptions have changed

ACTUARIAL VALUATION - Every three years a review is carried out by the actuary on the Pension Fund’s assets and liabilities reporting to the Council on the Fund’s financial position and recommended employers’ contribution rates.

AMORTISATION - The writing off, of a loan balance or intangible asset over a period to revenue.

ANNUAL GOVERNANCE STATEMENT – The annual governance statement is a statutory document that explains the processes and procedures in place to enable the Council to carry out its functions effectively.

ASSET - An asset is something that the Council owns that has a monetary value. Assets are either current or long term.

BALANCE SHEET - The Balance Sheet is a financial statement summarising the overall financial position of the Council at the end of the financial year.

BILLING AUTHORITY - The billing authority is responsible for levying and collecting the Council Tax in its area, both on its own behalf and that of its precepting authorities.

BUDGET - The budget represents a statement of the Council’s planned expenditure and income.

CAPITAL ADJUSTMENT ACCOUNT - This is the money set aside in the Council’s accounts for capital spending and to repay loans.

CAPITAL CHARGES - This is a charge made to the Council’s service revenue accounts to reflect the cost of utilising property, plant, and equipment in the provision of services.

CAPITAL EXPENDITURE - Expenditure on acquisition of a non-current asset or expenditure that adds to and not merely maintains the value of an existing asset.

CAPITAL FINANCING - This describes the various sources of money used to pay for capital expenditure. Capital expenditure can be funded from external sources, such as borrowing, capital grants and by contributions from the internal sources, such as capital receipts and reserves.

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CAPITAL RECEIPT - A capital receipt is the income that results from the sale of land, buildings and other capital assets. A specified portion of this may be used to fund new capital expenditure. The balance must be set-aside and may only be used for paying off debt, not for funding new revenue services.

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 shortterm, highly liquid investments that are readily convertible to cash, for example bank call accounts.

CODE - The Code of Practice on Local Authority Accounting in the United Kingdom 2018/19.

COLLECTION FUND – A fund operated by the billing authority into which all receipts of Council Tax and National Non-Domestic Rates are paid. Payments are made from the fund to support the Council’s general fund services and to the precepting authorities and the NNDR pool. The fund must be maintained separately from the Council’s General Fund.

COMMUNITY ASSETS - Assets that the Council intends to hold in perpetuity that have no determinable useful life and that may have restrictions on their disposal, such as parks and historic buildings.

COMPRESHENSIVE INCOME AND EXPENDITURE ACCOUNT – A statement which details the

total income received and the expenditure incurred by the Council during a year in line with IFRS reporting as required by the Code.

CONTINGENT ASSET - A possible asset that arises from past events and whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Council.

CONTINGENT LIABILITIES - A contingent liability is either:

or

COUNCIL TAX - A system of local taxation, which is set by both the billing and precepting authorities at a level determined by the revenue expenditure requirement for each authority, divided by the Council Tax Base for its area.

COUNCIL TAX BASE - An amount calculated by the billing authority, by applying the band proportions to the total properties in each band to ascertain the number of band D equivalent properties in the authority’s area. The tax base is also used by the precepting and some levying bodies in determining their charge to the area.

CREDITORS - Amounts of money owed by the Council for goods or services received.

CURRENT ASSETS - Items that can be readily converted into cash.

CURRENT LIABILITIES - Items that are due to be paid immediately or in the short term.

DEBTORS - Amounts of money owed to the Council for goods or services provided.

DEDICATED SCHOOLS GRANT (DSG) - A ring-fenced grant from the Department for Education paid to Local Education Authorities for the Education of Children and Young Adults up to the age of 25.

DEPRECIATION - A provision made in the accounts to reflect the cost of consuming assets during the year, e.g. a vehicle purchased for £30,000 with a life of five years would depreciate on a straight-line basis at the rate of £6,000 per annum. Depreciation forms part of the ‘capital charges’ made to service revenue accounts and is covered by International Accounting Standard (IAS) 16.

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DIRECT REVENUE CONTRIBUTIONS - Funding of capital expenditure directly from revenue budgets.

EARMARKED RESERVES - Amounts set aside for a specific purpose to meet future commitments or potential liabilities, for which it is not appropriate to establish a provision.

EXIT PACKAGES - The cost to the Council of early termination of staff employment before normal retirement age.

EVENTS AFTER THE BALANCE SHEET DATE (POST BALANCE SHEET EVENTS ) - Events after the Balance Sheet date are those events, favourable or unfavourable, that occur between the Balance Sheet date and the date when the Statement of Accounts is authorised for issue.

EXTERNAL AUDITOR - The auditor appointed by the Public Sector Audit Appointments (PSAA) to carry out an audit of the Council’s accounts. The current auditor is Grant Thornton.

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 motive in their negotiations other than to secure a fair price.

FINANCE LEASE - A contractual agreement for the use of an asset, where in substance the risks and rewards associated with ownership reside with the user of the asset (lessee) rather than the owner (lessor).

FINANCIAL YEAR - The local authority financial year starts on 1 April and ends on the following 31 March.

GENERAL FUND - This is the main revenue account of the Council. The fund includes the cost of all services provided which are paid from Government grants, generated income, NNDR retention and the City Council’s share of Council Tax. It excludes the Housing Revenue Account. By law, it includes the cost of services provided by other bodies who charge a levy to the Council.

GOVERNMENT GRANTS - Grants made by the Government towards either revenue or capital expenditure to help with the cost of providing services and capital projects. Some of these grants have restrictions on how they may be used whilst others are general purpose.

GROUP ACCOUNTS – Where a Council has a material interest in another organisation (e.g. a subsidiary organisation) group accounts must be produced. These accounts report the financial position of the Council and all organisations in which it has an interest.

HERITAGE ASSET - Assets held and maintained principally for their contribution to knowledge and culture. Examples of Heritage Assets are historical buildings, civic regalia and museum and gallery collections.

HOUSING REVENUE ACCOUNT (HRA) - The HRA includes expenditure and income arising from the provision of rented dwellings. It is, in effect, a landlord account. Statute provides for this account to be separate from the General Fund and any surplus or deficit must be retained within the HRA.

IMPAIRMENT - This is where the value of an asset falls below the carrying value in the accounts and so to reflect the commercial reality of the situation a charge is made in the running costs.

INFRASTRUCTURE ASSETS – Non-current assets that are unable to be readily disposed of, the expenditure on which is recoverable only by continued use of the asset created. Examples are highways and footpaths.

INTANGIBLE ASSETS - Assets which do not have a physical form but provide an economic benefit for a period of more than one year for example software licences.

INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) – International Financial

Reporting Standards (IFRS) are a set of accounting standards developed by an independent, not-for-profit organisation called the International Accounting Standards Board (IASB)

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LEASING - Method of financing the acquisition of capital assets, usually in the form of operating or financing leases.

LIABILITIES - Amounts the Council either owes or anticipates owing to others, whether they are due for immediate payment or not.

MAJOR REPAIRS RESERVE (MRR) - This reserve is for capital expenditure on HRA assets.

MINIMUM REVENUE PROVISION (MRP) - A statutory amount, that must be charged to revenue, to provide for the redemption of debt.

MOVEMENT IN RESERVES STATEMENT – This financial statement presents the movement in usable and unusable reserves (the Council’s total reserve balances).

NATIONAL NON-DOMESTIC RATE (NNDR) – More commonly known as ‘business rates’, these are collected by billing authorities from all non-residential buildings. Since 1 April 1990 the poundage level has been set by the Treasury. Amounts payable are based on rateable values multiplied by this poundage level.

NET BOOK VALUE - The amount at which fixed assets are included in the balance sheet, i.e. their historical cost or current value, less the cumulative amounts provided for depreciation.

NON-CURRENT ASSETS - Assets which yield a benefit to the Council for a period of more than one year.

NON-OPERATIONAL ASSETS - Fixed assets held by a Council, but not directly occupied, used, or consumed in the delivery of services; for example, investment properties and assets surplus to requirements held pending sale or redevelopment.

OPERATING LEASE - This is a lease where the effective ownership of the asset remains with the lessor.

OPERATIONAL ASSETS - Fixed assets held and occupied, used, or consumed by the Council in the direct delivery of those services for which it has either a statutory or a discretionary responsibility.

OUTTURN - This is the actual level of expenditure and income for the financial year.

PENSION FUNDS - For the Local Government Pension Scheme, the funds that invest employers’ and employees’ pension contributions to provide pensions for employees on their retirement and pensions for employees’ dependants in the event of death of an employee.

PENSION STRAIN - The cost to the Council of reimbursing the Pension Fund should it agree to employees aged 55 and over drawing their pension before normal retirement age.

PRECEPT - This is the method by which a precepting authority (Avon and Somerset Police & Crime Commissioner, Avon Fire Authority) obtains income from the billing authority to cover its net expenditure. This is calculated after deducting its own Revenue Support Grant. The precept levied by the precepting authority is incorporated within the Council Tax charge. The Council pays the amount demanded over an agreed time scale.

PRIOR YEAR ADJUSTMENT - A material adjustment applicable to prior years arising from changes in accounting policies or from the correction of fundamental errors.

PRIVATE FINANCE INITIATIVE (PFI) - PFI started in 1997/98 and offers a form of Public-Private Partnership in which local authorities do not buy assets but rather pay for the use of assets held by the private sector.

PROPERTY, PLANT AND EQUIPMENT (PPE) - Covers all tangible (physical) assets used in the delivery of services, for rental to others, or for administrative purposes, that are used for more than one year.

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PROVISIONS - Amounts set aside to meet liabilities or losses which are likely or certain to be incurred but where the amount due or the timing of the payment remains uncertain .

PRUDENTIAL CODE - The Prudential Code frees authorities to set their own borrowing limits having regard to affordability. To demonstrate this has been done, and enable adherence to be monitored, authorities are required to adopt a number of appropriate ‘Prudential Indicators’.

PUBLIC WORKS LOAN BOARD (PWLB) - A body, part of the Debt Management Office (a government agency) which lends money to public bodies for capital purposes. At present nearly all borrowers are local authorities. Monies are drawn from the national Loans Fund and rates of interest are determined by the Treasury.

RATEABLE VALUE - The Valuation Office Agency (part of HM Revenue and Customs) assesses the rateable value of nondomestic properties. Business rate bills are set by multiplying the rateable value by the year’s NNDR poundage (which is set by the Government). Domestic properties no longer have rateable values; instead they are assigned to one of the eight council tax valuation bands.

RELATED PARTIES - Two or more parties are related parties when at any time during the financial period:

RESERVES - An amount set aside for a specific purpose in one financial year and carried forward to meet expenditure in future years. A distinction is drawn between reserves and provisions (see above), which are set up to meet known liabilities.

REVALUATION - Recognises increases or decreases in the value of non-current assets that are not matched by expenditure on the asset; gains or losses are accounted for through the revaluation reserve.

REVENUE EXPENDITURE – The regular day to day running costs of items including salaries and wages and other running costs incurred to provide services.

REVENUE EXPENDITURE FUNDED FROM CAPITAL UNDER STATUTE (REFFCUS) -

Expenditure which is legitimately financed from capital resources, but which does not result in, or remain matched with tangible assets.

SURPLUS ASSETS - Assets not being used in the delivery of services that do not qualify as being ‘held for sale’ under accounting guidance.

SOFT LOANS - Funds received and advanced at less than market rates.

UNSUPPORTED BORROWING - Local authorities can set their own borrowing levels based upon their capital need and their ability to pay for the borrowing, costs are not supported by the Government so services need to ensure they can fund the repayment costs. The borrowing may also be referred to as Prudential Borrowing.

USABLE CAPITAL RECEIPTS - This represents the amount of capital receipts available to finance capital expenditure in future years, or to provide for the repayment of debt.

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Statement of Accounts Bristol City Council - For the Year Ended 31 March 2021

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Introduction
An introduction to the 2020/21 statement
of accounts by the deputy mayor and
portfolio holder for finance, governance and
performance, Councillor Craig Cheney.
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The 2020/21 financial year was another challenging year for local government finances with the COVID-19 pandemic casting even more uncertainty, both on the future economic outlook nationally and locally, and the funding for public services.

Despite the funding pressures and financial impact of COVID-19 we have made strong progress in our key priorities of making Bristol a more inclusive city where no one is left behind. During the year we invested over £1bn providing services for our city in delivery of our commitments within our Corporate Strategy and aligned to the One City Plan for Bristol.

Highlights of our achievements over the last year include:

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Statement of Accounts Bristol City Council - For the Year Ended 31 March 2021

We will continue to be committed to our determination to provide the best and most cost-effective services for our residents in the face of these ongoing uncertainties.

I would like to take this opportunity to thank all colleagues across the Council for their enormous effort throughout the year to deliver services within the difficult financial constraints, provide value for money for the taxpayer and focus on efforts to support residents through the immediate and longer-term impacts of the coronavirus pandemic.

We are focussed on providing transparency for residents to judge whether tax-payer money has been spent properly and be assured from our performance and improvement programmes that we are in a better place to tackle the financial and other challenges ahead.

Councillor Craig Cheney

Deputy Mayor – Finance, Governance, Property and Culture

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Narrative Report ¢5.

Statement of Accounts Bristol City Council - For the Year Ended 31 March 2021

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Background
Bristol is the largest city in the south
west of England, covering an area of 110
square kilometres. It is the 10th largest
city in the United Kingdom and one of
the 11 Core Cities. It has a population of
around 463,000 living in approximately
203,500 dwellings.
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Bristol is part of the West of England Combined Authority and is well connected by road, rail, sea and air. It has one of the most vibrant and successful economies in the UK and from Brunel to Banksy has a history of achieving great things. Within the West of England, Bristol is the primary economic centre with nearly half of all the jobs (44.8%) and enterprises (40.1%).

The city has won a number of awards in recent years; the European prize in 2019 for its One City approach to join up local governance, the UNESCO City of Film in 2017 as well as England’s first UNESCO Learning City, UK’s smartest city and European City of Sport in 2017.

Despite the devastating effect of the pandemic on the culture and creative sector, Bristol has used its creative talent to adapt wherever possible. The successful Wildscreen Festival, the world’s largest wildlife film and TV festival and Encounters film festival went virtual, attracting speakers such as Sir David Attenborough and Greta Thunberg and launching the Lockdown Depict short series of films.

Bristol is a UNESCO City of Film and has led the design and development of the multilingual Cities of Film website which launched in July 2020.

COVID-19 Pandemic Impact and Response

The last year (2020/2021) has been one of the toughest with COVID-19 and the health and wellbeing of Bristol residents has been adversely impacted by the pandemic. The pandemic has highlighted long-standing health, social and economic inequalities, and the impact on the prospects of its residents. The full extent of the impact and the effect it has had on health inequalities across the city is not yet clear and work will need to take place in the future to fully understand the impacts.

While the diverse and high skilled economy of the city has provided some protection for key industries and employment, the full impact on the economy, businesses, and the labour market, is still unknown.

The challenges of the pandemic continue but it is important to reflect and recognise the many examples of good work that have taken place:

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Statement of Accounts Bristol City Council - For the Year Ended 31 March 2021

has accelerated city-wide ambitions to end rough sleeping in the city and our drive to build sustainable and affordable housing.

A further £1.2m has been added to the Discretionary Housing Payment budget to reduce the risk of homelessness and support the maintenance of tenancies during the year. To support the “move on” fund, an additional £420k was provided to support those who had been living in hostels and hotels during the pandemic whose time there has come to an end, to alleviate possibility of street homelessness. £235k has been provided to assist those with no recourse to public funds, so refugees, those who are without settled immigration status.

Additionally, there has been support in every school holiday (including half term) since October 2020 for every child aged 2 or over that is either in receipt of free school meals or the pupil premium. This was at a cost of around £1.2m.

our most deprived communities. £40k was awarded to Bristol’s care leavers in December 2020 to give them some help with their food and heating costs. £608k was awarded to Bristol’s 15 foodbanks and Voluntary organisations that have supported those who are vulnerable during the pandemic.

In October, the initial priorities for recovery and renewal in Bristol’s Economic Recovery and Renewal Strategy. This strategy will focus on reducing poverty and inequality; increasing the city’s resilience and environmental sustainability; and enhancing the economic and social wellbeing of every community as the city recovers.

Despite these challenges Bristol is still a city of hope and ambition.

An award of £282k was made to 20 community organisations across the city in January 2021 to allow funds to go directly to

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Statement of Accounts Bristol City Council - For the Year Ended 31 March 2021

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Our Services 2O2O/21
The following core services are provided by the council:
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Core Services:

Adults, Children, Education and Public Health:

Growth & Regeneration:

with additional and special educational needs and disabilities (SEND). The grant can only be used to meet expenditure properly included in the schools budget.

Public Health:

We work with local partners (including charities, businesses and other public services providers like the police and the NHS) and residents to determine and deliver local priorities. Typically councils like us provide over 700 services, either directly ourselves or by commissioning services from outside organisations.

Resources:

Provides internal support services including:

Ring-fenced Accounts:

Housing Revenue Account:

Our Leadership and Workforce:

Our 70 elected councillors represent the people of Bristol and set the overall policy of the council.

Dedicated Schools Grant including SEND:

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Statement of Accounts Bristol City Council - For the Year Ended 31 March 2021

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Our Performance
All statistics on the next two pages are the most up
to date statistics available at the time of publication
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Key facts: Communites & living 80% of residents 71% felt that are satisfied with their people from different local area as a place to backgrounds get on well live. (2020 Bristol together in their local area. Quality of Life survey) ( 79% 2019/20) 70.5% of residents think air quality and traffic pollution is a problem locally (2020 Quality of Life Survey)

19.7% of residents reported below average levels of mental wellbeing (2020 Quality of Life Survey).

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Key facts:
1,350
Housing
new homes built in
Bristol in 2019/20
( 1,799 2018/19)
Nearly 3,300
student units have
been completed
between 2006
Over
£ afforable homes built in 3,500 and 2020
homes Bristol since 2006
543
Prevented
1,512
households from
becoming homeless
during 2020/21
50 people
people housed in
emergency COVID-19
accommodation had
subsequently been
resettled as at
31 Dec 2020.
night in Bristol compared with 98 in November 2019.
(National annual count - November 2020)
sleeping rough in a single
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Key facts:
Adult Social Care
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4,090
adults received a community-based
social care support during 2020/21
a further
1,840
care home places were funded
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Statement of Accounts Bristol City Council - For the Year Ended 31 March 2021

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Key facts:
Culture & Creativity
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33% participate
in cultural activities at
least once a month
( 43% 2019/20)
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Key facts:
Education
78.9% [rated as Good or Better for ]
overall effectiveness
OFSTED (March 2021)
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Key facts:
Transport and sustainability
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Number of people
who ride a bike
at least
weekly 28%
( 27% 2019/20)
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87
bus journeys
per head of population in 2019/20
(from 68.2 in 2013/14)
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45% of all
household waste was
sent for reuse, recycling
129kg of waste per and composting in 2020/21
household was ( 37.4% 2009/10) CO2
landfilled in 2019/20
Citywide CO2 emissions
have decreased by
40%
compared with 230kg in 2016/17
(2005-2018)
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Key facts: Economy & employment

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254,500 working age 75.4%
residents were in Average earnings
employment in 77.1%
December 2020.
£31,900 £30,500
Bristol UK
( £30,400 in 2019)
B
S
T R
I T
EA IT
R
A
O
GR IN
B L
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Statement of Accounts Bristol City Council - For the Year Ended 31 March 2021

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Financial Performance
The Council is a large and diverse organisation and our
accounts are by their nature technical and complex.
This section of the report provides an explanatory
narrative to the key elements of the statements and
sections in the accounts and provides a summary of
our financial performance for 2020/21.
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Revenue Financial Summary 2020/21

However, as a result of the positive outturn position, our finances are in a better place to meet the ongoing Covid-19 challenges over the medium term, ensure the continued delivery of organisational priorities, as well as increasing financial resilience in 2021/22 and beyond. Aligned with the above retention of an appropriate level of general reserves will be essential to mitigate risk, including future funding uncertainties and will be utilised as a key indicator of sound financial governance.

Revenue expenditure covers the cost of the Council’s day to day operations and contributions to and from reserves.

The net General Fund outturn is £450.6m and in the context of the original budget/funding set in February 2020 (£395.7m) presents an in-year overspend of £54m. This takes into account the gross Covid-19 pressures of £74.7m and a surplus on non-Covid activities of £19.7m at year-end.

The financial impact of the Covid-19 pandemic on the Council’s General Fund budget in 2020/21 (i.e. excluding Housing Revenue Account, DSG and collection of Council tax or Business Rates income) is £74.7m for the year. This was made up of £50.6m additional expenditure and the inability to deliver planned savings, as well as £24.1m reduction in income from sales, fees, and charges. Government coronavirus funding to Council’s was reactive, fragmented, and piecemeal, with some elements being allocated towards the end of the financial year and ringfenced to specific People (inc DSG) activity. As a result, carry forwards of £14.4m of Growth & Regeneration Covid-19 grants and underspends in the Council’s own funds Corporate Budgets of £8.1m previously earmarked to bridge the Covid-19 funding gap, were necessary.

The gross cost of services during the year was £1.206bn (£1.137bn 2019/20). This includes both General Fund services and the Housing Revenue Account (HRA). After deducting specific grants and income from fees and charges, the net cost of services was £432.5m (£408.5m in 2019/20). The breakdown of net expenditure between the different service areas is shown in the following chart.

Directorate Net Expenditure (£m)

People (inc DSG) 207.3 207.3
Resources
Growth & Regeneration		 80.3 152.9
HRA -18.8
Corporate Budgets 9
-50 0 50 100 150 200 250
£m

The surplus on the HRA is transferred to reserves for future re-investment in the HRA

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Statement of Accounts Bristol City Council - For the Year Ended 31 March 2021

Financial erformance p

Sources of Funding

During 2020/21 the Council continued to pilot 100% business rates retention. Pilot authorities retain 100% of the growth in locally raised business rates. Of this we share 5% with the West of England Combined Authority and 1% with Avon Fire Authority. In return the Council forgoes Revenue Support Grant (RSG) and several other funding streams. Each pilot authority’s tariffs and top-ups calculated by central government are adjusted to ensure the change is cost neutral and that no individual pilot authority loses out because of these changes.

The Council collects £134.7m of business rates of which £117.0m (net of reliefs) is retained in year by the Council. This is also net of the tariff of £84.6m which the Council returns to central government and £xxm transferred to the Avon Fire Authority and the West of England Combined Authority.

The Council also collects £266.4m of Council Tax (on behalf of Avon and Somerset Police and Crime Commissioner, Avon Fire Authority, and itself), of which £226.1m is retained in year by the Council.

Reserves

Useable reserves have increased overall by £153m. This is largely because of Covid related funding received in 2020/21 but required for use in 2021/22. £83m of this is grant for the business rates relief for retail hospitality and leisure which will be directly required to offset losses in the collection fund carried forward into 2021/22. The accounting arrangements for business rates and council tax mean that the deficits on the Collection Fund in 2020/21 are charged to the General Fund in future years. Further Covid funding of £26m, received in 2020/21 has also been carried forward to manage the pandemic over the medium term and meet future commitments.

Other significant contributions to reserves during 2020/21 include

During the year the Council received £512.6m of Government grant income which was used to fund revenue expenditure. This is an increase of £91m from 2019/20. This increase predominantly relates to Covid-19 grant income. Of these grants £89.4m were specifically related to business rates reliefs offered during Covid.

The Council generates £908m of fees, charges and grants used to deliver services and keep council tax down.

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Statement of Accounts Bristol City Council - For the Year Ended 31 March 2021

Financial erformance p

Dedicated Schools Grant

At the end of 2020/21 the deficit on the Dedicated Schools Grant (DSG) adjustment account has increased to over £10m, this includes the additional cost of the impact of COVID-19 on budgets. Whilst there are some small variations in each of the blocks, the deficit is mainly as the result of overspends in the High Needs Block with the key driver attributed to Top-ups in Mainstream schools, Special schools, Other Local Authorities, Alternative Learning Provision, and Pupil Referral Units. An increase of 324 pupils (12.9% increase) attracting top-up payments at the end of March 2021 when compared to the same period last year, which accounts for £7.44m of this overspend.

The key priority for the Education Service remains addressing the significant weaknesses identified in the 2019 SEND (special educational needs and disabilities) inspection. The delivery of key milestones particularly in relation to statutory plans, including Educational Health and Care (EHC) Plans, has created significant pressures in the SEND and High Needs Block of the Dedicated Schools Grant, within a relatively short period of time. There is a risk that the deficit will continue to rise as more children and young people are newly assessed as in need support in 2021/22.

This is a national issue and we will continue to press for the SEND review to move forward to address the funding gaps in this area which are experienced across the country. In addition to making representation to government departments the Council’s actions include:

Council’s with an overall deficit on their DSG account at the end of a financial year must be able to present a plan to the DfE for managing their future DSG spend. The Plan is intended to help local authorities to develop evidence-based and strategic plans covering the provision available for children and young people with special educational needs and disabilities. The ESFA have designed a template with a focus on High Needs, to help local authorities manage their DSG and Bristol is using the template.

The first do nothing baseline iteration of the DSG Management Plan for Bristol, has been produced and further work is underway to account for any planned interventions which will have a mitigating impact, while delivering much needed improvements in the system. It is unlikely that the combined impact of planned interventions and improvements will address the deficit in full and, set against the current trajectory of demand and increasing costs, the position remains challenging.

The ESFA recognise that the management of DSG balances, both bringing spend in line with income and repaying deficits, will take time for some Local authorities.

Schools Reserves – Individual Schools Balances at the end of March 2021, overall school’s revenue balances have decreased by £2.217m from £8.028m to £5.813m. Conversely, because of the pandemic capital balances have increased by £0.395m to £3.597m.

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Statement of Accounts Bristol City Council - For the Year Ended 31 March 2021

Financial erformance p

Capital Investment

Capital expenditure forms a large part of our spending. The Council has an ambitious capital programme to deliver projects that are fundamental to the Council achieving its aspiration to re-shape how we deliver our services as well as helping to unlock revenue savings and efficiencies to secure our ongoing financial stability. Overall, the Capital Programme for 2020/21 was originally set at £295.1m. Capital spending (including revenue expenditure allowed to be funded by capital) during the year totalled £165.6m. An analysis of capital investment by directorate and sources of capital funding are shown in the charts below. The Capital Programme was financed from a combination of borrowing (£31.5m) and from grants, contributions, and reserves (£134.1m).

The major areas of investment have included:

The Council holds £3.386bn of fixed assets, comprising £2.795bn of operational assets for delivering services, £207m of Heritage Assets for cultural benefit and £384m of nonoperational assets.

----- Start of picture text -----
Capital Investment
Housing Revenue People
Account £31.8m
£39.1m
Resources
£15.9m Growth &
Regeneration
£78.8m
----- End of picture text -----

Capital Financing

----- Start of picture text -----
Revenue and Balances
Prudential
£26.2m
Borrowing
£31.5m
Capital Receipts
£35.1m
Capital Grants
£72.8m
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Statement of Accounts Bristol City Council - For the Year Ended 31 March 2021

Financial erformance p

Service Investments

The Council has investments in subsidiary companies and other service investments. These investments are primarily for outcomes and benefits for delivered rather than for yield. During the year the Council proceeded with disposal of its one of these companies; Bristol Energy and that process is still in progress. The accounts reflect the residual liabilities the Council has in winding up that company. The investment in Bristol Energy is fully impaired.

Other cash investments as at the end of the financial year include loans to Bristol Waste Company and Goram Homes as well as investment in City Funds, Bristol Credit Union, and Avon Community Bank.

Housing Revenue Account (HRA)

The HRA Income and Expenditure Statement sets out the financial position for the year, before taking account of the statutory adjustments required to be made to the accounts. The Statement of Movement on the HRA Balance reflects these statutory adjustments and shows how the financial performance for the year has impacted on HRA reserves.

Treasury Management

The 2020–2025 Treasury Strategy identified a medium-term net borrowing requirement of £215m to support the existing and future Capital Programme. The Council’s strategy is to defer borrowing while it has significant levels of treasury cash balances available for investment (£207m at March 2021). Deferring borrowing will reduce the “net” revenue interest cost of the Authority as well as reducing the Councils exposure to counter party risk for its investments. The Council recognises that utilising investments in lieu of borrowing has a finite duration and that future borrowing will be required to support capital expenditure.

Net debt (borrowing less investment) was £227m at the end of the year. The average level of treasury funds available for investment purposes during the year was £194m. The return for the period was 0.30% compared to the recognised benchmark of 0.07% (7-day London Inter Bank Bid (Libid) average for period).

The Council is responsible for managing cashflows with an annual churn exceeding £1.5bn.

The Council has complied with all treasury management legislative and regulatory requirements during the period and all transactions were in accordance with the approved Treasury Management Strategy.

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Statement of Accounts Bristol City Council - For the Year Ended 31 March 2021

Pensions

Many pension schemes will be facing significant challenges considering the COVID-19 pandemic and will have seen a worsening of the funding position because of the market instability and valuations taking place in 2020. This has presented a significant funding challenge in terms of the long-term objective to lower costs and reduce the pay back of deficits.

The City Council is a member of the Avon Pension Fund. The pension liability as at 31 March 2021 is £1.128bn. This represents the value of what the Council owes across future years offset by the value of assets invested in the pension fund. The deficit on the Pension Fund has increased by £134m over the last year, this was mainly due to a significant drop in yields from corporate bonds due to a combination of lower interest rates and concerns around financial risk during the pandemic. These Markets are continuing to improve but remain lower than at the end of 2019/20.

The current funding level is an estimated 97%. Employers are paying additional contributions over a period of 14 years to meet the shortfall. The pension fund is revalued every three years. The most recent valuation, effective 1 April 2020, set contribution rates for three years, with the next valuation due in 2022, any impact of the value of the deficit and changes in deficit repayment level or duration will be reflected from 1 April 2023. An interim valuation is being undertaken to give a better understanding of the risks of the deficit to help manage over the medium term.

Contingencies

The Council has set aside a provision of £25.5m within the collection fund for any business rates appeals against rateable values in future years. The magnitude of the provision reflects the on-going fact that the Council, as a business rates retention pilot, has a significantly greater exposure to the risk of business rates appeals. The reduction of £2m since 2019/20, recognises that the number of outstanding appeals against the 2010 list is falling. The annual contribution is in line with government recommendations. There were approximately 194 appeals outstanding as at 31 March 2021.

Budget for 2021/22 and Medium Term Financial Plan (MTFP)

The Council is required to set an annual balanced budget which presents how its financial resources, or ‘revenue’, are to be allocated and used. The Council’s revenue spending plans explains what we intend to spend on statutory services, as well as local key priorities and objectives. The budget sets out the financial challenges Bristol City Council faces following the coronavirus pandemic and focusses on recovery, and how our communities will recover from the pandemic. In February 2021 the Council agreed a balanced budget for 2021/22. This included a net revenue budget for 2021/22 of £424.1 m but also a five-year capital programme totalling £890.1m for both General fund and Housing Revenue Account (HRA).

The uncertainty regarding future funding for local authorities means a robust and evidenced assessment of financial governance and future resilience is critical and in the consideration of the robustness of any estimates.

When this is combined with current unprecedented economic and financial uncertainty there will undoubtedly be risks inherent in the budget process and it is important that these are identified, mitigated and managed effectively. These are outlined in depth in the

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Statement of Accounts Bristol City Council - For the Year Ended 31 March 2021

MTFP but some of the key financial planning risks that may affect the projections over the medium term and delivery of a balanced budget include uncertainty in relation to the prolonged pandemic, its severity and the impact on economic recovery, ongoing demand and cost of social care for both Adults and Children, the achievement of the Council’s current and future year’s budget savings in both their timing and income target and the potential risk of overspends on major capital projects.

Where significant budget risks have been identified, suitable proposals are being put in place to mitigate against these risks where possible. The Council also holds contingencies and General unallocated reserves. The fact that the Council holds other reserves earmarked for alternative purposes that could be called on if necessary, means the overall the budget position of the Council can be sustained within the overall level of resources available.

Financial Health Indicators

It is essential to ensure the Council manages its financial resilience to meet unforeseen demands on services. Below is a selection of key financial resilience indicators as determined by CIPFA. The highest area of risk to the financial resilience of the Council compared to other similar authorities is the proportion of budget spent on social care services as this is seen as a very inflexible cost which is difficult to reduce over short term and impacts on the Council’s ability to respond with agility to changing demands. Close monitoring is required of the Adult Social Care transformation programme to ensure the mitigations and / or planned efficiencies are being realised. The Council will be required to take into account its resilience when making budget, borrowing and taxation decisions.

Indicators of Financial Stress - Results Breakdown

Unallocated Reserves
Earmarked Reserves
Change in Unallocated Reserves
Change in Earmarked Reserves
Change in HRA Reserves
Children Social Care Ratio
Adult Social Care Ratio
Higher Risk
Lower Risk

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Statement of Accounts Bristol City Council - For the Year Ended 31 March 2021

The Statement of Accounts

The Statement of Accounts is set out in the accompanying document; they consist of the following statements that are required to be prepared under the Code of Practice.

The Core Statements are:

The Comprehensive Income and Expenditure Statement – this records all the Council’s income and expenditure for the year. The top half of the statement provides an analysis by service area. The bottom half of the statement deals with corporate transactions and funding. Expenditure represents a combination of:

The Movement in Reserves Statement is a summary of the changes to our reserves over the course of the year. Reserves are divided into “useable”, which can be invested in capital projects or service improvements, and “unusable” which must be set aside for specific purposes. We continually review the money we have in reserves for specific purposes to make sure they are at the right levels, and that our reserves continue to meet our needs.

The Balance Sheet is a ‘snap shot’ of the council’s assets, liabilities, cash balances and reserves at the year-end date.

The Cash Flow Statement shows the reasons for changes in the Council’s cash balances during the year, and whether that change is due to operating activities, new investment, or financing activities (such as repayment of borrowing and other long term liabilities).

of the Statement of Accounts fully incorporate the results of Bristol Holding Limited, Bristol Waste Company Limited, Bristol Energy Limited and Goram Homes Limited. Full details of the relationship can be found in the Group Accounts section of the Statement.

Other entities which fall within the group boundary, but which are not consolidated into the Group Accounts as they are not considered to be material, are detailed within the Related Parties note within the Statement of Accounts.

The Supplementary Financial Statements are:

The Housing Revenue Account – this separately identifies the Council’s statutory landlord function as a provider of social housing under the Local Government and Housing Act 1989.

The Collection Fund summarises the collection of Council tax and business rates, and the redistribution of some of that money to Avon Fire Authority, the Avon and Somerset Police and Crime Commissioner and central government.

The Notes to these financial statements provide more detail about the Council’s accounting policies and individual transactions. Our Annual Governance Statement sets out the governance structure of the Council. It summarises the outcome of our review of the Governance Framework that has been in place during 2020/21 and our system of internal control, which is a critical component of our overall governance arrangements.

Denise Murray

Director of Finance (Section 151 Officer)

Group Accounts - the Council is required to produce Group Accounts alongside its own financial statements where it has material interests in subsidiaries, associates and/or joint ventures. The Group Accounts included as part

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Statement of Responsibilities

The Authority’s Responsibilities

The Council is required to:

The Director of Finance Responsibilities

The Director of Finance 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 of Accounts, the Director of Finance has:

Certificate of the Director of Finance

I hereby certify that this Statement of Accounts, provides a true and fair view of the financial position, financial performance and cash flows of Bristol City Council for the period ending 31 March 2021.

Denise Murray

Denise Murray Director of Finance (Section 151 Officer) 30 July 2021

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Independent Auditorfs Report (To Follow) 2_4

ANNUAL GOVERNANCE STATEMENT 2020/21

Demonstrating the importance of effective governance in local service delivery and public accountability.

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1. Introduction

2. Conclusions and Statement of Commitment

25

compliance, and heightened risk of fraud. Several responses, recovery and renewal strategies and policies where implemented in 2020/21 such as business support policies, the Local Outbreak Management Plan, the updated Bristol City Council Business Plan 2020/21 and the One City: Economic Recovery and Renewal Strategy.

Signed: Signed: Marvin Rees - Elected Mayor of Bristol Mike Jackson – Head of Paid Service Signed: Signed: Denise Murray – Chief Finance Officer (s151 Tim O’Gara – Monitoring Officer Officer)

3. Governance Framework

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Committees and Boards:

• Scrutiny
Commissions
Overview and		 Regulatory
Committees:
•
Development		 Other Committees:
• Audit (including a		 Partnership Boards:
• One City
• Scrutiny
Management Board
Communities		 Control
•
Licensing
•
Public Rights of		 Values and Ethics sub
committee)
• HR Committee		 • Bristol Homes
• Health & Wellbeing
• Learning City
• Resources Way and Green • Children’s and Adult’s
• People) Space Safeguarding
• Growth &
Regeneration		 •
Public Safety &
Protection

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Bristol Heat Networks. Part of the group’s governance arrangement includes a shareholder advisory group that maintains oversight of performance of the companies and external and internal audit assurance arrangements. Council has representation on company boards and an active Group Audit and Risk Committee is in place that oversees governance, risk management and internal control across the companies.

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Accountability within the Governance Framework
O&S Management Board; and
Audit Committee
Accountability
All
Mayor &
Councillors
Cabinet
Code of Corporate Governance (The Council’s commitment to good governance is based on “ Good Governance in Local Government: Framework
Policy Development
Mayor & Cabinet - providing strategic leadership; determining policy aims and objectives, resource allocation and prioritisation in line with strategic direction,
Legal and regulatory frameworks but not engaging directly in operational management of Council services
Policy Implementation
Senior Leadership Team - It is the duty of senior Officers to ensure that the policies of the Council are implemented
Legal & Democratic Corporate
Policies & Procedures Policies & Procedures
• The Constitution • Corporate Strategy
• Scheme of Delegation • Strategic Partnership
• Decision Pathway Protocols
• Shareholder Liaison • Quarterly
• Scrutiny Commissions Performance
incl. Call In / Reviews Monitoring
• Members Codes of • Management
Conduct Assurance
• Member Officer statements
Protocol • Corporate &
• Complaints reporting Directorate Risk
• Public Consultations Register
Financial Management HR
Framework Policies & Procedures
• Medium Term Financial • Employee Code of
Plan Conduct
• Capital Strategy • Equality & Diversity
• Annual Budget Setting • Whistleblowing Policy
• Budget Monitoring • Anti-Fraud, Bribery
Process and Corruption
• Statement of Accounts Strategy
• Treasury Management • Information Security
Strategy Policy
• Procurement Regulations • Pay Policy
• Compliance with CIPFA • My Performance
Guidelines Framework
• External Audit Letter • Declarations of
• Internal Audit Opinion Interest
Our
Citizens
Council Officers
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4. Principles of Governance – Assuring Compliance

Core Principle Governance in Action(2020/21)
A. Behaving with
integrity,
demonstrating
strong commitment
to ethical values and
respecting the rule
of law		 •The Council’s constitution sets out how the Council operates, how decisions
are made and the policies and procedures in place which provide a robust
framework for decision making. The Constitution is reviewed periodically with
Audit Committee approval of proposed updates in March 2021.
•The Monitoring Officer has oversight of decisions through the Decision
Pathway and the legal service is consulted on the legal implications of all
reports to ensure compliance with all relevant laws and regulations.
•The Council’s Corporate Strategy sets out the values and behaviours it
expects from its employees. Managers are required to review performance
against the values and behaviours as part of the individual performance
management framework.
•During 20/21 the Council updated its Equality and Inclusion Policy and
Strategy with unanimous Full Council approval, establishing new targets and
measures related to equality, diversity and inclusion practice. This is supported
by an Advancing Equality and Inclusion Action Plan agreed by Cabinet, with
progress monitored as part of a new internal governance structure for
equalities, led by a Strategic Group chaired by the Chief Executive. A
significant number of employees and managers have completed core equality
and inclusion learning programmes and a dedicated equality and inclusion
section is included in the corporate induction. Hiring managers have had
refresher recruitment and selection training, with a focus on unconscious bias
and trained diverse recruiters are now in place.
•Codes of conduct are in place for staff and Council Members which set out the
standards of conduct expected and require declarations of interests, gifts and
hospitality to be made. Minutes of meetings record declarations of interests by
Councillors. An overview of complaints received about Members conduct, and
action taken to resolve them, was provided to the Value and Ethics Sub-
committee in March 2021.
•Whistle-blowing arrangements were revised from April 2020 following previous
concerns that staff did not have confidence in them. New arrangements have
developed and successfully embedded throughout the year as confirmed by an
independent review of these arrangements which was reported to Audit
Committee in March 2021.
B. Ensuring openness
and comprehensive
stakeholder
engagement		 •Our Communications Strategy 2019/2023 sets out our ambitions to enable
strong communications within the council and form better relationships outside
of the Council with our partners and the communities we serve.
•Participative democracy was successfully trialled by way of Citizen’s
Assembly, seeking public views on key strategic issues arising from COVID-
19-19 and recovering from the pandemic.
•An updated Partnerships Policy and Toolkit was completed. Continued
internal communication to formally launch and embed these, including a
refresh of the Council’s register of partnerships is planned for Q1-Q2 21/22.
•Western Gateway: A Governance review has taken place, a Partnership Board
has been set upalongwithgovernance arrangements,and a secretariat

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established. This has enabled the effective operation of the partnership, with
assurance provided by the Government's decision to invest a further £800k
supporting its development in 2021/22.
•The One City Approach and its associated governance framework has
included public, minuted meetings of its Thematic Boards, and has enabled
frequent informal engagement and alignment of city activity in responding to
the pandemic.
•A cross-party and multi-agency Local Engagement Board was established to
oversee public communications and engagement relating to the Local
Outbreak Management Plan for COVID-19.
•Whilst not in place for 2020/21, the Council has recognised the benefits of a
Consultation and Engagement Strategy which is a priority for development in
2021/22.
•Forward plans are published on a monthly basis for Mayoral and Cabinet
decisions.
C. Defining outcomes
in terms of
sustainable
economic, social
and environmental
benefits		 •The Corporate Strategy sets out our contribution to the City and sets out the
key priorities for 2018 – 2023. Annual Business Plans set out the most
important actions we need to take each year to achieve the Corporate
Strategy.
•During 2020/21 the Council updated its Business Plan in-year to account for
COVID-19 response and recovery, with outcomes and milestones tracked
through Executive Director Meetings.
•New city-wide strategies for tackling the Climate Emergency and Ecological
Emergency - co-produced in a One City Approach with partners - were
published.
•Re-certification of our Environmental Management systems (ISO 14001) was
achieved and a carbon disclosure project assessment concluded that our
plans to reduce Climate impacts are strategic,holistic ambitious but realistic.
D. Determining the
interventions
necessary to
optimise the
achievement of the
intended outcomes		 •Key interventions are determined through the annual Business Planning cycle
and its accompanying Performance Framework development, with assurance
provided through senior officer and political review and approval of all Service
Plans and Director Summaries, plus Corporate Leadership Board approval and
Cabinet noting of the final corporate Business Plan.
•During 2020/21 work has been undertaken to strengthen the Council’s
technological foundations for data analytics and insights, enabling more
powerful and insightful use of data and evidence to inform decision making
and help determine interventions. This is a developing area, with a pilot
complete in Children and Families Services and more planned. A Data,
Insights and Information strategy is planned for 2021/22.
•Issues have been identified through internal review by the Equality and
Inclusion team of Equalities Impact Assessments, with a refreshed system and
process devised and plans to retrain officers undertaking the assessments.
The process has been approved, launched and will now following training of
officers need to be more fully embedded within Decision Pathway
considerations in 2021/22.
•External assurance on Equality and Inclusion interventions and progress was
sought by participation in the Local Government Association’s Equality
Framework for Local Governmentpeer challenge in Q4 2020/21.
E. Developing capacity
including the
capability of its
leadership and the
individuals within it		 •Work was completed to refresh the Workforce Strategy, and this is now in
place for 2021/22. Actions are included in respect of; equality, diversity and
inclusion gaps that will be addressed, the future supply of skills and
professions mapped against demand, areas where job or service redesign is
needed to help us deliver our priorities, the type and level of skills needed for
the future,how we attract,retain and developtalent within the organisation.

30

•The focus during 2020/21 has been on the response to the COVID-19
pandemic, redirecting our resources and reprioritising our work to ensure we
keep our staff and the people of Bristol safe whilst continuing to keep essential
day to day services running.
•A strategic Client to support the Council’s shareholder executive and
governance arrangements around the council’s companies has been created.
•A Strategic Partnering business model has been introduced to support capital
programme delivery.
•The Council has prepared a comprehensive Member Development Programme
in 2020/21 with a range of training and induction programmes for all councillors
which is being progressed following the May 2021 elections.
•The Leadership Framework has been used to support the recruitment and
selection of senior leadership roles, it’s also woven into performance review for
managers to helpthem reflect on their managementpractice.
F. Managing risk and
performance
through robust
internal control and
strong public
financial
management		 •An approved Performance Framework is in place, aligned to the approved
annual Business Plan (and onward to the Corporate Strategy). This is robustly
reported through management meetings including Executive Director Meetings
and Corporate Leadership Board, with reporting of key indicators on to
Cabinet. Accompanying Scrutiny of divisional level measures takes place via
Scrutiny Commissions, and of corporate measures via Overview and Scrutiny
Management Board. Accompanying Scrutiny of divisional level measures
takes place via Scrutiny Commissions, and of corporate measures via
Overview and Scrutiny Management Board.
•New procurement rules have been developed and launched in January 2021
with ongoing work to strengthen contract management arrangements.
•The financial approach of managing the pandemic is a one-off shock with a
medium-term impact and new funding and reserves managed accordingly.
Clear financial protocols and procedures were in place to ensure there was
consistency, transparency, and accountability in the use of public funds.
•All service, directorate and corporate risks are reviewed regularly in line with
the risk management policy. A new risk management system (Pentana Risk)
has been procured and is being implemented which will improve the
monitoring of progress being made in relation to timely delivery of key
mitigating actions
•The Council has updated relevant data protection policies and procedures and
to ensure on-going compliance, recommendations from a range of data
protection focussed internal audit work will be taken forward as part of GDPR
Phase II project in 2021/22 to enhance compliance with this principle.
G. Implementing good
practices in
transparency,
reporting and audit
to deliver effective
accountability		 •Processes were implemented to transparently account for additional
government funding received and emergency support being provided in
response to the pandemic. Internal Audit assurance work is underway to
confirm the effectiveness of those new processes
•Corrective action arising from the Value for Money reports by the External
Auditors has been acted upon and appropriate action is being taken to
implement recommendations.
•Automating management action tracking of agreed actions following internal
audit review has enabled high level focus to improve the extent to which
improvement actions are implemented.
•Root cause analysis of the Chief Internal Auditors previous ‘limited assurance’
opinions enabled management to recognise the need to prioritise resources
towards achieving the Council’s highest priorities whilst also ensuring there is
capacity to drive the enabling activity that will improve the Councils
governance,risk management and internal control arrangement,

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5. Impact of COVID-19 on our Governance Arrangements

5.5 Other examples of changes to the governance arrangements included the following:

32

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6. Review of Effectiveness

First Line Assurances - Management Self Assurance is provided:

34

Second Line Assurances – Oversight and Monitoring Functions Assurance

35

36

Third Line ‘Independent’ Assurance, External Inspection and Review Functions

37

had an 18 month timeframe to July 2021. Advisors from the Department for Education (DfE) and NHS England (NHSE) meet with leaders from the council and CCG every four months, to review progress made against the planned achievement milestones in the WsoA. During 2020/21 three of these monitoring meetings took place virtually in July, November, and March. At each meeting, it was concluded that progress had been good despite the challenges brought by COVID-19 and the advisors were satisfied with progress. The final monitoring meeting takes place on the 19[th] July. Good progress has been made against almost all the milestones. The four milestones remaining overdue in July are all underway with revised timelines agreed by the SEND Improvement Board. The SEND Partnership Group will co-produce the next iteration of the SEND action plan, which will continue to be monitored by the bi-monthly SEND Improvement Board. The window for re-inspection is likely to be October 2021 to March 2022.

7. Significant Governance Issues 2020/21

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----- Start of picture text -----
Item Issue Key Actions
1 COVID-19 Continue to implement Local Outbreak Management
The global outbreak of the COVID-19 Plan and associated governance structures, plus
virus had a material impact on the communication and engagement, including about
City and the Council’s services and vaccination.
its finances during 2020/21. The
impact and response were complex Action planning and tracking / assurance work against
as some services operated remotely, the Council’s share of the One City Economic Recovery
others were closed and new and Renewal Strategy, plus ongoing monitoring and
responsibilities such as testing were assurance of wider system activity via City Office and
introduced as a response to Council teams such as Economic Development.
community needs.
Revise the Council’s Corporate Strategy, Medium
The impact of the pandemic will be Term Financial Plan and Capital Strategy in concert, to
felt for many years and the recovery ensure resilience and that the impacts and recovery
period will be elongated. The actions are accounted for and part of mainstream
longevity and uncertainty of the ‘business as usual’ for the Council, including within its
pandemic will require flexible annual Business Planning process.
recovery approaches and medium to
long term resilience in the Council’s Continued operation of city-wide and regional
finances. governance structures to ensure coordinated response
and recovery, including One City Boards, City Leaders
group, Local Resilience Forum Strategic Recovery
Group, COVID-19 Health Protection Committee.
Maintain the iterative Avon and Somerset recovery
Equalities Impact Assessment which was coordinated
by Bristol City Council, using this amongst other key
data and evidence sources to inform activity.
Enact plans to support a safe return of people to a
more normal life, including high streets, transport,
hospitality settings and the general public realm.
As a partner in One City, contribute to the annual
revision of the One City Plan 2050 and other city-wide
strategies that require a ‘recovery’ lens.
----- End of picture text -----

2 Governance arrangements for the Council’s subsidiaries The External Auditors issued a qualified ‘except for’ opinion in their value for money assessment in relation to governance arrangements in respect of BE 2020 Ltd, and the report outlined 12 recommendations for improvement. The actions taken by the Council to address the issues outlined in the report will be assessed by the External Auditors within the 2020/21 Audit. The scope of the review in respect to BE 2020 Ltd was expanded and the findings are due to be reported in 2021/22.

Management actions in response to the value for money report recommendations were agreed and submitted to the Audit Committee in January 2021. The Council is monitoring the implementation of these management actions to ensure that the issues identified by the External Auditor are fully addressed. Review of Governance Arrangements for Bristol City Council’s Subsidiaries’ was discussed separately at the Extraordinary Full Council public meeting February 2021 and a subsequent report to Full Council public meeting in May 2021 to consider the progress on the implementation of the management actions.

The expanded scope of the external audit work on the governance arrangements regarding BE 2020 Ltd has been completed and the Council awaits the outcome of the External Auditors review and the standard

39

consideration of whether the application of formal audit powers will be applied.

3 Dedicated Schools Grant deficit

The Dedicated Schools Grant (DSG) was in deficit of £10.004m at the financial year-ending 2020/21. A range of outcome and process improvements are being delivered in line with the Written Statement of Action however, the financial deficit is forecasted to increase by c. 100% (£10.5m) by the year end 31 March 2022. Should this forecast be realised, this will result in a cumulative forecasted, carry forward deficit of £20.5m at the end of the financial year.

The forecasted deficit in the DSG is predominantly attributed to the significant increase needed for support for children and young people with special educational needs and /or disabilities (SEND), via the High Needs budget. The scale of SEND deficit is a national issue and the SEND review announced in September 2019 with a commitment to boost outcomes and improve value for money, has been subject to repeated delays.

Whilst the Council will continue to call for sufficiency of government funding to address the legislatively driven deficits, investment and clarity about future funding, arrangements plans will need to be considered for a sustainable long-term provision that meets the needs of children and young people in Bristol.

The Education Transformation Programme is largely focused on the following SEND improvement activities.

The first iteration of the evolving DSG Deficit Management Plan (DMP) has been published and presented to Schools Forum (June 2021).

The completed DMP will be kept up to date, and along with the Education Transformation programme, will be reported periodically to the Schools Forum, People Scrutiny commission and or Cabinet during 2021/22.

During the refurbishment of the Bristol Beacon, as the building was dismantled, contractors identified large numbers of significant and unforeseen structural and heritage issues that created huge complexity and added significant time and costs to the project.

Recognising the cultural importance of the building and its contribution to the region’s economy, Cabinet agreed a revised capital investment budget of £106.9m, an increase of

The Bristol Beacon has been re baselined in terms of budget and duration. A Project Management Office has been created and a Strategic Partner commissioned to provide key professional support to the project. Project assurance is ongoing in the form of Project Board reporting and management process.

The Capital Programme is managed and monitored through the Capital & Investment Board and Delivery Executive provides member oversight. These governance arrangements together with skills and capacity brought by the Capital Strategic Partnering arrangements, continues to strengthen and improve capital monitoring and is providing a focus on setting realistic delivery budgets and profiles, which allow for

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£58.1m (119%) on the original sufficient lead times before expenditure is likely to be approved budget of £48.8m. incurred. The new governance arrangements will need to be embedded and will be subject to continuous This represents a significant review to ensure they are working effectively. diversion of Council resources. The strategic partner is also helping to establish a Capital Portfolio Office which will become an information hub about the Council’s capital programmes and projects, and will provide advice and information to senior officers to make strategic decisions.

As part of the annual VFM review the External Auditors are required to assess whether the Council has made proper arrangements for securing economy, efficiency and effectiveness in its use of resources and the Council will give appropriate consideration to any findings / agreed recommendations for improvement arising from this review.

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Core Statements

Comprehensive Income and Expenditure Statement for the year ended 31 March 2021

Gross
Exp
£’000
391,416
228,165
190,409
105,574
204,487
17,657
**1,137,708 **		 2019/20
Gross
Income

£’000
(166,564)
(160,328)
(84,368)
(119,811)
(196,848)
(1,252)
**(729,171) **


Net
Exp


£’000
224,852 People
67,837 Resources
106,041 Growth & Regeneration
(14,237) Housing Revenue Account
7,639 Dedicated Schools Grant
16,405 Corporate Funding & Expenditure

408,537 Cost of services

2,375 Other operating expenditure (Note 9)
55,304 Financing and investment income and
expenditure (Note 10)
(414,418) Taxation and non-specific grant income
(Note 11)
51,798 (Surplus) or Deficit on provision of
services
Items that will not be reclassified to
the (Surplus) or Deficit on the
Provision on Services
(99,682)
(Surplus) or deficit on revaluation of
Property, Plant and Equipment assets
(Note 20)
(45,748) Remeasurement of the net defined
benefit liability\asset (Note 34)
Items that may be reclassified to the
(Surplus) or Deficit on the Provision
on Services
-
(Surplus)or deficit on financial assets
measured at fair value (Notes 24)
(145,430) Other comprehensive income and
expenditure
(93,632) Total comprehensive income and
expenditure		 Gross
Exp
£’000
417,307
239,408
260,538
104,341
212,076
9,860
1,243,530		 2020/21
Gross
Income

£’000
(212,528)
(164,456)

(71,263)
(123,136)
(201,110)

(903)
(773,396)		 Net
Exp

£’000

204,779

74,952

189,275

(18,795)

10,966

8,957

470,134
``
7,937
7,313
(473,173)
12,211
(171,378)
112,346
-
(59,032)
(46,821)

42

Movement in Reserves Statement for the year ended 31 March 2021

Note General Fund
Balance		 Earmarked Reserves
Restated		 School Reserves Sub Total - General
Fund		 Housing Revenue
Account		 Housing Revenue
Account Earmarked
Reserves		 Sub Total - Housing
Revenue Account		 Capital Receipts Major Repairs
Reserve		 Capital Grants
Unapplied		 Total Usable
Reserves		 Unusable Reserves
Restated		 Total Council
Reserves
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Adjusted Balance at 1 April 2019 23,258 81,179 12,493 116,929 78,718 7,852 86,570 70,824 3,606 3,919 281,847 1,293,274 1,575,121
Movement in Reserves during 2019/20
Surplus or (deficit) on the provision of services (54,814) (54,814) 3,016 3,016 (51,798) (51,798)
Other Comprehensive Expenditure and Income - - - 145,431 145,431
Total Comprehensive Expenditure and Income (54,814) - - (54,814) 3,016 - 3,016 - - - (51,798) 145,431 93,633
Adjustments between accounting basis and funding basis under
regulations		 Note 17 59,578 59,578 (2,060) (2,060) 7,688 - (1,234) 63,972 (63,972) -
Net Increase/(Decrease) before Transfers to Earmarked Reserves 4,764 - - 4,764 956 - 956 7,688 - (1,234) 12,174 81,459 93,633
Transfers to/(from) Earmarked Reserves Note 18 (11,020) 16,211 (5,191) - 7,852 (7,852) - - - -
Increase/(Decrease) in 2019/20 (6,256) 16,211 (5,191) 4,764 8,808 (7,852) 956 7,688 - (1,234) 12,174 81,459 93,633
Balance at 31 March 2020 Carried Forward 17,001 97,390 7,302 121,693 87,526 0 87,526 78,512 3,606 2,685 294,022 1,374,733 1,668,755
Movement in Reserves during 2020/21
Surplus or (deficit) on the provision of services (30,208) (30,208) 17,997 17,997 (12,211) (12,211)
Other Comprehensive Expenditure and Income - - - 59,032 59,032
Total Comprehensive Expenditure and Income (30,208) - - (30,208) 17,997 - 17,997 - - - (12,211) 59,032 46,821
Adjustments between accounting basis and funding basis under
regulations		 Note 18 172,416 172,416 (7,082) (7,082) (20) 7,690 395 173,399 (173,399) -
Net Increase/(Decrease) before Transfers to Earmarked Reserves 142,208 - - 142,208 10,915 - 10,915 (20) 7,690 395 161,188 (114,367) 46,821
Transfers to/(from) Earmarked Reserves Note 19 (123,543) 123,317 226 0 (651) 651 - 0 - 0
Increase/(Decrease) in 2020/21 18,665 123,317 226 142,208 10,264 651 10,915 (20) 7,690 395 161,188 (114,367) 46,821
Balance at 31 March 2021 Carried Forward 35,666 220,707 7,528 263,901 97,791 651 98,441 78,492 11,296 3,080 455,210 1,260,366 1,715,575

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Balance Sheet as at 31 March 2021
31-Mar-20
Note
£'000
2,718,767
Property, Plant & Equipment
20
204,056
Heritage Assets
21
15,958
Intangible Assets
23
252,586
Investment Property
24
42,074
Long Term Investments
24
49,831
Long Term Debtors
29
3,283,272
Long Term Assets
89,093
Short Term Investments
24
10,166
Inventories
106,283
Short Term Debtors
29
69,426
Cash and Cash Equivalents
30
723
Assets held for sale
275,691
Current assets
(14,778)
Short Term Borrowing
24
(167,447)
Short Term Creditors
31
(1,897)
Provisions
32
(26,741)
Capital grants received in advance
17
(5,379)
Derivative Financial Instruments
(216,242)
Current liabilities
(450,488)
Long Term Borrowing
24
(28,257)
Provisions
32
(1,166,622)
Other Long-Term Liabilities
31
(28,600)
Capital Grants Receipts in Advance
17
(1,673,967)
Long-term liabilities
1,668,754
Net assets
(294,021)
Usable Reserves
19
(1,374,733)
Unusable Reserves
33
(1,668,754)
Total reserves		 31-Mar-21
£'000
2,846,144
207,406
20,573
275,903
43,570
49,098
3,442,694
64,983
12,416
144,928
121,572
806
344,705
(4,966)
(215,373)
(5,760)
(44,447)
-
(270,546)
(450,488)
(26,277)
(1,291,181)
(33,331)
(1,801,277)
1,715,576
(455,209)
(1,260,366)
(1,715,576)

44

Cash Flow Statement for the year ended 31 March 2021

2019/20

£'000
Note
(51,798) Net deficit on the provision of services
204,425 Adjustment to net surplus on the provision of services for
non-cash movements
35
(89,922)
Adjust for items included in the net surplus or deficit on the
provision of services that are investing and financing
activities
35
62,705 Net cash flows from Operating Activities
(25,041) Investing Activities
36
24,365 Financing Activities
37
62,029 Net increase (decrease) in Cash and Cash Equivalents
7,397 Cash and Cash Equivalents at the beginning of the reporting
period
30
69,426 Cash and Cash Equivalents at the end of the reporting
period		 2020/21

£'000
(12,211)

152,268

(83,538)
56,519

20,726

(25,099)
52,146

69,426
121,572

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Notes to the Accounts

1 Accounting Policies

(i) General Principles

The Statement of Accounts summarises the Council's transactions for the 2020/21 financial year and its position at the year-end of 31 March 2021. The Council is required to prepare an annual Statement of Accounts by the Accounts and Audit (England) Regulations 2015, which require the accounts to be prepared in accordance with proper accounting practices. These practices primarily comprise the Code of Practice on Local Authority Accounting in the United Kingdom 2020/21 (the Code) supported by International Financial Reporting Standards (IFRS).

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. The Statement of Accounts has been prepared on a ‘going concern’ basis.

(ii) Recognition of Income and Expenditure

Activity is accounted for in the year in which it takes place, which may not be the same year in which cash payments are made or received.

Revenue from contracts with service recipients, whether for services or the provision of goods, is recognised when (or as) the goods or services are transferred to the service recipient in accordance with the performance obligations in the contract. In local government, the generation of revenues from charges to service recipients is only a minor funding stream and contracts with customers tend to be accounted for and delivered within each financial year.

Revenue from the sale of goods and disposal of assets is recognised when the Council transfers the risks and rewards of ownership to the purchaser. 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.

Government grants and third-party contributions are recognised when there is reasonable assurance that the Council will comply with any conditions attached to the payments, and that the grants or contributions will be received. Where conditions attached to grants or contributions have not been satisfied, monies received to date are carried in the Balance Sheet as creditors and credited to the CIES when the conditions are satisfied. 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.

Supplies are recorded as expenditure when they are consumed. If there is a gap between the date supplies are received and their consumption, they are carried as inventories in the Balance Sheet. Expenses in relation to services received (including services provided by employees) are recorded as expenditure when the services are received rather than when payments are made.

(iii) 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 investments that mature in three months or less from the date of acquisition and are readily convertible to known amounts of cash with low risk of change in value.

Cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Council’s cash management strategy.

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(iv) Charges to Revenue for Non-Current Assets

Services, support services and trading accounts are debited with the following amounts to record the cost of holding non-current assets during the year:

(v) City Region Deal

The Council has applied the principles of IPSAS 23 ‘Revenue from non-Exchange transactions (Taxes and Transfers)’ in accounting for the transactions and balances relating to the City Region Deal.

Growth paid to the accountable body (South Gloucestershire Council) for the Business Rates Pool (BRP) is recognised by the Council as a debtor until such point that the funds are paid out by the BRP or committed by the Economic Development Fund (EDF) to fund future EDF payments in respect of approved programmes.

( vi) Collection Fund and Local Taxation

Bristol City Council is a billing authority for local taxation and collects:

The Collection Fund shows the transactions of the billing authority in relation to the collection from taxpayers and the distribution to local authorities, central government and precepting bodies of council tax and non-domestic rates (NDR). There is no requirement for a separate Collection Fund Balance Sheet since the assets and liabilities arising from collecting non-domestic rates and council tax belong to the bodies (i.e. major preceptors, the billing authority and the Government).

The Collection Fund is effectively an agency account therefore income, expenditure and balance sheet transactions are apportioned between the Council, central government and precepting bodies.

The council tax and NDR income included in the Comprehensive Income and Expenditure Statement is the Council’s share of accrued income for the year. However, regulations determine the amount of council tax and NDR that must be included in the Council’s General Fund. Therefore, 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 is taken to the Collection Fund Adjustment Account and included as a reconciling item in the Movement in Reserves Statement. The Balance Sheet includes the Council’s share of the end of year balances in respect of council tax and NDR relating to arrears, impairment allowances for doubtful debts, overpayments and prepayments and appeals.

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(vii) Dedicated Schools Grant

The Local Authorities (Capital Finance and Accounting) (England)(Amendment) Regulations 2020 establish new accounting practices in relation to the treatment of local authorities’ schools budget deficits such that where a local authority has a deficit on its school's budget relating to its accounts for a financial year beginning on 1 April 2020, 1 April 2021 or 1 April 2022, it must not charge the amount of that deficit to a revenue account. Instead, the deficit (including the accumulated deficit as of 31 March 2020) is charged to an unusable reserve the Dedicated Schools Grant Adjustment Account by a transfer from the General Fund Balance in the Movement in Reserves Statement.

(viii) Employee Benefits

Benefits Payable During Employment

Monetary benefits such as wages and salaries, paid leave and bonuses, and non-monetary benefits (for example, cars) for current employees are recognised as an expense in the year in which employees render service to the Council. An accrual is made to represent the cost of holiday entitlement earned but not taken at each year end, to meet Code and IAS requirements.

Termination Benefits

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, these costs are charged on an accruals basis to the respective Service line in the Comprehensive Income and Expenditure Statement.

Post-Employment Benefits

Employees of the Council are members of three separate pension schemes:

All the above schemes provide defined benefits to members for example retirement lump sums and pensions, earned as employees working for the Council.

However, the arrangements for the Teachers' scheme and NHS Scheme mean that liabilities for these benefits cannot ordinarily be identified for the Council. These schemes are therefore accounted for as if they were defined contributions schemes and no liability for future payments of benefits is recognised in the Balance Sheet. The CIES is charged with the employer’s contributions payable to Teachers pensions and NHS pensions in the year.

The Local Government Pension Scheme

The Local Government Pension Scheme is accounted for as a defined benefits scheme:

The liabilities of the Avon Pension Fund attributable to the Council are included in the Balance Sheet on an actuarial basis using the projected unit method - i.e. 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, etc., and projections of projected earnings for current employees. Liabilities are measured on an actuarial basis discounted to present value, using the projected unit method. The discount rate to be used is determined in reference to market yields at balance sheet date of high-quality corporate bonds.

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

The change in the net pension liability of the Council is analysed into the following components:

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 according to the relevant accounting standards. In the Movement in Reserves Statement, this means that there are appropriations to and from the Pensions 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 Pensions Reserve thereby measures the beneficial impact to the General Fund of being required to account for retirement benefits based on cash flows rather than as benefits earned by employees.

In 2020, the Council made an up-front payment of the LGPS deficit contributions for the three years 2020/21 - 2022/23 totalling £20.430m (net of academy conversions). This payment was made April 2020. The up-front payment took advantage of the independent Actuary’s calculation of the return these contributions could achieve once invested by the Pension Fund. The discount calculated by the Actuary for making the up-front payment (net of academy conversions) rather than the typical approach of monthly payments in arrears over the three-year period was £1.295m, reducing total payments from £21.725m to £20.430m. The return was judged to be far greater than could have been achieved by investing the amounts as part of the Council’s Treasury Management Strategy and the approach represented good value for money for the Council.

Discretionary Benefits

The Council has restricted powers to provide discretionary post-employment benefits. Any such benefits are accrued for in the year of the decision to make the award and are charged to the Comprehensive Income and Expenditure Statement against the service in which the employees worked.

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(ix) Events After The Reporting Period

Events after the balance sheet date are those events, both favourable and unfavourable, which 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:

Events taking place after the date when the Statement of Accounts is authorised for issue are not reflected in the Statement of Accounts.

(x) Fair Value Measurement

The Council measures some of its non-financial assets such as surplus assets and investment properties and some of its financial instruments such as equity shareholdings at fair value at each reporting date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement assumes that the transaction to sell the asset or transfer the liability takes place either:

a) in the principal market for the asset or liability, or

b) in the absence of a principal market, in the most advantageous market for the asset or liability.

The Council measures the fair value of an asset or liability using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

When measuring the fair value of a non-financial asset, the Council considers a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Council uses valuation techniques that are appropriate in the circumstances and for which sufficient data is available, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

Inputs to the valuation techniques in respect of assets and liabilities for which fair value is measured or disclosed in the Council’s financial statements are categorised within the fair value hierarchy, as follows:

(xi) Financial Instruments

The Council adopted the IFRS 9 Financial Instruments accounting standard with effect from 1st April 2018.

Financial Liabilities

Financial liabilities are recognised on the Balance Sheet when the Council becomes a party to the contractual provisions of a financial instrument and are initially measured at fair value and are carried at their amortised cost. As 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

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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 Council’s borrowings this means that the amount presented in the Balance Sheet is the outstanding principal repayable (plus accrued interest). Interest charged to the Comprehensive Income and Expenditure Statement is the amount payable for the year according to the loan agreement.

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. The Council has a policy of spreading the gain or loss over the term of the replacement loan that was used to refinance the loan against which the premium was payable or discount receivable. The reconciliation of amounts charged to the Comprehensive Income and Expenditure Statement to the net charge required against the General Fund balance is managed by a transfer to or from the Financial Instruments Adjustment Account in the Movement in Reserves Statement.

Financial Assets

Financial assets are classified using an approach that is based on the business model for holding the financial assets and their cashflow characteristics.

There are three main classes of financial assets measured at:

The Council’s business model for most of its investments is to hold them to collect contractual cash flows. Financial assets are therefore classified as amortised cost. There are some exceptions, where the Council holds strategic investments to help it meet other policy objectives, such as the support of economic development in the county. This means that some investments are ones where contractual payments are not solely payment of principal and interest (i.e. where the cash flows do not take the form of a basic debt instrument).

Financial Assets Measured at Amortised Cost

Financial assets measured at amortised cost are recognised on the Balance Sheet when the Council becomes a party to the contractual provisions of a financial instrument and are initially measured at fair value. They are subsequently measured 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 financial assets held by the Council, this means that the amount presented in the Balance Sheet is the outstanding principal receivable (plus accrued interest) and interest credited to the Comprehensive Income and Expenditure Statement is the amount receivable for the year in the loan agreement.

However, from time to time the Council makes loans to voluntary organisations at less than market rates (soft loans). When soft loans are made, a loss is recorded in the CIES (debited to the appropriate service) for the present value of the interest that will be foregone over the life of the instrument, resulting in a lower amortised cost than the outstanding principal. Interest is credited to the Financing and Investment Income and Expenditure line in the CIES at a marginally higher effective rate of interest than the rate receivable from the voluntary organisations, with the difference serving to increase the amortised cost of the loan in the Balance Sheet. Statutory provisions require that the impact of soft loans on the General Fund Balance is the interest receivable for the financial year – the reconciliation of amounts debited and credited to the CIES to the net gain required against the General Fund Balance is managed by a transfer to or from the Financial Instruments Adjustment Account in the Movement in Reserves Statement. Any gains and losses that arise on the derecognition of an asset are credited or debited to the Financing and Investment Income and Expenditure line in the CIES.

In addition, the Council does have deferred payment policies where individuals are allowed to defer payment against an invoice raised by the Council, for example where the Council holds a legal charge against a property that enables sums to be reimbursed from sale proceeds later. These are like loans at less than market rates and are referred to as soft loans. If any the lost interest against the soft loan was significant

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then adjustments would be made to the relevant service revenue account and Balance Sheet. However, the impact on the Council's revenue account of soft loans and lost interest is not financially significant and the accounts have not been adjusted to reflect these requirements.

Expected Credit Loss Model

The Council recognises expected credit losses on all its financial assets held at amortised cost or FVOCI, either on a 12-month or lifetime basis. The expected credit loss model also applies to lease receivables and contract assets. Only lifetime losses are recognised for trade receivables (debtors) held by the Council.

Impairment losses are calculated to reflect the expectation that the future cash flows might not take place because the borrower could default on their obligations. Credit risk plays a crucial part in assessing losses. Where risk has increased significantly since an instrument was initially recognised, losses are assessed on a lifetime basis. Where risk has not increased significantly or remains low, losses are assessed based on 12month expected losses.

Financial Assets Measured at Fair Value through Profit or Loss (FVPL)

Financial assets that are measured at FVPL are recognised on the Balance Sheet when the Council becomes a party to the contractual provisions of a financial instrument and are initially measured and carried at fair value. Fair value gains and losses are recognised as they arrive in the Surplus or Deficit on the Provision of Services.

The fair value measurements of the financial assets are based on the following techniques:

The inputs to the measurement techniques are categorised in accordance with the following three levels:

Any gains and losses that arise on the derecognition of the asset are credited or debited to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement.

An equity instrument can be elected to a FVOCI treatment rather than a FVPL treatment if it is not held for trading. The Council has reviewed its assets that would be measured at FVPL based on the business model and has elected to classify instruments as either FVPL or FVOCI on an instrument-by-instrument basis based on the assessed benefit to the Council from the chosen classification.

(xii) 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:

Amounts recognised as due to the Council are not credited to the Comprehensive Income and Expenditure Statement until conditions attached to the grant or contribution 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.

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(xiii) Heritage Assets

The Council’s Heritage Assets are predominantly on display in museum buildings and galleries in the city, held in storage or loaned out to other educational or cultural organisations.

These assets are all valued on a historic cost basis or an annual insurance valuation basis.

The Council holds numerous ancient monuments and statues which are not recognised on the Balance Sheet because of the diverse and often unique nature of the assets held and the lack of comparable market values.

There is no depreciation charge against heritage assets because it is estimated that the assets have an extended and indeterminate useful life such that any depreciation charge would be negligible. The carrying values of Heritage Assets are reviewed when there is evidence of impairments for example when an asset has suffered physical deterioration or breakage or where doubts arise as to its authenticity. Any reductions to the carrying value of the assets are recognised and measured in accordance with the Council’s general policy on impairments.

(xiv) Intangible Assets

Expenditure on non-monetary assets that do not have physical substance but are controlled by the Council as a result of past events (for example software licences) is capitalised when it is expected that future economic benefits or service potential will flow from the Intangible Asset to the Council.

Internally generated assets are capitalised where it is demonstrable that the project is technically feasible and is intended to be completed (with adequate resources being available) and the Council will be able to generate future economic benefits or deliver service potential by being able to sell or use the asset. Expenditure is capitalised where it can be measured reliably as attributable to the asset and is restricted to that incurred during the development phase (research expenditure cannot be capitalised).

Expenditure on the development of websites is not capitalised if the website is solely or primarily intended to promote or advertise the Council’s goods or services.

Intangible Assets are measured initially at cost. Amounts are only revalued where the fair value of the assets held by the Council can be determined by reference to an active market. In practice, no Intangible Asset held by the Council meets this criterion, and they are therefore carried at amortised cost. The depreciable amount of an Intangible Asset is amortised over its useful life to the relevant service line in the Comprehensive Income and Expenditure Statement. An asset is tested for impairment whenever there is an indication that the asset might be impaired – any losses recognised are posted to the relevant service line in the Comprehensive Income and Expenditure

(xv) Interests in Companies and Other Entities

(a) Subsidiaries

Subsidiaries are all entities over which the Council has control. The Council controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and can affect those returns through its power over the entity.

The Council’s material subsidiaries are Bristol Holding Limited (which is directly held) and Bristol Waste Company Limited, Bristol Energy Limited and Goram Homes Limited (all of which are indirectly held). There are no non-controlling interests.

In the single entity accounts, the Council has opted to account for its investments in subsidiaries in accordance with Chapter 7 of the Code, Financial Instruments. The investments are accordingly classified as fair value through other comprehensive income (FVPL) and are carried in the Balance Sheet at fair value. Changes in the fair value of the Council’s investments in subsidiaries are recognised in Other Comprehensive Income. Impairments are recognised directly in the Surplus/Deficit on the Provision of Services.

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In the group accounts, the subsidiaries are consolidated on a line-by-line basis with adjustments to eliminate intra-group transactions, balance and unrealised gains on transactions between the group entities. Where necessary, amounts reported by subsidiaries have been adjusted to conform to the Council’s accounting policies.

b) Joint Arrangements

A Joint Arrangement is an arrangement of which two or more parties have joint control where the parties are bound by contractual arrangement and the contractual arrangement gives two or more of those parties joint control of the arrangement. Joint Arrangements are classified as Joint Ventures or Joint Operations.

The Council has no material Joint Ventures.

A Joint Operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement.

The Council has one Joint Operation being the West of England Local Enterprise Partnership. In respect of this, the Council accounts for:

(xvi) Investment Property

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

Investment properties are measured initially at cost and subsequently at fair value, based on “the highest or best price that can be obtained in the most advantageous market, in an arms’ length transaction between knowledgeable participants at the measurement date”. Investment Properties are not depreciated but are revalued annually according to market conditions at the year-end

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.

Rental Income received in relation to investment properties is 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 Balance in the Movement in Reserves Statement and posted to the Capital Adjustment Account and, for sale proceeds, the Capital Receipts Reserve.

(xvii) Leases

Leases are classified as finance leases where the terms of the lease transfer substantially all the risks and rewards incidental to ownership of the property, plant or equipment from the lessor to the lessee. All other leases are classified as operating leases. Where a lease covers both land and buildings, the land and buildings elements are considered separately for classification.

Arrangements that do not have the legal status of a lease but convey a right to use an asset in return for payment are accounted for under this policy where fulfilment of the arrangement is dependent on the use of specific assets.

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The Council as 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:

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 Council 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 and 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.

Operating Leases

Rentals paid under operating leases are charged to the Comprehensive Income and Expenditure Statement as an expense of the services benefitting 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 if there is a rent-free period at the commencement of the lease).

The Council as Lessor

Finance Leases

To date the Council has not granted any Finance Leases.

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 if 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.

(xviii) Minimum Revenue Provision (MRP)

The Council is not required to use Council tax to fund depreciation, revaluation and impairment losses or amortisation of non-current assets. However, it is required to make an annual contribution from revenue towards the reduction in its overall borrowing requirement equal to either an amount calculated on a prudent basis or as determined by the Council in accordance with statutory guidance.

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(xix) Overheads And Support Services

The Council operates and manages its support services within the Resources Directorate, and this is how these services are reported to management. The costs of overheads and support services are therefore not re-apportioned (except for ring-fenced accounts such as the HRA, Public Health and Licencing).

(xx) Prior Period Adjustments

Prior period adjustments arise because of a change in accounting policies or to correct a material error. Changes in accounting estimates are only accounted for prospectively i.e. in the current and future years which are affected by the changes, they 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 in accounting policy is made, it is applied retrospectively (unless stated otherwise) by adjusting opening balances for the current year and comparative amounts for the prior period as if the new policy had always been applied.

Where material errors are discovered in prior period figures they are corrected retrospectively by amending opening balances and comparative amounts for the prior period.

(xxi) Service Concessions

Service concessions are agreements to receive services, where the responsibility for making available the property, plant and equipment needed to provide the services passes to the contractor. As the Council is deemed to control the services that are provided under these schemes, and as ownership of the property, plant and equipment will pass to the Council at the end of the contracts for no additional charge, the Council carries the assets used under the contracts on its Balance Sheet as part of Property, Plant and Equipment.

The original recognition of these assets at fair value (based on the cost to purchase the property, plant and equipment) is balanced by the recognition of a liability for amounts due to the scheme operator to pay for the capital investment.

Non-current assets related to these contracts and recognised on the Balance Sheet are revalued and depreciated in the same way as property, plant and equipment owned by the Council.

The amounts payable to the contract operator are analysed into the following elements:

(xxii) Property, Plant and Equipment

Assets that have physical substance and are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes and that are expected to be used during more than one financial year are classified as Property, Plant and Equipment.

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 will flow to the Council and the cost of the item can be measured reliably. Capital schemes above £0.25m are subject to annual review and any expenditure incurred which has not enhanced the asset’s value is charged as an expense in the financial year that it is incurred. Expenditure on capital

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assets totalling less than £20,000 in any single financial year is classed as de-minimis and therefore is not capitalised but charged as an expense.

Measurement

Assets are initially measured at cost, comprising:

The Council does not capitalise borrowing costs.

The cost of assets acquired other than by purchase is deemed to be its fair value, unless the acquisition does not have commercial substance (i.e. it will not lead to a variation in the cash flows of the Council). In the latter case, where an asset is acquired via an exchange, the cost of the acquisition is the carrying amount of the asset given up by the Council.

Assets are then carried in the Balance Sheet using the following measurement bases:

Where there is no market-based evidence of fair value because of the specialist nature of an asset, depreciated replacement cost (DRC) is used as an estimate of fair value.

Where non-property assets that have short useful lives or low values (or both), depreciated historical cost basis is used as a proxy for fair value.

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 a loss previously charged to a service.

When decreases in value are identified, they are accounted for in the same way as an impairment.

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.

Impairment

Assets are assessed at each year-end as to whether there is any indication that an asset may be impaired. Where indications exist and possible differences are estimated to be material, the recoverable amount of the asset is estimated and, where this is less than the carrying amount of the asset, an impairment loss is recognised for the shortfall.

Where impairment losses are identified, they are accounted for as follows:

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Depreciation

Depreciation is provided for on all Property, Plant and Equipment assets by the systematic allocation of their depreciable amounts over their useful lives. An exception is made for assets without a determinable finite useful life (i.e. freehold land, car parks, quay walls and lock gates, some Community Assets) and assets that are not yet available for use (i.e. assets under construction).

Depreciation is calculated on the following bases:

The Council applies component accounting to all assets with a net book value more than £5m - where the item of Property, Plant and Equipment asset has major components whose cost is significant in relation to the total cost of the item, identified 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 to the Capital Adjustment Account.

Disposals and Non-current Assets Held for Sale

When it becomes probable that the carrying amount of an asset will be recovered principally through a sale transaction rather than through its continuing use, it is reclassified as an Asset Held for Sale. The asset is revalued immediately before reclassification and then carried at the lower of this amount and fair value less costs to sell. Where there is a subsequent decrease to fair value less costs to sell, the loss is posted to the Other Operating Expenditure line in the Comprehensive Income and Expenditure Statement. Gains in fair value are recognised only up to the amount of any previously losses recognised in the Surplus or Deficit on Provision of Services. Depreciation is not charged on Assets Held for Sale.

If assets no longer meet the criteria to be classified as Assets Held for Sale, they are reclassified back to non-current assets and valued at the lower of their carrying amount before they were classified as Held for Sale; adjusted for depreciation, amortisation or revaluations that would have been recognised had they not been classified as Held for Sale, and their recoverable amount at the date of the decision not to sell.

When an asset is disposed of or is decommissioned, 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. Receipts from disposals (if any) are credited to the same line in the Comprehensive Income and Expenditure Statement also as part of the gain or loss on disposal (i.e. netted off against the carrying value of the asset at the time of disposal). Any revaluation gains accumulated for the asset in the Revaluation Reserve are transferred to the Capital Adjustment Account.

Amounts received for a disposal more than £10k are categorised as capital receipts. A proportion of receipts relating to housing disposals 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 HRA'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

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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.

(xxiii) Provisions, Contingent Liabilities and Contingent Assets

Provisions

Provisions are made where an event has taken place whereby the Council has a legal or constructive obligation that probably requires settlement by a transfer of economic benefits or service potential, 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 as an expense to the appropriate service line in the Comprehensive Income and Expenditure Statement in the year that the Council becomes aware of the obligation and are measured at the best estimate at the balance sheet date of the expenditure required to settle the obligation, considering relevant risks and uncertainties.

When payments are eventually made, they are charged to the relevant provision. Estimated settlements are reviewed at the end of each financial year, where it becomes less than probable that a transfer of economic benefits will now be required (or a lower settlement than anticipated is made); the provision is reversed and credited back to the relevant service.

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 are disclosed in a note 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 or otherwise of uncertain future events not wholly within the control of the Council. Contingent assets are not recognised in the Balance Sheet but are disclosed in a note to the accounts.

(xxiv) Reserves

The Council sets aside specific amounts as reserves for future policy purposes or to cover contingencies. Reserves are created by appropriating amounts out of 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 in that year to score against the Surplus or Deficit on the Provision of Services in the Comprehensive Income and Expenditure Statement. The reserve is then appropriated back into the General Fund Balance in the Movement in Reserves Statement so that there is no net charge against council tax for the expenditure.

The category of unusable reserves includes those reserves which 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. These reserves are explained in the relevant notes.

(xxv) Revenue Expenditure Funded from Capital under Statute

Expenditure incurred during the year that may be capitalised under statutory provisions but that does not result in the creation of a non-current asset has been charged as expenditure to the relevant service in the Comprehensive Income and Expenditure Statement 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 reverses out the amounts charged so that there is no impact on the level of council tax.

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(xxvi) Schools

The Code of Practice on Local Authority Accounting in the United Kingdom 2020/21 confirms that the balance of control for local authority-maintained schools (i.e. those categories of school identified in the School Standards and Framework Act 1998, as amended) lies with the local authority. The Code also stipulates that those schools’ assets, liabilities, reserves and cash flows are recognised in the single entity accounts of the Council (and not the Group Accounts). Therefore, schools’ transactions, cash flows and balances are recognised in each of the financial statements of the Council as if they were the transactions, cash flows and balances of the Council.

Schools within the Council’s group fall into the following categories

Other types of school, such as voluntary aided and voluntary controlled schools, academies and free schools are outside of the Council’s control and therefore not included in this Statement of Accounts.

(xxvii) Value Added Tax

The Comprehensive Income and Expenditure Account excludes amounts relating to VAT and will be included as an expense only if it is not recoverable from Her Majesty's Revenue and Customs. VAT receivable is excluded from income within the Council's Income and Expenditure account.

(xxviii) Rounding Convention

Unless otherwise stated the convention used in these Financial Statements is to round amounts to the nearest thousand pounds. All totals are the rounded additions of unrounded figures, and therefore may – from time-to-time – not be the strict sums of the figures presented in the text or tables.

2 Accounting Standards that have been issued but have not yet been adopted

The Code of Practice on Local Council Accounting in the United Kingdom (the Code) requires the Council 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.

At the balance sheet date, the following new standards and amendments to existing standards have been published but not yet adopted by the Code of Practice of Local Authority Accounting in the United Kingdom:

The main change to the Code will be the requirements of International Financial Reporting Standard 16 – Leases adopted in the 2021/22 Code. The required date of application and the date that the Council will adopt IFRS 16 is 1 April 2022. IFRS 16 introduces a single lessee accounting model and requires a lessee to recognise assets and liabilities for most leases with a term of more than 12 months, unless the underlying asset is of low value. A lessee is required to recognise a right-of-use asset representing its right to use the underlying leased asset and a lease liability representing its obligation to make lease payments Whilst this is expected to have little impact on the Council, work will need to be undertaken during 2021/22 to ensure significant lease type arrangements across the Council are identified and accurately recorded. This will include a review of existing and creation of new processes for managing and recording lease arrangements.

Other changes to the Code include,

None of these amendments are anticipated to have a material impact on the Council’s financial performance and financial position.

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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 as follows:

The Council has completed a school-by-school assessment across the different types of school it controls within the city. The Council has assessed the legal framework underlying each type of school and determined the treatment of non-current assets within the financial statements according to whether it owns or has some responsibility for, control over or benefit from the service potential of the premises and land occupied. The Council has considered its accounting classification for each school on an individual case basis in conjunction with the relevant dioceses for voluntary aided and voluntary controlled schools.

There is a high degree of uncertainty about future levels of funding for local government, with the deferral for a second year running of the Government’s medium term Spending Review, postponement of the implementation of the Fair Funding Review, delays to the Adult Social Care funding green paper and uncertainties over the impact of the COVID-19 pandemic and gradual lifting of restrictions on major income streams. 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 because of a need to close facilities and reduce levels of service provision.

The costs of the Schools Private Finance Initiative (PFI) Contracts exceed the income received from the Government Grant and School Contributions, leaving the Council with a liability under the PFI Contracts. All PFI Schools have now transferred to Academy status and these assets have been removed from the Council’s balance sheet. Following a review of the costs and benefits, the Council considers the contract not to be onerous as the benefits significantly outweigh the costs.

In the single entity accounts, the Council has opted to account for its investments in subsidiaries in accordance with Chapter 7 of the Code, Financial Instruments. The investments are accordingly classified as fair value through other comprehensive income (FVOCI) and are carried in the Balance Sheet at fair value. Changes in the fair value of the Council’s investments in subsidiaries are recognised in Other Comprehensive Income. Impairments are recognised directly in the Surplus/Deficit on the Provision of Services.

COVID-19 Funding – the Council has received additional grant funding as part of the government’s response to the COVID-19 pandemic, some to cover the Council’s own expenditure/income shortfalls and some for passing on to local businesses and individuals. The Council has made judgements about whether it is acting as principal or agent in relation to this funding. Where the Council is acting as principal the grant receipts have been recognised as income and associated payments as expenditure. Where the Council is acting as agent the grant receipts and corresponding payments are not included in the Comprehensive Income and Expenditure Statement (CIES), other than any element of the funding relating to administration costs.

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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 considering 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 2021 for which there is a significant risk of material adjustment in the forthcoming financial year are as follows:

Item Uncertainties Consequence if actual results differ
from assumptions
Property, Plant and
Equipment
(excluding Council
dwellings)		 Asset valuations are based on market prices
and are periodically re-valued using a 5-year
rolling programme to ensure that the
Council does not materially misstate its
property, plant and equipment. If market
prices change significantly, over time there
will be a corresponding increase or
reduction in the value of Council land and
buildings.
The outbreak of Covid-19 has and
continues to impact many aspects of daily
life and the global economy – with some
real estate markets having experienced
lower levels of transactional activity and
liquidity.
The pandemic and the measures taken to
tackle COVID-19 continue to affect
economies and real estate markets globally.
Nevertheless, as at the valuation date, some
property markets have started to function
again, with transaction volumes and other
relevant evidence returning to levels where
an adequate quantum of market evidence
exists upon which to base opinions of
value. Accordingly, and for the avoidance
of doubt, our valuation is not reported as
being subject to ‘material valuation
uncertainty’ as defined by VPS 3 and
VPGA 10 of the RICS Valuation – Global
Standards.		 A reduction in estimated valuations would
result in reductions to the Revaluation
Reserve and/or a loss recorded in the
Comprehensive Income and Expenditure
Statement. If the value of the Council's
property, plant and equipment was to
reduce by say 10%, this would result in a
£103m change in cost value charged
against the Revaluation Reserve and/or the
Comprehensive Income and Expenditure
Statement.
A corresponding increase in estimated
valuations would result in a combination of
increases to the Revaluation Reserve and /
or
reversals
of
previous
negative
revaluations
charged
to
the
Comprehensive Income and Expenditure
Statement.
Pensions Liability Estimation of the net liability to pay
pensions depends on several complex
judgements relating to the discount rate
used, the rate at which salaries are projected
to increase, changes in retirement ages,
mortality rates and expected returns on
Pension Fund investments. The Council
has engaged Mercer Ltd, a firm of
consulting actuaries, to provide expert		 Variations in the key assumptions will have
the following impact on the net pension
liability
•
a 0.1% increase in the discount rate will
reduce the net pension liability by
£80m.
•
a 0.1% increase in the assumed level of
pension increases will increase the net
pension liabilityby £85m.

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advice about the assumptions to be
applied.		 •
a 0.1% increase in the assumed level of
pay inflation will increase the net
pension liability by £22m.
•
an increase of one year in longevity will
increase the net pension liability by
£24m.
Fair Value
Estimation		 Asset valuations are based on either:
•
market
prices
for
investment
property, surplus assets and non-
current assets held for sale: or
•
the adjusted net worth of unquoted
companies in which the Council has a
controlling or significant interest.
It remains unclear what impact the COVID
19 pandemic will have on property values
and there is a risk of material changes
during the next year.		 If the value of the Council's investment
property, surplus property and non-
current assets held for sale, was to reduce
by 10%, this would result in a £32m
reduction and a corresponding reduction
to Unusable Reserves in the Balance Sheet.

5 Events after the Balance Sheet Date

The Statement of Accounts was authorised for issue by the Section 151 Officer on 30 July. Events taking place after this date are not reflected in the financial statements or Notes. However there has been one event since the 31 March 2020 up to the date the accounts were authorised for issue by the S151 Officer.

On 3rd June 2021, Bristol Holding Ltd agreed to the reclassification of 27,321,425 redeemable preference shares (at a 7% coupon) held in BE2020 Ltd being converted into ordinary shares held in the company. All accured and future interest and any arrears of preferential dividend attaching to the preference shares have been waived and written off. The total value of the preference share interest is £6.5m. This had been fully provided for on a year-on-year basis in the Council’s accounts.

6 Other Items of Expenditure and Income

Income and expenditure relating to COVID-19

The accounting arrangements for business rates income mean that the General Fund Balance at 31 March 2021 excludes the loss for rate reliefs introduced by the government in 2020/21 to support business sectors during the pandemic. This loss will be charged to the General Fund in 2021/22 as part of the deficit on the Collection Fund being recouped in future years. However, the Council received £84m of government grant in 2020/21 to compensate for this loss. This material grant income has been shown separately within Taxation and Non-Specific Grant Income on the face of the CIES. The additional S31 business rates reliefs grant over and above what was budgeted for in 2020/21 has been transferred to a revenue reserve to be used in 2021/22 to offset the business rates deficit that will be charged to the General Fund (see Note 19 Usable Reserves).

Details of general and specific revenue grant funding for COVID-19 is provided in note 17 Grant Income In the CIES specific grant income is included within the Cost of Services and general grant income is included within Taxation and Non-Specific Grant Income. Where the Council has acted as an agent of the government in administering grants to businesses, social care providers and individuals these are excluded from the CIES.

The financial impact of the Covid-19 pandemic on the Council’s General Fund budget in 20/21 (i.e. excluding Housing Revenue Account, DSG and collection of Council tax or Business Rates income) is £74.7 million for the year. This was made up of £50.6 million additional expenditure and the inability to deliver planned savings, as well as £24.1 million reduction in income from sales, fees and charges.

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These costs have been funded by a mixture of specific and general funding provided by Government departments as well as local mitigations.

7 Expenditure and Funding Analysis for the year ended 31 March 2021

The objective of the Expenditure and Funding Analysis is to demonstrate to council tax and rent payers how the funding available to the Council (i.e. government grants, rents, council tax and business rates) for the year has been used in providing services in comparison with those resources consumed or earned by authorities in accordance with generally accepted accounting practices. The Expenditure and Funding Analysis also shows how this expenditure is allocated for decision making purposes between the Council's directorates. Income and expenditure accounted for under generally accepted accounting practices is presented more fully in the Comprehensive Income and Expenditure Statement.

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People
Resources
Growth & Regen
Housing Revenue Account
Dedicated Schools Grant
Corporate Funding and Expenditure
Other income and expenditure (Notes 9,10,11)
(Surplus) Deficit on the Provision of Services
Opening General Fund and HRA Balance
Less Deficit on General Fund and HRA
Balance in Year
Closing General Fund and HRA Balance at 31
March 2021*		 Revised
outturn
Adjustments
EFA (Note 1)
£'000
£'000
246,804
(46,298)
60,153
3,768
82,651
3,296
(10,915)
(10,851)
7,113
(54)
62,147
(50,934)		 Net
Expenditure
Chargeable to
the General
Fund and
HRA
Balances
Adjustments
for Capital
Purposes
EFA (Note 2)
Net change
for the
Pension
Adjustments
EFA Note 3
Other
Differences
EFA
(Note 4)
£'000
£'000
£'000
£'000
200,506
2,507
1,766
63,921
6,625
4,406
85,947
98,736
4,592
(21,766)
641
2,330
7,059
3,907
11,213
(14,462)
(4,408)
16,612
Total
Adjustments
Net Expenditure
in the
Comprehensive
Income and
Expenditure
Statement
£'000
£'000
4,273
204,779
11,031
74,952
103,328
189,275
2,971
(18,795)
3,907
10,966
(2,257)
8,957
447,953
(101,073)		 346,880
94,047
12,593
16,612		 123,253
470,134
(500,003)
(68,856)
22,523
88,413
(153,123)
(209,219)
(153,123)
362,342		 42,079
(457,923)
165,332
12,211

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2019/20

Revised
outturn
Adjustments
EFA (Note 1)
£'000
£'000
People
215,668
(14,360)
Resources
58,193
(975)
Growth & Regen
66,197
4,354
Housing Revenue Account
(1,041)
(10,062)
Dedicated Schools Grant
3,661
Corporate Funding and Expenditure
40,018
(14,950)
382,696
(35,993)
Other income and expenditure (Notes 9,10,11)
(Surplus) Deficit on the Provision of Services
Opening General Fund and HRA Balance
Less Deficit on General Fund and HRA Balance in Year
Closing General Fund and HRA Balance at 31 March 2020*		 Revised
outturn
Adjustments
EFA (Note 1)
£'000
£'000
215,668
(14,360)
58,193
(975)
66,197
4,354
(1,041)
(10,062)
3,661
40,018
(14,950)		 Net
Expenditure
Chargeable to
the General
Fund and
HRA
Balances
Adjustments
for Capital
Purposes
EFA (Note 2)
Net change
for the
Pension
Adjustments
EFA Note 3
Other
Differences
EFA
(Note 4)
£'000
£'000
£'000
£'000
201,308
22,415
1,129
57,218
5,961
4,658
70,551
30,925
4,565
(11,103)
(5,503)
2,369
3,661
3,978
25,068
(19,601)
8,075
2,864
Total
Adjustments
Net Expenditure
in the
Comprehensive
Income and
Expenditure
Statement
£'000
£'000
23,544
224,852
10,619
67,837
35,490
106,041
(3,134)
(14,237)
3,978
7,639
(8,662)
16,405
382,696
(35,993)		 346,703
34,197
24,774
2,864		 61,835
408,537
(352,422)
(26,994)
23,029
(351)
(5,720)
(203,499)
(5720)
(209,219)		 (4,317)
(356,739)
57,518
51,798

66

EFA Note 1 – Adjustments

The reallocation of transactions to/from service areas below the net cost of services to Other Income and Expenditure for example interest receivable and interest payable from Corporate Funding and Expenditure to Other Income and Expenditure. The removal of transfers to/from reserves included in outturn in Corporate Funding & Expenditure as these are not shown on the face of the CIES.

EFA Note 2 - Adjustments for Capital Purposes

Adjustments for capital purposes - this column adds in depreciation, impairment and revaluation gains and losses in the services line for:

EFA Note 3 - Net change for Pension Adjustments

Net change for the removal of pension contributions and the addition of IAS 19 Employee Benefits pension related expenditure and income:

EFA Note 4 - Other Differences

Other differences between amounts debited/credited to the Comprehensive Income and Expenditure Statements and amounts payable/receivable to be recognised under statute:

67

8 Expenditure & Income Analysed By Nature

2019/20
2020/21 Revised
Expenditure & Income Analysed By Nature £000 £000
Expenditure
Employee Benefits Expense 387,679 378,049
Depreciation, Amortisation & Impairment 122,875 99,140
Other Service Expenditure 768,202 738,093
Total Expenditure 1,278,756 1,215,282
Income
Fees, Charges and Other Service Income (314,343) (323,950)
Interest & Investment Income (10,938) (7,883)
Income from Council tax & Non-domestic Rates (360,299) (357,352)
Government Grants, Other Grants and Contributions (583,081) (474,299)
Total Income (1,268,661) (1,163,484)
Surplus or deficit on the Provision of Services 10,095 51,798

8a Revenue from Contracts with Service Recipients

The Council contracts with service recipients as part of its normal operating activities. The table below sets out the material items of income within fees, charges and other service income in the table above.

Contributions from Other Organisations
Health Authorities
Other Local Authorities
Social Care Charges
Sales of Services
Car Parking
Housing Revenue Account Income
Commercial Rents
Licencing		 2020/21
£'000
17,805
35,951
6,252
26,685
4,195
4,681
122,440
16,111
6,723		 2019/20
£'000
22,469
24,521
13,885
27,591
7,050
13,098
121,875
14,560
7,529

The Council has identified contractual arrangements in place in relation to Deferred Payments, where care users can use the value of their home to help pay care home costs. The following amounts were recognised in the Comprehensive Income and Expenditure Account as income,

Client Contributions
Deferred Payments
Total		 2020/21
£'000
25,795
635		 2019/20
£'000
26,514
1,077
26,430 27,591

68

The following amounts were included in the Balance Sheet for contracts with service recipients, in relation to the contracts identified above

Adult care and health residential
Adult care and heath
Total		 2020/21
£'000
1,662
383
2,045		 2019/20
£'000
2,121
310
2,431

Except for the above all contracts with service recipients are complete and, therefore, no contract obligations, assets or liabilities continue beyond this financial year.

9 Other Operating Expenditure

Precepts and levies
Payments to the Government housing capital receipts pool
Losses/(gains) on the disposal of non-current assets
Total		 2020/21
£'000
10,953
2115
(5,132)
7,936		 2019/20
£'000
9,226
2,113
(8,963)
2,376

10 Financing and Investment Income and Expenditure

Interest payable and similar charges
Loss Allowance (Financial Guarantee Contracts)
Changes in the fair value of financial instruments*
Pensions net interest cost
Interest receivable and similar income
Income and expenditure in relation to Investment Properties
Changes in fair value of Investments
Total		 2020/21
£'000
34,241
(5,379)
(1,669)
22,523
(9,268)
(10,569)
(22,566)
7,313		 2019/20
£'000
35,268
5,379
17,079
23,029
(10,232)
(11,474)
(3,744)
55,304

.

11 Taxation and Non-Specific Grant Income

Council tax income
Non-domestic rates
Non-service-related government grants
Capital grants and contributions
Total		 2020/21
£'000
(224,419)
(137,300)
(69,849)
(41,605)
(473,173)		 2019/20
£'000
(215,116)
(142,236)
(23,402)
(33,664)
(414,418)

69

12 Pooled Budgets

Better Care Fund

The Better Care Fund (BCF) was established to support the integration of health and social care as a basis for joint planning the delivery of local services. The current BCF was established in April 2018 as part of a joint programme between Bristol City Council and NHS Bristol Clinical Commissioning Group agreed under Section 75 of the National health Service Act 2006. The formal governance of the BCF is through the Joint Commissioning Board and the Bristol Health and Well Being Board.

Under this Section 75 agreement there are five funds totalling £78.638m in 2020/21 and administered by whichever body undertook the contracting arrangements.

Fund 1 is administered by Bristol Clinical Commissioning Group and totals £16.607m. The fund includes contributions from the CCG only, which have been paid to providers contracted to support the sub schemes Reduction in Hospitals Admissions, Frail and Complex, Falls Prevention and Reablement. The CCG controls this fund in its entirety and wholly owns any risk relating to this fund as per the Section 75 agreement.

Fund 2 is administered by Bristol Clinical Commissioning Group and totals £0.812m. The funding is provided to Bristol City Council to offset in-year contract price and cost pressures.

Fund 3 is hosted by Bristol City Council and totals £3.528m, which is wholly made up of the Disabled Facilities Grant. The fund includes contributions from the City Council only, which are paid directly to providers. The City Council controls this fund in its entirety and wholly owns any risk relating to this fund as per the Section 75 agreement.

Fund 4 is a joint arrangement hosted by Bristol City Council and totals £41.176m. Both the CCG and Bristol City Council contribute towards the source of funding. The City Council is the Lead Commissioner for the services commissioned through this fund. The risks are shared based on the area of spend. The CCG owns the risks for Health related spend and Bristol City Council holds the risk for Social Care related spend as per the section 75 agreement.

Fund 5 is hosted by Bristol City Council and totals £16.515m, which is wholly made up of the improved Better Care (iBCF) and Winter Pressures funds. The fund includes contributions from the City Council only, which are paid directly to providers. The City Council controls this fund in its entirety and wholly owns any risk relating to this fund as per the Section 75 agreement.

Better Care Fund
Funding provided to the pooled
budget:
Bristol CCG
Bristol City Council
Total funding into Pooled Budget
Expenditure met from Pooled Budget
Bristol CCG
Bristol City Council
Total expenditure from Pooled Budget
Net surplus/(deficit) on the pooled
budget during the year
Bristol City Council’s share of the net
surplus/(deficit) arising on the pooled
budget		 Fund 1 Fund 2
Fund 3
£’000
£’000
£’000		 Fund 4
Fund 5
£’000
£’000		 Total
£’000
16,607
812
-
-
3,528
16,607
812
3,528
16,607
812
-
-
-
3,528
16,607
812
3,528		 15,629
25,547
16,515
41,176
16,515
15,629
-
27,098
16,515
42,727
16,515		 33,048
45,590
78,638
-
33,048
47,141
80,189
-
-
-		 (1,551)
-		 -
-
-
-		 (1,551)
-		 -

70

13 Members' Allowances

The Council paid the following amounts to members of the Council during the year.

Allowances 2020/21
£'000
1,395		 2019/20
£'000
1,246

In addition to the above, the elected Mayor is paid an annual allowance amounting to £80,871 (2019/20: £72,016)

71

14 Officers' Remuneration & Exit Packages

Where a senior officer’s annual salary is £50,000 or more, but less than £150,000, remuneration is disclosed individually by way of job title. For those senior officers whose salary is £150,000 or more, their name is also disclosed. The remuneration paid during the year was as follows:

2020/21 Salary, Fees
and
Allowances		 Compensation
for Loss of
Office
Pension
Contribution		 Total
Post Title Post Term Post Holder Notes £ £ £ £
Executive Director - Resources - Head of Paid Service Apr ’20 - Mar ‘21 M Jackson 169,538 - - 169,538
Executive Director - People Apr ’20 - Mar ‘21 J Jensen 1 169,538 - 36,163 205,701
Executive Directors - Growth and Regeneration Apr ‘20 – Mar ‘21 S Peacock 169,538 - 36,163 205,701
Director – Homes and Landlord Services Apr ’20 – Dec ‘20 J Higson 2 115,750 26,971 17,259 159,980
Statutory Officers- Director Adult Social Care Apr ’20 – Mar ‘21 H Evans 126,652 - 25,350 152,002
Statutory Officers- Chief Financial (S151) Apr’ 20 – Mar ‘21 123,300 - 26,300 149,600
Statutory Officers- Director Education and Skills Apr ’20 – Mar ‘21 107,888 - 23,013 130,901
Statutory Officers – Director of Public Health Apr ’20 - Mar ‘21 92,475 - 19,725 112,200
Statutory Officers- Service Director Legal and Democratic (Monitoring
Officer)		 Apr ’20 - Mar ‘21 87,338 - 18,629 105,967

1 Post holder left on 31[st] March 2021

2 Post holder left on 31[st] December 2020 3 Local authorities also pay the coroner’s salary or fees and agree other terms and conditions, but there is no contract of employment between the local authority and coroner. Coroners should not be equated in financial or other terms with chief officers.

*Fees paid in respect of individuals engaged on an interim basis

The Council also secured services from various individuals on an interim basis during 2019/20 and 2020/21. The amounts disclosed below in respect of these posts are the costs incurred by the Council to secure the individuals services on this basis and not the amounts these individuals actually received (which will have been lower). The fees payable by the Council in respect of these individuals amounted to £150,000 or more pro rata, in 2020/21 were as follows:

72

2019/20 Salary, Fees
and
Allowances		 Compensation
for Loss of
Office
Pension
Contribution		 Total
Post Title Post Term Post Holder Notes £ £ £ £
Executive Director - Resources - Head of Paid Service Apr ’19 - Mar ‘20 M Jackson 165,000 - - 165,000
Executive Director - People Apr ’19 - Mar ‘20 J Jensen 1 160,613 - 37,262 197,875
Executive Director - Growth and Regeneration (Interim)* Apr ’19 - Nov ‘19 C Molton 146,353 - - 146,353
Executive Directors - Growth and Regeneration Nov ’19 – Mar ‘20 S Peacock 61,875 - 14,355 76,230
Statutory Officers- Director Adult Social Care Apr ’19 – Mar ‘20 120,045 - 25,520 145,565
Statutory Officers- Director Education and Skills (Interim)* Apr’ 19 – Oct ‘19 A Stubbersfield 116,678 - - 116,678
Statutory Officers- Director Education and Skills Sep ’19 – Mar ‘20 56,292 - 13,060 69,351
Statutory Officers- Chief Financial (S151) Apr ’19 - Mar ‘20 120,000 - 27,840 147,840
Statutory Officers- Service Director Legal and Democratic (Monitoring
Officer)		 Apr ’19 - Mar ‘20 84,634 - 19,635 104,269
Statutory Officers – Director of Public Health Apr ’19 - Mar ‘20 90,000 - 20,880 110,880

1 Post previously called Executive Director - Adults, Children and Education

*Fees paid in respect of individuals engaged on an interim basis

The Council also secured services from various individuals on an interim basis during 2019/20. The amounts disclosed below in respect of these posts are the costs incurred by the Council to secure the individuals services on this basis and not the amounts these individuals actually received (which will have been lower). The fees payable by the Council in respect of these individuals amounted to £150,000 or more pro rata, in 2019/20 were as follows:

73

In addition to the remuneration of senior employees set out above, the number of the Council’s employees receiving more than £50,000 remuneration for the year (excluding employer’s contributions) is set out in the table below:

Remuneration band 2020/21
Number of employees		 2020/21
Number of employees		 2019/20
Number of employees		 2019/20
Number of employees
Schools Non-
Schools		 Schools Non-
Schools
£50,000 -£54,999 11 37 15 32
£55,000 -£59,999 13 42 14 39
£60,000 -£64,999 10 20 13 29
£65,000 -£69,999 10 32 15 26
£70,000 -£74,999 10 18 6 24
£75,000 -£79,999 3 27 2 5
£80,000 -£84,999 - 7 1 4
£85,000 – 89,999 - 4 1 2
£90,000 -£94,999 - 3 1 3
£95,000 -£99,999 - 4 - 3
£100,000 -£104,999 - - - 1
£105,000 -£109,999 - 2 - 3
£110,000 -£114,999 - 1 - -
£115,000 -£119,999 - - - 1
£120,000 - £124,999 - 2 - 2
Totals 57 199 68 174

Exit Packages

The numbers of exit packages relating to Council employees during 2020/21, with total cost per band and the total cost of compulsory and other redundancies are set out in the table below. The numbers and costs include packages agreed at the end of the year but not paid. Costs include the costs of early payment of pension in the cases of early retirement.

Exit package cost
band
£0 - £20,000
£20,001 - £40,000
£40,001 - £60,000
£60,001 - £80,000
£80,001 - £100,000
£100,001 - £150,000
£150,001 - £200,000
Total		 Number of
compulsory
redundancies		 Number of
compulsory
redundancies		 Number of other
departures		 Number of other
departures		 Total number of
exit packages by
cost band		 Total number of
exit packages by
cost band		 Total cost of exit
packages in each
band
2020/212019/20
£'000 £'000
98
229
61
227
-
341
-
-
-
92
-
102
-
-
159
991
2020/21 2019/20 2020/21 2019/20 2020/21 2019/20 2020/21
No. No. No. No. No. No. £'000
7 10 6 19 13 29 98
- 3 2 5 2 8 61
- - - 7 - 7 -
- - - - - - -
- - - 1 - 1 -
- - - 1 - 1 -
- - - - - - -
7 13 8 33 15 46 159

74

15 External Audit Costs

The Council has incurred the following costs in relation to the audit of the Statement of Accounts, certification of grant claims and statutory inspections and to non-audit services provided by the Council’s external auditors Grant Thornton.

external auditors Grant Thornton.
Fees payable to the External Auditor regarding external audit services
carried out by the appointed auditor for the year
Fees payable to the External Auditor for the certification of grant
claims and returns for the year
Fees payable in respect of other services provided by the External
Auditor during the year
Total		 2020/21
£'000
157
36
5
198
2019/20

£'000

211

32

-

243

75

16 Dedicated Schools Grant

The Council’s expenditure on schools is funded primarily by grant monies provided by the Education Funding Agency (EFA), the Dedicated Schools Grant (DSG). Once allocated to a local authority an element is recouped by the EFA to fund academy schools in the Council’s area. The DSG is ring-fenced and can only be applied to meet expenditure properly included in the Schools Budget, as defined in the School Finance and Early Years (England) Regulations 2018. The Schools Budget includes elements for a range of educational services provided on a Council wide basis and for the Individual Schools Budget (ISB), which is divided into a budget share for each maintained school.

Details of the deployment of DSG receivable are shown in the following table:

2019/20 2020/21
£’000 £’000
Central Total
Notes		 Central
Expenditure
ISB		 Expenditure
ISB		 Total
355,148
Final DSG before academy recoupment

374,259
189,088
Less: Academy figure recouped for year
1

200,955
166,060
Total DSG after academy recoupment

173,304
1,962
Plus: Brought forward from previous year
2

(2,892)
(2,407)
Less: Carry forward agreed in advance
3

-
170,429
Agreed initial budgeted distribution
27,100
143,329		 29,575
140,837		 170,412
(105)
In year adjustments
4
-
(105)		 -
(435)		 (435)
170,324
Final budgeted distribution
27,100
143,224		 29,575
140,402		 169,977
27,585
Less: actual central expenditure
27,585
-		 29,575
-		 29,575
143,224
Less: actual ISB deployed to schools
-
143,224		 -
150,406		 150,406
-
Plus: LA contribution for year
-
-		 -
-		 -
(485)
Carry forward
(485)
0		 -
(10,004)		 (10,004)
(2,407)
Carry forward agreed in advance
-
(2,892)
Total carried forward (Note 19)
5

(10,004)

  1. The academy recoupment in 2019/20 comprised 80 academies open at the start of the year plus 3 that converted in year and 1 that opened in year. The academy recoupment in 2020/21 comprised 84 academies open at the start of the year plus 2 that converted in year and 1 new that opened in year.

  2. This is the brought forward figure from 2019/20.

  3. Agreement with School Forum and Cabinet in January 2019, to accelerate funding from 2020/21 DSG to reflect in-year pressure in High Needs Block, now expired.

  4. The in-year estimated adjustment for the final early years block funding 2020/21, following the January 2021 census data up-date, due in summer 2021.

  5. The total carry forward deficit is £10.004m for the year. Included in the carry forward are surpluses for dedelegated budgets of £0.553m, £0.621 in Early Years Block, £0.619m Schools Block and the High Needs Transformation Programme of £0.812, with offsetting deficits of (£12.609m) in High Needs Block.

76

17 Grant Income

The Council credited the following grants and contributions to the Comprehensive Income and Expenditure Statement in 2020/21:

Credited to Taxation and Non Specific Grant Income:

Capital grants and contributions (Note 11 & see below)
Non service related government grants (Note 11)
Total		 2020/21
£'000
41,605
69,849
111,454
2019/20

£'000
33,664
23,402

57,066

Capital grants and contributions

Government grants applied:
People
Growth & Regeneration
Resources
Housing Revenue Account
Developer Contributions
Total Government Grants & Contributions applied
Government grants unapplied
Total grants credited to the CIES		 2020/21
£'000

1,955
32,805
50
481
5,918
41,209
396
41,605
2019/20

£'000

7,093

24,938

-

27

1,606

33,664

-

33,664

77

Grants Credited to Services

People
Adult Education
Better Care Fund
COVID-19 - Emergency Response Grants (Adult Social Care)
Dedicated Schools Grant
Education Services Grant
Education and Skills Funding Agency Grants
COVID-19 - Education and Skills Funding Agency Grants
Independent Living Fund Grant
PFI Special Grant
Pupil Premium
Troubled Families Grant
Youth Justice Board Grant
Other Care Grants (Adults)
Other Care Grants (Children)
Other
Growth & Regeneration
Discretionary Housing Payments
Go Ultra Low Grant
Homelessness Reduction & Support Grants
Housing Benefit (rent allowances/council tax benefit) subsidy
Housing Benefit Administration Subsidy
Housing Revenue Grant
Innovate UK Grant
Public Health
COVID-19 - Public Health Grants
Public Heath – Other
SWERCOTS
Travel & Transport Grants
Air Quality Grant
Arts Council England - Museums
Better Bus Area Fund
Bus Service Operators Grant (BSOG)
Sustainable Travel Access Fund
Winter Funding
COVID-19 – Business Support Grant
Other
Resources
COVID-19 – Tax Income Guarantee Grant
COVID-19 – Test & Trace Support Grant
Non City Council elections
Brexit
Local Crisis and Prevention Fund
Other
Total		 31 Mar
2021
£'000

1,582
14,736
9,358
172,870
988
12,840
1,743
1,665
17,652
7,066
1,659
759
3,533
4,390
1,449

1,351
2,307
4,226
127,922
2,804
-
438
33,259
15,810
271
424
157
1,393
2,096
87
-
2,535
1,640
18,662
5,039

1,420
752
25
86
608
477
476,079		 31 Mar
2020
£'000
2,079
14,487
-
165,955
10
11,318
-
1,669
17,433
7,133
1,684
747
1,830
3,481
804
1,154
1,022
4,046
136,205
2,596
76
-
31,628
-
317
402
232
1,146
1,898
172
448
2,336
2,028
13,545
4,735
-
-
615
307
-
467
434,005

78

The Council has received several grants, contributions and donations that have yet to be recognised as income as they have conditions attached to them that could require the monies or property to be returned to the giver. The balances at the year-end are as follows:

Capital Grants and Contributions Received in Advance
Government grants
Section 106 contributions
Total
Due < 1 year
Due > 1 year
Total
Revenue grants (within creditors)
People
Growth & Regeneration
Resources
Total		 31 March
2021
£'000
33,337
44,441
77,778
44,447
33,331		 Restated
31 March
2020
£'000
17,208
38,133
55,341
26,741
28,600
77,778
2,812
3,442
493
6,747		 55,341
-
-
31,919
31,919

79

18 Adjustments between Accounting Basis and Funding Basis under Regulations

This note details the adjustments that are made to the total comprehensive income and expenditure recognised by the Council in the year, in accordance with proper accounting practice to the resources that are specified by statutory provisions as being available to the Council to meet future capital and revenue expenditure.

2020/21
General
fund
balance
Housing
Revenue
Account
Capital
Receipts
£'000
£'000
£'000
Adjustment 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
(88,430)
(29,993)
Movement in the market value of Investment Properties
22,945
(379)
Amortisation of Intangible Assets
(4,137)
(388)
Capital grants and distributions
41,123
481
Revenue and expenditure funded from capital under statute
(18,636)
3,263
Amount of non-current assets written off on disposal or sale as part of the
gain/loss on disposal to the Comprehensive Income and Expenditure
Statement
(16,029)
(20,774)
Changes in Fair Value of Financial Instruments (MiRs)
1,669
Insertion of items not debited or credited to the Comprehensive Income and Expenditure Statement:
Statutory provision for the financing of capital investment
13,611
Capital expenditure charged against the General Fund and HRA balances
4,185
408
Adjustments involving the Capital Receipts Reserve:
Transfer of sale proceeds credited as part of the gain/loss on disposal to the
Comprehensive Income and Expenditure Statement
7,453
33,197
(40,649)
Administrative costs of non-current asset disposals
(163)
163
Use of the Capital Receipts Reserve to finance new capital expenditure
35,128
Contribution from the Capital Receipts Reserve to finance the payments to the
Government capital receipts pool
Adjustment Involving the Major Repairs Reserve (MRR):
HRA depreciation credited to MRR
29,332
Use of the MRR to finance new capital expenditure
Adjustments involving the Capital Grants Unapplied Account:
Application of grants and contributions to capital financing
Adjustments involving the Financial Instruments Adjustment Account:
Amount by which finance costs charged to the Comprehensive Income and
Expenditure Statement are different from finance costs chargeable in the year
in accordance with statutory requirements
177
Adjustments involving the Pensions Reserve:
Reversal of items relating to retirement benefits debited or credited to the
Comprehensive Income and Expenditure Statement (see Note 34)
(74,292)
(9,542)
Employer's pensions contributions and direct payments to pensioners payable
in the year
43,976
4,740
Adjustments involving the Collection Fund Adjustment Account:
Amount by which council tax income credited to the Comprehensive Income
and Expenditure Statement is different from council tax income calculated for
the year in accordance with statutory requirements
(88,413)
Adjustment involving the Accumulating Compensated Absences Adjustment Account:
Amount by which officer remuneration 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
(6,785)
Other Reserve Movements
(8,556)
Total Adjustment
-170,300
7,082
-2,095		 2020/21
General
fund
balance
Housing
Revenue
Account
Capital
Receipts
£'000
£'000
£'000
Adjustment 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
(88,430)
(29,993)
Movement in the market value of Investment Properties
22,945
(379)
Amortisation of Intangible Assets
(4,137)
(388)
Capital grants and distributions
41,123
481
Revenue and expenditure funded from capital under statute
(18,636)
3,263
Amount of non-current assets written off on disposal or sale as part of the
gain/loss on disposal to the Comprehensive Income and Expenditure
Statement
(16,029)
(20,774)
Changes in Fair Value of Financial Instruments (MiRs)
1,669
Insertion of items not debited or credited to the Comprehensive Income and Expenditure Statement:
Statutory provision for the financing of capital investment
13,611
Capital expenditure charged against the General Fund and HRA balances
4,185
408
Adjustments involving the Capital Receipts Reserve:
Transfer of sale proceeds credited as part of the gain/loss on disposal to the
Comprehensive Income and Expenditure Statement
7,453
33,197
(40,649)
Administrative costs of non-current asset disposals
(163)
163
Use of the Capital Receipts Reserve to finance new capital expenditure
35,128
Contribution from the Capital Receipts Reserve to finance the payments to the
Government capital receipts pool
Adjustment Involving the Major Repairs Reserve (MRR):
HRA depreciation credited to MRR
29,332
Use of the MRR to finance new capital expenditure
Adjustments involving the Capital Grants Unapplied Account:
Application of grants and contributions to capital financing
Adjustments involving the Financial Instruments Adjustment Account:
Amount by which finance costs charged to the Comprehensive Income and
Expenditure Statement are different from finance costs chargeable in the year
in accordance with statutory requirements
177
Adjustments involving the Pensions Reserve:
Reversal of items relating to retirement benefits debited or credited to the
Comprehensive Income and Expenditure Statement (see Note 34)
(74,292)
(9,542)
Employer's pensions contributions and direct payments to pensioners payable
in the year
43,976
4,740
Adjustments involving the Collection Fund Adjustment Account:
Amount by which council tax income credited to the Comprehensive Income
and Expenditure Statement is different from council tax income calculated for
the year in accordance with statutory requirements
(88,413)
Adjustment involving the Accumulating Compensated Absences Adjustment Account:
Amount by which officer remuneration 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
(6,785)
Other Reserve Movements
(8,556)
Total Adjustment
-170,300
7,082
-2,095		 Major
Repairs
Reserve
Capital
Gains
Unapplied
£'000
£'000
(29,332)
21,642
(395)		 Total
Movement
Usable
Reserves
£'000
(118,423)
22,566
(4,525)
41,604
(15,373)
(36,803)
1,669
13,611
4,592
-
-
35,128
-
-
21,642
(395)
177
0
(83,834)
48,716
(88,413)
(6,785)
(8,556)
-170,300
7,082
-2,095		 -7,690
-395		 -173,398

80

2019/20 General fund Housing Capital Major Capital Total
balance Revenue Receipts Repairs Grants Movement
Account Reserve Unapplied Usable
Reserves
£'000 £'000 £'000 £'000 £'000 £'000
Adjustment 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 (50,509) (30,790) (81,299)
Movement in the market value of Investment Properties 4,131 (387) 3,744
Amortisation and impairment of Intangible Assets (2,861) (373) (3,234)
Capital grants and distributions 33,636 27 33,663
Revenue and expenditure funded from capital under statute (10,225) 2,809 (7,416)
Amount of non-current assets written off on disposal or sale
as part of the (loss) on disposal to the Comprehensive Income (38,376) (8,473) (46,849)
and Expenditure Statement
Changes in Fair Value of Financial Instruments (17,079) (17,079)
Insertion of items not debited or credited to the Comprehensive Income and Expenditure Statement:
Statutory provision for the financing of capital investment 10,631 12,515 23,146
Capital expenditure charged against the General Fund and
HRA balances		 10,271 10,999 21,270
Adjustments involving the Capital Receipts Reserve:
Transfer of sale proceeds credited as part of the (loss) on
disposal to the Comprehensive Income and Expenditure 46,098 10,359 (56,458) (1)
Statement
Administrative costs of non-current asset disposals (645) 645 -
Use of the Capital Receipts Reserve to finance new capital
expenditure		 30,688 30,688
Contribution from the Capital Receipts Reserve to finance the
payments to the Government capital receipts pool		 (2,113) 2,113 -
Adjustment Involving the Major Repairs Reserve (MRR):
Excess depreciation transferred to the MRR -
HRA depreciation credited to MRR 25,668 (25,668) -
Use of the MRR to finance new capital expenditure 25,668 25,668
Adjustments involving the Capital Grants Unapplied
Account:
Application of grants and contributions to capital financing 1,234 1,234
Adjustments involving the Financial Instruments Adjustment Account:
Amount by which finance costs charged to the Comprehensive
Income and Expenditure Statement are different from finance
costs chargeable in the year in accordance with statutory		 178 178
requirements
Adjustments involving the Pensions Reserve:
Reversal of items relating to retirement benefits debited or
credited to the Comprehensive Income and Expenditure (88,105) (9,829) (97,934)
Statement (see Note 33)
Employer's pensions contributions and direct payments to
pensioners payable in the year		 45,272 4,859 50,131
Adjustments involving the Collection Fund Adjustment Account:
Amount by which council tax income credited to the
Comprehensive Income and Expenditure Statement is
different from council tax income calculated for the year in		 351 351
accordance with statutory requirements
Adjustment involving the Accumulating Compensated Absences Adjustment Account:
Amount by which officer remuneration charged to the
Comprehensive Income and Expenditure Statement on an
accruals basis is different from remuneration chargeable in the		 (233) (233)
year in accordance with statutory requirements
Other Reserve Movements
Total Adjustment (59,578) 2,060 (7,688) 0 1,234 (63,972)

81

19 Usable Reserves

Reserves represent the Council’s net worth and show its spending power. Usable reserves result from the Council’s activities and can be spent in the future. This note sets out the amounts set aside and posted back to Usable Reserves in 2020/21, they include:

Details of specific earmarked reserves are as follows,

RESERVE PURPOSE
Capital Investment
Reserve		 The capital reserve is maintained to provide funding for the Council’s capital
investments and growth in Enterprise areas.
Business Transformation
Reserves		 Invest to save funds. The reserve will be used to fund one-off costs attributed
to delivery of savings in the currently agreed programme.
Risk Reserves Risk Reserves Funds set aside to mitigate known risks not otherwise provided
for including, volatility in Housing Benefit Subsidy and uninsured risks.
Statutory/Ring-fenced
reserves		 Amounts required by statute or accounting code of practice to be set aside and
ring-fenced for specific purposes, for example Public Health Reserve, City
Deal Business Rate Pooling, Stoke Park Dowry Covid 19 Support grant.
Technical/Financing
Reserve		 Technical Financial Reserves - Includes PFI sinking fund, grant income carried
forward in accordance with accounting regulations and resources set aside to
match known contract liabilities.
Service specific reserves Amounts set aside to finance specific projects or to meet known expenditure
plans, including:
- Bristol Futures - to provide new technology to improve public services
- Development Fund primarily to fund Docks Asset Survey
existing and proposed regeneration schemes
- Housing Support to provide support for homelessness issues

82

01 April Transfers Transfers 31-Mar- 01 April Transfers Transfers 31 March
2019 out in 20 2020 out in 2021
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Total General Fund Strategic
Reserve		 (23,258) 0 (3,258) (17,001) (17,001) 0 (18,665) (35,666)
General Fund Earmarked
Reserves
Capital Investment Reserve (14,230) 10,065 (7,500) (25,166) (25,166) 1,501 (11,969) (35,634)
Business Transformation Reserve (4,362) 1,322 - (3,131) (3,131) 798 (1,000) (3,333)
Risk Management Reserve (18,609) 7,253 (4,622) (16,050) (16,050) 10,233 (100,176) (105,993)
Statutory/Ring-fenced Reserve (14,825) 1,502 (1,685) (31,255) (31,255) 32,350 (50,288) (49,192)
Financing Reserve (11,735) 3,107 (1,242) (9,218) (9,218) 3,323 (713) (6,608)
Service Specific Reserves (17,419) 38 (1,997) (12,570) (12,570) 3,978 (11,355) (19,947)
Total (81,179) 23,287 (17,046) (97,390) (97,390) 52,184 (175,501) (220,707)
School Reserves
Schools – DSG (1,962) 0 (2,978) 2,892 2,892 (2892) 0 0
Schools - Balances (8,365) 0 (2,994) (8,910) (8,910) 1,729 0 (7,180)
Schools - Other (2,166) 240 0 (1,284) (1,284) 978 (42) (348)
Total Schools (12,493) 240 (5,972) (7,302) (7,302) (184) (42) (7,529)
HRA
HRA General Reserve (78,718) 0 (7,449) (87,526) (87,526) 601 (10,865) (97,791)
Major Repairs Reserve (3,606) 0 (2,381) (3,606) (3,606) 21,642 (29,332) (11,296)
HRA Earmarked Reserves (7,852) 0 (507) 0 0 601 (1,251) (651)
Total HRA Reserves (90,176) 0 (10,337) (91,132) (91,132) 22,843 (41,448) (109,737)
Capital Reserves
Capital Grants Received in
Advance		 (3,919) 14,765 (22,116) (2,685) (2,685) 107,570 (107,966) (3,080)
Capital Receipts Unapplied (70,824) 0 (915) (78,512) (78,512) 45,138 (45,117) (78,491)
Total Usable Capital Reserves (74,742) 14,765 (23,031) (81,196) (81,196) 152,708 (153,083) (81,571)
TOTAL USABLE RESERVES (281,848) 38,292 (59,644) (294,021) (294,021) 227,550 (388,739) (455,209)

83

20 Property, Plant and Equipment Movements in 2020/21

The valuations, excluding vehicles, plant, equipment, infrastructure assets and community assets are carried out by Richard Fear, MRICS, Property Investment Manager – Growth & Regeneration. The basis for the valuation of all assets is set out in the statement of accounting policies.

Council Dwellings Other Land and
Buildings		 Vehicles, Plant, Furniture and
Equipment		 Infrastructure Assets Community Assets Assets under Construction Surplus Assets Total Property, Plant
and Equipment		 PFI Assets included in Property, Plant and Equipment
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Cost or valuation
At 1 April 2020 1,685,723 656,097 81,595 355,103 7,681 11,711 42,113 2,840,023 27,044
Additions 22,801 14,850 10,762 18,455 263 36,514 104 103,729 -
Revaluation increases/(decreases)
recognised in the Revaluation
Reserve 82,579 52,100 - - - (236) 6,796 141,239 (140)
Revaluation increases/(decreases)
recognised in the surplus/deficit on
the Provision of Services - (29,962) - - - (40,396) (868) (71,226) -
De-recognition - Disposals (8,340) (13,405) (3,951) - - - (4,249) (29,945) -
Assets reclassified to/from Held
for Sale - - - - - (83) (83) -
Assets reclassified to/from
Investment Property (552) - - - - 17 (535) -
Other movements in cost or
valuation 3614 (21,147) 1,538 - (74) 16,069 - - -
At 31 March 2021 1,786,377 657,981 89,944 373,538 7,870 23,662 43,830 2,983,202 26,904
Accumulated Depreciation and Impairment
At 1 April 2020 (12,579) (16,994) (35,150) (55,957) (416) (4) (156) (121,256) (313)
Depreciation Charge (28,756) (18,428) (7,380) (10,874) (260) (65,698) (635)
Depreciation written out to
Revaluation Reserve 26,884 - - - - 26,884 630
Depreciation written out to
Surplus/Deficit on the provision of
Services 18,003 - - 312 257 18,572 -
De-recognition - disposals 65 333 3,951 - 51 4,400 -
Other movements in Depreciation
and Impairment 8 360 - - (312) (16) 40 -
At 31 March 2020 (14,378) (16,726) (38,579) (66,831) (416) (4) (124) (137,058) (318)
Balance Sheet at 31 March 2021 1,771,999 641,255 51,365 306,707 7,454 63,428 43,706 2,846,144 26,586
Balance Sheet at 1 April 2020 1,673,144 639,103 46,445 299,146 7,265 11,707 41,957 2,218,767 26,731

84

Property, Plant and Equipment Comparative movements in 2019/20

Council Dwellings Other Land and
Buildings		 Vehicles, Plant, Furniture and Equipment Infrastructure Assets Community Assets Assets under Construction Surplus Assets Total Property, Plant
and Equipment		 PFI Assets included in Property, Plant and Equipment
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Cost or valuation
At 1 April 2019 1,664,252 585,955 68,595 331,124 8,715 30,383 43,129 2,732,153 22,975
Additions 31,925 29,052 20,102 25,312 1,011 6,988 1,832 116,222 -
Revaluation
increases/(decreases)
recognised in the Revaluation
Reserve (3,244) 75,178 - - 652 - 694 73,280 4,528
Revaluation
increases/(decreases)
recognised in the
surplus/deficit on the
Provision of Services - (27,216) - (208) (2,062) (331) (3,298) (33,115) (459)
De-recognition - Disposals (6,420) (13,318) (7,028) - - (17,990) (2,079) (46,835) -
Assets reclassified to/from
Held for Sale - - - (1,800) (1800) -
Assets reclassified to/from
Investment Property 270 (152) - - 118 -
Other movements in cost or
valuation (1,060) 6,598 (74) (1,125) (635) (7,339) 3,635 - -
At 31 March 2020 1,685,723 656,097 81,595 355,103 7,681 11,711 42,113 2,840,023 27,044
Accumulated Depreciation and Impairment
At 1 April 2019 (12,269) (9,597) (37,120) (45,743) (240) (7) (368) (105,344) (229)
Depreciation Charge (25,158) (16,567) (5,191) (10,539) - - (382) (57,837) (543)
Depreciation written out to
Revaluation Reserve 24,779 - - - - - - 24,779 -
Depreciation written out to
Surplus/Deficit on the
provision of Services - 8,715 - - - - 1015 9,730 459
De-recognition - disposals 51 287 7,013 - - 11 52 7,414 -
Other movements in
Depreciation and Impairment 18 168 148 325 (176) (8) (473) 2 -
At 31 March 2020 (12,579) (16,994) (35,150) (55,957) (416) (4) (156) (121,256) (313)
Balance Sheet at 31 March
2020 1,673,144 639,103 46,445 299,146 7,265 11,707 41,957 2,718,767 26,731
Balance Sheet at 1 April 2019 1,651,983 576,358 31,475 285,381 8,475 30,376 42,761 2,626,809 22,746

85

Depreciation is provided for on all Property, Plant and Equipment assets by the systematic allocation of their depreciable amounts over their useful lives. The following useful lives and depreciation rates have been used:

Capital Commitments

On 31 March 2021 the Council had entered several contracts for the construction or enhancement of Property, Plant and Equipment with outstanding contract commitments of £64.2m.

Significant contractual commitments outstanding at 31 March 2021 were as follows:

£m
Bristol Beacon - Cultural refurbishment scheme Willmott Dixon Construction Ltd 9.5
Avonmouth and Severnside Enterprise Area - Flood defences South Gloucestershire Council 8.5
School rebuild and expansion - Perry Court Primary School Bristol LEP Ltd (Skanska) 5.8
Bristol Waste (agency agreement) - Hartcliffe site construction Bristol Waste Company Ltd 5.2
New Housing Provision - Registered Provider grants Clarion Housing Group Ltd 4.8
School expansion - KnowleDGE Special School 6th form Bristol LEP Ltd (Skanska) 3.8
Transport Cumberland Road Stabilisation works Alun Griffiths (Contractors) Ltd 3.6
Priority Stock - Refurbishment at Silcox Rd Rateavon Ltd 3.4
Energy District Heat Networks - Castle Park Energy Centre Goram Homes Ltd 3.4
School Expansion - Cathedral Schools Trust Trinity Academy Bristol LEP Ltd (Skanska) 2.7
Transport Redcliffe Bridge Refurbishment Cleveland Bridge UK Ltd 2.2
Transport - Floating pontoon walkway Knights Brown Construction Ltd 1.9
New Housing Provision - Multi-disciplinary services Perfect Circle JV Ltd 1.7
Temple Island Development - Multi-disciplinary services Perfect Circle JV Ltd 1.4
Sea Mills Assisted Living Centre Refurbishment Kier Construction Ltd 1.2
Bristol Beacon - Project Management services Arcadis Ltd 1.2
Transport Highways Resurfacing (DfT Challenge Bid 2020) Eurovia Infrastructure Ltd 1.2
Total 61.5

86

Revaluations

The Council carries out a rolling programme that ensures all Property, Plant and Equipment required to be measured at fair value is revalued at least every 5 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. Vehicles, Plant and Equipment are valued at historic cost, which is considered to be a suitable proxy for fair value. The following table shows the effective valuation dates for all Property Plant and Equipment:



Council
Dwellings		 Other Land and
Buildings		 Vehicles, Plant,
etc.		 Infrastructure Community
Assets		 Assets Under
Construction		 Surplus Assets Total Property,
Plant and
Equipment
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Carried at
historical
cost		 - 4,116 89,944 373,538 7,870 11,768 - 487,236
1 Oct 2019 1,786,377 583,102 - - - 1,031 43,830 2,414,340
1 Oct 2018 - 9,154 - - - 1,166 - 10,320
1 Dec 2017 - 12,019 - - - 300 - 12,319
1 Apr 2016 - 9,105 - - - 9,348 - 18,453
1 Apr 2015 - 40,485 - - - 49 - 40,534
Total cost
valuation		 1,786,377 657,981 89,944 373,538 7,870 23,622 43,830 2,983,202

In addition, the Council has instructed its valuers to undertake a review of all assets held in the Other Land and Buildings category to ensure that the carrying value of assets last valued in previous years is not materially different from their fair value. To perform this exercise, the Other Land and Building category was split into subcategories, for example schools, car parks, leisure and culture etc. The review concluded that the fair value was not materially different from the carrying value at the Balance Sheet date.

87

21 Heritage Assets

Reconciliation of the carrying value of Heritage Assets held by the Council.

Cost or valuation
01 April 2020
Additions
Revaluations
31 March 2021
Cost or valuation
01 April 2019
Additions
Revaluations
31 March 2020		 Art
Collection
Ethnography
& Foreign
Archaeology
£'000
£'000		 Antiquarian
books
Other
Total
£'000
£'000
£'000
126,625
42,588
96
0
3,167
6		 7,675
27,168
204,056
0
0
96
0
81
3,254
129,888
42,594		 7,675
27,249
207,406
125,031
42,593
335
1,259
-5		 7,675
26,795
202,094
5
340
-
368
1,622
126,625
42,588		 7,675
27,168
204,056

The above collection of Heritage Assets is predominantly valued on an annual insurance valuation basis, and some items classified as “other” are valued at historic cost.

Heritage Assets: Further Information on the Museum’s collections

Loans

The Museum occasionally makes available loan items from its collection to regional and national museums and borrows collections for specific exhibitions. Collections not on display are held in secure storage but access is permitted on an appointment basis.

Preservation

The collections have been under the care of conservators since the 1940s. They specialise in antiquities, paintings, paper and photographs, and preventive conservation and are based at Bristol Museum and Art Gallery. Our conservators:

88

22 Investment Properties

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

Rental income from Investment Property
Direct operating expenses arising from Investment Property
Net gain		 2020/21
£'000
11,161
(592)
10,569
2019/20

£'000

11,998
(524)

11,474

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 to carry out repairs, maintenance or enhancement.

The following table summarises the movement in the fair value of Investment Properties over the year:

Balance at start of the year
Additions – purchases
Disposals
Net gains/losses from fair value adjustments
Transfers to/from Property, Plant and Equipment
Balance at end of the year		 2020/21
2019/20

£'000
249,251
-
(289)
3,744
(120)

252,586
£'000
252,586
256
-
22,566
495
275,903

Gains or losses arising from changes in the fair value of the investment property are recognised in the surplus or deficit on the provision of services – financing and investment.

Fair Value Hierarchy

Details of the authority’s investment properties and information about the fair value hierarchy are as follows:

Retail
Industrial
Office
Balance at end of the year		 Other significant observable
inputs
(Level2)
2020/21
2019/20
£'000
£'000
67,540
66,834
144,779
121,361
63,584
64,391
275,903
252,586

The investment properties have been valued by the Council’s in-house valuers (all RICS qualified) and by external specialists on an investment income basis which represents highest and best use overall.

There is a strong market for such property within Bristol with different markets for different sectors. Bristol City Council has a significant diverse portfolio of properties in the boundary of Bristol and has significant inhouse experience of managing its estate. In determining the value of each asset, we have considered quoted prices for similar properties within the local market, existing lease terms and rentals, current market rentals and yields, the covenant strength for existing tenants and data and market knowledge from managing the Council’s investment property portfolio, leading to the properties being categorised at Level 2 in the fair value hierarchy.

89

23 Intangible Assets

The Council accounts for its Information Technology (IT) system software as Intangible Assets which includes purchased licenses covering a period of more than a year. All software is amortised over five years (this is based on assessments of the period that the software is expected to be of use to the Council). All software is carried at cost (used as a proxy for fair value) given the short life of the asset.

The carrying amount of Intangible Assets is amortised on a straight-line basis. The amortisation of £4.5m charged to revenue in 2020/21 was charged to the central ICT cost centre and the Housing Revenue Account. The charge to central ICT was absorbed as an overhead across all the service headings in the Net Cost of Service. It is not possible to quantify exactly how much of the amortisation is attributable to each service heading. The main purchases in 2020/21 relate to system improvements from within the IT Transformation programme (ITTP).

The movement on Intangible Asset balances during the year is as follows:

Balance at start of the year
Gross carrying amounts
Accumulated amortisation
Accumulated impairment
Net carrying amount at start of year
Additions:
Purchases
Amortisation for the period
Net carrying amount at the end of year
Comprising:
Gross carrying amounts
Accumulated amortisation
Accumulated impairment
Balance at end of the year		 2020/21
£'000

33,792
-15,820
-2,014
15,958

9,140
-4,525
20,573

42,932
-20,345
-2,014
20,573		 2019/20
£'000
26,172
-12,585
-2,014
11,573
7,620
-3,235
15,958
33,792
-15,820
-2,014
15,958

90

24 Financial Instruments

The borrowings and investments disclosed in the Balance Sheet are made up of the following categories of financial instruments. The value of debtors and creditors reported in the table are those amounts meeting the definition of a financial instrument. The balances of debtors and creditors reported in the balance sheet and associated notes also include balances which do not meet the definition of a financial instrument, such as taxbased debtors and creditors.

based debtors and creditors.
Long-Term Current
31 March 31 March 31 March 31 March
2021 2020 2021 2020
£'000 £'000 £'000 £'000
Financial Liabilities at Amortised
cost
Borrowing (450,488) (450,488) (4,966) (14,778)
Service Concessions (123,910) (131,735) (8,951) (8,820)
Creditors (94) (84) (194,467) (144,019)
Financial Liabilities at Fair Value
through profit and loss
Financial Derivative (5,379)
Total Financial Liabilities (574,492) (582,307) (208,384) (172,996)
Financial Assets at amortised cost
Investments - 1 85,079 102,502
Debtors 11,332 10,487 92,809 70,039
Financial Assets at Fair Value
through Other Comprehensive
Income
Investment 350 350 -
Financial Assets at Fair Value
through profit and loss
Investments 43,220 41,723 101,476 56,017
Total Financial Assets 54,902 52,561 279,364 228,558

Movements

The increase in financial liabilities, circa £27m relates to an increase in the value of general creditors (£50m) during the year primarily due to government grants being received in advance. This was partly offset by the planned repayment of long-term borrowing (£10m) and service concessions (£8m), and the cancelling of parental company guarantees (£5m).

The financial assets increased by circa £53m through a combination of increases in working capital and reserves resulting in additional cash resources to invest in lieu of using these resources.

91

Borrowing

31 March
31 March
2021
2020
Current borrowing £'000
£'000
Deposit loans (repayable at notice - up to 7 days) 101
151
Other short-term borrowing (repayable within 1 year):
- Public Works Loan Board 3,251
13,470
- Banks and other monetary sector 1,334
1,136
- Energy improvement Loans 259
-
- Local bonds and property rent disposals 11
11
- Stocks 10
10
Total 4,966
14,778
31 March
31 March
2021
2020
Non-current borrowing £'000
£'000
Public Works Loan Board 330,439
330,439
Lender Option Borrower Option (Lobo) 70,000
70,000
Market Debt 50,000
50,000
Stocks 49
49
Total 450,488
450,488

92

Income, Expense, Gains or Losses

The gains and losses recognised in the Comprehensive Income and Expenditure Statement for financial instruments are as follows:

follows: follows: follows: follows:
Financial Instruments Gains and Losses 2020/21
Financial
Liabilities Financial Assets
Measured
at
amortised
cost		 Amortised
Cost		 Fair
Value
through
the CI		 Fair
Value
through
the P&L		 Total
£'000 £'000 £'000 £'000 £'000
Interest expense & Impairment
Losses (28,862) - - - (28,862)
Total expense in Surplus or
Deficit on the Provision of
Services (28,862) - - - (28,862)
Interest Income - 5,113 - 109 5,222
Fair Value Movement - - - 1,669 1,669
Dividend Income - - - 4,046 4,046
Total income in Surplus or
Surplus / Deficit on the
Provision of Services (28,862) 5,113 - 5,824 (17,925)
Deficit arising on revaluation of
financial assets in Other
Comprehensive Income and
Expenditure - - - - -
Net gain/(loss) for the year (28,862) 5,113 - 5,824 (17,925)
Financial Instruments Gains and Losses 2019/20
Financial
Liabilities Financial Assets
Measured Fair Fair
at
amortised		 Amortised
Cost		 Value
through		 Value
through		 Total
cost the CI the P&L
£000s £000s £000s £000s £000s
Interest expense (40,647) -
-		 - (40,647)
Total expense in Surplus or
Deficit on the Provision of
Services (40,647) -
-		 - (40,647)
Interest Income -
5,861		 - 301 6,162
Increases in Fair Value - - - (17,079) (17,079)
Dividend Income -
-
-		 4,070 4,070
Total income in Surplus or
Deficit on the Provision of
Services (40,647)
5,861		 - (12,708) (47,494)
Surplus / Deficit arising on
revaluation of financial assets in
Other Comprehensive Income
and Expenditure -
-
-		 - -
Net gain/(loss) for the year (40,647) 5,861 - (12,708) (47,494)

93

Fair Value of Financial Assets and Property Assets

Some of the authority’s financial assets are measured in the Balance Sheet at fair value on a recurring basis and are described in the following table, including the valuation techniques used to measure them.

Fair value measurements at 31
**March 2021 using: **		 Fair value measurements at 31
**March 2021 using: **		 Fair value measurements at 31
**March 2021 using: **		 Fair value measurements at 31
**March 2020 using: **		 Fair value measurements at 31
**March 2020 using: **		 Fair value measurements at 31
**March 2020 using: **
Descriptions Quoted
prices in
active
markets		 Observable
inputs		 Unobservable
inputs		 Quoted
prices in
active
markets		 Observable
inputs		 Unobservable
inputs
Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
£000 £000 £000 £000 £000 £000
Recurring fair value
measurements
Fair Value through
Profit and Loss
MoneyMarket Funds 101,476 - - 56,017 - -
Bristol Port Company
(Non-traded Unquoted
EquityInvestment)		 - - 29,000 - - 27,000
Bristol Holdings
(unquoted equity
investment)		 - - 4,992 - - 5,623
Other unquoted private
companies		 - - 128 - - 100
Pooledpropertyfund - - 9,100 - - 9,000
Fair Value through
Other Comprehensive
Income
Other unquoted private
companies		 - - 350 - - 350
Total Non-traded
securities:		 101,476 - 43,570 56,017
-		 42,073
Investmentproperties - 275,903 - - 252,586 -
Surplusproperties - 43,706 - - 41,957 -
Total recurring fair
value measurements		 101,476 319,609 43,570 56,017 294,543 42,073
Non-recurring fair value
measurements
Assets held for sale 806 -
723
-
Total non-recurring fair
value measurements		 - 806 - -
723		 -

94

Valuation
techniques and
Inputs
Description of
asset		 Valuation
hierarchy		 Basis of Valuation Observable and
Unobservable
inputs		 Key sensitivities
affecting the
valuations provided
Money Market
Funds		 Level 1 Unadjusted quoted prices
in active markets for
identical shares		 Latest quoted prices
Surplus assets Level 2 All surplus assets have
been valued by RICS
qualified valuers to Fair
Value less costs to sell,
reflecting highest and
best use.		 Evidence of title,
floor area, siting and
site conditions,
type/age and
current use of the
property have been
considered together
with general market
conditions and
advertised value of
similar properties
currently up for sale.		 Not all assets are
physically inspected
every year. Latent
defects, repair and
maintenance
backlogs, general
changes in the
market and other
impairments could
have a significant
impact on the values
provided.
Investment
Properties(further detailed
information in note 22)		 Level 2 All investment properties
have been valued by the
Council’s in-house
valuers (all RICS
qualified) on an
investment income basis
which we are satisfied
represents highest and
best use overall.		 All valued on an
investment income
basis, using existing
lease terms and
current yields		 Changes to market
conditions, lease
terms, covenant
strength and
occupancy levels
could all affect the
asset valuations
provided.
Bristol Port
Company		 Level 3 This investment has been
valued by an external
specialist valuation
company for financial
year ending 31stMarch
2020 and refreshed by
Council officers for this
financial year on the
same basis.		 Calculations have
been based an
income approach to
valuation, by
applying a multiple
derived from the
market to a
maintainable profit
figure.		 Changes to market
conditions (local and
global), and the
comparable data used
within the valuations.
If the growth of
future returns is
greater or lesser by
0.5% than the 2%
forecast, the fair
value will be circa
£1.5m higher or
lower respectively.
Bristol Holdings Level 3 This investment has been
valued at the Council’s
share of each company’s
net assets.		 Calculations have
been based on their
unaudited accounts
as at 31 March 2021.		 Valuations could be
affected by the
difference between
audited and
unaudited accounts.

95

Investments in other
unquoted companies		 Level 3 These investments have
been valued at the
Council’s share of each
company.		 Calculations have
been based on their
latest audited
accounts		 The value of these
companies is
relatively low (£478k)
so any change in the
metrics used in the
valuation technique
will not have a
material impact.
Investments in
Pooled Property
Fund		 Level 3 These investments have
been valued at the
Council's share within
the pooled fund.		 The valuation for
Pooled Property
Funds has been
based on the latest
quarterly financial
report		 Changes to housing
market conditions
could affect the
valuation of the
pooled property
fund. If the market
value of the
properties within this
fund is greater or
lesser than 1% the
fair value of the fund
will be £91k higher
or lower respectively.

96

Transfers between levels of the fair value hierarchy

There were no transfers between levels 1 and 2 during the year.

Changes in valuation technique

There has been no change in valuation techniques used during the year.

Reconciliation of fair value measurements for assets at fair value within level 3

31 March
31 March
2021
2020
Non-traded
securities
Non-traded
securities
£000
£000
42,073
51,860
-
-
-
-
1,597
(17,079)
-
-
1,597
(17,079)
100
7,842
(200)
(550)
43,570
42,073
Description
Opening balance
Transfers into level 3
Transfers out of level 3
included in the surplus/(deficit) on the
Provision of Services
included in Other Comprehensive Income and
Expenditure
Total gains/(losses) for the period:
Additions
Disposals
Closing balance

Gains and losses included in the surplus / (deficit) on the provision of services for the current year primarily relates to the investments in Bristol Port (+£2m) and Bristol Holdings (-£631k).

97

The Fair Values of Financial Assets and Financial Liabilities that are not Measured at Fair Value

Except for the financial assets carried at fair value (described in the table above), all other financial liabilities and financial assets represented by loans and receivables and long-term debtors and creditors are carried on the balance sheet at amortised cost. Their fair value can be assessed by calculating the present value of the cash flows that take place over the remaining life of the instruments, using the following assumptions:

Financial Liabilities 31 March 2021 31 March 2020
Carrying
amount
Fair value		 Carrying
amount
Fair value
£000
£000		 £000
£000
Public Works Loan Board (PWLB) 333,690
501,500		 343,909
480,200
Lender Option Borrower Option 70,865
108,400		 70,663
99,400
Market Debt 50,469
74,700		 50,473
69,200
Current Creditors 194,467
194,467		 144,019
144,019
Service Concessions 132,861
204,061		 140,555
212,819
Other 524
524		 305
305
Total Liabilities 782,876
1,083,652		 749,924
1,005,943

The Authority has used a transfer value for the fair value of financial liabilities. We have also calculated an exit price fair value of £1.237m a decrease of £156m which is calculated using early repayment discount rates. The Authority has no contractual obligation to pay these penalty costs and would not incur any additional cost if the loans run to their planned maturity date.

The fair value for financial liabilities and assets has been assessed by calculating the present value of the cash flows that will take place over the remaining term of the instruments, using the assumptions detailed above; the fair value is arrived at by applying the discounted cash flow calculations based on the PWLB premium/discount calculations.

The fair value of the liabilities is higher than the carrying amount because the Authority’s portfolio of loans includes several fixed rate loans where the interest rate payable is higher than the prevailing rates at the Balance Sheet date. This shows a notional future loss (based on economic conditions at 31 March 2021) arising from a commitment to pay interest to lenders above current market rates.

Financial Assets 31 March 2021 31 March 2020
Carrying
amount
Fair value		 Carrying
amount
Fair value
£000
£000		 £000
£000
Current investments 64,983
64,983		 33,076
33,076
Cash and Cash Equivalents 20,096
20,096		 69,426
69,426
Non-current investments -
-		 1
1
Current Debtors 92,809
92,809		 70,039
70,039
Non-current debtors 11,332
11,332		 10,487
10,487
Total Financial Assets 189,220
189,220		 183,029
183,029

98

The fair value of the assets is the same as the carrying value due to the majority of these assets having a maturity of less than 12 months or is a trade or other receivable where the fair value is taken to be the carrying amount or the billed amount.

Short-term debtors and creditors are carried at cost as this is a fair approximation of their value.

Fair value hierarchy for financial assets and financial liabilities that are not measured at fair value

Fair value measurements at 31 Fair value measurements at 31 Fair value measurements at 31 Fair value measurements at 31 Fair value measurements at 31 Fair value measurements at 31
March 2021 using: March 2020 using:
Quoted Observable Unobservable Quoted
Observable		 Unobservable
prices in
inputs		 inputs prices in
inputs		 inputs
active active
markets markets
Descriptions
Level 1
Level 2		 Level 3 Level 1
Level 2		 Level 3
£000
£000		 £000 £000
£000		 £000
Recurring fair value
measurements using:
Financial Liabilities
held at Amortised Cost
Public Works Loan Board
(PWLB) 333,690 343,909
Lender Option Borrower
Options 70,865 70,663
Market debt 50,469 50,473
Service Concessions 132,861 140,555
Other 524 305
Total 588,409 605,905
Financial Assets held at
amortised cost
Current Investments 64,983 33,076
Cash and Cash
Equivalents 20,096 69,426
Non-current Investments - 1
Non-current Debtors 11,332 10,487
Total 96,411 112,990

The fair value for financial liabilities and financial assets that are not measured at fair value included in Levels 2 and 3 in the table above have been arrived at using a discounted cash flow analysis with the most significant inputs being the discount rate detailed above.

The fair value for financial liabilities and financial assets that are not measured at fair value can be assessed by calculating the present value of the cash flows that will take place over the remaining term of the instruments, using the assumptions detailed above, primarily for financial liabilities the fair value is arrived at by applying the discounted cash flow calculations based on the PWLB premium/discount calculations.

99

25 Nature and Extent of Risks Arising from Financial Instruments

The Authority’s activities expose it to a variety of financial risks:

The Council’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the resources available to fund services. Risk management is carried out by a central treasury team, under policies approved by the Council in the annual treasury management strategy, and compliance with the CIPFA Prudential Code of Practice, the CIPFA Treasury Management Code of Practice, and Investment Guidance that is issued under the Local Government Act 2003. The Council provides written principles for overall risk management, as well as written policies covering specific areas, such as interest rate risk, credit risk, and the investment of surplus cash. These are required to be reported and approved at or before the Council’s annual council tax setting budget or before the start of the year to which they relate. These items are reported with the annual treasury management strategy that outlines the detailed approach to managing risk in relation to the Council’s financial instrument exposure. Actual performance is also reported annually to Members.

The annual treasury management strategy which incorporates the prudential indicators was approved by Council on 25 February 2020 and is available on the Council website.

Credit risk

Credit risk arises from deposits with banks and financial institutions, as well as credit exposures to the Council’s customers.

This risk is minimised through the Annual Investment Strategy, which requires that deposits are not made with financial institutions unless they meet identified minimum credit criteria, in accordance with Fitch, Standard and Poor’s and Moody’s Credit Ratings Services. The Annual Investment Strategy also imposes a maximum sum to be invested with a financial institution located within each category.

Details of the Investment Strategy can be found on the Council’s website. The key areas of the Investment Strategy are that the minimum criteria for investment counterparties include:

The Council’s maximum exposure to credit risk in relation to its investments in banks and building societies will vary according to credit ratings assigned by the three main credit rating agencies and cannot be assessed generally as the risk of any institution failing to make interest payments or repay the principal sum will be specific to each individual institution. Recent experience has shown that it is rare for such entities to be unable to meet their commitments. A risk of irrecoverability applies to all the Authority’s deposits, but there was no evidence at the 31 March 2021 that this was likely to crystallise.

100

Allowance for Credit Losses

The following analysis summarises the Council’s potential maximum exposure to credit risk on financial assets valued at amortised cost, based on experience of default and un-collectability over the last five financial years, adjusted to reflect current market conditions.

Amount Historical
experience
of default
Adjustmen
t
for
market
conditions		 Estimate
d
maximu
m
exposure
to default
Estimate
d
maximu
m
exposure
to default
£000 %
%		 £000
£000
A B
C		 (A*C)
Non-Current Investments: 31-Mar-21 31-Mar-21
31-Mar-21		 31-Mar-21
31-Mar-20
Non-traded securities - 0.00%
0.00%		 -
-
Sub-total - -
-
Current Investments:
Local Authorities 45,013 0.00%
0.00%		 -
-
AA rated counterparties 15,585 0.03%
0.03%		 5
-
A rated counterparties 24,481 0.04%
0.04%		 10
18
Sub-total 85,079 15
18
Trade debtors 92,809 -
-
Non-current debtors 11,332 -
-
Total Financial assets 189,220 15
18

The estimated maximum exposure for credit loss for Treasury investments is 15k and therefore no allowance for credit loss have been made for these assets due to materiality.

No credit limits were exceeded during the reporting period and the Council does not expect any losses from non-performance by any of its counterparties in relation to deposits.

The Council does not generally allow credit for its trade debtors, including amounts due from government departments and other Local Authorities.

The risk of loss for trade receivables is minimised by a combination of the following:

The write off of a debt is always the last option available and is only taken when all other appropriate measures have been taken to recover payment, and in cases of bankruptcy.

101

The bad debt provision is calculated by reference to the Council’s historic experience with the provision being applied to debts over 60 days old and the value increasing according to the age of the debt.

Debtor analysis Gross
at		 debtor Allowance
for credit
losses at		 Net
debtor at		 Net
debtor at		 Net
debtor at
31-Mar-21 31-Mar-21 31-Mar-21 31-Mar-
20
£'000 £'000 £'000 £'000
Local taxpayers 35,192 (19,626) 15,566 6,099
Housing rents 13,123 (10,091) 3,032 2,880
Other - sundry debtors 146,708 (32,670) 114,038 83,872
Total Other Entities and
Individuals 195,023 (62,387) 132,636 92,851
Central Government bodies 10,561 - 10,561 11,047
Other local authorities 1,571 - 1,571 1,636
NHS bodies 160 - 160 749
Total debtors 207,315 (62,387) 144,928 106,283
Balance sheet debtors 207,315 (62,387) 144,928 106,283
Current debtors not qualifying
as a financial instrument under
IFRS (71,745) 19,626 (52,119) (36,244)
Current debtors qualifying
as a financial instrument
under IFRS 135,570 (42,761) 92,809 70,039

The following table analyses the Gross debt that is now past due over varying periods. This overdue debt is covered by a provision for bad debt.

31 March
31 March
2021
2020
£'000
£'000
Less than three months 29,971
30,438
1,754
1,521
15,276
9,474
46,848
38,863
Three to four months
Four months to one year
More than oneyear
Total 93,849
80,296

Liquidity risk

The Council has a comprehensive cash flow management system that seeks to ensure that cash is available as needed. If unexpected movements happen, the Council has ready access to borrowings from the money markets to cover day-to-day cash flow need and the Public Works Loans Board and capital markets for access to longer term funds. The Council is also required to provide a balanced budget through the Local Government Finance Act 1992, which ensures sufficient monies are raised to cover annual expenditure. Therefore, there is no significant risk that it will be unable to raise finance to meet its commitments under financial instruments.

102

The maturity analysis of financial assets, excluding sums due from customers, is as follows:

31 March
31 March
2021
2020
£'000
£'000
Less than 1 year 279,364
228,558
Between 1 and 2 years 1,699
1,582
Between 2 and 3 years 1,724
1,191
More than 3years 51,479
49,788
Total 334,266
281,119

The maturity analysis of financial liabilities is as follows:

31 March
2021
31 March
2020
£'000
£'000
Less than 1 year 208,384
172,996
Between 1 and 2 years 13,853
8,651
Between 2 and 3 years 9,146
13,553
More than 3years 551,493
560,103
Total 782,876
755,303

Refinancing and Maturity risk

The Council maintains a significant debt and investment portfolio. Whilst the cash flow procedures above are considered against the refinancing risk procedures, longer-term risk to the Council relates to the exposure to replacing financial instruments as they mature. This risk relates to both the maturing of longer-term financial liabilities and longer-term financial assets.

The approved treasury indicator limits for the maturity structure of debt and the limits on investments placed for greater than one year in duration are the key parameters used to address this risk. The Council approved treasury and investment strategies address the main risks and the central treasury team address the operational risks within the approved parameters. This includes:

The maturity profile of the Council’s debt portfolio along with the Council’s approved minimum and maximum exposure is shown in the table below.

Approved
minimum
limits %
Approved
maximum
limits %		 Actual 31
March
2021
%
£'000		 Actual 31
March
2020
%
£'000
Less than 1 year
-
30		 4,966
1%		 14,778
3%
Between 1 and 2 years
-
40		 5,000
1%		 -
-%
Between 2 and 5 years
-
40		 20,000
4%		 10,000
2%
Between 5 and 10 years
-
50		 34,000
7%		 49,000
11%
More Than 10 Years
25
100		 391,488
87%		 391,488
84%
Total 455,454
100%		 465,266
100%

103

Included within the maturity profile are £70m of LOBOS with maturities averaging 40 years. Inherent within these loan instruments are options (averaging an option every 3 years) that could give rise to the debt being repaid early. These loans are regularly reviewed with the current and expected structure of interest rates. The risk of the lenders exercising their options is currently low for the short to medium term. Therefore, the maturity of these loans in above table are currently based on their maturity date, 10 years and over.

Market risk

The Council is exposed to interest rate movements on its borrowings and investments. Movements in interest rates have a complex impact on the Council. For instance, a rise in variable and fixed interest rates would have the following effects:

Borrowings are not carried at fair value on the balance sheet, so nominal gains and losses on fixed rate borrowings would not impact on the Surplus or Deficit on the Provision of Services or Other Comprehensive Income and Expenditure. However, changes in interest payable and receivable on variable rate borrowings and investments will be posted to the Surplus or Deficit on the Provision of Services and affect the General Fund Balance. Movements in the fair value of fixed rate investments that have a quoted market price will be reflected in the Other Comprehensive Income and Expenditure Statement.

The Council has several strategies for managing interest rate risk. The Annual Treasury Management Strategy draws together the Council’s expected treasury operations, including an expectation of interest rate movements. From this Strategy a treasury indicator is set which provides maximum limits for fixed and variable interest rate exposure. The central treasury team will monitor market and forecast interest rates within the year to adjust exposures appropriately. For instance, during periods of falling interest rates, and where economic circumstances make it favourable, fixed rate investments may be taken for longer periods to secure better long-term returns, similarly the drawing of longer-term fixed rates borrowing would be postponed.

At 31 March 2021, if interest rates had been 1% higher with all other variables held constant, the financial effect would be:

31 March
2021
£'000
Increase in interest receivable on variable rate investments 1,966
Impact on Surplus or Deficit on the Provision of Services 1,966
Share of overall impact debited to the HRA 1,193
Decrease in fair value of fixed rate borrowings liabilities (no impact on the
Surplus or Deficit on the Provision of Services or Other Comprehensive
Income and Expenditure)		 264,600

104

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

Price risk

The Council does not generally invest in equity shares but has recently invested in Bristol Holdings, a wholly owned subsidiary. Whilst this holding is generally illiquid, the Council is exposed to losses arising from movements in the prices of these shares.

As the shareholding has arisen in the acquisition of specific interests, the Council is not able to limit its exposure to price movements by diversifying its portfolio. Instead, it only acquires shareholdings in return for “open book” arrangements with the company so that the Council can monitor factors that might cause a fall in the value of specific holdings.

These shares are valued at fair value.

Foreign exchange risk

During 2020/21 the Council received monies denominated in Euro's relating to the receipt of European grant. The authority also made payments in a variety of currencies for the supply of goods and services. Payments and receipts are converted to Sterling at the earliest opportunity.

26 Capital Expenditure and Capital Financing

The total amount of capital expenditure incurred in the year is shown in the table below (including the value of assets acquired under finance leases and PFI/PP contracts), together with the resources that have been used to finance it. Where capital expenditure is to be financed in future years by charges to revenue as assets are used by the Council, the expenditure results in an increase in the Capital Financing Requirement (CFR), a measure of the capital expenditure incurred historically by the Council that has yet to be financed. Movements on the CFR are also analysed below.

Opening Capital Financing Requirement
Capital investment
Property, Plant and Equipment
Investment Properties
Heritage Assets
Intangible Assets
Long Term Investments / Debtors
Revenue Expenditure Funded from Capital under Statute
Capital Receipts set aside for repayment of debt
Sources of finance
Capital receipts
Government grants and other contributions
Sums set aside from revenue:
• Direct revenue contributions
• MRP – City Council Debt
Closing Capital Financing Requirement
Explanation of movements in year
Less Minimum Revenue Provision
Use of capital receipt for repayment of debt
Increase in underlying need to borrowing (unsupported by
government financial assistance)
Increase in Capital Financing Requirement		 2020/21
£'000
869,923

107,527
256
95
9,140
1,660
18,636
(1,386)

(38,391)
(41,209)

(26,234)
(13,611)
886,406
(13,611)
(1,386)
31,480
16,483
2019/20

£'000
847,021
126,927
-
340
7,620
17,592
10,225
(13,839)
(33,496)
(34,898)
(46,938)
(10,631)
869,923
(10,631)
(13,839)

47,372

22,902

105

27 Leases

Council as Lessor

Operating Leases

The Council leases out property within the commercial trading estate under operating leases for the following purposes:

centres

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

Not later than one year
Later than one year and not later than five years
Later than five years		 31 March
2021
£'000		 31 March
2020

£'000
13,821
52,243
851,243
917,307
13,708

49,370

850,558

913,636

The minimum lease payments receivable at 31 March 2021 and 2020 are based on the current rents receivable at the respective Balance Sheet dates. They do not include estimates of future rents reviews or contingent rents.

28 Service Concessions

Schools PFI Phase 1A

On 31[st] March 2004 the Council entered into a Private Finance Initiative (PFI) contract with Bristol Schools Limited. The contract provided for the design, construction and financing of four new secondary schools, Bedminster Down, Henbury School, Orchard School and Oasis Academy Brightstowe. All four schools were constructed and are operational. Bristol Schools Limited will maintain and operate the facilities for twenty-six years from the date the first school became operational.

A capital contribution of £5.346m was made to the first phase of the project by way of a cash payment. This was in respect of the provision of leisure facilities and of the retention of part of the site of Henbury School by the Council, for subsequent disposal.

As at 31st March 2021 cumulative payments totalling £151m (£141m in 2019/20) have been made to the PFI contractor. The future estimated payments the Council will make under the contract are as follows:

Year
2021/22
2022/23 to 2025/26
2026/27 to 2030/31
2031/32
Total		 Payment
for
Services
£'000
3,225
13,726
19,179
1,557
37,687		 Repayment
of Liability

£'000

2,149

10,720

20,275

1,879
35,023		 Interest

£'000

4,119

13,714

8,706

221
26,760
Other

£'000

251

855

(354)

413
1,165
Total

£'000

9,744

39,015

47,806

4,070
100,635

Over the life of the PFI project, the Council is scheduled to receive government grant of £134.8m.

106

Schools PFI Phase 1B and 1C, Building Schools for the Future

During 2006/07 the Council entered into a PFI contract with Bristol PFI Limited to design, build, finance and operate four additional schools in Bristol. A Local Education Partnership (LEP) was also created to manage the supply chain and deliver the four schools. The partnership is between Skanska Education Partnerships (80%), Partnership for Schools (10%) and Bristol City Council (10%). The schools are Brislington Enterprise College, Bristol Brunel Academy, Bristol Metropolitan Academy and Bridge Learning Campus. Bristol PFI Limited will maintain and operate the facilities for twenty-seven years from the date the first school became operational.

A capital contribution of £9.569m was made to the project by way of a cash payment. This was used towards the cost of the Bridge Learning Campus and provision of leisure facilities at Bristol Brunel Academy.

As at 31st March 2021 cumulative payments totalling £215m (£197m in 2019/20) have been made to the PFI contractor. The future estimated payments the Council will make under this contract are as follows:

Year
2021/22
2022/23 to 2025/26
2026/27 to 2030/31
2031/32 to 2034/35
Total		 Payment
for
Services
Repayment
of Liability Interest
Other
Total
£'000
£'000
£'000
£'000
£'000
5,512
4,008
5,675
4,031
19,226
23,689
16,338
19,611
19,229
78,867
33,690
27,210
16,705
25,481 103,086
25,689
26,134
4,590
16,585
72,998
88,580
73,690
46,581
65,326
274,177

Over the life of the PFI project, the Council is scheduled to receive government grant of £326.3m.

Hengrove Leisure Centre

In April 2010 the Council entered into a PFI contract with Bristol Active Limited to design, build, finance and operate a new leisure centre, and associated car park, in Hengrove. The centre opened in February 2012 and Bristol Active Limited will operate and maintain the facility until 2037.

The assets and associated liability have been included on the Council’s Balance Sheet in accordance with IFRS.

A capital contribution of £7.161m was made to the project by way of a cash payment. This was used to fund the capital works for the Car Park and as a contribution towards the capital works of the Leisure Centre.

As at 31 March 2021 payments totalling £32m (£27m at 31 March 2020) have been made to the PFI Contractor. The future estimated payments the Council will have to make under the Contract are as follows:

Year
2021/22
2022/23 to 2025/26
2026/27 to 2030/31
2031/32 to 2035/36
2036/37
Total		 Payment
for
Services
Repayment
of Liability Interest
Other
Total
£'000
£'000
£'000
£'000
£'000
357
646
1,325
1,212
3,540
1,519
1,908
4,729
6,191
14,347
2,082
3,954
4,531
7,822
18,389
2,197
5,036
2,317
9,407
18,957
605
1,216
126
1,646
3,593
6,760
12,760
13,028
26,278
58,826

107

Over the life of the PFI project, the Council is scheduled to receive government grant of £69.6m.

Property, Plant and Equipment

The PFI assets, and related liabilities, have been recognised on the Council’s balance sheet when made available for use. Movements in their value over the year are detailed in the analysis of the movements on the Property, Plant and Equipment balance in Note 20. The assets will be transferred back to the Council at the end of the contracts for nil consideration.

Locally managed schools transferring to Academy status are granted a 125 year peppercorn lease and, in response to CIPFA guidance, are de-recognised from the Council’s accounts as control of these assets is transferred to the Academy.

Payments are made to the PFI contractors as monthly “unitary payments”. The estimated payments the Council will make under the contracts are shown below.

These payments are commitments and can vary subject to indexation, reductions for performance and availability failures, and possible future variations to the scheme.

The funding of the unitary payment for the School PFI schemes will come from the individual schools budget, the overall schools budget and a special government grant. The Hengrove Leisure unitary payment will be funded by the special government grant, with the balance provided from Sports Services budgets. PFI payments are accounted for in the year in which the service was provided and are allocated to repayment of the liability, finance cost, service charge and other costs (lifecycle cost and contingent rents).

The unitary payments have been calculated to compensate the contractor for the fair value of the services they provide, the capital expenditure incurred, and the interest payable on financing the capital expenditure. The Hengrove Leisure PFI contains a significant amount of third party income, this is income received directly by the PFI Contractor from the users of the facility. The payment for services has been shown net of this estimated income, as the unitary payments have been reduced to reflect the operator’s right to this income. The outstanding liability due to the contractor for reimbursement of capital expenditure is as follows:

Balance outstanding at the start of year
Movement in year
Balance outstanding at year end		 Schools
2020/212019/20
£'000
£'000
114,775
120,098
(6,063)
(5,323)
108,712
**114,775 **		 Hengrove Leisure
2020/21
2019/20
£'000
£'000
13,469
14,284
(708)
(815)
12,761
13,469		 Hengrove Leisure
2020/21
2019/20
£'000
£'000
13,469
14,284
(708)
(815)
12,761
13,469

14,284
(815)

13,469

The above listed commitments are affected by past inflation – previous price rises will be built into future payments. They are also affected by future inflation, which gives rise to uncertainty.

Bristol Waste Contract

In August 2015 the Council entered into a service contract with Bristol Waste Company to provide recycling and waste services. The assets and associated liability have been included on the Council’s Balance Sheet in accordance with IFRS.

During the year Bristol Waste acquired £1.1m of assets to support the provision of waste services, funded from a loan from the Council.

108

The future estimated payments the Council will make under the contract are as follows:

Year
2021/22
2022/23 to 2025/26
2026/27
Total		 Payment for
Services
£'000
Repayment of
Liability
£'000
Interest
£'000
Total
£'000
30,147
2,148
288
32,583
130,796
7,366
595
138,757
10,128
1,874
11
12,013
171,071
11,388
894
183,353

Total Balance Outstanding on all Service Concessions is shown in the table below:

Balance outstanding at the
start of year
Movement in year
Balance outstanding at
year end		 Schools
Hengrove Leisure
Bristol Waste
Contract
Total
2020/21
2019/20
2020/21
2019/20
2020/21
2019/20
2020/21
2019/20
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
114,775
120,098
13,469
13,469
12,311
1,046
140,555
135,428
(6,063)
(5,323)
(708)
(779)
(923)
11,265
(7,694)
5,127
108,712
114,775
12,761
14,284
11,388
12,311
132,861
140,555

29 Debtors

i
Current debtors
Trade receivables
Prepayments
VAT
Other
Total		 31 March
2021
£'000
21,451
3,948
9,632
109,897
144,928		 31 March
2020

£'000
9,611
3,475
8,931
84,266

106,283

Impairments for doubtful debts are detailed in Note 24.

ii
Long-term debtors
Mortgages
Capital loans (Probation/Fire/LEP/Bristol Waste))
South Gloucestershire Council
Former county Council debt
Total		 31 March
2021
£'000
190
10,865
354
37,689
49,098		 31 March
2020

£'000
194
9,996
381
39,260

49,831

109

30 Cash and Cash Equivalents

The balance of Cash and Cash Equivalents is made up of the following elements:

Cash held by the Council
Bank current accounts
Short-term deposits with banks / building societies
Total Cash and Cash Equivalents		 31 March
2021
£'000
271
(20,702)
142,003
121,572		 31 March
2020

£'000
275
8,165
60,986

69,426

31 Creditors

Current liabilities
Trade payables
Other payables
Receipts in advance
Total
Other long-term liabilities
Service Concession contract liabilities (see Note 28)
Retirement benefit obligations (see Note 34)
Deferred liabilities
Deferred capital receipts
Rent Deposits
Total		 31 March
2021
£'000
12,038
142,329
61,006
215,373
31 March
2021
£'000
123,910
1,127,918
39,259
0
94
1,291,181		 31 March
2020

£'000
2,029
119,400
46,018

167,447
31 March
2020

£'000
131,735
993,905
40,895
3
84

1,166,622

Deferred liabilities are amounts which, by arrangement, are payable beyond the next year, at some point in the future or are to be paid off by an annual sum over a period. As at the 31 March 2021 the liability in the Council’s Balance Sheet of £39.3m (2020: £40.9m) comprised of former county Council loan debt.

Deferred capital receipts are amounts derived from sales of assets, which will be received in instalments over agreed periods of time. They arise from mortgages on the sale of Council houses, which form part of mortgages under long term debtors.

110

32 Provisions

2
Provisions
Business
Transformation
Insurance fund
NDR Provision for
appeals
Legal
Winding up of
Bristol Energy Ltd
Other
Due < 1 year
Due > 1 year		 Balance at
31 March
2020
Additional
provisions
made in
2020/21
£'000
£'000
(121)
(1,785)
(298)
(27,454)
(10,430)
(498)
-
-
(3,891)
(296)
(135)		 Amounts
used in
2020/21
£'000
12
475
12,363
-
-
20		 Balance
at 31
March
2021
£'000
(109)
(1,608)
(25,521)
(498)
(3,891)
(411)		 Due <
1 year
£'000
(109)
(1,152)
-
(498)
(3,891)
(111)		 Due >
1 year
£'000
-
(456)
(25,521)
-
-
(300)
(30,154)
(14,754)
(1,898)
(28,257)
(30,154)		 12,870 (32,038)
(5,761)
(26,277)
(32,038)		 (5,761) (26,277)

Details of the provisions are shown in the table below:

Provision Purpose
Business Transformation Covers future exit costs arising from services management of change processes
Insurance fund To meet the known and anticipated liabilities on claims under the Council’s
insurance arrangements.
NDR Provision for appeals Covers the cost of future appeals
Legal Created to cover the costs of various outstanding legal cases within Adult
Social Care
Winding up of Bristol Energy
Ltd		 Covers costs of winding up Bristol Energy Ltd
Other Other provisions are individually not material

111

33 Unusable Reserves

Revaluation Reserve
Capital Adjustment Account
Financial Instruments Adjustment Account
Deferred Capital Receipt Reserve
Pensions Reserve
Collection Fund Adjustment Account – Council
tax
Collection Fund Adjustment Account – NNDR
Collection Fund Adjustment Account – Growth
/ Renewable Energy Disregard
Accumulated Absences Account
Dedicated Schools Grant Adjustment Account		 31 March
2021
£'000
(1,007,648)
(1,510,865)
6,898
(1,448)
1,141,369
4,539
80,159
3,237
13,388
10,004
(1,260,366)		 31 March
2020
£'000
(861,614)
(1,520,227)
7,076
-
993,905
1,446
667
(2,590)
6,604
-
(1,374,733)

Revaluation Reserve

The Revaluation Reserve contains the gains made by the Council arising from increases in the value of its Property, Plant and Equipment. The balance is reduced when assets with accumulated gains are:

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.

Balance at 1 April
Upward revaluation of assets
Downward revaluation of assets and impairment
losses not charged to the Surplus/Deficit on the
Provision of Services
Surplus or deficit on revaluation of non-current
assets not posted to the Surplus/Deficit on the
Provision of Services
Amount written off to the Capital Adjustment
Account
Balance at 31 March		 2020/21
2020/212019/20 2019/20		 2020/21
2020/212019/20 2019/20
£'000
£'000
£'000
£'000
(210,933)
39,555

112

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 and amortisation 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 and gains recognised on donated assets that have yet to be consumed by the Council. The account also contains revaluation gains accumulated on Property, Plant and Equipment before 1 April 2007, the date that the Revaluation Reserve was created to hold such gains.

Note 25 provides details of the source of all the transactions posted to the Account, apart from those involving the Revaluation Reserve.

Balance at 1 April
Reversal of items relating to capital expenditure debited or
credited to the Comprehensive Income and Expenditure
Statement:
Charges for depreciation and impairment of non-current assets
Revaluation losses on Property, Plant and Equipment
Amortisation of Intangible Assets
Movement in the fair value of financial Instruments
Revenue Expenditure Funded from Capital Under Statute
Amounts of non-current assets written off on 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 Reserve
Net written out amount of the cost of non-current assets consumed
in the year
Capital financing applied in the year:
Use of the Capital Receipts Reserve to finance new capital
expenditure
Use of the Major Repairs Reserve to finance new capital expenditure
Capital grants and contributions credited to the Comprehensive
Income and Expenditure Statement that have been applied to capital
financing
Statutory provision for the financing of capital investment charged
against the General Fund and HRA balances
Use of the Capital Receipts Reserve for repayment of Long-Term
Investments financed by borrowing
Long Term Capital Investment repaid
Capital expenditure charged against the General Fund and HRA
balances
Movements in the market value of Investments debited or credited
to the Comprehensive Income and Expenditure Statement
Balance at 31 March		 2020/21
2019/20

£'000
£'000
(1,520,227)
(1,510,028)


57,837

28,820

3,235

11,722

10,225

46,849
65,697
52,654
4,525
(1,597)
18,636
36,802
(1,343,510)
(1,351,340)
(26,662)

(1,378,002)


(33,496)

(25,668)

(34,898)

(10,631)

(13,839)

1,321

(21,270)
(25,344)
(1,368,854)
(38,391)

(21,642)

(41,209)
(13,611)
(1,386)
1,386
(4,592)
(1,488,299)
(1,516,483)

(3,744)
(22,566)
(1,510,865) (1,520,227)

113

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. As a result, the balance on the Account at 31 March 2020 will be charged to the General Fund over the next 40 years.

Balance at 1 April
Premiums incurred in the year and charged to the
Comprehensive Income and Expenditure Statement
Proportion of premiums incurred in previous financial
years to be charged against the General Fund Balance in
accordance with statutory requirements
Amount by which finance 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		 2020/21
2020/21 2019/20 2019/20
£'000
£'000
£'000
£'000
7,076
7,254


(178)
(178)

(178)
(178)
6,898
**7,076 **		 2020/21
2020/21 2019/20 2019/20
£'000
£'000
£'000
£'000
7,076
7,254


(178)
(178)

(178)
(178)
6,898
**7,076 **
**7,076 **

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 authority 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.

Balance at 1 April
Transfer of deferred sale proceeds credited as part of gain/loss
on disposal to the comprehensive income and expenditure
statement
Transfer to the capital receipts reserve upon receipt of cash
Balance at 31 March		 2020/21
£'000
-
(1,448)
-
**(1,448) **		 2019/20
£'000
-
-

Pensions Reserve

The Pensions 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, 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 fund or eventually pays any pensions for which it is directly responsible. The debit balance on the Pensions Reserve

114

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.

Balance at 1 April
Remeasurements on pensions assets and liabilities
Reversal of items relating to retirement 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
payments to pensioners payable in year
Balance at 31 March		 2020/21
£'000
993,905
112,346
83,834
-48,716
1,141,369		 2019/20
£'000
991,850
(45,748)
97,934
(50,131)
993,905

Collection Fund Adjustment Account

The Collection Fund Adjustment Account manages the differences arising from the recognition of council tax and non-domestic rates income in the Comprehensive Income and Expenditure Statement as it falls due from council taxpayers and business rate payers, compared with the statutory arrangements for paying across amounts to the General Fund from the Collection Fund.

Balance at 1 April
Amount by which council tax and non-domestic rates income 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		 2020/21
£'000
(477)
88,412
87,935		 2019/20
£'000
(126)
(351)
(477)

Accumulated Absences Account

The Accumulating Compensated Absences Adjustment 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 be neutralised by transfers to or from the account.

Balance at 1 April
Settlement or cancellation of accrual made at the end of the
preceding year
Amounts accrued at the end of the current year
Amount by which officer remuneration 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		 2020/21
2020/21
2019/20 2019/20
£'000
£'000
£'000
£'000
6,604
6,370
(6,604)
(6,370)
13,388
6,604
6,784
234
13,388
6,604		 2020/21
2020/21
2019/20 2019/20
£'000
£'000
£'000
£'000
6,604
6,370
(6,604)
(6,370)
13,388
6,604
6,784
234
13,388
6,604
6,604

115

Dedicated Schools Grant Adjustment Account

Regulations effective from 1 April 2020 require that a Schools Budget deficit must be carried forward to be funded from future Dedicated Schools Grant (DSG) income, unless permission is sought from the Secretary of State for Education to fund the deficit from the General Fund. They also require that where a local authority has a deficit on its Schools Budget relating to its accounts for a financial year beginning on 1 April 2020, 1 April 2021 or 1 April 2022, it must not charge the amount of that deficit to a revenue account, but instead record any such deficit in a separate account. The Dedicated Schools Grant Adjustment Account has been created for that purpose and the in-year deficit for 2020/21 and cumulative deficit brought forward as at 1 April 2020 have been transferred into that account. Further details on the deployment of DSG are provided in Note 16.

Balance at 1 April
Transfer of the opening Dedicated Schools Grant deficit from
earmarked revenue reserves
Reversal of the Dedicated Schools Grant within the surplus deficit on
the provision of services in the Comprehensive Income and
Expenditure Account
Balance at 31 March		 2020/21
£'000
-
2,892
7,112
10,004		 2019/20
£'000
-
-
-

116

34 Pensions

Participation in Pension Schemes

As part of the terms and conditions of employment of its officers, the Council makes contributions towards the cost of post-employment benefits. Although these benefits will not actually be payable until employees retire, the Council has a commitment to make the payments (for those benefits) and to disclose them at the time that employees earn their future entitlement.

The Council participates in three pension schemes:

The Local Government Pension Scheme (LGPS) - all staff, with the exception of teachers, are eligible to join the Local Government Pension Scheme (LGPS). The scheme is administered by Bath and North East Somerset Council and is called the Avon Pension Fund. The Fund provides members with benefits related to length of service and pensionable salary. The LGPS is a funded defined benefit pension arrangement for local authorities and is governed by statute principally now the Local Government Pension Scheme Regulations 2013.

The Teachers' Pension Scheme - Teachers employed by the Council are members of the Teachers’ Pension Scheme, administered on behalf of the Department for Education. The Scheme provides teachers with specified benefits upon their retirement and the Council contributes towards the costs by making contributions based on a percentage of members’ pensionable salaries. The Scheme is a multi-employer defined benefit scheme. However, the Scheme is unfunded, and the Department for Education uses a notional fund as the basis for calculating the employers’ contribution rate paid by local authorities.

The rate of contribution for 2020/21 was 23.68% resulting in a total payment of £10.309m (£8.645m in 2019/20) to the Teachers' Pension Agency. In addition, the Council made payments totalling £2.505m (£2.474m in 2019/20) in respect of pensions and added years where the early retirement of teachers was agreed. The Council also met its share of the residual liability for former Avon County Council employees, amounting to £1.690m (£1.769m in 2019/20). The estimated liability for unfunded payments has been calculated by the actuary and is included in the Balance Sheet.

The National Health Service Pension Scheme – In 2020/21 a total payment of £0.35m (£0.40m in 2019/20) was made to the NHS Pension Scheme, following the transfer of public health responsibilities from primary care trusts.

117

Accounting Transactions relating to retirement benefits

The Council recognises the cost of retirement benefits in the reported cost of services when they are earned by employees, rather than when the benefits are eventually paid as pensions. However, the charge required to be made against Council tax is based on the cash payable in the year, so the real cost of postemployment/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.

Income and Expenditure Account
Net cost of services
Current service cost
Past service gains/curtailment costs/Settlements
Administration expense
Financing and Investment Income Expenditure
Net interest cost
Total post-employment benefits charged to the Surplus or
Deficit on the Provision of Services
Other Post-employment Benefits charged to the
Comprehensive Income and Expenditure Statement
Remeasurements (assets/liabilities)
Movement in Reserves Statement
Reversal of net charges made for retirement benefits in
accordance with IAS19
Actual amount charged against the General Fund Balance
for pensions in the year:
Employer’s contributions payable to scheme		 Local Government
Pension Scheme
2020/21
2019/20
£'000
£'000
64,432
63,986
(4,332)
9,812
1,211
1,107
21,068
21,429
82,379
96,334
107,833
(42,309)
(82,379)
(96,334)
44,519
45,888		 Teachers' Unfunded
Pensions
2020/21
2019/20
£'000
£'000
1,455
1,600
1,455
1,600
4,513
(3,439)
(1,455)
(1,600)
4,197
4,243		 Teachers' Unfunded
Pensions
2020/21
2019/20
£'000
£'000
1,455
1,600
1,455
1,600
4,513
(3,439)
(1,455)
(1,600)
4,197
4,243
1,600
1,600
(3,439)
(1,600)
4,243

The Housing Revenue Account (HRA) Income and Expenditure Account has also been adjusted in 2020/21 to reflect the current service cost and an appropriate share of the net interest cost. The latter item has been apportioned to the HRA on the basis of pensionable pay.

118

Assets and Liabilities in relation to Retirement Benefits

01-Apr
Current service cost
Interest on pension liabilities
Contributions by scheme
participants
Remeasurement (liabilities)
Experience (gain)/loss
(Gain)/loss on financial
assumptions
(Gain)/loss on demographic
assumptions
Benefits paid
Past service grants, curtailment
costs and settlements
31-Mar		 Funded liabilities:
Unfunded liabilities:
Unfunded
Local Government
Pension Scheme
Local Government
Pension Scheme
Teachers' Unfunded
Pensions
2020/21
2019/20
2020/21
2019/20
2020/21
2019/20
£'000
£'000
£'000
£'000
£'000
£'000
(2,514,914)
(2,589,755)
(33,688)
(41,548)
(62,721)
(68,803)
(64,432)
(63,986)
(59,629)
(61,497)
(776)
(964)
(1,455)
(1,600)
(13,196)
(12,074)
54,877
(13,648)
786
4,374
998
(858)
(404,302)
59,862
(3,408)
434
(5,511)
1,402
0
109,158
0
1,232
0
2,895
69,098
66,838
2,730
2,784
4,197
4,243
7,211
(9,812)
(2,925,287)
(2,514,914)
(34,356)
(33,688)
(64,492)
(62,721)		 liabilities:
Total Liability
Local Government & Teachers
Pensions
2020/21
2019/20
£'000
£'000
(2,611,323)
(2,700,106)
(64,432)
(63,986)
(61,860)
(64,061)
(13,196)
(12,074)
56,661
(10,132)
(413,221)
61,698
0
113,285
76,025
73,865
7,211
(9,812)
(3,024,135)
(2,611,323)		 liabilities:
Total Liability
Local Government & Teachers
Pensions
2020/21
2019/20
£'000
£'000
(2,611,323)
(2,700,106)
(64,432)
(63,986)
(61,860)
(64,061)
(13,196)
(12,074)
56,661
(10,132)
(413,221)
61,698
0
113,285
76,025
73,865
7,211
(9,812)
(3,024,135)
(2,611,323)
(2,700,106)
(63,986)
(64,061)
(12,074)
(10,132)
61,698
113,285
73,865
(9,812)
(2,611,323)

119

Reconciliation of fair value of the Local Government Pension Scheme assets:

01-Apr
Interest on plan assets
Remeasurement (assets)
Administration expense
Settlements
Employer contributions
Contributions by scheme participants
Benefits paid
31-Mar		 2020/21
£'000
1,617,523
39,337
244,214
(1,211)
(2,879)
57,970
13,196
(71,828)
1,896,322		 2019/20
£'000
1,722,618
41,032
(119,103)
(1,107)
0
31,631
12,074
(69,622)
1,617,523

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. Expected returns on equity investments reflect long-term rates of return experienced in the respective markets.

The actual return on plan assets in the year was £283,551m (2019/20 £108,641m).

Scheme History – Pension Assets and Liabilities Recognised in the Balance Sheet:

Present value of liabilities:
Local Government Pension
Scheme
Teachers' unfunded liabilities
Fair value of assets in the Local
Government Pension Scheme
Surplus/(deficit) in the scheme:
Local Government Pension
Scheme
Teachers' unfunded liabilities
Total		 2020/21
£'000
(2,959,643)
(64,492)
1,896,322
(1,063,321)
(64,492)
(1,127,813)		 2019/20
£'000
(2,548,602)
(62,721)
1,617,523
(931,079)
(62,721)
(993,800)		 2018/19
£'000
(2,631,303)
(68,803)
1,722,618
(908,685)
(68,803)
(977,488)

The total liabilities shown in the Balance Sheet comprise the above (£1,127,813m) together with a small amount in respect of pre-1974 liabilities (£0.105m) totalling (£1,127,918m).

120

Basis for Estimating Assets and Liabilities

Liabilities have been assessed using the projected unit credit actuarial cost method, an estimate of the pensions that will be payable in future years dependent on assumptions about mortality rates, salary levels etc. Both the Local Government Pension Scheme and Discretionary Benefits liabilities have been assessed by Mercer Ltd, an independent firm of actuaries, estimates for the Council's Fund being based on the latest full valuation of the scheme as at 31 March 2019.

The principal assumptions used by the actuary have been:

Mortality assumptions:
Longevity at 65 for current pensioners:
Men
Women
Longevity at 75 for current pensioners:
Men
Women
Longevity at 65 for future pensioners:
Men
Women
Rate for discounting scheme liabilities
Rate of inflation - CPI
Rate of increase in salaries
Rate of increase in pensions		 Local Government
Pension Scheme
2020/212019/20




23.3
23.2
25.4
25.3






24.8
24.7
27.4
27.3


%
2.1
2.4
2.7
2.1
4.2
3.6
2.8
2.2		 Teachers
2020/212019/20


23.3
23.2
25.4
25.3

14.4
14.3
16.2
16.1
-
-
-
-

%
2.1
2.4
2.7
2.1
-
-
2.8
2.2

The estimated Macaulay duration of liabilities (at later of 31 March 2019 or admission date) is 16 years retired.

The estimation of the defined benefit obligations is sensitive to the actuarial assumptions set out in the table above. The sensitivity analyses below have been determined based on reasonably possible changes of the assumptions occurring at the end of the reporting period and assumes for each change that the assumption analysed changes, while all the other assumptions remain constant. The assumptions in longevity, for example, assume that life expectancy increases or decreases for men and women. In practice, this is unlikely to occur, and changes in some of the assumptions may be interrelated. The estimations in the sensitivity analysis have followed the accounting policies for the scheme, i.e. on an actuarial basis using the projected unit credit method. The methods and types of assumptions used in preparing the sensitivity analysis below did not change from those used in the previous period.

The actuary has provided a sensitivity analysis for each significant actuarial assumption as at the end of the reporting period. The table below shows how the defined benefit obligation would have been affected by changes in the relevant actuarial assumption that were reasonably possible at the 31 March 2021.

Impact on the Defined Benefit Obligation in the Scheme
(LGPS) 2020/21 2019/20
£'000 £'000
Longevity (increase or decrease by 1 year) 93,692 71,999
Rate of inflation (increase or decrease by 0.1%) 51,775 44,429
Rate of increase in salaries (increase or decrease by 0.1%) 4,865 4,726

121

Rate for discounting scheme liabilities (increase or decrease by 0.1%) (49,860) (42,780)

Impact on the Defined Benefit Obligation in the Scheme
(Teachers) 2020/21 2019/20
£'000 £'000
Longevity (increase or decrease by 1 year) 2,444 2,242
Rate of inflation (increase or decrease by 0.1%) 657 640
Rate for discounting scheme liabilities (increase or decrease by 0.1%) -588 -575

Local Government Pension Scheme assets comprise

Asset Category
Sub-Category
Quoted
(Y/N)
Equities
UK Quoted
Y
Global Quoted
Y
Emerging Markets
Y
Sub-total equities
Bonds
UK Government Indexed
Y
Sterling Corporate Bonds
Y
Sub-total bonds
Property
Property Funds
Sub-total property
Alternatives
Hedge Funds
Y
Diversified Growth Funds
Y
Infrastructure
Y
Secured Income
Y
EFT’s
Y
Sub-total alternatives
Cash and equivalents
Cash Accounts
Y
Sub-total cash
Total Assets		 31 March
2021
£’000
0
608,560
102,582
711,142
267,857
160,392
428,249
136,536
136,536
98,877
179,339
147,399
100,279
38,860
564,754
55,641
55,641
1,896,322		 31 March
2020
£’000
112,828
521,489
70,200
704,517
90,581
146,390
236,971
160,135
160,135
93,008
218,042
129,617
24,398
15,249
480,314
35,586
35,586
1,617,523

Governance and Risk Management

The liability associated with the Council’s pension arrangements is material to the Council, as is the cash funding required.

Local Government Pension Scheme

Governance

As administering authority, Bath and North East Somerset Council (B&NES), has legal responsibility for the pension fund as set out in the Local Government Pension Scheme Regulations. B&NES delegates its responsibility for administering the Fund to the Avon Pension Fund Committee, which is the formal decision making body for the Fund. The Avon Pension Fund Committee is responsible for the investment,

122

funding, administration and communication strategies. It also monitors the performance of the fund and approves and monitors compliance of statutory statements and policies required under the Regulations. The Committee is supported by an Investment Panel which considers the investment strategy and investment performance in greater depth.

Asset and Liability (ALM) Strategy

The Avon Pension Fund does not have an explicit asset and liability matching strategy. The primary objective of its investment strategy is to generate positive real investment return above the rate of inflation for a given level of risk to meet the liabilities as they fall due over time. When setting the investment strategy, the expected volatility of the assets relative to the value placed on the liabilities was measured and taken into account. The aim of the strategy and management structure is to minimise the risk of a reduction in the value of the assets and maximise the opportunity for asset gains across the Fund.

To achieve its investment objective the Fund invests across a diverse range of assets such as equities, bonds, property and other alternative investments, and uses several investment managers. The risk management process identifies and mitigates the risks arising from the Fund’s investment strategy and policies which are reviewed regularly to reflect changes in market conditions. As a result of its investment strategy, the Fund is exposed to a variety of financial risks including market risk (market price, interest rate and currency risk), credit risk and liquidity risk.

As a result of its investment strategy, the Fund is exposed to a variety of financial risks including market risk (market price, interest rate and currency risk), credit risk and liquidity risk.

Impact on the Authority’s Cash Flows

The objectives of the scheme are to keep employers’ contributions at as constant a rate as possible. The Council has agreed a strategy with the scheme’s actuary to achieve a funding level of 100% over the next 16 years. Funding levels are monitored on an annual basis. A new triennial valuation was completed on 31 March 2019 and is effective from 1 April 2020.

The Council made a pension deficit contribution of £20.430m in April 2020.

The provisions of the LGPS and the Fund were amended with effect from 1 April 2014. Prior to that date benefits were paid on members’ final salaries, whereas for service after that date benefits are based on career average salaries.

The total contributions expected to be made to the Local Government Pension Scheme by the Council in the year to 31 March 2022 are £38.242m. Expected contributions for the Teacher Pensions Scheme in the year to 31 March 2022 are £4.197m.

Unfunded Teachers’ Discretionary Benefits

The Council is responsible for any additional discretionary pension benefits awarded to teachers upon early retirement outside of the terms of the teachers’ pension scheme.

Governance

The Teachers’ Pension Scheme arrangements are managed centrally by government departments/agencies, and there is no material involvement for the Council.

Impact on the Council’s Cash Flows

123

The Scheme targets a pension paid throughout life. The amount of pension depends on how long employees are active members of the Scheme and their salary when they leave the Scheme (“final salary scheme”) for service up to 31 March 2015, and on a revalued average salary (“career average scheme”) for service from 1 April 2015.

The Council’s involvement is limited to additional discretionary pension benefits to retired teachers which were rewarded at the point of retirement.

Risks Strategy

Given their unfunded nature, there are no investment risks in relation to this scheme. The greatest single risk is that the Government could change the funding standards relating to the scheme, increasing the Council’s contributions.

Investment Risks

There are no investment risks in relation to these arrangements, given their unfunded nature. The greatest single risk is that the government could change the funding standards relating to them, which could increase the Council’s contributions to them.

35 Cash Flow Statement – Operating Activities

The cash flows for operating activities include the following significant items:

Interest received
Interest paid
Dividends received		 2020/21
£'000
5,842
(33,652)
2,092		 2019/20
£'000
4,257
(35,808)
2,376

The deficit on the provision of services has been adjusted for the following non-cash movements:

Depreciation, impairment and downward revaluations
Amortisation
Increase/(decrease) in impairment for bad debt
(Decrease)/increase in creditors
(Increase)/decrease in debtors
(Increase)/decrease in inventories
Movement in pension liability
Contributions to/(from) Provisions
Carrying amount of non-current assets and non-current assets held for
sale, sold or derecognised
Other non-cash items charged to the net surplus or deficit
On the provision of services
Net cash flows from non-cash movements		 2020/21
£'000
118,351
4,525
2,131
44,001
(34,145)
(2,250)
21,667
(3,495)
25,545
(24,062)
152,268		 2019/20
£'000
86,657
3,245
1,694
18,454
(7,351)
(8,294)
47,803
4,099
46,849
11,269
204,425

124

Adjust for items included in the net surplus or deficit on the provision of services that are investing or financing activities:


ncing activities:
Capital grants credited to surplus or deficit on the provision of services
Proceeds from the sale of Property Plant and Equipment, Investment
Property and Intangible Assets		 2020/21
£'000
(41,604)
(41,934)
(83,538)		 2019/20
£'000
(33,664)
(56,258)
(89,922)

125

36 Cash Flow Statement - Investing Activities

36
Cash Flow Statement - Investing Activities
Purchase of Property, Plant and Equipment, Investment Property and
Intangible Assets
Purchase of short-term and long-term investments
Other (payments)/receipts for investing activities
Proceeds from the sale of Property, Plant and Equipment, Investment
Property and Intangible Assets
Proceeds from short-term and long-term investments
Capital Grants Received
Other receipts from investing activities
Net cash flows from investing activities
37
Cash Flow Statement - Financing Activities
Cash receipts of short- and long-term borrowing
Cash payments for the reduction of outstanding liabilities relating to
finance leases and on-Balance-Sheet PFI contracts
Repayments of short- and long-term borrowing
Council tax and NNDR adjustments
Net cash flows from financing activities		 2020/21
£'000
(106,008)
(294,800)
(5,090)
40,291
318,600
64,041
3,692
20,726
2020/21
£'000
224
(8,809)
(11,586)
(4,928)
(25,099)		 2019/20
£'000
(102,078)
(124,641)
(10,368)
56,290
107,000
46,700
2,056
(25,041)
2019/20
£'000
30,000
(7,363)
0
1,728
24,365

38 Related Parties

The Council is required to disclose material transactions with related parties – bodies or individuals that have the potential to control or influence the Council or to be controlled or influenced by the Council. Disclosure of these transactions allows readers to assess the extent to which the Council might have been 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.

Some Members or members of their close families, have an interest in voluntary organisations and community groups awarded grants by the Council. Both Council members and Executive Directors have been asked to provide information regarding related party transactions. From the information received, it is believed that there have not been any significant transactions involving Executive Directors during the year however one Member has disclosed that a close family member is a Director of Bristol Food Network which has a contract with the Council to deliver a number of food related activities.

Central Government has significant influence over the general operations of the Council - it is responsible for providing the statutory framework within which the Council operates. It provides the majority of its funding in the form of grants, which are disclosed in Note 17.

The Council has interests in a number of companies over which it has significant influence or control as set out below.

126

Name Nature of Council relationship Transactions
with the Council		 Nature
of
transactions		 Balances owed to
/
(from)
the
Council as at 31 3
2021
Bristol
Holdings
Limited		 100% subsidiary
The City Council has one Director post
on the Board.		 £163k
recharges
from
BCC
and
£20k recharges to
BCC		 Recharges £6.5m preference
share interest owed
to BCC
Bristol Waste
Company		 100% subsidiary of Bristol Holding
Limited
The City Council has one Director post
on the Board.		 £41m payments by
Council
to
company
£1.5m
recharges
from Company to
Council		 Contract for
waste collection
and recycling
services
Recharges		 £9.4m loan from
BCC
for
the
acquisition
of
waste vehicles.
BE2020
Limited
(Formally
Bristol Energy
Limited)		 100% subsidiary of Bristol Holdings
Limited
The City Council has one Director post
on the Board.		 £1.6m sales and
recharges from the
Council
£2.4m
sales
of
energy
to
the
Council
£2.7m
agreed
contribution from
Indemnity.		 Purchase and sale
of energy.
Recharges		 £1m owed to BCC
Goram Homes
Ltd		 100% subsidiary of Bristol Holdings
Limited.
The City Council has one Director post
on the Board.		 £1.5m Loan Development
of
building projects		 £1.5m loan
Bristol
Heat
Networks
Limited
(formally
Energy Service
Bristol
Limited)		 100% subsidiary of Bristol Holdings
Limited.
The City Council has one Director post
on the Board.		 None Operation of heat
network
energy
centres		 None
Bristol Energy
& Technology
Services
(Supply)
Limited		 100% subsidiary of Bristol Holdings
Limited
The City Council has one Director post
on the Board.
The companyis currentlydormant.		 None N/A Nil
Bristol is Open
Limited		 100% owned subsidiary
The City Council has one Director posts
on the Board.		 None N/A Nil
Bristol
Local
Education
Partnership
(LEP) Ltd		 Joint venture with BCC holding 10%,
Building
Schools
for
the
Future
Investments (Bristol) Ltd 10% and
Skanska Infrastructure Development UK
Limited 80%
The Council has one director post on the
board.		 £67m payments to
the company		 Provision of ICT
and
construction
services to schools
in Bristol.
City Leap Ltd 100% owned subsidiary.
The Council has one director post on the
board.
The Companyis currentlydormant.		 None N/A Nil

127

City
Leap
Bristol Ltd		 100% owned subsidiary.
The Council has one director post on the
board.
The Companyis currentlydormant.		 None N/A Nil
Bristol
City
Leap Ltd		 100% owned subsidiary.
The Council has one director post on the
board.
The Companyis currentlydormant.		 None N/A Nil
City
Leap
Energy
Partnership
Limited		 100% owned subsidiary.
The Council has one director post on the
board.
The Company is currently dormant.		 None N/A Nil
Bristol
Infrastructure
Limited		 100% owned subsidiary.
The Council has one director post on the
board.
The Company is currently dormant.		 None N/A Nil
Energy Service
Bristol Limited		 100% owned subsidiary.
The Council has one director post on the
board.
The Companyis currentlydormant.		 None N/A Nil

West of England Partnership

Four unitary authorities - Bath & North East Somerset Council, Bristol City Council, North Somerset Council and South Gloucestershire Council - continue to work together and co-ordinate high level planning to improve the quality of life of their residents and provide for a growing population. This joint work focuses on activities that are better planned at the West of England level, rather than at the level of the individual Council areas.

The partnership is not a partnership in law, nor a formal decision making body, and does not have the power to bind the four unitaries. The partnership’s activity is integrated into the West of England Local Enterprise Partnership (LEP), which promotes economic growth and prosperity through its key themes of Place, People and Business

39 Transfer of Functions

As part of the West of England devolution deal, South Gloucestershire, Bristol and Bath & North East Somerset Councils agreed to the establishment of the West of England Combined Authority to support economic growth and development across the region. Under the devolution deal certain functions were transferred from the constituent authorities to the WECA from 1[st] April 2018. These included concessionary fares, community transport, key route network development and bus service information. WECA has commissioned South Gloucestershire Council to provide concessionary fares on its behalf since 2019/20.

WECA levies the constituent authorities for the cost of the services for which it is now responsible. This is shown under Other Operating Expenditure. The value of the levy in 2020/21 is £9.750m (2019/20 £8.120m). There has been no change to the Council’s assets or liabilities arising from the transfer of functions to WECA.

128

40 Contingent Liabilities

The prospective Bristol Arena operator has challenged the Councils termination of their Agreement for Lease in respect of the Arena on Temple Island and has claimed loss of profits, or costs, over the life of the potential lease. As at 31 March 2021 litigation proceedings had not commenced and no claims have been received.

There is currently a claim against the Council for £2.7 million in relation to compensation in respect of part of the AVTM Metrobus programme for the site at Ashton Fields. The claim concerns the valuation of the site. This is going to the Upper tribunal with the likely hearing being at the beginning of 2022.

129

HRA Income and Expenditure Statement

The HRA reflects a statutory obligation to account separately for Council housing provision. The HRA Income and Expenditure Statement shows the major elements of HRA expenditure and how they are met from rents, service charges and other income. The account does not reflect all of the transactions required by statute to be charged or credited to the HRA for the year. The movement on the HRA Statement gives details of the additional transactions, which are required by statute.

Note
Expenditure
Repairs and maintenance
Supervision and management
Special services
Rent, rates, taxes and other charges
Depreciation and impairment of non-current assets
4
Debt management
Debt write offs and movement in the allowance for bad debts
Total expenditure
Income
Dwelling rents
2
Non-dwelling rents
Charges for services and facilities
Contributions towards expenditure
Total income
Net cost of HRA services as included in the
Comprehensive Income and Expenditure Statement
Net cost of HRA services
(Gain) on sale of HRA non-current assets
Movement in the Fair Value of Investment Properties
Interest payable and similar charges
HRA interest and investment income
Pensions interest costs and expected return on assets
5
Capital Grants and Contributions Receivable
(Surplus) for the year on HRA services
2020/21
2019/20

Net

£'000
Net
£'000
32,537
28,920
9,155
1,296
31,164
42
2,460
31,450
29,959
9,769
1,117
30,381
37
1,628
104,341 105,574


(109,997)
(961)
(8,755)
(98)
(113,814)
(1,017)
(8,301)
(4)
(123,136) (119,811)
(18,795)
(14,237)
(14,237)
(1,886)

387

11,459
(1,312)

2,601
(27)
(18,795)
(12,423)
379
11,210
(359)
2,472
(481)
(17,997) (3,015)

130

Statement of movement on the HRA Balance

Note
HRA balance brought forward
(Surplus) for the year on the HRA Income and
Expenditure Account
Adjustments between accounting basis and funding basis
under statute
(Increase) before reserve transfers
Transfer from/to reserves
Net (increase) on HRA balance
HRA balance carried forward
Note to the statement of movement on the HRA Balance
Note
Items included in the HRA Income and Expenditure
Account but excluded from the movement on HRA
Balance for the year
Depreciation and impairment of property, plant &
equipment
4
Amortisation of Intangible Fixed Assets
4
Fair value movements on investment properties
Net charges made for retirement benefits in accordance
with IAS19
5
Net gain/loss on disposal of assets
Capital Grants and Other Contributions
6
Items not included in the HRA Income and
Expenditure Account but included in the movement
on HRA Balance for the year
Capital expenditure funded by the HRA
6
Employer’s contributions payable to the Avon Pension
Fund and retirement benefits payable direct to pensioners
5
Transfer to Major Repairs Reserve
8
HRA depreciation to Major Repairs Reserve
8
Amortisation of premiums
Net additional amount required by statute to be
debited or
credited to the HRA Balance for the year		 31 March
2021
Net
£'000
(87,526)
(17,997)
7,082
(10,915)
50
(10,865)
(98,391)
31 March
2021
Net
£'000

(29,993)
(388)
(379)
(9,542)
12,423
481		 31 March
2020
Net
£'000
(78,718)
(3,015)
2,059
(956)
(7,852)
(8,808)
(87,526)
31 March
2020
Net
£'000
(30,790)
(373)
(387)
(9,829)
1,886
27
(27,398)
408
4,740
29,332
34,480
7,082		 (39,466)
10,999
4,859
-
25,668
-
41,526
2,060

131

Notes to the Housing Revenue Account

1 Dwelling numbers as at 31 March 2021

Houses
Bungalows
Flats
Total Dwellings held at 31 March 2021		 31 March
2021		 31 March
2020
11,214
1,081
14,472
26,767		 11,271

1,077

14,485

26,833

2 Rent and Rent Arrears

The total value of dwelling rents in 2020/21, less rent attributable to empty properties (voids), is £113.8m (£110m in 2019/20). The amount of rent arrears, including recoverable housing benefit, water charges, defect charges, etc are:

Former tenants
Current tenants
Balance Sheet Provision
Former tenants
Current tenants		 31 March
2021
£'000
3,081
10,042
13,123
2,698
7,393
10,091		 31 March
2020

£'000
3,472
9,013

12,485
3,056
6,549

9,605

Vacant Possession

The vacant possession value of dwellings as at 1st April 2021 was £5.063bn. The value of dwellings in the balance sheet (excluding dwellings leased to Registered Social Landlords) was £1.772bn, a difference of £3.291bn This difference reflects the economic cost of providing Council housing at less than market rent. This cost is determined by applying the Government prescribed discount rate of 35% of the Market Value to the vacant possession value.

3 Sums Directed by the Secretary of State to be Debited or Credited to the HRA

In 2020/21 there were no sums approved by the Secretary of State to be debited to the HRA in relation to the transfer of rent rebates from the HRA to the General Fund.

132

4 Depreciation and Impairment

Depreciation
Operational Assets
- Dwellings
- Other, including leased
Intangible Fixed Assets
Total depreciation
Revaluation losses
Reversal of impairment losses
Total depreciation and impairment		 2020/21
£'000
28,756
576
2019/20

£'000
25,158
510
29,332
388
29,720
661
30,381
25,668
373

26,041

5,123
-

31,164

Impairment

There was a loss on revaluation of £0.661m charged to the surplus on provision of Services (2019/20: £5.123m).

5 HRA Share of Contributions to/from Pension Reserve

For 2020/21 the HRA has been attributed with a share of the interest cost, net of the expected return on pension assets, as calculated by the actuary to the pension fund £2.5m (2019/20 £2.6m). This share has been calculated using the proportion of HRA pensionable pay to the total of that for the Council. The net cost of services shown in the HRA statement also includes the current service cost as required by IAS19 of £9.5m (2019/20 (£9.8m). This is excluded from the HRA Balance for the year and replaced with Employers Contributions payable £4.7m (2019/20(£4.9m) with the net movement on the Pension reserves of £4.8m (2019/20 £4.9m). Further information regarding the accounting for pensions is included in the notes to the consolidated revenue account and balance sheet, see note 33.

6 Capital Expenditure and financing

Total expenditure during the year and its financing was as follows:

Expenditure
Dwellings
Other Assets
Financing
Usable capital receipts
Revenue contributions to capital
Major Repairs Reserve
Other		 2020/21
£'000
38,637
408
39,045
16,514
408
21,642
481
39,045
2019/20

£'000
49,143
74

49,217
12,523
11,026
25,668

49,217

133

7 Capital Receipts

Capital receipts received during the year from disposals of land, houses and other property within the HRA was £35.3m (£10.4m in 2019/20). The receipts are summarised as follows:

Receipts unapplied brought forward - 1 April
Right to Buy sales
Mortgage repayments
Disposal of Land and Buildings
Allowable reductions
Repaid to MHCLG
Capital receipts applied
Capital receipts applied to GF
Capital receipts unapplied carried forward - 31 March
Major Repairs Reserve
Balance brought forward - 1 April
Capital expenditure (dwellings)
Major Repairs Allowance set aside in year
Excess depreciation credited to Statement of Movement on HRA
Balance
Balance carried forward - 31 March		 2020/21
£'000
50,550
8,021
3
27,287
85,861

(2,115)
(16,515)
67,231
2020/21
£'000
(3,606)
21,642
(29,332)
(11,296)
2019/20

£'000
54,827
10,188
-
171

65,186
(2,113)
(12,523)

50,550

2019/20

£'000
(3,606)
25,668
(25,668)
(3,606)

8 Major Repairs Reserve

Depreciation has been calculated in accordance with our accounting policies for all HRA assets. We have used the Keystone component accounting information for Dwelling as a proxy for component accounting and Corporate Asset Management system for Non-Dwelling.

The MRA balance was £29.3m for 2020/21 (2019/20 - £25.7m). £21.6m was used to finance appropriate Housing Revenue Account capital expenditure.

9 Balance Sheet Value of Land and Houses, etc.

Dwellings
Land
Other assets		 2020/21
£'000
1,771,999
38,785
28,562
1,839,346
2019/20

£'000
1,678,285
38,722
20,071
1,737,078

134

10 Asset Split

Asset Split
Operational - dwellings
Operational - other land and buildings
Non-operational
Intangible
Other		 2020/21
£'000
1,771,999
60,848
6,199
1,587

1,840,633
2019/20

£'000
1,678,285
52,282
6,512
1,568
3
1,738,650

135

Collection Fund

Collection Fund Income and Expenditure Account

£'000
£'000
£'000
Business
Rates
Council Tax
Total
Note
Income
-
255,560
255,560 Council Tax
31 March 2020		 £'000
£'000
£'000
Business Rates
Council Tax
Total
-
-
266,356
266,356
31 March 2021
227,650
-
227,650 Non-Domestic Rates
(2,879)
-
(2,879) Transitional Protection Payment		 137,951
-
137,951
(3,254)
-
(3,254)
Contributions towards previous years
Collection Fund Deficit:
-
-
-
Central Government		 -
-
-
-
-
-
Bristol City Council		 1,673
-
1,673
Avon & Somerset Police and Crime
-
-
-
Commissioner
-
-
-
Avon Fire Authority
-
-
-
West of England Combined Authority
224,771
255,560
480,331
Expenditure
Apportionment of Previous Years
Surplus
-
-
-
Central Government		 -
-
-
18
-
18
89
-
89
136,478
266,356
402,834
-
-
-
1,012
1,886
2,898
Bristol City Council		 -
37
37
Avon & Somerset Police and Crime
-
225
225
Commissioner
1
83
84
Avon Fire Authority
3
-
3
West of England Combined Authority
1,016
2,194
3,210
Precepts, Demands and Shares
197,330
214,733
412,063 Bristol City Council		 -
4
4
-
2
2
-
-
-
0
43
43
197,854
226,055
423,910

Avon & Somerset Police and Crime
-
27,662
27,662 Commissioner		 -
29,289
29,289
2,111
9,511
11,622 Avon Fire Authority
10,547
-
10,547 West of England Combined Authority		 2,105
9,635
11,740
10,524
-
10,524
209,988
251,906
461,894
Charges to the Collection Fund		 210,483
264,979
475,462
2,003
2,457
4,460 Write offs of uncollectable amounts
586
2,890
3,476 Increase/(Decrease) in bad debt provision
704
-
704 Cost of Collection Allowance
8,297
-
8,297 Disregarded amounts
-
-
-
Prior year adjustment
575
-
575 Increase/(Decrease) in provision for appeals		 649
1,237
1,885
6,551
3,723
10,274
702
-
702
4,716
-
4,716
-
-
-
(2,056)
-
(2,056)
12,165
5,347
17,512		 10,561
4,960
15,521
1,602
(3,887)
(2,285) Surplus/ (Deficit) for the year
(1,288)
2,192
904 Surplus/ (Deficit) as at 1 April		 (84,567)
(3,626)
(88,193)
314
(1,695)
(1,381)
314
(1,695)
(1,381) Surplus/ (Deficit) as at 31 March		 (84,253)
(5,321)
(89,574)

136

Notes to the Collection Fund Income and Expenditure Account

1 General

The Collection Fund is an agent’s statement that reflects the statutory obligation for billing authorities to maintain a separate Collection Fund. The statement shows the transactions of the billing authority in relation to the collection from taxpayers and distribution to local authorities and the Government of council tax and non-domestic rates. Only the elements attributable to the City Council are recognised with the Council’s other accounts.

2 Council tax

Council tax income derives from charges raised according to the value of residential properties, which have been classified into 8 valuation bands based upon 1 April 1991 values for this specific purpose. Individual charges are calculated by estimating the amount of income required to be taken from the Collection Fund by the City Council, the Avon and Somerset Police and Crime Commissioner and the Avon Fire Authority for the forthcoming year and dividing this by the council tax base of 128,566 for 2020/21 (126,999 for 2019/20). This represents the total number of properties in each band adjusted by a proportion to convert the number to a Band D equivalent and adjusted for discounts and the estimated collection rate. This basic amount of council tax for a Band D property of £2,061.03 for 2020/21 (£1,982.11 for 2019/20) is multiplied by the proportion specified for the particular band to give an individual amount due.

Calculation of the council tax Base used in setting the 2020/21 council tax:

A Entitled to
Disabled Relief
-
31
-
59		 A
52,737
2,838
-
5,502
-		 B
74,080
1,419
-
5,623
-		 C
39,455
1,405
-
2,733
-		 D
18,659
1,192
-
1,140
-
BAND		 E
9,780
1,037
-
505
-
S		 F
4,799
172
-
213
-		 G
2,852
44
-
131
-		 H
338
6
64
-		 Total
202,700
8,132
-
15,850
-
No of Properties
Exemptions and disabled relief
Less Discounts
Total Equivalent Dwellings
Ratio
Band D Equivalents
Add Changes re: Additional Properties
Additional Exemptions
Council Tax Support
Adjustments to reflect Discretionary
Discounts
Rate of Collection 98.5%
Council Tax Base
28
5/9		 44,397
6/9		 67,039
7/9		 35,317
8/9		 16,327
1		 8,238
11/9		 4,414
13/9		 2,677
15/9		 280
18/9		 178,718
15 29,598 52,141 31,393 16,327 10,069 6,376 4,462 561 150,943
1,715
2,190
-
19,944
-
1,958
-
128,566

137

3 Collection Fund balance sheet items have been apportioned as shown in the table below.

----- Start of picture text -----
Total Bristol City Police & Crime Avon Fire
Council Commissioner Authority
Council Tax
£'000 £'000 £'000 £'000
Debtors 22,897 19,536 2,553 809
Bad debt allowance (13,392) (11,426) (1,493) (473)
Prepayments and overpayments (3,729) (3,181) (416) (132)
Surplus/ (Deficit) at 31 March (5,321) (4,539) (588) (194)
Total Bristol City West of England Avon Fire Central
Council Combined Authority Government
Authority
Business Rates
£'000 £'000 £'000 £'000 £'000
Debtors 16,554 15,560 828 166
Bad debt allowance (8,724) (8,201) (436) (87)
Prepayments ans overpayments (2,898) (2,724) (145) (29)
Appeals provision (27,150) (25,521) (1,357) (271)
Surplus/ (Deficit) at 31 March (84,253) (80,160) (4,287) (837) 1,030
----- End of picture text -----

4 National Non-Domestic Rates (NNDR)

The Council collects NNDR for its area based on rateable values as determined by the Valuation Office Agency and reviewed on a 5 yearly basis. The last revaluation date was on 1 April 2017. The next revaluation was expected to be 1 April 2021, with valuations being effective from this date, but has been delayed due to COVID-19.

Each year the Government specifies an amount known as the non-domestic rating multiplier and (subject to the effects of transitional arrangements) local businesses pay rates calculated by multiplying their rateable value by that multiplier. A second multiplier known as the small business non-domestic rating multiplier was introduced from 1 April 2005 and this multiplier is applicable to those businesses that qualify for small business relief.

In 2020/21 the non-domestic rating multiplier was 51.2p (50.4p in 2019/20) and the small business nondomestic rating multiplier was 49.9p (49.1p in 2019/20).

As part of the governments West of England devolution deal Bristol, Bath and North East Somerset and South Gloucestershire Councils agreed to the establishment of the West of England Combined Authority (WECA) to support economic growth and development across the region. This also enabled the three Council’s to take part in a 100% business rates retention pilot. As a result Bristol City Council is now responsible not only for collection of rates due from the ratepayers in its area but also for redistribution of the sums paid according to the following percentages: Bristol City Council: 94%, West of England Combined Authority 5% and Avon Fire Authority: 1%.

The NNDR income after reliefs and provisions was £132.808m for 2020/21 (£224.484m for 2019/20). The significant change is due to specific COVID-19 reliefs given. The total rateable value at 31 March 2021 was £556.356m (£560.880m at 31 March 2020).

138

5 City Region Deal Growth Disregard

From 2015/16, the Council is allowed to retain 100% of the growth in Business Rates in its Enterprise area and Enterprise Zone. The growth is transferred to the Council’s General Fund before being pooled with other participating authorities

City Region Deal

Background

Under the City Region Deal, Bristol City, Bath & North East Somerset, North Somerset and South Gloucestershire Councils (“the Authorities”) are part of a Business Rates Retention Scheme, introduced by the Government in April 2013, allowing Authorities to retain a proportion of the business rates collected locally. The Authorities are allowed to retain 100% of the growth in business rates raised in the City Regions network of Enterprise Areas over a 25 year period ending on 31/3/2039 to create an Economic Development Fund for the West of England and to manage local demographic and service pressures arising from economic growth.

A ‘baseline’ level of rates for each Authority has been agreed with the government for the areas designated within the Non-Domestic Rating (Designated Areas) Regulations 2015. Rates collected up to this figure (the baseline) are subject to the national rates retention system. Rates collected in excess of this figure (the ‘growth figure’) are retained by the Authorities under the Non-Domestic Rates Designated Area Regulations 2013 and 2014 in a pooling arrangement. The governance of the distribution of retained pooled funds will occur through a Business Rates Pooling Board constituted under the Business Rates Pooling Principles Agreement (BRPPA) signed by the four Authorities.

Transactions

Each participating Council pays an annual growth figure to South Gloucestershire Council, as the Accountable Body for the BRP, representing business rates collected in the Enterprise Areas in excess of an agreed baseline figure. Retained funds will be distributed or invested annually in accordance with the 2014 Regulations and the BRPPA as:

• Tier 1: to ensure that no individual Council is any worse off than it would have been under the national local government finance system,

• Tier 2: to an Economic Development Fund (EDF) for reinvestment within the designated areas through approved programmes,

Cash receivable and disbursements payable by the BRP and the Council’s share of these are reflected under “Cash Transactions” in the table below. Expenditure and revenue recognised in the Council’s CIES is also disclosed.

139

----- Start of picture text -----
CASH TRANSACTIONS REVENUE & EXPENDITURE
Business Rates of which the Council Council Revenue
Pool Total Council's share Expenditure
£'000 £'000 £'000 £'000
Funds held by BRP at 1 April (41,689) (11,169) - -
Receipts into the Pool in-year
- Growth sums payable by Council's to BRP in year (28,529) (7,628) 7,044 -
Distributions out of the Pool in-year
- Tier 1 no worse off 10,158 3,631 - (3,631)
- BRP management fee 33 8 - -
- EDF management fee 64 16 - -
- Tier 2 EDF funding 1,164 128 - -
-Tier 3 demographic and service pressures 2,969 650 - (774)
Funds held by BRP at 31 March (55,830) (14,363)
Analysed between:
Uncommitted cash (Tier 2 inc contingency) (15,251) (4,564) (2,098) n/a
Committed cash (Tier 3) (40,579) (9,800) n/a n/a
Expenditure/(Revenue) recognised (55,830) (14,363) 4,947 (4,406)
----- End of picture text -----

As stated under the accounting policies, growth paid over to the BRP is recognised as expenditure by each Council to the extent that the use of the funds by the BRP has been committed. Uncommitted cash is recognised by each Council as a debtor.

The uncommitted cash of £4,564m contributed by the Council and held by the BRP is recognised by the Council as a debtor and is held in an earmarked reserve to smooth the impact of City Region Deal transactions and match the release of revenue support and charges for projects. The BRP has not made a payment to Bristol City Council on behalf of the EDF in 2020/21 (2019/20 £1.813m.)

The Council itself has recognised revenue income of £4.406m (2019/20 £7.010m) from the BRP and expenditure of £4.947m (2019/20 £5.598m) to the BRP for the year.

140

Group Accounts

Introduction

The Code of Practice on Local Authority Accounting in the United Kingdom 2020/21 (The Code) requires local authorities with interests in subsidiaries, associates and/or joint ventures to prepare group accounts in addition to their own single entity financial statements, unless their interest is not considered material. The aim of the Group Accounts is to provide the reader with an overall view of the material economic activities of the Council.

The Council has interests in a number of companies that are classified as a subsidiary or joint venture, all of which have been considered for consolidation. Three of these, Bristol Holding Limited, Bristol Waste Company Limited and BE2020 Limited (formally Bristol Energy Limited) are considered to be material to the financial statements. Details of the companies considered for consolidation are shown below. Although not material, Goram Homes Limited, and Bristol Heat Networks Limited as subsidiaries of Bristol Holdings Limited has also been consolidated into the group financial statements.

The Group Accounts contain the core statements similar in presentation to the Council’s single entity accounts but consolidating the figures of the Council with, Bristol Holding Limited, Bristol Waste Company Limited, Bristol Energy Limited, Goram Homes Limited and Bristol Heat Networks Limited. Copies of the individual audited accounts are available from Companies House.

The purpose of each of the core statements is explained in the relevant sections of the single entity accounts. No amendments have been necessary to the accounts of the group entities as a result of material differences arising from the variation in accounting policies.

The following pages include:

141

Group Financial Statements

The Group Comprehensive Income and Expenditure Account as at 31 March 2021

This statement shows the accounting cost in the year of providing the Group’s services in accordance with generally accepted accounting practices.

----- Start of picture text -----
2019/20 2020/21
Gross Gross
Gross Exp Net Exp Gross Exp Net Exp
Income Income
£’000 £’000 £’000 £’000 £’000 £’000
391,416 (166,564) 224,852 Adults, Children and Education 417,307 (212,528) 204,779
228,165 (160,328) 67,837 Resources 240,163 (164,415) 75,748
303,791 (184,194) 119,597 Growth & Regeneration 299,882 (117,207) 182,675
105,574 (119,811) (14,237) Housing Revenue Account 104,341 (123,136) (18,795)
204,487 (196,848) 7,639 Designated Schools Grant 212,076 (201,110) 10,966
17,657 (1,252) 16,405 Corporate Funding & Expenditure 9,860 (903) 8,957
1,251,090 (828,997) 422,093 Cost of services (Note G1) 1,283,629 (819,299) 464,330
2,099 Other operating expenditure 5,821
37,869 Financing and investment income and expenditure (Note G2) 8,781
(414,418) Taxation and non-specific grant income (473,173)
47,643 (Surplus)Deficit on provision of services 5,759
(99,683) Deficit on revaluation of Property, Plant and Equipment assets (171,378)
(45,764) Remeasurement of the net defined benefit liability/asset 112,632
- -
Surplus/deficit on financial assets measured at fair value
(145,447) Other comprehensive (income) and expenditure (58,746)
(97,804) Total comprehensive (income) and expenditure (52,987)
----- End of picture text -----

142

Group Movement in Reserves Statement

This statement shows the movement in the year on the different reserves held by the group, analysed into usable reserves and other reserves.

Note General Fund
Balance		 Earmarked
Reserves
Restated		 School
Reserves
Sub Total -
General Fund		 Housing
Revenue
Account		 Housing
Revenue
Account
Earmarked
Reserves		 Capital
Receipts
Major
Repairs
Reserve		 Capital
Grants
Unapplied		 Total
Usable
Reserves		 Unusable
Reserves
(Note 32)
Total
Council
Reserves		 Council
Share of
Subsidiaries		 Total Group
Reserves
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Balance at 31 March 2019 Carried Forward 23,258 81,179 12,493 116,930 78,718 7,852 70,824 3,606 3,919 281,849 1,293,274 1,575,122 (19,122) 1,556,000
Movement in Reserves during 2019/20
Surplus or (deficit) on the provision of services
Other Comprehensive Expenditure and Income
Adjustments between group accounts and authority accounts
Total Comprehensive Expenditure and Income
Adjustments between accounting basis and funding basis under
regulations
Net Increase/(Decrease) before Transfers to Earmarked Reserves		 Note
17		 -
(16,866)
-
(37,948)
(54,814)

59,578
4,763		 -
-
-
-		 -
-
-
-		 -
(16,866)
-
(37,948)
(54,814)
50,078
4,763		 -
3,016
-
3,016
(2,060)
956		 -
-
-
-		 -
-
-
7,688
7,688		 -
-
-
-		 -
-
-
(1,234)
(1,234)		 -
(13,850)
-
(37,948)
(51,798)
54,472
12,173		 -
-
145,431
145,431
(63,972)
81,459		 -
(13,849)
145,431
(37,948)
93,633
93,633		 -
42,119
(37,948)
4,172
4,172		 -
28,270
145,431
(75,896)
97,805
-
97,805
Transfers to/(from) Earmarked Reserves Note
18
(11,020)		 16,211 (5,191) - 7,852 (7,852) - - - -
Increase/(Decrease) in 2019/20
Balance at 31 March 2020 Carried Forward		 (6,257)
17,001		 16,211
97,390		 (5,191)
7,302		 4,763
121,694		 8,808
87,526		 (7,852)
0		 7,688
78,513		 -
3,606		 (1,234)
2,685		 12,173
294,024		 81,459
1,374,733		 93,633
1,668,754		 4,173
(14,949)		 97,805
-
1,653,805
Movement in Reserves during 2020/21
Surplus or (deficit) on the provision of services 15,060 15,060 17,997 33,057 - 33,057 47,202 80,259
Other Comprehensive Expenditure and Income - - - - - - - - - - 59,032 59,032 59,032
Adjustments between group accounts and authority accounts (43,152) (43,152) (43,152) (43,152) (43,152) (86,304)
Total Comprehensive Expenditure and Income
Adjustments between accounting basis and funding basis under
regulations		 Note
18		 (28,092)

170,300		 - - (28,092)
170,300		 17,997
(7,082)		 - -
2,095		 -
7,690		 -
395		 (10,095)
173,398		 59,032
(173,398)		 48,937 4,050 52,987
-
Net Increase/(Decrease) before Transfers to Earmarked Reserves 142,207 - - 142,207 10,915 - 2,095 7,690 395 163,302 (114,366) 48,937 4,050 52,987
Transfers to/(from) Earmarked Reserves Note
19
(123,543)		 123,317 226 - (651) 651 - - - -
Increase/(Decrease) in 2020/21 18,664 123,317 226 142,207 10,264 651 2,095 7,690 395 163,302 (114,366) 48,937 4,050 52,987
Balance at 31 March 2021 Carried Forward 35,665 220,707 7,528 263,901 97,790 651 80,608 11,296 3,080 457,325 1,260,367 1,717,691 (10,899) 1,706,792

143

Group Consolidated Balance Sheet as at 31 March 2021
31-Mar-20
Note
£'000
2,720,789
Property, Plant & Equipment
204,056
Heritage Assets
15,958
Intangible Assets
252,586
Investment Property
36,551
Long Term Investments
G10
40,253
Long Term Debtors
3,270,193
Long Term Assets
89,093
Short Term Investments
G10
10,804
Inventories
130,024
Short Term Debtors
G3
79,927
Cash and Cash Equivalents
759
Assets held for sale
310,607
Current assets
(14,778)
Short Term Borrowing
G10
(213,838)
Short Term Creditors
G4
(2,406)
Provisions
(5,379)
Derivative Financial Instrument
(26,741)
Capital grants received in advance
(263,142)
Current liabilities
(450,488)
Long Term Borrowing
G10
(28,257)
Provisions
(1,156,508)
Other Long Term Liabilities
(28,600)
Capital Grants Receipts in Advance
(1,663,853)
Long-term liabilities
1,653,805
Net assets
(282,498)
Usable Reserves
(1,371,307)
Unusable Reserves
G5
(1,653,805)
Total reserves		 31-Mar-21
£'000
2,848,032
207,406
20,573
275,903
38,678
38,466
3,429,058
64,983
13,259
147,299
127,568
806
353,915
(4,966)
(226,326)
(5,760)
0
(44,448)
(281,500)
(450,488)
(26,277)
(1,284,585)
(33,331)
(1,794,681)
1,706,792
(454,062)
(1,252,730)
(1,706,792)

144

Group Cash Flow Statement for the year ended 31 March 2021

The cash flow statement shows the changes to cash and cash equivalents of the Group during the reporting period. The statement shows how the group generates and uses cash and cash equivalents by classifying cash flows as operating, investing and financing activities.

2019/20
£'000
Note
(47,643) Net surplus on the provision of services
192,798 Adjustment to net surplus on the provision of services for non-cash
movements
G6
(90,100) Adjust for items included in the net surplus or deficit on the
provision of services that are investing and financing activities
G6
55,055 Net cash flows from Operating Activities
(20,924) Investing Activities
G7
24,365 Financing Activities
G8
58,496 Net increase (decrease) in Cash and Cash Equivalents
21,431 Cash and Cash Equivalents at the beginning of the reporting period
79,927 Cash and Cash Equivalents at the end of the reporting period		 2020/21

£'000
(5,759)

141,642

(83,538)
52,345

20,396

(25,099)
47,641
79,927
127,568

Notes to the Group Accounts

Accounting Policies

Generally, the accounting policies for the group accounts are the same as those applied to the single entity financial statements, except for the following policies which are specific to the group accounts:

Basis of Identification of the Group Boundary

Group accounts are prepared by aggregating the transactions and balances of the Council and all its material subsidiaries, associates and joint arrangements. In its preparation of these Group Accounts, the Council has considered its relationship with entities that fall into the following categories:

145

In accordance with this requirement, the Council has determined its Group relationships as follows :

Bristol Holding Ltd Direct Subsidiary Consolidated
Bristol Waste Company Ltd Indirect Subsidiary Consolidated
BE2020 Limited (formally Bristol Energy
Limited)		 Indirect Subsidiary Consolidated
Bristol Energy and Technology Services
(Supply) Ltd		 Indirect Subsidiary Not Material – Dormant
company
Local Education Partnership Joint Venture Not Material
Bristol is Open Ltd Direct Subsidiary Not Material
Goram Homes Indirect Subsidiary Consolidated
Bristol Heat Networks Limited Indirect Subsidiary Consolidated

The grounds for exclusion from consolidation of certain entities are not material to the true and fair view of the financial statements or to the understanding of the users.

Basis of Consolidation – Group Accounts

The Group Accounts have been prepared using the group accounts requirements of the Code. Companies or other reporting entities that are under the ultimate control of the Council have been included in the Council’s group accounts to the extent that they are material to users of the financial statements in relation to their ability to see the complete economic activities of the Council and its exposure to risk through interests in other entities and participation in their activities.

Subsidiaries have been consolidated on a line by line basis, subject to the elimination of intra-group transactions from the statements, in accordance with the Code. Accounting policies have been aligned where applicable.

Bristol Holding Limited

Bristol Holding is a wholly owned subsidiary of the City Council, incorporated on 12 March 2015. The principal activity of the company is that of a holding company and the activities of the group are the provision of waste services, housing development and a gas and electric supply business in the UK with particular focus on residential customers.

On the 13 July 2015 the company acquired Bristol Energy and Technology Services (Supply) Limited for £100,000 and on 31 March 2016, the company acquired Bristol Waste Limited from Bristol City Council.

As at the 31 March 2021 the Council has invested £37.153m in Bristol Holding Limited. This was made up of £9.228m ordinary shares and £27.925m cumulative redeemable preference shares.

Bristol Waste Company Limited

Bristol Waste Company Limited is a wholly owned subsidiary of Bristol Holding Limited. The company was incorporated on 5 March 2015. From the 8 August 2015 the company has been providing waste collection, street cleaning and other maintenance services in Bristol.

BE2020 Bristol Energy Limited (formally Bristol Energy Limited)

BE2020 is a wholly owned subsidiary of Bristol Holding Limited incorporated on 17 July 2014. The company commenced trading on 23 November 2015 and launched its product offering to customers in February 2016. On 2 October 2020 a resolution was passed to authorise the Company to change its name to BE2020

146

Bristol Energy and Technology Services (Supply) Limited (formally Bristol Energy

Limited)

Bristol Energy and Technology Services (Supply) Limited is a wholly owned subsidiary of Bristol Holding Limited incorporated on 14 March 2016. The company is currently dormant. On 14 February 2018 a resolution was passed to authorise the Company to change its name to Bristol Energy and Technology Services (Supply) Limited.

Goram Homes Limited

Goram Homes is a wholly owned subsidiary of Bristol Holding Limited incorporated on 1 October 2018. The company aims to increase the provision of new homes in the city and to meet housing requirements without compromising on build quality particularly around the provision of affordable housing, space standards and sustainability.

Bristol Heat Networks Limited

Bristol Heat Networks Limited is a wholly owned subsidiary of Bristol Holding Limited incorporated on 31 October 2018. The company aims to deliver affordable, low carbon heat and is fundamental to the Council’s drive to make the city carbon neutral by 2030.

None of the other entities in which the City Council has an interest are considered material enough to merit consolidation into the Council’s Group Accounts. Details of these can be found within the Related Parties note in the Council’s single entity accounts (Note 38)

Events after the Balance Sheet Date

The Statement of Accounts was authorised for issue by the Section 151 Officer on 30 July. Events taking place after this date are not reflected in the financial statements or Notes. However there has been one event since the 31 March 2020 up to the date the accounts were authorised for issue by the S151 Officer.

On 3rd June 2021, Bristol Holding Ltd agreed to the reclassification of 27,321,425 redeemable preference shares (at a 7% coupon) held in BE2020 Ltd being converted into ordinary shares held in the company. All accrued and future interest and any arrears of preferential dividend attaching to the preference shares have been waived and written off.

Group financial position

The closing net deficit balance of the group is £43.060m which takes into account previous years losses carried forward.

Where there are no material changes to the statements the notes are as per the Council’s single entity accounts. Where consolidation has resulted in material changes additional notes are set out below.

G1 Net Cost of Services

The Net cost of Services in the consolidated CIES includes gross income of £45.8m and gross expenditure of £40m associated outside of the group boundary.

Revenue from Contracts with Customers

Further to a review of this area, the Group can confirm that there is no material contractual revenue income from customers to disclose. There is therefore nothing to disclose in relation to the introduction of IFRS 15-Revenues from Contracts with Customers.

147

G2 Financing and Investment Income and Expenditure

Interest payable and similar charges
Loss Allowance (Financial guarantee contracts)
Changes in the fair value of financial instruments
Pensions net interest cost
Interest receivable and similar income
Income and expenditure in relation to Investment Properties
Changes in fair value of Investment Properties
Total		 2020/21
£'000
36,261
(5,379)
(2,301)
22,523
(9,189)
(10,569)
(22,566)
8,780		 2019/20
£'000
37,291
5,379
(2,350)
23.029
(10,262)
(11,474)
(3,744)
37,869

G3 Current Debtors

Current debtors
Trade Receivables
Prepayments
VAT
Other Receivable Amounts
Total		 31 March 2021
£'000
24,080
4,677
9,632
108,910
147,299		 31 March 2020

£'000
16,725
19,614
8,931
84,754

130,024

G4 Creditors

Current liabilities
Trade Payables
Other Payables
Receipts In Advance
Total
nusable Reserves
Revaluation Reserve
Capital Adjustment Account
Financial Instruments Adjustment Account
Deferred Capital Receipts Reserve
Pensions Reserve
Collection Fund Adjustment Account
Accumulated Absences Account
Dedicated Schools Grant Adjustment Account		 31 March 202131 March 2020
£'000
£'000
10,949
16,470
144,956
127,667
70,421
69,701
226,326
213,838
31 March
2021
31 March
2020
£'000
£'000
(1,007,648)
(861,614)
(1,505,872)
(1,514,604)
6,898
7,076
(1,448)
-
1,133,437
991,708
87,935
(477)
13,388
6,604
10,004
(1,252,730)
(1,371,307)		 31 March 2020

£'000		 31 March 2020

£'000
16,470
127,667
69,701
213,838
31 March
2020

£'000
(861,614)
(1,514,604)

7,076
-

991,708

(477)

6,604
(1,371,307)

G5 Unusable Reserves

148

G6 Cash Flow Statement

The cash flows for operating activities include the following significant items:

Interest received
Interest paid
Dividends received		 2020/21
£'000
634
(34,003)
1,954		 2019/20
£'000
4,288
(37,832)
2,376

The deficit on the provision of services has been adjusted for the following non-cash movements:

Depreciation, impairment and downward revaluations
Amortisation
Increase/(decrease) in impairment for bad debt
(Decrease)/increase in creditors
(Increase)/decrease in debtors
(Increase)/decrease in inventories
Movement in pension liability
Contributions to/(from) provisions
Carrying amount of non-current assets held for sale, sold or derecognised
Other non-cash items charged to the net surplus or deficit
On the provision of services
Net cash flows from non-cash movements		 2020/21
£'000
120,197
4,525
2,131
10,711
(12.774)
(2,455)
21,109
3,495
25,545
(30,842)
141,642		 2019/20
£'000
82,681
4,431
1,694
27,642
(10,155)
(8,816)
47,008
4,099
46,849
(2,635)
190,798

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 deficit on the provision of services
Net adjustment from the sale of short- and long-term investments
Premiums or discounts on the repayment of financial liabilities
Proceeds from the sale of Property Plant and Equipment, Investment
Property and Intangible Assets		 2020/21
£'000
(41,934)
(41,604)
(83,538)		 2019/20
£'000
(33,664)
-
(56,436)
(90,100)

149

G7 Cash Flow Statement - Investing Activities

Purchase of Property, Plant and Equipment, Investment Property and
Intangible Assets
Purchase of short-term and long-term investments
Other (payments)/receipts for investing activities
Proceeds from the sale of Property, Plant and Equipment, Investment
Property and Intangible Assets
Proceeds from short-term and long-term investments
Capital Grants Received
Other receipts from investing activities
Net cash flows from investing activities		 2020/21
£'000
(107,018)
(294,800)
(4,410)
40,291
318,600
64,041
3,692
20,396		 2019/20
£'000
(117,110)
(116,900)
(173)
57,503
107,000
46,700
2,056
(20,924)

G8 Cash flow Statement - Financing Activities

Cash receipts of short- and long-term borrowing
Cash payments for the reduction of outstanding liabilities relating to
Finance leases and on-Balance Sheet PFI contracts
Repayments of short and long-term borrowing
Council tax and NNDR adjustments
Other payments/(receipts) in respect of financing activities
Net cash flows from financing activities		 2020/21
£'000
224
-
(8,809)
(11,586)
(4,928))
(25,099)		 2019/20
£'000
30,000
(7,363)
-
1,728
-
24,365

150

G9 Directors Remuneration and Exit Packages

Where a Directors annual salary is £50,000 or more, but less than £150,000, remuneration is disclosed by way of job title. For those Directors whose salary is £150,000 or more, their name is also disclosed.

2020/21 Salary, Fees
and
Allowances		 Compensation
for Loss of
Office
Pension
Contribution		 Total
Post Title Post Term Post Holder Notes £ £ £ £
Bristol Energy Company
Interim Managing Director Apr 20 – Nov 20 A Booth 1 111,209 - - 111,209
Consultant to the Board Apr’ 20 – Mar’ 21 C Smith 1 242,101 242,101
Bristol Waste Company
Managing Director Apr’ 20 – Mar’21 125,744 - 5,368 131,112
Operations Manager Apr’ 20 – Mar 21 103,783 - 4,407 108,190
Finance Director Apr’ 20 – Mar’21 110,431 - 4,789 115,220
Goram Homes
Managing Director Apr’ 20 – Mar’ 21 113,300 - 10,300 123,600
Finance Director Apr’ 20 – Mar’ 21 1 61,233 6,123 67,356
Bristol Holding Company
Executive Chair (CEO) Apr’ 20 – Mar’ 21 88,365 18,848 66,369
Interim Director of Finance Apr’ 20 – Mar’ 21 1 110,000 - - 110,000

Note 1 (Interim) – The amounts disclosed in the table in respect of these posts are the costs incurred by the Company to secure the individuals services on and not the amounts the individuals actually received (which will have been lower).

Note 2 - The table above is presented in a format as prescribed in Schedule 1 of the Accounts and Audit Regulations 2015. This presentation differs from disclosure in the Companies audited accounts as these are prepared in accordance with FRS 102.

151

2019/20 Salary, Fees
and
Allowances		 Compensation
for Loss of
Office
Pension
Contribution		 Total
Post Title Post Term Post Holder Notes £ £ £ £
Bristol Energy Company
Managing Director Apr’19 – Mar’20 M Majewicz 306,081 7,800 9,079 322,960
Interim Managing Director Mar’20 A Booth 1 33,917 - - 33,917
Interim Director of Finance Oct’19 – Mar’20 C Smith 1 113,333 - - 113,333
Bristol Waste Company
Managing Director Apr’19 – Mar’20 119,587 - 5,187 124,774
Operations Manager Apr’19 – Mar’20 97,344 - 4,096 101,440
Finance Director Apr’19 – Mar’20 73,179 - 3,307 76,486
Goram Homes
Managing Director Apr’19 – Sept’19 S Blake 104,046 - - 104,046
Managing Director Sept’19 – Mar’20 52.678 - 4,167 63,845
Finance Director Oct’19 – Mar’20 1 37,800 37,800
Bristol Holding Company
Executive Chair (CEO) Aug’19 – Mar’20 53,871 12,498 66,369
Interim Director of Finance July’19 – Mar’20 1 121,344 - - 121,344

Note 1 (Interim) – The amounts disclosed in the table in respect of these posts are the costs incurred by the Company to secure the individuals services on this basis and not the amounts the individuals actually received (which will have been lower).

Note 2 - The table above is presented in a format as prescribed in Schedule 1 of the Accounts and Audit Regulations 2015. This presentation differs from that of the disclosure in the Companies audited accounts as these are prepared in accordance with FRS 102

152

G10 Financial Instruments

The borrowings and investments disclosed in the Balance Sheet are made up of the following categories of financial instruments. The value of debtors and creditors reported in the table are those amounts meeting the definition of a financial instrument. The balances of debtors and creditors reported in the balance sheet and associated notes also include balances which do not meet the definition of a financial instrument, such as tax-based debtors and creditors.

Long-Term Long-Term Current Current
31 March 31 March 31 March 31 March
2021 2020 2021 2020
£'000 £'000 £'000 £'000
Financial Liabilities at Amortised
cost
Borrowing (450,488) (450,488) (4,966) (14,778)
Service Concessions (114,670) (119,424) (6,803) (8,820)
Creditors (2,738) (2,281) (207,569) (190,410)
Financial Liabilities at Fair Value
through profit and loss
Financial Derivative - - - (5,379)
Total Financial Liabilities (567,896) (572,193) (219,338) (219,387)

Financial Assets at amortised cost
Investments - 1 91,705 113,003
Debtors 800 1,009 96,008 93,780
Financial Assets at Fair Value
through Other Comprehensive
Income
Investment 350 350 - -
Financial Assets at Fair Value
through profit and loss
Investments 38,228 36,100 101,476 56,016
Total Financial Assets 39,378 37,460 288,559 262,799

Movements

The net increase of financial assets and liabilities (circa £32m) was through a combination of increases in working capital and reserves resulting in additional cash resources to invest in lieu of using these resources.

153

Borrowing

31 March
31 March
2021
2020
Current borrowing £'000
£'000
Deposit loans (repayable at notice - up to 7 days) 102
151
Other short-term borrowing (repayable within 1 year):
- Public Works Loan Board 3,251
13,470
- Banks and other monetary sector 1,334
1,136
- Energy Improvement Loans 259
-
- Local Bonds and Property rent deposits 11
11
- Stocks 10
10
Total 4,966
14,778
31 March
31 March
2021
2020
Non-current borrowing £'000
£'000
Public Works Loan Board 330,439
330,439
Lender Option Borrower Option (Lobo) 70,000
70,000
Market Debt 50,000
50,000
Stocks 49
49
Total 450,488
450,488

154

Income, Expense, Gains or Losses

The gains and losses recognised in the Comprehensive Income and Expenditure Statement for financial instruments are as follows:

Financial Instruments Gains and Losses 2020/21 Financial Instruments Gains and Losses 2020/21 Financial Instruments Gains and Losses 2020/21
Financial
Liabilities Financial Assets
Measured at
Amortised
Cost		 Amortised Cost Fair
Value
through
the CI		 Fair Value
through the
P&L		 Total
£'000 £'000 £'000 £'000 £'000
Interest expense & Impairment
Losses (28,862) - - - (28,862)
Total expense in Surplus or
Deficit on the Provision of
Services (28,862) - - - (28,862)
Interest Income 4,754 109 4,863
Fair Value Movement 2,300 2,300
Dividend Income 2,092 2,092
Total income in Surplus or
Deficit on the Provision of
Services (28,862) 4,754 - 4,501 (19,607)
Deficit arising on revaluation
of financial assets in Other
Comprehensive Income and
Expenditure - - - - -
Net gain/(loss) for the year (28,862) 4,754 - 4,501 (19,607)
Financial Instruments Gains and Losses 2019/20 Financial Instruments Gains and Losses 2019/20 Financial Instruments Gains and Losses 2019/20
Financial
Liabilities Financial Assets
Measured at
amortised
cost		 Loans and
receivables		 Fair Value
through the
CI		 Fair
Value
through
the I&E		 Total
£000s £000s £000s £000s £000s
Interest expense & Impairment
Losses (40,647) -
-
-
(40,647)
Total expense in Surplus or
Deficit on the Provision of
Services (40,647) -
-
-		 (40,647)
Interest Income -
5,531		 -
301
5,832
Fair Value Movement - - - 2,350
2,350
Dividend Income -
-
-
2,376
2,376
Total income in Surplus or
Deficit on the Provision of
Services (40,647)
5,531		 - 5,027 (30,089)

155

Deficit arising on revaluation of
financial assets in Other
Comprehensive Income and
Expenditure -
-
-
-		 -
Net gain/(loss) for the year (40,647) 5,531 - 5,027 (30,089)

Fair Value of Financial Assets and Property Assets

Some of the Groups’ financial assets are measured in the Balance Sheet at fair value on a recurring basis and are described in the following table, including the valuation techniques used to measure them.

Fair value measurements at 31 Fair value measurements at 31 March 2021 using: March 2020 using:

Quoted Observable Unobservable Quoted Quoted Observable Observable
Unobservable
prices in inputs inputs prices in inputs inputs
Descriptions active
markets		 active
markets
Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
£000 £000 £000 £000 £000 £000
Recurring fair value
measurements
Fair Value through Profit and
Loss
Money Market Funds 101,476 - - 56,017 -
-
Bristol Port Company (Non-
traded Unquoted Equity
Investment) - - 29,000 - -
27,000
Other Unquoted private
companies - - 128 - -
100
Pooled property fund - - 9,100 - -
9,000
Fair Value through Other
Comprehensive Income
Other unquoted private
companies - - 350 - -
350
Total Non-traded securities: 101,476 - 38,578 56,017 -
36,450

Investment properties		 - 275,903 -
-

**252,586 **

-

Surplus properties		 - 43,706 -
-

**41,957 **

-
Total recurring fair value
measurements 101,476 319,609 38,578 56,017 294,543
**36,450 **

156

Non-recurring fair value
measurements		 Non-recurring fair value
measurements		 Non-recurring fair value
measurements		 Non-recurring fair value
measurements		 Non-recurring fair value
measurements
Assets held for sale
806
-
-
723
-
Total non-recurring fair value
measurements
-
806
-
-
723
-
Valuation
techniques and
Inputs
Description of
asset		 Valuation
hierarchy		 Basis of Valuation Observable
and
Unobservable
inputs		 Key sensitivities affecting the
valuations provided
Money Market
Funds		 Level 1 Unadjusted quoted
prices in active markets
for identical shares		 Latest quoted
prices
Surplus assets Level 2 All surplus assets have
been valued by RICS
qualified valuers to Fair
Value less costs to sell,
reflecting highest and
best use.		 Evidence of
title, floor area,
siting and site
conditions,
type/age and
current use of
the property
have been taken
into account
together with
general market
conditions and
advertised value
of similar
properties
currently up for
sale.		 Not all assets are physically
inspected every year. Latent
defects, repair and maintenance
backlogs, general changes in the
market and other impairments
could have a significant impact on
the values provided.
Investment
Properties(further
detailed information in note 21)		 Level 2 All investment
properties have been
valued by the Group’s
in-house valuers (all
RICS qualified) on an
investment income
basis which we are
satisfied represents
highest and best use
overall.		 All valued on an
investment
income basis,
using existing
lease terms and
current yields		 Changes to market conditions,
lease terms, covenant strength and
occupancy levels could all affect
the asset valuations provided.

157

Bristol Port
Company		 Level 3 This investment has
been valued by an
external specialist
valuation company for
financial year ending
31stMarch 2021 and
refreshed by Council
officers for this
financial year on the
same basis.		 Calculations
have been based
an income
approach to
valuation, by
applying a
multiple derived
from the market
to a
maintainable
profit figure.		 Changes to market conditions
(local and global), and the
comparable data used within the
valuations. If the growth of
future returns is greater or lesser
by 0.5% than the 2% forecast, the
fair value will be circa £1.5m
higher or lower respectively.
Investments in
other unquoted
companies		 Level 3 These investments have
been valued at the
Group’s share of each
company.		 Calculations
have been based
on their latest
audited accounts		 The value of these companies are
relatively low (£478k) so any
change in the metrics used in the
valuation technique will not have
a material impact.
Investments in
Pooled Property
Fund		 Level 3 These investments have
been valued at the
Group's share within
the pooled fund.		 The valuation
for Pooled
Property Funds
have been based
on the latest
quarterly
financial report.		 Changes to housing market
conditions could affect the
valuation of the pooled property
fund. If the market value of the
properties within this fund is
greater or lesser than 1% the fair
value of the fund will be £91k
higher or lower respectively.

Transfers between levels of the fair value hierarchy

There were no transfers between levels 1 and 2 during the year.

Changes in valuation technique

There has been no change in valuation techniques used during the year.

158

Reconciliation of fair value measurements for assets at fair value within level 3

31 March
31 March
2021
2020
Description Non-traded
securities
Non-
traded
securities
£000
£000
Opening balance 36,450
34,550
Transfers into level 3 -
-
Transfers out of level 3 -
-
included in the surplus/(deficit) on the
Provision of Services		 2,228
2,350
included in Other Comprehensive Income and
Expenditure		 -
-
Total gains/(losses) for the period: 2,228
2,350
Additions 100
100
Disposals (200)
(550)
Closing balance 38,578
**36,450 **

Gains and losses included in the surplus / (deficit) on the provision of services for the current year primarily relates to the investment in the Bristol Port Company (+£2m) .

159

The Fair Values of Financial Assets and Financial Liabilities that are not Measured at Fair Value

Except for the financial assets carried at fair value (described in the table above), all other financial liabilities and financial assets represented by loans and receivables and long term debtors and creditors are carried on the balance sheet at amortised cost. Their fair value can be assessed by calculating the present value of the cash flows that take place over the remaining life of the instruments, using the following assumptions:

For loans from the PWLB payable, prevailing market rates have been applied to provide the fair value under PWLB debt redemption procedures. An additional note to the tables sets out the alternative fair value measurement applying the premature repayment, highlighting the impact of the alternative valuation;

For non-PWLB loans payable, prevailing interest rates have been applied to provide the fair value; No early repayment or impairment is recognised;

Where an instrument has a maturity of less than 12 months or is a trade or other receivable the fair value is taken to be the carrying amount or the billed amount;

The fair value of trade and other receivables is taken to be the invoiced or billed amount.

Financial Liabilities 31 March 2021
31 March 2020
Carrying
amount
Fair value
Carrying
amount
Fair value
£000
£000
£000
£000
Public Works Loan Board (PWLB) 333,690
501.500
343,909
480,200
Lender Option Borrower Option 70,865
108,400
70,663
99,400
Market Debt 50,469
74,700
50,473
69,200
Current Creditors 210,213
210,213
192,607
192,607
Service Concessions 121,473
192,673
128,244
200,508
Other 524
524
305
305
Total Liabilities 787,234
1,088,010
786,201
1,042,220

The Group has used a transfer value for the fair value of financial liabilities. We have also calculated an exit price fair value of £1.244bn an increase of £156m which is calculated using early repayment discount rates. The Group has no contractual obligation to pay these penalty costs and would not incur any additional cost if the loans run to their planned maturity date.

The fair value for financial liabilities and assets has been assessed by calculating the present value of the cash flows that will take place over the remaining term of the instruments, using the assumptions detailed above, the fair value is arrived at by applying the discounted cash flow calculations based on the PWLB premium/discount calculations.

The fair value of the liabilities is higher than the carrying amount because the Group’s portfolio of loans includes a number of fixed rate loans where the interest rate payable is higher than the prevailing rates at the Balance Sheet date. This shows a notional future loss (based on economic conditions at 31 March 2021) arising from a commitment to pay interest to lenders above current market rates.

160

Financial Assets 31 March 2021
31 March 2020
Carrying
amount
Fair value
Carrying
amount
Fair value
£000
£000
£000
£000
Current investments 64,983
64,983
33,076
33,076
Cash and Cash Equivalents 26,092
26,092
74,153
74,153
Non-current investments -
-
1
1
Current Debtors 96,008
96,008
82,203
82,203
Non-current debtors 800
800
10,786
10,786
Total Financial Assets 187,883
187,883
200,219
200,219

The fair value of the assets is the same as the carrying value due to the majority of these assets having a maturity of less than 12 months or is a trade or other receivable where the fair value is taken to be the carrying amount or the billed amount.

Short-term debtors and creditors are carried at cost as this is a fair approximation of their value.

161

Fair value hierarchy for financial assets and financial liabilities that are not measured at fair value

Fair value measurements at 31 Fair value measurements at 31 March 2021 using: March 2020 using:

Quoted Observabl Unobservable Quoted Observable Unobserva
prices in e inputs inputs prices in inputs ble inputs
active active
markets markets
Descriptions
Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
£000 £000 £000 £000 £000 £000
Recurring fair value
measurements using:
Financial Liabilities
held at Amortised Cost
Public Works Loan Board
(PWLB) 333,690 343,909
Lender Option Borrower
Options 70,865 70,663
Market debt 50,469 50,473
Service Concessions 123,621 128,244
Other 524 305
Total 579,169 593,594
Financial Assets held at
amortised cost
Current Investments 64,983 33,076
Cash and Cash
Equivalents 26,092 79,927
Non-current Investments - 1
Non-current Debtors 800 1,009
Total 91,875 114,013

The fair value for financial liabilities and financial assets that are not measured at fair value included in Levels 2 and 3 in the table above have been arrived at using a discounted cash flow analysis with the most significant inputs being the discount rate detailed above.

The fair value for financial liabilities and financial assets that are not measured at fair value can be assessed by calculating the present value of the cash flows that will take place over the remaining term of the instruments, using the assumptions detailed above, primarily for financial liabilities the fair value is arrived at by applying the discounted cash flow calculations based on the PWLB premium/discount calculations.

162

G11 Nature and Extent of Risks Arising from Financial Instruments

The Group’s activities expose it to a variety of financial risks:

Credit risk – the possibility that other parties might fail to pay amounts due to the Group. Liquidity risk – the possibility that the Group might not have funds available to meet its commitments to make payments. Re-financing risk – the possibility that the Group might be requiring to renew a financial instrument on maturity at disadvantageous interest rates or terms.

Market risk – the possibility that financial loss might arise for the Group as a result of changes in such measures as interest rates and money market movements.

The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the resources available to fund services. Risk management is carried out by a central treasury team, under policies approved by the Council in the annual treasury management strategy, and compliance with the CIPFA Prudential Code of Practice, the CIPFA Treasury Management Code of Practice, and Investment Guidance that is issued under the Local Government Act 2003. The Group provides written principles for overall risk management, as well as written policies covering specific areas, such as interest rate risk, credit risk, and the investment of surplus cash. These are required to be reported and approved at or before the Council’s annual council tax setting budget or before the start of the year to which they relate. These items are reported with the annual treasury management strategy that outlines the detailed approach to managing risk in relation to the Group’s financial instrument exposure. Actual performance is also reported annually to Members.

The annual treasury management strategy which incorporates the prudential indicators was approved by Council on 25 February 2020 and is available on the Council website.

Credit risk

Credit risk arises from deposits with banks and financial institutions, as well as credit exposures to the Group’s customers.

This risk is minimised through the Annual Investment Strategy, which requires that deposits are not made with financial institutions unless they meet identified minimum credit criteria, in accordance with Fitch, Standard and Poor’s and Moody’s Credit Ratings Services. The Annual Investment Strategy also imposes a maximum sum to be invested with a financial institution located within each category.

Details of the Investment Strategy can be found on the Council’s website. The key areas of the Investment Strategy are that the minimum criteria for investment counterparties include:

Credit ratings of Short Term of F1, Long Term A-, with the lowest available rating being applied to the criteria; UK institutions provided with support from the UK Government;

The Group’s maximum exposure to credit risk in relation to its investments in banks and building societies will vary according to credit ratings assigned by the three main credit rating agencies and cannot be assessed generally as the risk of any institution failing to make interest payments or repay the principal sum will be specific to each individual institution. Recent experience has shown that it is rare for such entities to be unable to meet their commitments. A risk of irrecoverability applies to all of the Group’s deposits, but there was no evidence at the 31 March 2021 that this was likely to crystallise.

163

Allowance for Credit Losses

The following analysis summarises the Group’s potential maximum exposure to credit risk on financial assets valued at amortised cost, based on experience of default and un-collectability over the last five financial years, adjusted to reflect current market conditions.

Amount
Historical
experience of
default
Adjustment
for market
conditions		 Estimated
maximum
exposure to
default
Estimated
maximum
exposure to
default
£000
%
%		 £000
£000
A
B
C		 (A*C)
31-Mar-21
31-Mar-21
31-Mar-21		 31-Mar-21
31-Mar-20
Current Investments:
Local Authorities 45,013
0.00%
0.00%
-
-
AA rated counterparties 15,585
0.02%
0.02%
3
-
A rated counterparties 30,477
0.06%
0.06%
18
24
Sub-total 91,073 21
**24 **
Trade debtors 96,008 -
-
Non-current debtors 800 -
-
Total Financial assets 187,883 21
**24 **

The estimated maximum exposure for credit loss for Treasury investments is £21k and therefore no allowance for credit loss have been made for these assets.

No credit limits were exceeded during the reporting period and the Group does not expect any losses from nonperformance by any of its counterparties in relation to deposits.

The Group does not generally allow credit for its trade debtors, including amounts due from government departments and other Local Authorities.

The risk of loss for trade receivables is minimised by a combination of the following:

Wherever possible obtaining payment in advance of service delivery Availability and encouragement to pay by direct debit

A wide range of payment options available, including by telephone, internet, banks and retail networks (via the Allpay solution i.e. Payzone, Paypoint and Post Offices)

Having a standardised recovery process including reminder letters and statement of accounts

164

Utilising a corporate Debt Management Team to take an ethical debt approach to all types of debt with referral to External Debt Collection agencies or instigating Court claims only used as a last resort Negotiating flexible repayment plans for overdue debt where necessary

The write off of a debt is always the last option available and is only taken when all other appropriate measures have been taken to recover payment, and in cases of bankruptcy.

The bad debt provision is calculated by reference to the Group’s historic experience with the provision being applied to debts over 60 days old and the value increasing according to the age of the debt.

Current debtor analysis Gross debtor at Allowance
for credit
losses at		 Net debtor
at		 Net debtor
at		 Net
debtor at
31-Mar-21 31-Mar-21 31-Mar-21 31-Mar-
20
£'000 £'000 £'000 £'000
Local tax payers 35,192 (19,626) 15,566 6,099
Housing rents 13,123 (10,091) 3,032 2,880
Other - sundry debtors 149,961 (32,724) 117,237 107,613
Total Other Entities and
Individuals 198,276 (62,441) 135,835 116,592
Central Government bodies 10,561 - 10,561 11,047
Other local authorities 1,571 - 1,571 1,636
NHS bodies 160 - 160 749
Total debtors 210,568 - 148,127 130,024
Balance sheet debtors 210,568 (62,441) 148,127 130,024
Current debtors not qualifying as
a financial instrument under IFRS
(71,745)		 19,626 (52,119) (36,244)
Current debtors qualifying as a
financial instrument under
IFRS 138,823 (42,815) 96,008 93,780

The following table analyses the Gross debt that is now past due over varying periods. This overdue debt is covered by a provision for bad debt.

31 March
31 March
2021
2020
£'000
£'000
Less than three months 30,047
34,073
1,759
4,313
15,276
9,474
46,848
38,862
Three to four months
Four months to one year
More than oneyear
Total 93,930
86,722

165

Liquidity risk

The Group has a comprehensive cash flow management system that seeks to ensure that cash is available as needed. If unexpected movements happen, the Group has ready access to borrowings from the money markets to cover day-to-day cash flow need and the Public Works Loans Board and capital markets for access to longer term funds. The Council is also required to provide a balanced budget through the Local Government Finance Act 1992, which ensures sufficient monies are raised to cover annual expenditure. Therefore, there is no significant risk that it will be unable to raise finance to meet its commitments under financial instruments.

The maturity analysis of financial assets, excluding sums due from customers, is as follows:

31 March
31 March
2021
2020
£'000
£'000
Less than 1 year 288,559
262,800
Between 1 and 2 years 339
438
Between 2 and 3 years 324
15
More than 3years 38,715
37,006
Total 327,937
300,259

The maturity analysis of financial liabilities is as follows:

31 March
2021
31 March
2020
£'000
£'000
219,338
219,387
11,786
6,803
7,163
11,786
548,947
553,604
787,234
791,580
Less than 1 year
Between 1 and 2 years
Between 2 and 3 years
More than 3years
Total

Refinancing and Maturity risk

The Group maintains a significant debt and investment portfolio. Whilst the cash flow procedures above are considered against the refinancing risk procedures, longer-term risk to the Group relates to the exposure to replacing financial instruments as they mature. This risk relates to both the maturing of longer-term financial liabilities and longer-term financial assets.

The approved treasury indicator limits for the maturity structure of debt and the limits on investments placed for greater than one year in duration are the key parameters used to address this risk. The Council approved treasury and investment strategies address the main risks and the central treasury team address the operational risks within the approved parameters. This includes:

Monitoring the maturity profile of financial liabilities and amending the profile through either new borrowing or the rescheduling of the existing debt; and

Monitoring the maturity profile of investments to ensure sufficient liquidity is available for the Group’s day-to-day cash flow needs, and monitoring the spread of longer-term investments provides stability of maturities and returns in relation to the longer-term cash flow needs.

166

The maturity profile of the Group’s debt portfolio along with the Groups’ approved minimum and maximum exposure is shown in the table below.

Approved
minimum
limits %
Approved
maximum
limits %		 Actual 31
March 2021
%
£'000		 Actual 31
March 2020
%
£'000
Less than 1 year
-
30		 4,966
1		 14,778
3
Between 1 and 2 years
-
40		 5,000
1		 -
-
Between 2 and 5 years
-
40		 20,000
4		 10,000
2
Between 5 and 10 years
-
50		 34,000
7		 49,000
11
More Than 10 Years
25
100		 391,488
87		 391,488
84
Total 455,454
100		 465,266
100

Included within the maturity profile are £50m of LOBOS with maturities averaging 40 years. Inherent within these loan instruments are options (averaging an option every 3 years) that could give rise to the debt being repaid early. These loans are regularly reviewed with the current and expected structure of interest rates. The risk of the lenders exercising their options is currently low for the short to medium term. Therefore, the maturity of these loans in above table are currently based on their maturity date, 10 years and over.

Market risk

The Group is exposed to interest rate movements on its borrowings and investments. Movements in interest rates have a complex impact on the Group. For instance, a rise in variable and fixed interest rates would have the following effects:

Borrowings at variable rates – the interest expense charged to the Comprehensive Income and Expenditure Statement will rise; Borrowings at fixed rates – the fair value of the borrowing will fall (no impact on revenue balances); Investments at variable rates – the interest income credited to the Comprehensive Income and Expenditure Statement will rise; and

Investments at fixed rates – the fair value of the assets will fall (no impact on revenue balances).

Borrowings are not carried at fair value on the balance sheet, so nominal gains and losses on fixed rate borrowings would not impact on the Surplus or Deficit on the Provision of Services or Other Comprehensive Income and Expenditure. However, changes in interest payable and receivable on variable rate borrowings and investments will be posted to the Surplus or Deficit on the Provision of Services and affect the General Fund Balance. Movements in the fair value of fixed rate investments that have a quoted market price will be reflected in the Other Comprehensive Income and Expenditure Statement.

The Group has a number of strategies for managing interest rate risk. The Annual Treasury Management Strategy draws together the Group’s expected treasury operations, including an expectation of interest rate movements. From this Strategy a treasury indicator is set which provides maximum limits for fixed and variable interest rate exposure. The central treasury team will monitor market and forecast interest rates within the year to adjust exposures appropriately. For instance during periods of falling interest rates, and where economic circumstances make it favourable, fixed rate investments may be taken for longer periods to secure better long term returns, similarly the drawing of longer term fixed rates borrowing would be postponed.

167

At 31 March 2021, if interest rates had been 1% higher with all other variables held constant, the financial effect would be:

31 March
2021
£'000
Increase in interest receivable on variable rate investments 1,966
Impact on Surplus or Deficit on the Provision of Services 1,966
Share of overall impact debited to the HRA 1,193
Decrease in fair value of fixed rate borrowings liabilities (no impact on the
Surplus or Deficit on the Provision of Services or Other Comprehensive
Income and Expenditure)		 264,600

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

Foreign exchange risk

During 2020/21 the Group received monies denominated in Euro's relating to the receipt of European grant. The Group also made payments in a variety of currencies for the supply of goods and services. Payments and receipts are converted to Sterling at the earliest opportunity.

168

----- Start of picture text -----
Draft
Statement
of Accounts
Bristol City Council,
for the year ended
31 March 2021
(Subject to audit)
The Accounts and Audit
Regulations 2015 require the
city council to prepare a set of
Financial Statements. The Financial
Statements have been prepared
in accordance with the Code
of Practice on Local Authority
Accounting in the United Kingdom
2019/20 (the Code) published by
the Chartered Institute of Public
Finance and Accountancy (CIPFA).
----- End of picture text -----

1

Contents

Page
ary of Terms 1
en Statements and Director of Finance Narrative Report
• Councillor Preface 6
• Director of Finance Narrative Report 8
• Statement of Responsibilities 22
• Auditor's Report - (to follow on completion of the audit) 23
• Annual Governance Statement 24

1. Glossary of Terms

2. Written Statements and Director of Finance Narrative Report

3. Core Financial Statements

4. Notes To The Accounts

Notes supporting the Core Statements

Notes supporting the Core Statements
Note 1 - Accounting Policies 46
Note 2 - Accounting Standards that have been issued but have not yet been adopted 60
Note 3 - Critical Judgements in applying Accounting Policies 61
Note 4 - Assumptions and Estimation Uncertainty 62
Note 5 - Events after the Balance Sheet Date 63
Note 6 - Other Items of Expenditure and Income 63
Notes supporting the Comprehensive Income and Expenditure Statement
Note 7 - Expenditure & Funding Analysis 64
Note 8 - Expenditure & Income Analysed by Nature 68
Note 9 - Other Operating Expenditure 69
Note 10 - Financing & Investment Income and Expenditure 69
Note 11 - Taxation and Non-Specific Grant Income 69
Note 12 - Pooled Budgets 70
Note 13 - Members' Allowances 71
Note 14 - Officers Remuneration and Exit Packages 72
Note 15 - External Audit Costs 75
Note 16 - Dedicated Schools Grant 76
Note 17 - Grant Income 77
Notes supporting the Movement in Reserves Statement
Note 18 - Adjustments between Accounting Basis and Funding Basis under Regulations 80
Note 19 - Usable Reserves 82

Notes supporting the Balance Sheet

Note 20 - Property, Plant and Equipment 84
Note 21 - Heritage Assets 88
Note 22 - Investment Properties 89
Note 23 - Intangible Assets 90
Note 24 - Financial Instruments 91
Note 25 - Nature and Extent of Risks from Financial Instruments 100
Note 26 - Capital Expenditure and Financing 105
Note 27 - Leases 106
Note 28 - Service Concessions 106
Note 29 - Debtors 109
Note 30 - Cash and Cash Equivalents 110
Note 31 - Creditors 110
Note 32 - Provisions 111
Note 33 - Unusable Reserves 112
Note 34 - Pensions 117

Notes supporting the Cash Flow Statemen t

Note 35 - Cash Flow Statement - Operating Activities 124
Note 36 - Cash Flow Statement - Investing Activities 125
Note 37 - Cash Flow Statement - Financing Activities 125

Other Notes

Note 37 Related Parties 126
Note 38 Transfer of Functions 128
Note 39 Contingent Liabilities 129

5. Supplementary Accounting Statements

• Housing Revenue Account 130
• Collection Fund 136

6. Group Accounts

GLOSSARY OF TERMS

ACCOUNTING PERIOD - This is the length of time covered by the accounts. This is normally a period of 12 months commencing on 1 April. The end of the accounting period is the Balance Sheet date.

ACCOUNTING POLICIES – The rules and practices adopted by the Council that determine how the transactions and events are reflected in the accounts.

ACCRUALS - The concept that income and expenditure are recognised as they are earned or incurred, not as money is received or paid.

ACTUARY - An independent consultant who advises on the financial position of the Pension Fund.

ACTUARIAL GAINS AND LOSSES - For a defined benefit pensions scheme, the changes in actuarial deficits or surpluses that arise because either:

Events have not coincided with the actuarial assumptions made for the last valuation; or

The actuarial assumptions have changed

ACTUARIAL VALUATION - Every three years a review is carried out by the actuary on the Pension Fund’s assets and liabilities reporting to the Council on the Fund’s financial position and recommended employers’ contribution rates.

AMORTISATION - The writing off, of a loan balance or intangible asset over a period to revenue.

ANNUAL GOVERNANCE STATEMENT – The annual governance statement is a statutory document that explains the processes and procedures in place to enable the Council to carry out its functions effectively.

ASSET - An asset is something that the Council owns that has a monetary value. Assets are either current or long term.

BALANCE SHEET - The Balance Sheet is a financial statement summarising the overall financial position of the Council at the end of the financial year.

BILLING AUTHORITY - The billing authority is responsible for levying and collecting the Council Tax in its area, both on its own behalf and that of its precepting authorities.

BUDGET - The budget represents a statement of the Council’s planned expenditure and income.

CAPITAL ADJUSTMENT ACCOUNT - This is the money set aside in the Council’s accounts for capital spending and to repay loans.

CAPITAL CHARGES - This is a charge made to the Council’s service revenue accounts to reflect the cost of utilising property, plant, and equipment in the provision of services.

CAPITAL EXPENDITURE - Expenditure on acquisition of a non-current asset or expenditure that adds to and not merely maintains the value of an existing asset.

CAPITAL FINANCING - This describes the various sources of money used to pay for capital expenditure. Capital expenditure can be funded from external sources, such as borrowing, capital grants and by contributions from the internal sources, such as capital receipts and reserves.

1

CAPITAL RECEIPT - A capital receipt is the income that results from the sale of land, buildings and other capital assets. A specified portion of this may be used to fund new capital expenditure. The balance must be set-aside and may only be used for paying off debt, not for funding new revenue services.

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 shortterm, highly liquid investments that are readily convertible to cash, for example bank call accounts.

CODE - The Code of Practice on Local Authority Accounting in the United Kingdom 2018/19.

COLLECTION FUND – A fund operated by the billing authority into which all receipts of Council Tax and National Non-Domestic Rates are paid. Payments are made from the fund to support the Council’s general fund services and to the precepting authorities and the NNDR pool. The fund must be maintained separately from the Council’s General Fund.

COMMUNITY ASSETS - Assets that the Council intends to hold in perpetuity that have no determinable useful life and that may have restrictions on their disposal, such as parks and historic buildings.

COMPRESHENSIVE INCOME AND EXPENDITURE ACCOUNT – A statement which details the

total income received and the expenditure incurred by the Council during a year in line with IFRS reporting as required by the Code.

CONTINGENT ASSET - A possible asset that arises from past events and whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Council.

CONTINGENT LIABILITIES - A contingent liability is either:

or

COUNCIL TAX - A system of local taxation, which is set by both the billing and precepting authorities at a level determined by the revenue expenditure requirement for each authority, divided by the Council Tax Base for its area.

COUNCIL TAX BASE - An amount calculated by the billing authority, by applying the band proportions to the total properties in each band to ascertain the number of band D equivalent properties in the authority’s area. The tax base is also used by the precepting and some levying bodies in determining their charge to the area.

CREDITORS - Amounts of money owed by the Council for goods or services received.

CURRENT ASSETS - Items that can be readily converted into cash.

CURRENT LIABILITIES - Items that are due to be paid immediately or in the short term.

DEBTORS - Amounts of money owed to the Council for goods or services provided.

DEDICATED SCHOOLS GRANT (DSG) - A ring-fenced grant from the Department for Education paid to Local Education Authorities for the Education of Children and Young Adults up to the age of 25.

DEPRECIATION - A provision made in the accounts to reflect the cost of consuming assets during the year, e.g. a vehicle purchased for £30,000 with a life of five years would depreciate on a straight-line basis at the rate of £6,000 per annum. Depreciation forms part of the ‘capital charges’ made to service revenue accounts and is covered by International Accounting Standard (IAS) 16.

2

DIRECT REVENUE CONTRIBUTIONS - Funding of capital expenditure directly from revenue budgets.

EARMARKED RESERVES - Amounts set aside for a specific purpose to meet future commitments or potential liabilities, for which it is not appropriate to establish a provision.

EXIT PACKAGES - The cost to the Council of early termination of staff employment before normal retirement age.

EVENTS AFTER THE BALANCE SHEET DATE (POST BALANCE SHEET EVENTS ) - Events after the Balance Sheet date are those events, favourable or unfavourable, that occur between the Balance Sheet date and the date when the Statement of Accounts is authorised for issue.

EXTERNAL AUDITOR - The auditor appointed by the Public Sector Audit Appointments (PSAA) to carry out an audit of the Council’s accounts. The current auditor is Grant Thornton.

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 motive in their negotiations other than to secure a fair price.

FINANCE LEASE - A contractual agreement for the use of an asset, where in substance the risks and rewards associated with ownership reside with the user of the asset (lessee) rather than the owner (lessor).

FINANCIAL YEAR - The local authority financial year starts on 1 April and ends on the following 31 March.

GENERAL FUND - This is the main revenue account of the Council. The fund includes the cost of all services provided which are paid from Government grants, generated income, NNDR retention and the City Council’s share of Council Tax. It excludes the Housing Revenue Account. By law, it includes the cost of services provided by other bodies who charge a levy to the Council.

GOVERNMENT GRANTS - Grants made by the Government towards either revenue or capital expenditure to help with the cost of providing services and capital projects. Some of these grants have restrictions on how they may be used whilst others are general purpose.

GROUP ACCOUNTS – Where a Council has a material interest in another organisation (e.g. a subsidiary organisation) group accounts must be produced. These accounts report the financial position of the Council and all organisations in which it has an interest.

HERITAGE ASSET - Assets held and maintained principally for their contribution to knowledge and culture. Examples of Heritage Assets are historical buildings, civic regalia and museum and gallery collections.

HOUSING REVENUE ACCOUNT (HRA) - The HRA includes expenditure and income arising from the provision of rented dwellings. It is, in effect, a landlord account. Statute provides for this account to be separate from the General Fund and any surplus or deficit must be retained within the HRA.

IMPAIRMENT - This is where the value of an asset falls below the carrying value in the accounts and so to reflect the commercial reality of the situation a charge is made in the running costs.

INFRASTRUCTURE ASSETS – Non-current assets that are unable to be readily disposed of, the expenditure on which is recoverable only by continued use of the asset created. Examples are highways and footpaths.

INTANGIBLE ASSETS - Assets which do not have a physical form but provide an economic benefit for a period of more than one year for example software licences.

INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) – International Financial

Reporting Standards (IFRS) are a set of accounting standards developed by an independent, not-for-profit organisation called the International Accounting Standards Board (IASB)

3

LEASING - Method of financing the acquisition of capital assets, usually in the form of operating or financing leases.

LIABILITIES - Amounts the Council either owes or anticipates owing to others, whether they are due for immediate payment or not.

MAJOR REPAIRS RESERVE (MRR) - This reserve is for capital expenditure on HRA assets.

MINIMUM REVENUE PROVISION (MRP) - A statutory amount, that must be charged to revenue, to provide for the redemption of debt.

MOVEMENT IN RESERVES STATEMENT – This financial statement presents the movement in usable and unusable reserves (the Council’s total reserve balances).

NATIONAL NON-DOMESTIC RATE (NNDR) – More commonly known as ‘business rates’, these are collected by billing authorities from all non-residential buildings. Since 1 April 1990 the poundage level has been set by the Treasury. Amounts payable are based on rateable values multiplied by this poundage level.

NET BOOK VALUE - The amount at which fixed assets are included in the balance sheet, i.e. their historical cost or current value, less the cumulative amounts provided for depreciation.

NON-CURRENT ASSETS - Assets which yield a benefit to the Council for a period of more than one year.

NON-OPERATIONAL ASSETS - Fixed assets held by a Council, but not directly occupied, used, or consumed in the delivery of services; for example, investment properties and assets surplus to requirements held pending sale or redevelopment.

OPERATING LEASE - This is a lease where the effective ownership of the asset remains with the lessor.

OPERATIONAL ASSETS - Fixed assets held and occupied, used, or consumed by the Council in the direct delivery of those services for which it has either a statutory or a discretionary responsibility.

OUTTURN - This is the actual level of expenditure and income for the financial year.

PENSION FUNDS - For the Local Government Pension Scheme, the funds that invest employers’ and employees’ pension contributions to provide pensions for employees on their retirement and pensions for employees’ dependants in the event of death of an employee.

PENSION STRAIN - The cost to the Council of reimbursing the Pension Fund should it agree to employees aged 55 and over drawing their pension before normal retirement age.

PRECEPT - This is the method by which a precepting authority (Avon and Somerset Police & Crime Commissioner, Avon Fire Authority) obtains income from the billing authority to cover its net expenditure. This is calculated after deducting its own Revenue Support Grant. The precept levied by the precepting authority is incorporated within the Council Tax charge. The Council pays the amount demanded over an agreed time scale.

PRIOR YEAR ADJUSTMENT - A material adjustment applicable to prior years arising from changes in accounting policies or from the correction of fundamental errors.

PRIVATE FINANCE INITIATIVE (PFI) - PFI started in 1997/98 and offers a form of Public-Private Partnership in which local authorities do not buy assets but rather pay for the use of assets held by the private sector.

PROPERTY, PLANT AND EQUIPMENT (PPE) - Covers all tangible (physical) assets used in the delivery of services, for rental to others, or for administrative purposes, that are used for more than one year.

4

PROVISIONS - Amounts set aside to meet liabilities or losses which are likely or certain to be incurred but where the amount due or the timing of the payment remains uncertain .

PRUDENTIAL CODE - The Prudential Code frees authorities to set their own borrowing limits having regard to affordability. To demonstrate this has been done, and enable adherence to be monitored, authorities are required to adopt a number of appropriate ‘Prudential Indicators’.

PUBLIC WORKS LOAN BOARD (PWLB) - A body, part of the Debt Management Office (a government agency) which lends money to public bodies for capital purposes. At present nearly all borrowers are local authorities. Monies are drawn from the national Loans Fund and rates of interest are determined by the Treasury.

RATEABLE VALUE - The Valuation Office Agency (part of HM Revenue and Customs) assesses the rateable value of nondomestic properties. Business rate bills are set by multiplying the rateable value by the year’s NNDR poundage (which is set by the Government). Domestic properties no longer have rateable values; instead they are assigned to one of the eight council tax valuation bands.

RELATED PARTIES - Two or more parties are related parties when at any time during the financial period:

RESERVES - An amount set aside for a specific purpose in one financial year and carried forward to meet expenditure in future years. A distinction is drawn between reserves and provisions (see above), which are set up to meet known liabilities.

REVALUATION - Recognises increases or decreases in the value of non-current assets that are not matched by expenditure on the asset; gains or losses are accounted for through the revaluation reserve.

REVENUE EXPENDITURE – The regular day to day running costs of items including salaries and wages and other running costs incurred to provide services.

REVENUE EXPENDITURE FUNDED FROM CAPITAL UNDER STATUTE (REFFCUS) -

Expenditure which is legitimately financed from capital resources, but which does not result in, or remain matched with tangible assets.

SURPLUS ASSETS - Assets not being used in the delivery of services that do not qualify as being ‘held for sale’ under accounting guidance.

SOFT LOANS - Funds received and advanced at less than market rates.

UNSUPPORTED BORROWING - Local authorities can set their own borrowing levels based upon their capital need and their ability to pay for the borrowing, costs are not supported by the Government so services need to ensure they can fund the repayment costs. The borrowing may also be referred to as Prudential Borrowing.

USABLE CAPITAL RECEIPTS - This represents the amount of capital receipts available to finance capital expenditure in future years, or to provide for the repayment of debt.

5

Statement of Accounts Bristol City Council - For the Year Ended 31 March 2021

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Introduction
An introduction to the 2020/21 statement
of accounts by the deputy mayor and
portfolio holder for finance, governance and
performance, Councillor Craig Cheney.
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The 2020/21 financial year was another challenging year for local government finances with the COVID-19 pandemic casting even more uncertainty, both on the future economic outlook nationally and locally, and the funding for public services.

Despite the funding pressures and financial impact of COVID-19 we have made strong progress in our key priorities of making Bristol a more inclusive city where no one is left behind. During the year we invested over £1bn providing services for our city in delivery of our commitments within our Corporate Strategy and aligned to the One City Plan for Bristol.

Highlights of our achievements over the last year include:

6

Statement of Accounts Bristol City Council - For the Year Ended 31 March 2021

We will continue to be committed to our determination to provide the best and most cost-effective services for our residents in the face of these ongoing uncertainties.

I would like to take this opportunity to thank all colleagues across the Council for their enormous effort throughout the year to deliver services within the difficult financial constraints, provide value for money for the taxpayer and focus on efforts to support residents through the immediate and longer-term impacts of the coronavirus pandemic.

We are focussed on providing transparency for residents to judge whether tax-payer money has been spent properly and be assured from our performance and improvement programmes that we are in a better place to tackle the financial and other challenges ahead.

Councillor Craig Cheney

Deputy Mayor – Finance, Governance, Property and Culture

7

Narrative Report ¢5.

Statement of Accounts Bristol City Council - For the Year Ended 31 March 2021

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Background
Bristol is the largest city in the south
west of England, covering an area of 110
square kilometres. It is the 10th largest
city in the United Kingdom and one of
the 11 Core Cities. It has a population of
around 463,000 living in approximately
203,500 dwellings.
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Bristol is part of the West of England Combined Authority and is well connected by road, rail, sea and air. It has one of the most vibrant and successful economies in the UK and from Brunel to Banksy has a history of achieving great things. Within the West of England, Bristol is the primary economic centre with nearly half of all the jobs (44.8%) and enterprises (40.1%).

The city has won a number of awards in recent years; the European prize in 2019 for its One City approach to join up local governance, the UNESCO City of Film in 2017 as well as England’s first UNESCO Learning City, UK’s smartest city and European City of Sport in 2017.

Despite the devastating effect of the pandemic on the culture and creative sector, Bristol has used its creative talent to adapt wherever possible. The successful Wildscreen Festival, the world’s largest wildlife film and TV festival and Encounters film festival went virtual, attracting speakers such as Sir David Attenborough and Greta Thunberg and launching the Lockdown Depict short series of films.

Bristol is a UNESCO City of Film and has led the design and development of the multilingual Cities of Film website which launched in July 2020.

COVID-19 Pandemic Impact and Response

The last year (2020/2021) has been one of the toughest with COVID-19 and the health and wellbeing of Bristol residents has been adversely impacted by the pandemic. The pandemic has highlighted long-standing health, social and economic inequalities, and the impact on the prospects of its residents. The full extent of the impact and the effect it has had on health inequalities across the city is not yet clear and work will need to take place in the future to fully understand the impacts.

While the diverse and high skilled economy of the city has provided some protection for key industries and employment, the full impact on the economy, businesses, and the labour market, is still unknown.

The challenges of the pandemic continue but it is important to reflect and recognise the many examples of good work that have taken place:

9

Statement of Accounts Bristol City Council - For the Year Ended 31 March 2021

has accelerated city-wide ambitions to end rough sleeping in the city and our drive to build sustainable and affordable housing.

A further £1.2m has been added to the Discretionary Housing Payment budget to reduce the risk of homelessness and support the maintenance of tenancies during the year. To support the “move on” fund, an additional £420k was provided to support those who had been living in hostels and hotels during the pandemic whose time there has come to an end, to alleviate possibility of street homelessness. £235k has been provided to assist those with no recourse to public funds, so refugees, those who are without settled immigration status.

Additionally, there has been support in every school holiday (including half term) since October 2020 for every child aged 2 or over that is either in receipt of free school meals or the pupil premium. This was at a cost of around £1.2m.

our most deprived communities. £40k was awarded to Bristol’s care leavers in December 2020 to give them some help with their food and heating costs. £608k was awarded to Bristol’s 15 foodbanks and Voluntary organisations that have supported those who are vulnerable during the pandemic.

In October, the initial priorities for recovery and renewal in Bristol’s Economic Recovery and Renewal Strategy. This strategy will focus on reducing poverty and inequality; increasing the city’s resilience and environmental sustainability; and enhancing the economic and social wellbeing of every community as the city recovers.

Despite these challenges Bristol is still a city of hope and ambition.

An award of £282k was made to 20 community organisations across the city in January 2021 to allow funds to go directly to

10

Statement of Accounts Bristol City Council - For the Year Ended 31 March 2021

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Our Services 2O2O/21
The following core services are provided by the council:
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Core Services:

Adults, Children, Education and Public Health:

Growth & Regeneration:

with additional and special educational needs and disabilities (SEND). The grant can only be used to meet expenditure properly included in the schools budget.

Public Health:

We work with local partners (including charities, businesses and other public services providers like the police and the NHS) and residents to determine and deliver local priorities. Typically councils like us provide over 700 services, either directly ourselves or by commissioning services from outside organisations.

Resources:

Provides internal support services including:

Ring-fenced Accounts:

Housing Revenue Account:

Our Leadership and Workforce:

Our 70 elected councillors represent the people of Bristol and set the overall policy of the council.

Dedicated Schools Grant including SEND:

11

Statement of Accounts Bristol City Council - For the Year Ended 31 March 2021

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Our Performance
All statistics on the next two pages are the most up
to date statistics available at the time of publication
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Key facts: Communites & living 80% of residents 71% felt that are satisfied with their people from different local area as a place to backgrounds get on well live. (2020 Bristol together in their local area. Quality of Life survey) ( 79% 2019/20) 70.5% of residents think air quality and traffic pollution is a problem locally (2020 Quality of Life Survey)

19.7% of residents reported below average levels of mental wellbeing (2020 Quality of Life Survey).

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Key facts:
1,350
Housing
new homes built in
Bristol in 2019/20
( 1,799 2018/19)
Nearly 3,300
student units have
been completed
between 2006
Over
£ afforable homes built in 3,500 and 2020
homes Bristol since 2006
543
Prevented
1,512
households from
becoming homeless
during 2020/21
50 people
people housed in
emergency COVID-19
accommodation had
subsequently been
resettled as at
31 Dec 2020.
night in Bristol compared with 98 in November 2019.
(National annual count - November 2020)
sleeping rough in a single
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Key facts:
Adult Social Care
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4,090
adults received a community-based
social care support during 2020/21
a further
1,840
care home places were funded
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12

Statement of Accounts Bristol City Council - For the Year Ended 31 March 2021

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Key facts:
Culture & Creativity
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33% participate
in cultural activities at
least once a month
( 43% 2019/20)
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Key facts:
Education
78.9% [rated as Good or Better for ]
overall effectiveness
OFSTED (March 2021)
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Key facts:
Transport and sustainability
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Number of people
who ride a bike
at least
weekly 28%
( 27% 2019/20)
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87
bus journeys
per head of population in 2019/20
(from 68.2 in 2013/14)
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45% of all
household waste was
sent for reuse, recycling
129kg of waste per and composting in 2020/21
household was ( 37.4% 2009/10) CO2
landfilled in 2019/20
Citywide CO2 emissions
have decreased by
40%
compared with 230kg in 2016/17
(2005-2018)
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Key facts: Economy & employment

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254,500 working age 75.4%
residents were in Average earnings
employment in 77.1%
December 2020.
£31,900 £30,500
Bristol UK
( £30,400 in 2019)
B
S
T R
I T
EA IT
R
A
O
GR IN
B L
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Statement of Accounts Bristol City Council - For the Year Ended 31 March 2021

----- Start of picture text -----
Financial Performance
The Council is a large and diverse organisation and our
accounts are by their nature technical and complex.
This section of the report provides an explanatory
narrative to the key elements of the statements and
sections in the accounts and provides a summary of
our financial performance for 2020/21.
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Revenue Financial Summary 2020/21

However, as a result of the positive outturn position, our finances are in a better place to meet the ongoing Covid-19 challenges over the medium term, ensure the continued delivery of organisational priorities, as well as increasing financial resilience in 2021/22 and beyond. Aligned with the above retention of an appropriate level of general reserves will be essential to mitigate risk, including future funding uncertainties and will be utilised as a key indicator of sound financial governance.

Revenue expenditure covers the cost of the Council’s day to day operations and contributions to and from reserves.

The net General Fund outturn is £450.6m and in the context of the original budget/funding set in February 2020 (£395.7m) presents an in-year overspend of £54m. This takes into account the gross Covid-19 pressures of £74.7m and a surplus on non-Covid activities of £19.7m at year-end.

The financial impact of the Covid-19 pandemic on the Council’s General Fund budget in 2020/21 (i.e. excluding Housing Revenue Account, DSG and collection of Council tax or Business Rates income) is £74.7m for the year. This was made up of £50.6m additional expenditure and the inability to deliver planned savings, as well as £24.1m reduction in income from sales, fees, and charges. Government coronavirus funding to Council’s was reactive, fragmented, and piecemeal, with some elements being allocated towards the end of the financial year and ringfenced to specific People (inc DSG) activity. As a result, carry forwards of £14.4m of Growth & Regeneration Covid-19 grants and underspends in the Council’s own funds Corporate Budgets of £8.1m previously earmarked to bridge the Covid-19 funding gap, were necessary.

The gross cost of services during the year was £1.206bn (£1.137bn 2019/20). This includes both General Fund services and the Housing Revenue Account (HRA). After deducting specific grants and income from fees and charges, the net cost of services was £432.5m (£408.5m in 2019/20). The breakdown of net expenditure between the different service areas is shown in the following chart.

Directorate Net Expenditure (£m)

People (inc DSG) 207.3 207.3
Resources
Growth & Regeneration		 80.3 152.9
HRA -18.8
Corporate Budgets 9
-50 0 50 100 150 200 250
£m

The surplus on the HRA is transferred to reserves for future re-investment in the HRA

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Statement of Accounts Bristol City Council - For the Year Ended 31 March 2021

Financial erformance p

Sources of Funding

During 2020/21 the Council continued to pilot 100% business rates retention. Pilot authorities retain 100% of the growth in locally raised business rates. Of this we share 5% with the West of England Combined Authority and 1% with Avon Fire Authority. In return the Council forgoes Revenue Support Grant (RSG) and several other funding streams. Each pilot authority’s tariffs and top-ups calculated by central government are adjusted to ensure the change is cost neutral and that no individual pilot authority loses out because of these changes.

The Council collects £134.7m of business rates of which £117.0m (net of reliefs) is retained in year by the Council. This is also net of the tariff of £84.6m which the Council returns to central government and £xxm transferred to the Avon Fire Authority and the West of England Combined Authority.

The Council also collects £266.4m of Council Tax (on behalf of Avon and Somerset Police and Crime Commissioner, Avon Fire Authority, and itself), of which £226.1m is retained in year by the Council.

Reserves

Useable reserves have increased overall by £153m. This is largely because of Covid related funding received in 2020/21 but required for use in 2021/22. £83m of this is grant for the business rates relief for retail hospitality and leisure which will be directly required to offset losses in the collection fund carried forward into 2021/22. The accounting arrangements for business rates and council tax mean that the deficits on the Collection Fund in 2020/21 are charged to the General Fund in future years. Further Covid funding of £26m, received in 2020/21 has also been carried forward to manage the pandemic over the medium term and meet future commitments.

Other significant contributions to reserves during 2020/21 include

During the year the Council received £512.6m of Government grant income which was used to fund revenue expenditure. This is an increase of £91m from 2019/20. This increase predominantly relates to Covid-19 grant income. Of these grants £89.4m were specifically related to business rates reliefs offered during Covid.

The Council generates £908m of fees, charges and grants used to deliver services and keep council tax down.

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Statement of Accounts Bristol City Council - For the Year Ended 31 March 2021

Financial erformance p

Dedicated Schools Grant

At the end of 2020/21 the deficit on the Dedicated Schools Grant (DSG) adjustment account has increased to over £10m, this includes the additional cost of the impact of COVID-19 on budgets. Whilst there are some small variations in each of the blocks, the deficit is mainly as the result of overspends in the High Needs Block with the key driver attributed to Top-ups in Mainstream schools, Special schools, Other Local Authorities, Alternative Learning Provision, and Pupil Referral Units. An increase of 324 pupils (12.9% increase) attracting top-up payments at the end of March 2021 when compared to the same period last year, which accounts for £7.44m of this overspend.

The key priority for the Education Service remains addressing the significant weaknesses identified in the 2019 SEND (special educational needs and disabilities) inspection. The delivery of key milestones particularly in relation to statutory plans, including Educational Health and Care (EHC) Plans, has created significant pressures in the SEND and High Needs Block of the Dedicated Schools Grant, within a relatively short period of time. There is a risk that the deficit will continue to rise as more children and young people are newly assessed as in need support in 2021/22.

This is a national issue and we will continue to press for the SEND review to move forward to address the funding gaps in this area which are experienced across the country. In addition to making representation to government departments the Council’s actions include:

Council’s with an overall deficit on their DSG account at the end of a financial year must be able to present a plan to the DfE for managing their future DSG spend. The Plan is intended to help local authorities to develop evidence-based and strategic plans covering the provision available for children and young people with special educational needs and disabilities. The ESFA have designed a template with a focus on High Needs, to help local authorities manage their DSG and Bristol is using the template.

The first do nothing baseline iteration of the DSG Management Plan for Bristol, has been produced and further work is underway to account for any planned interventions which will have a mitigating impact, while delivering much needed improvements in the system. It is unlikely that the combined impact of planned interventions and improvements will address the deficit in full and, set against the current trajectory of demand and increasing costs, the position remains challenging.

The ESFA recognise that the management of DSG balances, both bringing spend in line with income and repaying deficits, will take time for some Local authorities.

Schools Reserves – Individual Schools Balances at the end of March 2021, overall school’s revenue balances have decreased by £2.217m from £8.028m to £5.813m. Conversely, because of the pandemic capital balances have increased by £0.395m to £3.597m.

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Statement of Accounts Bristol City Council - For the Year Ended 31 March 2021

Financial erformance p

Capital Investment

Capital expenditure forms a large part of our spending. The Council has an ambitious capital programme to deliver projects that are fundamental to the Council achieving its aspiration to re-shape how we deliver our services as well as helping to unlock revenue savings and efficiencies to secure our ongoing financial stability. Overall, the Capital Programme for 2020/21 was originally set at £295.1m. Capital spending (including revenue expenditure allowed to be funded by capital) during the year totalled £165.6m. An analysis of capital investment by directorate and sources of capital funding are shown in the charts below. The Capital Programme was financed from a combination of borrowing (£31.5m) and from grants, contributions, and reserves (£134.1m).

The major areas of investment have included:

The Council holds £3.386bn of fixed assets, comprising £2.795bn of operational assets for delivering services, £207m of Heritage Assets for cultural benefit and £384m of nonoperational assets.

----- Start of picture text -----
Capital Investment
Housing Revenue People
Account £31.8m
£39.1m
Resources
£15.9m Growth &
Regeneration
£78.8m
----- End of picture text -----

Capital Financing

----- Start of picture text -----
Revenue and Balances
Prudential
£26.2m
Borrowing
£31.5m
Capital Receipts
£35.1m
Capital Grants
£72.8m
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17

Statement of Accounts Bristol City Council - For the Year Ended 31 March 2021

Financial erformance p

Service Investments

The Council has investments in subsidiary companies and other service investments. These investments are primarily for outcomes and benefits for delivered rather than for yield. During the year the Council proceeded with disposal of its one of these companies; Bristol Energy and that process is still in progress. The accounts reflect the residual liabilities the Council has in winding up that company. The investment in Bristol Energy is fully impaired.

Other cash investments as at the end of the financial year include loans to Bristol Waste Company and Goram Homes as well as investment in City Funds, Bristol Credit Union, and Avon Community Bank.

Housing Revenue Account (HRA)

The HRA Income and Expenditure Statement sets out the financial position for the year, before taking account of the statutory adjustments required to be made to the accounts. The Statement of Movement on the HRA Balance reflects these statutory adjustments and shows how the financial performance for the year has impacted on HRA reserves.

Treasury Management

The 2020–2025 Treasury Strategy identified a medium-term net borrowing requirement of £215m to support the existing and future Capital Programme. The Council’s strategy is to defer borrowing while it has significant levels of treasury cash balances available for investment (£207m at March 2021). Deferring borrowing will reduce the “net” revenue interest cost of the Authority as well as reducing the Councils exposure to counter party risk for its investments. The Council recognises that utilising investments in lieu of borrowing has a finite duration and that future borrowing will be required to support capital expenditure.

Net debt (borrowing less investment) was £227m at the end of the year. The average level of treasury funds available for investment purposes during the year was £194m. The return for the period was 0.30% compared to the recognised benchmark of 0.07% (7-day London Inter Bank Bid (Libid) average for period).

The Council is responsible for managing cashflows with an annual churn exceeding £1.5bn.

The Council has complied with all treasury management legislative and regulatory requirements during the period and all transactions were in accordance with the approved Treasury Management Strategy.

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Statement of Accounts Bristol City Council - For the Year Ended 31 March 2021

Pensions

Many pension schemes will be facing significant challenges considering the COVID-19 pandemic and will have seen a worsening of the funding position because of the market instability and valuations taking place in 2020. This has presented a significant funding challenge in terms of the long-term objective to lower costs and reduce the pay back of deficits.

The City Council is a member of the Avon Pension Fund. The pension liability as at 31 March 2021 is £1.128bn. This represents the value of what the Council owes across future years offset by the value of assets invested in the pension fund. The deficit on the Pension Fund has increased by £134m over the last year, this was mainly due to a significant drop in yields from corporate bonds due to a combination of lower interest rates and concerns around financial risk during the pandemic. These Markets are continuing to improve but remain lower than at the end of 2019/20.

The current funding level is an estimated 97%. Employers are paying additional contributions over a period of 14 years to meet the shortfall. The pension fund is revalued every three years. The most recent valuation, effective 1 April 2020, set contribution rates for three years, with the next valuation due in 2022, any impact of the value of the deficit and changes in deficit repayment level or duration will be reflected from 1 April 2023. An interim valuation is being undertaken to give a better understanding of the risks of the deficit to help manage over the medium term.

Contingencies

The Council has set aside a provision of £25.5m within the collection fund for any business rates appeals against rateable values in future years. The magnitude of the provision reflects the on-going fact that the Council, as a business rates retention pilot, has a significantly greater exposure to the risk of business rates appeals. The reduction of £2m since 2019/20, recognises that the number of outstanding appeals against the 2010 list is falling. The annual contribution is in line with government recommendations. There were approximately 194 appeals outstanding as at 31 March 2021.

Budget for 2021/22 and Medium Term Financial Plan (MTFP)

The Council is required to set an annual balanced budget which presents how its financial resources, or ‘revenue’, are to be allocated and used. The Council’s revenue spending plans explains what we intend to spend on statutory services, as well as local key priorities and objectives. The budget sets out the financial challenges Bristol City Council faces following the coronavirus pandemic and focusses on recovery, and how our communities will recover from the pandemic. In February 2021 the Council agreed a balanced budget for 2021/22. This included a net revenue budget for 2021/22 of £424.1 m but also a five-year capital programme totalling £890.1m for both General fund and Housing Revenue Account (HRA).

The uncertainty regarding future funding for local authorities means a robust and evidenced assessment of financial governance and future resilience is critical and in the consideration of the robustness of any estimates.

When this is combined with current unprecedented economic and financial uncertainty there will undoubtedly be risks inherent in the budget process and it is important that these are identified, mitigated and managed effectively. These are outlined in depth in the

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Statement of Accounts Bristol City Council - For the Year Ended 31 March 2021

MTFP but some of the key financial planning risks that may affect the projections over the medium term and delivery of a balanced budget include uncertainty in relation to the prolonged pandemic, its severity and the impact on economic recovery, ongoing demand and cost of social care for both Adults and Children, the achievement of the Council’s current and future year’s budget savings in both their timing and income target and the potential risk of overspends on major capital projects.

Where significant budget risks have been identified, suitable proposals are being put in place to mitigate against these risks where possible. The Council also holds contingencies and General unallocated reserves. The fact that the Council holds other reserves earmarked for alternative purposes that could be called on if necessary, means the overall the budget position of the Council can be sustained within the overall level of resources available.

Financial Health Indicators

It is essential to ensure the Council manages its financial resilience to meet unforeseen demands on services. Below is a selection of key financial resilience indicators as determined by CIPFA. The highest area of risk to the financial resilience of the Council compared to other similar authorities is the proportion of budget spent on social care services as this is seen as a very inflexible cost which is difficult to reduce over short term and impacts on the Council’s ability to respond with agility to changing demands. Close monitoring is required of the Adult Social Care transformation programme to ensure the mitigations and / or planned efficiencies are being realised. The Council will be required to take into account its resilience when making budget, borrowing and taxation decisions.

Indicators of Financial Stress - Results Breakdown

Unallocated Reserves
Earmarked Reserves
Change in Unallocated Reserves
Change in Earmarked Reserves
Change in HRA Reserves
Children Social Care Ratio
Adult Social Care Ratio
Higher Risk
Lower Risk

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Statement of Accounts Bristol City Council - For the Year Ended 31 March 2021

The Statement of Accounts

The Statement of Accounts is set out in the accompanying document; they consist of the following statements that are required to be prepared under the Code of Practice.

The Core Statements are:

The Comprehensive Income and Expenditure Statement – this records all the Council’s income and expenditure for the year. The top half of the statement provides an analysis by service area. The bottom half of the statement deals with corporate transactions and funding. Expenditure represents a combination of:

The Movement in Reserves Statement is a summary of the changes to our reserves over the course of the year. Reserves are divided into “useable”, which can be invested in capital projects or service improvements, and “unusable” which must be set aside for specific purposes. We continually review the money we have in reserves for specific purposes to make sure they are at the right levels, and that our reserves continue to meet our needs.

The Balance Sheet is a ‘snap shot’ of the council’s assets, liabilities, cash balances and reserves at the year-end date.

The Cash Flow Statement shows the reasons for changes in the Council’s cash balances during the year, and whether that change is due to operating activities, new investment, or financing activities (such as repayment of borrowing and other long term liabilities).

of the Statement of Accounts fully incorporate the results of Bristol Holding Limited, Bristol Waste Company Limited, Bristol Energy Limited and Goram Homes Limited. Full details of the relationship can be found in the Group Accounts section of the Statement.

Other entities which fall within the group boundary, but which are not consolidated into the Group Accounts as they are not considered to be material, are detailed within the Related Parties note within the Statement of Accounts.

The Supplementary Financial Statements are:

The Housing Revenue Account – this separately identifies the Council’s statutory landlord function as a provider of social housing under the Local Government and Housing Act 1989.

The Collection Fund summarises the collection of Council tax and business rates, and the redistribution of some of that money to Avon Fire Authority, the Avon and Somerset Police and Crime Commissioner and central government.

The Notes to these financial statements provide more detail about the Council’s accounting policies and individual transactions. Our Annual Governance Statement sets out the governance structure of the Council. It summarises the outcome of our review of the Governance Framework that has been in place during 2020/21 and our system of internal control, which is a critical component of our overall governance arrangements.

Denise Murray

Director of Finance (Section 151 Officer)

Group Accounts - the Council is required to produce Group Accounts alongside its own financial statements where it has material interests in subsidiaries, associates and/or joint ventures. The Group Accounts included as part

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Statement of Responsibilities

The Authority’s Responsibilities

The Council is required to:

The Director of Finance Responsibilities

The Director of Finance 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 of Accounts, the Director of Finance has:

Certificate of the Director of Finance

I hereby certify that this Statement of Accounts, provides a true and fair view of the financial position, financial performance and cash flows of Bristol City Council for the period ending 31 March 2021.

Denise Murray

Denise Murray Director of Finance (Section 151 Officer) 30 July 2021

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Independent Auditorfs Report (To Follow) 2_4

ANNUAL GOVERNANCE STATEMENT 2020/21

Demonstrating the importance of effective governance in local service delivery and public accountability.

24

1. Introduction

2. Conclusions and Statement of Commitment

25

compliance, and heightened risk of fraud. Several responses, recovery and renewal strategies and policies where implemented in 2020/21 such as business support policies, the Local Outbreak Management Plan, the updated Bristol City Council Business Plan 2020/21 and the One City: Economic Recovery and Renewal Strategy.

Signed: Signed: Marvin Rees - Elected Mayor of Bristol Mike Jackson – Head of Paid Service Signed: Signed: Denise Murray – Chief Finance Officer (s151 Tim O’Gara – Monitoring Officer Officer)

3. Governance Framework

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Committees and Boards:

• Scrutiny
Commissions
Overview and		 Regulatory
Committees:
•
Development		 Other Committees:
• Audit (including a		 Partnership Boards:
• One City
• Scrutiny
Management Board
Communities		 Control
•
Licensing
•
Public Rights of		 Values and Ethics sub
committee)
• HR Committee		 • Bristol Homes
• Health & Wellbeing
• Learning City
• Resources Way and Green • Children’s and Adult’s
• People) Space Safeguarding
• Growth &
Regeneration		 •
Public Safety &
Protection

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Bristol Heat Networks. Part of the group’s governance arrangement includes a shareholder advisory group that maintains oversight of performance of the companies and external and internal audit assurance arrangements. Council has representation on company boards and an active Group Audit and Risk Committee is in place that oversees governance, risk management and internal control across the companies.

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Accountability within the Governance Framework
O&S Management Board; and
Audit Committee
Accountability
All
Mayor &
Councillors
Cabinet
Code of Corporate Governance (The Council’s commitment to good governance is based on “ Good Governance in Local Government: Framework
Policy Development
Mayor & Cabinet - providing strategic leadership; determining policy aims and objectives, resource allocation and prioritisation in line with strategic direction,
Legal and regulatory frameworks but not engaging directly in operational management of Council services
Policy Implementation
Senior Leadership Team - It is the duty of senior Officers to ensure that the policies of the Council are implemented
Legal & Democratic Corporate
Policies & Procedures Policies & Procedures
• The Constitution • Corporate Strategy
• Scheme of Delegation • Strategic Partnership
• Decision Pathway Protocols
• Shareholder Liaison • Quarterly
• Scrutiny Commissions Performance
incl. Call In / Reviews Monitoring
• Members Codes of • Management
Conduct Assurance
• Member Officer statements
Protocol • Corporate &
• Complaints reporting Directorate Risk
• Public Consultations Register
Financial Management HR
Framework Policies & Procedures
• Medium Term Financial • Employee Code of
Plan Conduct
• Capital Strategy • Equality & Diversity
• Annual Budget Setting • Whistleblowing Policy
• Budget Monitoring • Anti-Fraud, Bribery
Process and Corruption
• Statement of Accounts Strategy
• Treasury Management • Information Security
Strategy Policy
• Procurement Regulations • Pay Policy
• Compliance with CIPFA • My Performance
Guidelines Framework
• External Audit Letter • Declarations of
• Internal Audit Opinion Interest
Our
Citizens
Council Officers
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4. Principles of Governance – Assuring Compliance

Core Principle Governance in Action(2020/21)
A. Behaving with
integrity,
demonstrating
strong commitment
to ethical values and
respecting the rule
of law		 •The Council’s constitution sets out how the Council operates, how decisions
are made and the policies and procedures in place which provide a robust
framework for decision making. The Constitution is reviewed periodically with
Audit Committee approval of proposed updates in March 2021.
•The Monitoring Officer has oversight of decisions through the Decision
Pathway and the legal service is consulted on the legal implications of all
reports to ensure compliance with all relevant laws and regulations.
•The Council’s Corporate Strategy sets out the values and behaviours it
expects from its employees. Managers are required to review performance
against the values and behaviours as part of the individual performance
management framework.
•During 20/21 the Council updated its Equality and Inclusion Policy and
Strategy with unanimous Full Council approval, establishing new targets and
measures related to equality, diversity and inclusion practice. This is supported
by an Advancing Equality and Inclusion Action Plan agreed by Cabinet, with
progress monitored as part of a new internal governance structure for
equalities, led by a Strategic Group chaired by the Chief Executive. A
significant number of employees and managers have completed core equality
and inclusion learning programmes and a dedicated equality and inclusion
section is included in the corporate induction. Hiring managers have had
refresher recruitment and selection training, with a focus on unconscious bias
and trained diverse recruiters are now in place.
•Codes of conduct are in place for staff and Council Members which set out the
standards of conduct expected and require declarations of interests, gifts and
hospitality to be made. Minutes of meetings record declarations of interests by
Councillors. An overview of complaints received about Members conduct, and
action taken to resolve them, was provided to the Value and Ethics Sub-
committee in March 2021.
•Whistle-blowing arrangements were revised from April 2020 following previous
concerns that staff did not have confidence in them. New arrangements have
developed and successfully embedded throughout the year as confirmed by an
independent review of these arrangements which was reported to Audit
Committee in March 2021.
B. Ensuring openness
and comprehensive
stakeholder
engagement		 •Our Communications Strategy 2019/2023 sets out our ambitions to enable
strong communications within the council and form better relationships outside
of the Council with our partners and the communities we serve.
•Participative democracy was successfully trialled by way of Citizen’s
Assembly, seeking public views on key strategic issues arising from COVID-
19-19 and recovering from the pandemic.
•An updated Partnerships Policy and Toolkit was completed. Continued
internal communication to formally launch and embed these, including a
refresh of the Council’s register of partnerships is planned for Q1-Q2 21/22.
•Western Gateway: A Governance review has taken place, a Partnership Board
has been set upalongwithgovernance arrangements,and a secretariat

29

established. This has enabled the effective operation of the partnership, with
assurance provided by the Government's decision to invest a further £800k
supporting its development in 2021/22.
•The One City Approach and its associated governance framework has
included public, minuted meetings of its Thematic Boards, and has enabled
frequent informal engagement and alignment of city activity in responding to
the pandemic.
•A cross-party and multi-agency Local Engagement Board was established to
oversee public communications and engagement relating to the Local
Outbreak Management Plan for COVID-19.
•Whilst not in place for 2020/21, the Council has recognised the benefits of a
Consultation and Engagement Strategy which is a priority for development in
2021/22.
•Forward plans are published on a monthly basis for Mayoral and Cabinet
decisions.
C. Defining outcomes
in terms of
sustainable
economic, social
and environmental
benefits		 •The Corporate Strategy sets out our contribution to the City and sets out the
key priorities for 2018 – 2023. Annual Business Plans set out the most
important actions we need to take each year to achieve the Corporate
Strategy.
•During 2020/21 the Council updated its Business Plan in-year to account for
COVID-19 response and recovery, with outcomes and milestones tracked
through Executive Director Meetings.
•New city-wide strategies for tackling the Climate Emergency and Ecological
Emergency - co-produced in a One City Approach with partners - were
published.
•Re-certification of our Environmental Management systems (ISO 14001) was
achieved and a carbon disclosure project assessment concluded that our
plans to reduce Climate impacts are strategic,holistic ambitious but realistic.
D. Determining the
interventions
necessary to
optimise the
achievement of the
intended outcomes		 •Key interventions are determined through the annual Business Planning cycle
and its accompanying Performance Framework development, with assurance
provided through senior officer and political review and approval of all Service
Plans and Director Summaries, plus Corporate Leadership Board approval and
Cabinet noting of the final corporate Business Plan.
•During 2020/21 work has been undertaken to strengthen the Council’s
technological foundations for data analytics and insights, enabling more
powerful and insightful use of data and evidence to inform decision making
and help determine interventions. This is a developing area, with a pilot
complete in Children and Families Services and more planned. A Data,
Insights and Information strategy is planned for 2021/22.
•Issues have been identified through internal review by the Equality and
Inclusion team of Equalities Impact Assessments, with a refreshed system and
process devised and plans to retrain officers undertaking the assessments.
The process has been approved, launched and will now following training of
officers need to be more fully embedded within Decision Pathway
considerations in 2021/22.
•External assurance on Equality and Inclusion interventions and progress was
sought by participation in the Local Government Association’s Equality
Framework for Local Governmentpeer challenge in Q4 2020/21.
E. Developing capacity
including the
capability of its
leadership and the
individuals within it		 •Work was completed to refresh the Workforce Strategy, and this is now in
place for 2021/22. Actions are included in respect of; equality, diversity and
inclusion gaps that will be addressed, the future supply of skills and
professions mapped against demand, areas where job or service redesign is
needed to help us deliver our priorities, the type and level of skills needed for
the future,how we attract,retain and developtalent within the organisation.

30

•The focus during 2020/21 has been on the response to the COVID-19
pandemic, redirecting our resources and reprioritising our work to ensure we
keep our staff and the people of Bristol safe whilst continuing to keep essential
day to day services running.
•A strategic Client to support the Council’s shareholder executive and
governance arrangements around the council’s companies has been created.
•A Strategic Partnering business model has been introduced to support capital
programme delivery.
•The Council has prepared a comprehensive Member Development Programme
in 2020/21 with a range of training and induction programmes for all councillors
which is being progressed following the May 2021 elections.
•The Leadership Framework has been used to support the recruitment and
selection of senior leadership roles, it’s also woven into performance review for
managers to helpthem reflect on their managementpractice.
F. Managing risk and
performance
through robust
internal control and
strong public
financial
management		 •An approved Performance Framework is in place, aligned to the approved
annual Business Plan (and onward to the Corporate Strategy). This is robustly
reported through management meetings including Executive Director Meetings
and Corporate Leadership Board, with reporting of key indicators on to
Cabinet. Accompanying Scrutiny of divisional level measures takes place via
Scrutiny Commissions, and of corporate measures via Overview and Scrutiny
Management Board. Accompanying Scrutiny of divisional level measures
takes place via Scrutiny Commissions, and of corporate measures via
Overview and Scrutiny Management Board.
•New procurement rules have been developed and launched in January 2021
with ongoing work to strengthen contract management arrangements.
•The financial approach of managing the pandemic is a one-off shock with a
medium-term impact and new funding and reserves managed accordingly.
Clear financial protocols and procedures were in place to ensure there was
consistency, transparency, and accountability in the use of public funds.
•All service, directorate and corporate risks are reviewed regularly in line with
the risk management policy. A new risk management system (Pentana Risk)
has been procured and is being implemented which will improve the
monitoring of progress being made in relation to timely delivery of key
mitigating actions
•The Council has updated relevant data protection policies and procedures and
to ensure on-going compliance, recommendations from a range of data
protection focussed internal audit work will be taken forward as part of GDPR
Phase II project in 2021/22 to enhance compliance with this principle.
G. Implementing good
practices in
transparency,
reporting and audit
to deliver effective
accountability		 •Processes were implemented to transparently account for additional
government funding received and emergency support being provided in
response to the pandemic. Internal Audit assurance work is underway to
confirm the effectiveness of those new processes
•Corrective action arising from the Value for Money reports by the External
Auditors has been acted upon and appropriate action is being taken to
implement recommendations.
•Automating management action tracking of agreed actions following internal
audit review has enabled high level focus to improve the extent to which
improvement actions are implemented.
•Root cause analysis of the Chief Internal Auditors previous ‘limited assurance’
opinions enabled management to recognise the need to prioritise resources
towards achieving the Council’s highest priorities whilst also ensuring there is
capacity to drive the enabling activity that will improve the Councils
governance,risk management and internal control arrangement,

31

5. Impact of COVID-19 on our Governance Arrangements

5.5 Other examples of changes to the governance arrangements included the following:

32

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6. Review of Effectiveness

First Line Assurances - Management Self Assurance is provided:

34

Second Line Assurances – Oversight and Monitoring Functions Assurance

35

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Third Line ‘Independent’ Assurance, External Inspection and Review Functions

37

had an 18 month timeframe to July 2021. Advisors from the Department for Education (DfE) and NHS England (NHSE) meet with leaders from the council and CCG every four months, to review progress made against the planned achievement milestones in the WsoA. During 2020/21 three of these monitoring meetings took place virtually in July, November, and March. At each meeting, it was concluded that progress had been good despite the challenges brought by COVID-19 and the advisors were satisfied with progress. The final monitoring meeting takes place on the 19[th] July. Good progress has been made against almost all the milestones. The four milestones remaining overdue in July are all underway with revised timelines agreed by the SEND Improvement Board. The SEND Partnership Group will co-produce the next iteration of the SEND action plan, which will continue to be monitored by the bi-monthly SEND Improvement Board. The window for re-inspection is likely to be October 2021 to March 2022.

7. Significant Governance Issues 2020/21

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----- Start of picture text -----
Item Issue Key Actions
1 COVID-19 Continue to implement Local Outbreak Management
The global outbreak of the COVID-19 Plan and associated governance structures, plus
virus had a material impact on the communication and engagement, including about
City and the Council’s services and vaccination.
its finances during 2020/21. The
impact and response were complex Action planning and tracking / assurance work against
as some services operated remotely, the Council’s share of the One City Economic Recovery
others were closed and new and Renewal Strategy, plus ongoing monitoring and
responsibilities such as testing were assurance of wider system activity via City Office and
introduced as a response to Council teams such as Economic Development.
community needs.
Revise the Council’s Corporate Strategy, Medium
The impact of the pandemic will be Term Financial Plan and Capital Strategy in concert, to
felt for many years and the recovery ensure resilience and that the impacts and recovery
period will be elongated. The actions are accounted for and part of mainstream
longevity and uncertainty of the ‘business as usual’ for the Council, including within its
pandemic will require flexible annual Business Planning process.
recovery approaches and medium to
long term resilience in the Council’s Continued operation of city-wide and regional
finances. governance structures to ensure coordinated response
and recovery, including One City Boards, City Leaders
group, Local Resilience Forum Strategic Recovery
Group, COVID-19 Health Protection Committee.
Maintain the iterative Avon and Somerset recovery
Equalities Impact Assessment which was coordinated
by Bristol City Council, using this amongst other key
data and evidence sources to inform activity.
Enact plans to support a safe return of people to a
more normal life, including high streets, transport,
hospitality settings and the general public realm.
As a partner in One City, contribute to the annual
revision of the One City Plan 2050 and other city-wide
strategies that require a ‘recovery’ lens.
----- End of picture text -----

2 Governance arrangements for the Council’s subsidiaries The External Auditors issued a qualified ‘except for’ opinion in their value for money assessment in relation to governance arrangements in respect of BE 2020 Ltd, and the report outlined 12 recommendations for improvement. The actions taken by the Council to address the issues outlined in the report will be assessed by the External Auditors within the 2020/21 Audit. The scope of the review in respect to BE 2020 Ltd was expanded and the findings are due to be reported in 2021/22.

Management actions in response to the value for money report recommendations were agreed and submitted to the Audit Committee in January 2021. The Council is monitoring the implementation of these management actions to ensure that the issues identified by the External Auditor are fully addressed. Review of Governance Arrangements for Bristol City Council’s Subsidiaries’ was discussed separately at the Extraordinary Full Council public meeting February 2021 and a subsequent report to Full Council public meeting in May 2021 to consider the progress on the implementation of the management actions.

The expanded scope of the external audit work on the governance arrangements regarding BE 2020 Ltd has been completed and the Council awaits the outcome of the External Auditors review and the standard

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consideration of whether the application of formal audit powers will be applied.

3 Dedicated Schools Grant deficit

The Dedicated Schools Grant (DSG) was in deficit of £10.004m at the financial year-ending 2020/21. A range of outcome and process improvements are being delivered in line with the Written Statement of Action however, the financial deficit is forecasted to increase by c. 100% (£10.5m) by the year end 31 March 2022. Should this forecast be realised, this will result in a cumulative forecasted, carry forward deficit of £20.5m at the end of the financial year.

The forecasted deficit in the DSG is predominantly attributed to the significant increase needed for support for children and young people with special educational needs and /or disabilities (SEND), via the High Needs budget. The scale of SEND deficit is a national issue and the SEND review announced in September 2019 with a commitment to boost outcomes and improve value for money, has been subject to repeated delays.

Whilst the Council will continue to call for sufficiency of government funding to address the legislatively driven deficits, investment and clarity about future funding, arrangements plans will need to be considered for a sustainable long-term provision that meets the needs of children and young people in Bristol.

The Education Transformation Programme is largely focused on the following SEND improvement activities.

The first iteration of the evolving DSG Deficit Management Plan (DMP) has been published and presented to Schools Forum (June 2021).

The completed DMP will be kept up to date, and along with the Education Transformation programme, will be reported periodically to the Schools Forum, People Scrutiny commission and or Cabinet during 2021/22.

During the refurbishment of the Bristol Beacon, as the building was dismantled, contractors identified large numbers of significant and unforeseen structural and heritage issues that created huge complexity and added significant time and costs to the project.

Recognising the cultural importance of the building and its contribution to the region’s economy, Cabinet agreed a revised capital investment budget of £106.9m, an increase of

The Bristol Beacon has been re baselined in terms of budget and duration. A Project Management Office has been created and a Strategic Partner commissioned to provide key professional support to the project. Project assurance is ongoing in the form of Project Board reporting and management process.

The Capital Programme is managed and monitored through the Capital & Investment Board and Delivery Executive provides member oversight. These governance arrangements together with skills and capacity brought by the Capital Strategic Partnering arrangements, continues to strengthen and improve capital monitoring and is providing a focus on setting realistic delivery budgets and profiles, which allow for

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£58.1m (119%) on the original sufficient lead times before expenditure is likely to be approved budget of £48.8m. incurred. The new governance arrangements will need to be embedded and will be subject to continuous This represents a significant review to ensure they are working effectively. diversion of Council resources. The strategic partner is also helping to establish a Capital Portfolio Office which will become an information hub about the Council’s capital programmes and projects, and will provide advice and information to senior officers to make strategic decisions.

As part of the annual VFM review the External Auditors are required to assess whether the Council has made proper arrangements for securing economy, efficiency and effectiveness in its use of resources and the Council will give appropriate consideration to any findings / agreed recommendations for improvement arising from this review.

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Core Statements

Comprehensive Income and Expenditure Statement for the year ended 31 March 2021

Gross
Exp
£’000
391,416
228,165
190,409
105,574
204,487
17,657
**1,137,708 **		 2019/20
Gross
Income

£’000
(166,564)
(160,328)
(84,368)
(119,811)
(196,848)
(1,252)
**(729,171) **


Net
Exp


£’000
224,852 People
67,837 Resources
106,041 Growth & Regeneration
(14,237) Housing Revenue Account
7,639 Dedicated Schools Grant
16,405 Corporate Funding & Expenditure

408,537 Cost of services

2,375 Other operating expenditure (Note 9)
55,304 Financing and investment income and
expenditure (Note 10)
(414,418) Taxation and non-specific grant income
(Note 11)
51,798 (Surplus) or Deficit on provision of
services
Items that will not be reclassified to
the (Surplus) or Deficit on the
Provision on Services
(99,682)
(Surplus) or deficit on revaluation of
Property, Plant and Equipment assets
(Note 20)
(45,748) Remeasurement of the net defined
benefit liability\asset (Note 34)
Items that may be reclassified to the
(Surplus) or Deficit on the Provision
on Services
-
(Surplus)or deficit on financial assets
measured at fair value (Notes 24)
(145,430) Other comprehensive income and
expenditure
(93,632) Total comprehensive income and
expenditure		 Gross
Exp
£’000
417,307
239,408
260,538
104,341
212,076
9,860
1,243,530		 2020/21
Gross
Income

£’000
(212,528)
(164,456)

(71,263)
(123,136)
(201,110)

(903)
(773,396)		 Net
Exp

£’000

204,779

74,952

189,275

(18,795)

10,966

8,957

470,134
``
7,937
7,313
(473,173)
12,211
(171,378)
112,346
-
(59,032)
(46,821)

42

Movement in Reserves Statement for the year ended 31 March 2021

Note General Fund
Balance		 Earmarked Reserves
Restated		 School Reserves Sub Total - General
Fund		 Housing Revenue
Account		 Housing Revenue
Account Earmarked
Reserves		 Sub Total - Housing
Revenue Account		 Capital Receipts Major Repairs
Reserve		 Capital Grants
Unapplied		 Total Usable
Reserves		 Unusable Reserves
Restated		 Total Council
Reserves
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Adjusted Balance at 1 April 2019 23,258 81,179 12,493 116,929 78,718 7,852 86,570 70,824 3,606 3,919 281,847 1,293,274 1,575,121
Movement in Reserves during 2019/20
Surplus or (deficit) on the provision of services (54,814) (54,814) 3,016 3,016 (51,798) (51,798)
Other Comprehensive Expenditure and Income - - - 145,431 145,431
Total Comprehensive Expenditure and Income (54,814) - - (54,814) 3,016 - 3,016 - - - (51,798) 145,431 93,633
Adjustments between accounting basis and funding basis under
regulations		 Note 17 59,578 59,578 (2,060) (2,060) 7,688 - (1,234) 63,972 (63,972) -
Net Increase/(Decrease) before Transfers to Earmarked Reserves 4,764 - - 4,764 956 - 956 7,688 - (1,234) 12,174 81,459 93,633
Transfers to/(from) Earmarked Reserves Note 18 (11,020) 16,211 (5,191) - 7,852 (7,852) - - - -
Increase/(Decrease) in 2019/20 (6,256) 16,211 (5,191) 4,764 8,808 (7,852) 956 7,688 - (1,234) 12,174 81,459 93,633
Balance at 31 March 2020 Carried Forward 17,001 97,390 7,302 121,693 87,526 0 87,526 78,512 3,606 2,685 294,022 1,374,733 1,668,755
Movement in Reserves during 2020/21
Surplus or (deficit) on the provision of services (30,208) (30,208) 17,997 17,997 (12,211) (12,211)
Other Comprehensive Expenditure and Income - - - 59,032 59,032
Total Comprehensive Expenditure and Income (30,208) - - (30,208) 17,997 - 17,997 - - - (12,211) 59,032 46,821
Adjustments between accounting basis and funding basis under
regulations		 Note 18 172,416 172,416 (7,082) (7,082) (20) 7,690 395 173,399 (173,399) -
Net Increase/(Decrease) before Transfers to Earmarked Reserves 142,208 - - 142,208 10,915 - 10,915 (20) 7,690 395 161,188 (114,367) 46,821
Transfers to/(from) Earmarked Reserves Note 19 (123,543) 123,317 226 0 (651) 651 - 0 - 0
Increase/(Decrease) in 2020/21 18,665 123,317 226 142,208 10,264 651 10,915 (20) 7,690 395 161,188 (114,367) 46,821
Balance at 31 March 2021 Carried Forward 35,666 220,707 7,528 263,901 97,791 651 98,441 78,492 11,296 3,080 455,210 1,260,366 1,715,575

43

Balance Sheet as at 31 March 2021
31-Mar-20
Note
£'000
2,718,767
Property, Plant & Equipment
20
204,056
Heritage Assets
21
15,958
Intangible Assets
23
252,586
Investment Property
24
42,074
Long Term Investments
24
49,831
Long Term Debtors
29
3,283,272
Long Term Assets
89,093
Short Term Investments
24
10,166
Inventories
106,283
Short Term Debtors
29
69,426
Cash and Cash Equivalents
30
723
Assets held for sale
275,691
Current assets
(14,778)
Short Term Borrowing
24
(167,447)
Short Term Creditors
31
(1,897)
Provisions
32
(26,741)
Capital grants received in advance
17
(5,379)
Derivative Financial Instruments
(216,242)
Current liabilities
(450,488)
Long Term Borrowing
24
(28,257)
Provisions
32
(1,166,622)
Other Long-Term Liabilities
31
(28,600)
Capital Grants Receipts in Advance
17
(1,673,967)
Long-term liabilities
1,668,754
Net assets
(294,021)
Usable Reserves
19
(1,374,733)
Unusable Reserves
33
(1,668,754)
Total reserves		 31-Mar-21
£'000
2,846,144
207,406
20,573
275,903
43,570
49,098
3,442,694
64,983
12,416
144,928
121,572
806
344,705
(4,966)
(215,373)
(5,760)
(44,447)
-
(270,546)
(450,488)
(26,277)
(1,291,181)
(33,331)
(1,801,277)
1,715,576
(455,209)
(1,260,366)
(1,715,576)

44

Cash Flow Statement for the year ended 31 March 2021

2019/20

£'000
Note
(51,798) Net deficit on the provision of services
204,425 Adjustment to net surplus on the provision of services for
non-cash movements
35
(89,922)
Adjust for items included in the net surplus or deficit on the
provision of services that are investing and financing
activities
35
62,705 Net cash flows from Operating Activities
(25,041) Investing Activities
36
24,365 Financing Activities
37
62,029 Net increase (decrease) in Cash and Cash Equivalents
7,397 Cash and Cash Equivalents at the beginning of the reporting
period
30
69,426 Cash and Cash Equivalents at the end of the reporting
period		 2020/21

£'000
(12,211)

152,268

(83,538)
56,519

20,726

(25,099)
52,146

69,426
121,572

45

Notes to the Accounts

1 Accounting Policies

(i) General Principles

The Statement of Accounts summarises the Council's transactions for the 2020/21 financial year and its position at the year-end of 31 March 2021. The Council is required to prepare an annual Statement of Accounts by the Accounts and Audit (England) Regulations 2015, which require the accounts to be prepared in accordance with proper accounting practices. These practices primarily comprise the Code of Practice on Local Authority Accounting in the United Kingdom 2020/21 (the Code) supported by International Financial Reporting Standards (IFRS).

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. The Statement of Accounts has been prepared on a ‘going concern’ basis.

(ii) Recognition of Income and Expenditure

Activity is accounted for in the year in which it takes place, which may not be the same year in which cash payments are made or received.

Revenue from contracts with service recipients, whether for services or the provision of goods, is recognised when (or as) the goods or services are transferred to the service recipient in accordance with the performance obligations in the contract. In local government, the generation of revenues from charges to service recipients is only a minor funding stream and contracts with customers tend to be accounted for and delivered within each financial year.

Revenue from the sale of goods and disposal of assets is recognised when the Council transfers the risks and rewards of ownership to the purchaser. 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.

Government grants and third-party contributions are recognised when there is reasonable assurance that the Council will comply with any conditions attached to the payments, and that the grants or contributions will be received. Where conditions attached to grants or contributions have not been satisfied, monies received to date are carried in the Balance Sheet as creditors and credited to the CIES when the conditions are satisfied. 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.

Supplies are recorded as expenditure when they are consumed. If there is a gap between the date supplies are received and their consumption, they are carried as inventories in the Balance Sheet. Expenses in relation to services received (including services provided by employees) are recorded as expenditure when the services are received rather than when payments are made.

(iii) 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 investments that mature in three months or less from the date of acquisition and are readily convertible to known amounts of cash with low risk of change in value.

Cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Council’s cash management strategy.

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(iv) Charges to Revenue for Non-Current Assets

Services, support services and trading accounts are debited with the following amounts to record the cost of holding non-current assets during the year:

(v) City Region Deal

The Council has applied the principles of IPSAS 23 ‘Revenue from non-Exchange transactions (Taxes and Transfers)’ in accounting for the transactions and balances relating to the City Region Deal.

Growth paid to the accountable body (South Gloucestershire Council) for the Business Rates Pool (BRP) is recognised by the Council as a debtor until such point that the funds are paid out by the BRP or committed by the Economic Development Fund (EDF) to fund future EDF payments in respect of approved programmes.

( vi) Collection Fund and Local Taxation

Bristol City Council is a billing authority for local taxation and collects:

The Collection Fund shows the transactions of the billing authority in relation to the collection from taxpayers and the distribution to local authorities, central government and precepting bodies of council tax and non-domestic rates (NDR). There is no requirement for a separate Collection Fund Balance Sheet since the assets and liabilities arising from collecting non-domestic rates and council tax belong to the bodies (i.e. major preceptors, the billing authority and the Government).

The Collection Fund is effectively an agency account therefore income, expenditure and balance sheet transactions are apportioned between the Council, central government and precepting bodies.

The council tax and NDR income included in the Comprehensive Income and Expenditure Statement is the Council’s share of accrued income for the year. However, regulations determine the amount of council tax and NDR that must be included in the Council’s General Fund. Therefore, 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 is taken to the Collection Fund Adjustment Account and included as a reconciling item in the Movement in Reserves Statement. The Balance Sheet includes the Council’s share of the end of year balances in respect of council tax and NDR relating to arrears, impairment allowances for doubtful debts, overpayments and prepayments and appeals.

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(vii) Dedicated Schools Grant

The Local Authorities (Capital Finance and Accounting) (England)(Amendment) Regulations 2020 establish new accounting practices in relation to the treatment of local authorities’ schools budget deficits such that where a local authority has a deficit on its school's budget relating to its accounts for a financial year beginning on 1 April 2020, 1 April 2021 or 1 April 2022, it must not charge the amount of that deficit to a revenue account. Instead, the deficit (including the accumulated deficit as of 31 March 2020) is charged to an unusable reserve the Dedicated Schools Grant Adjustment Account by a transfer from the General Fund Balance in the Movement in Reserves Statement.

(viii) Employee Benefits

Benefits Payable During Employment

Monetary benefits such as wages and salaries, paid leave and bonuses, and non-monetary benefits (for example, cars) for current employees are recognised as an expense in the year in which employees render service to the Council. An accrual is made to represent the cost of holiday entitlement earned but not taken at each year end, to meet Code and IAS requirements.

Termination Benefits

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, these costs are charged on an accruals basis to the respective Service line in the Comprehensive Income and Expenditure Statement.

Post-Employment Benefits

Employees of the Council are members of three separate pension schemes:

All the above schemes provide defined benefits to members for example retirement lump sums and pensions, earned as employees working for the Council.

However, the arrangements for the Teachers' scheme and NHS Scheme mean that liabilities for these benefits cannot ordinarily be identified for the Council. These schemes are therefore accounted for as if they were defined contributions schemes and no liability for future payments of benefits is recognised in the Balance Sheet. The CIES is charged with the employer’s contributions payable to Teachers pensions and NHS pensions in the year.

The Local Government Pension Scheme

The Local Government Pension Scheme is accounted for as a defined benefits scheme:

The liabilities of the Avon Pension Fund attributable to the Council are included in the Balance Sheet on an actuarial basis using the projected unit method - i.e. 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, etc., and projections of projected earnings for current employees. Liabilities are measured on an actuarial basis discounted to present value, using the projected unit method. The discount rate to be used is determined in reference to market yields at balance sheet date of high-quality corporate bonds.

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

The change in the net pension liability of the Council is analysed into the following components:

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 according to the relevant accounting standards. In the Movement in Reserves Statement, this means that there are appropriations to and from the Pensions 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 Pensions Reserve thereby measures the beneficial impact to the General Fund of being required to account for retirement benefits based on cash flows rather than as benefits earned by employees.

In 2020, the Council made an up-front payment of the LGPS deficit contributions for the three years 2020/21 - 2022/23 totalling £20.430m (net of academy conversions). This payment was made April 2020. The up-front payment took advantage of the independent Actuary’s calculation of the return these contributions could achieve once invested by the Pension Fund. The discount calculated by the Actuary for making the up-front payment (net of academy conversions) rather than the typical approach of monthly payments in arrears over the three-year period was £1.295m, reducing total payments from £21.725m to £20.430m. The return was judged to be far greater than could have been achieved by investing the amounts as part of the Council’s Treasury Management Strategy and the approach represented good value for money for the Council.

Discretionary Benefits

The Council has restricted powers to provide discretionary post-employment benefits. Any such benefits are accrued for in the year of the decision to make the award and are charged to the Comprehensive Income and Expenditure Statement against the service in which the employees worked.

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(ix) Events After The Reporting Period

Events after the balance sheet date are those events, both favourable and unfavourable, which 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:

Events taking place after the date when the Statement of Accounts is authorised for issue are not reflected in the Statement of Accounts.

(x) Fair Value Measurement

The Council measures some of its non-financial assets such as surplus assets and investment properties and some of its financial instruments such as equity shareholdings at fair value at each reporting date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement assumes that the transaction to sell the asset or transfer the liability takes place either:

a) in the principal market for the asset or liability, or

b) in the absence of a principal market, in the most advantageous market for the asset or liability.

The Council measures the fair value of an asset or liability using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

When measuring the fair value of a non-financial asset, the Council considers a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Council uses valuation techniques that are appropriate in the circumstances and for which sufficient data is available, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

Inputs to the valuation techniques in respect of assets and liabilities for which fair value is measured or disclosed in the Council’s financial statements are categorised within the fair value hierarchy, as follows:

(xi) Financial Instruments

The Council adopted the IFRS 9 Financial Instruments accounting standard with effect from 1st April 2018.

Financial Liabilities

Financial liabilities are recognised on the Balance Sheet when the Council becomes a party to the contractual provisions of a financial instrument and are initially measured at fair value and are carried at their amortised cost. As 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

50

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 Council’s borrowings this means that the amount presented in the Balance Sheet is the outstanding principal repayable (plus accrued interest). Interest charged to the Comprehensive Income and Expenditure Statement is the amount payable for the year according to the loan agreement.

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. The Council has a policy of spreading the gain or loss over the term of the replacement loan that was used to refinance the loan against which the premium was payable or discount receivable. The reconciliation of amounts charged to the Comprehensive Income and Expenditure Statement to the net charge required against the General Fund balance is managed by a transfer to or from the Financial Instruments Adjustment Account in the Movement in Reserves Statement.

Financial Assets

Financial assets are classified using an approach that is based on the business model for holding the financial assets and their cashflow characteristics.

There are three main classes of financial assets measured at:

The Council’s business model for most of its investments is to hold them to collect contractual cash flows. Financial assets are therefore classified as amortised cost. There are some exceptions, where the Council holds strategic investments to help it meet other policy objectives, such as the support of economic development in the county. This means that some investments are ones where contractual payments are not solely payment of principal and interest (i.e. where the cash flows do not take the form of a basic debt instrument).

Financial Assets Measured at Amortised Cost

Financial assets measured at amortised cost are recognised on the Balance Sheet when the Council becomes a party to the contractual provisions of a financial instrument and are initially measured at fair value. They are subsequently measured 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 financial assets held by the Council, this means that the amount presented in the Balance Sheet is the outstanding principal receivable (plus accrued interest) and interest credited to the Comprehensive Income and Expenditure Statement is the amount receivable for the year in the loan agreement.

However, from time to time the Council makes loans to voluntary organisations at less than market rates (soft loans). When soft loans are made, a loss is recorded in the CIES (debited to the appropriate service) for the present value of the interest that will be foregone over the life of the instrument, resulting in a lower amortised cost than the outstanding principal. Interest is credited to the Financing and Investment Income and Expenditure line in the CIES at a marginally higher effective rate of interest than the rate receivable from the voluntary organisations, with the difference serving to increase the amortised cost of the loan in the Balance Sheet. Statutory provisions require that the impact of soft loans on the General Fund Balance is the interest receivable for the financial year – the reconciliation of amounts debited and credited to the CIES to the net gain required against the General Fund Balance is managed by a transfer to or from the Financial Instruments Adjustment Account in the Movement in Reserves Statement. Any gains and losses that arise on the derecognition of an asset are credited or debited to the Financing and Investment Income and Expenditure line in the CIES.

In addition, the Council does have deferred payment policies where individuals are allowed to defer payment against an invoice raised by the Council, for example where the Council holds a legal charge against a property that enables sums to be reimbursed from sale proceeds later. These are like loans at less than market rates and are referred to as soft loans. If any the lost interest against the soft loan was significant

51

then adjustments would be made to the relevant service revenue account and Balance Sheet. However, the impact on the Council's revenue account of soft loans and lost interest is not financially significant and the accounts have not been adjusted to reflect these requirements.

Expected Credit Loss Model

The Council recognises expected credit losses on all its financial assets held at amortised cost or FVOCI, either on a 12-month or lifetime basis. The expected credit loss model also applies to lease receivables and contract assets. Only lifetime losses are recognised for trade receivables (debtors) held by the Council.

Impairment losses are calculated to reflect the expectation that the future cash flows might not take place because the borrower could default on their obligations. Credit risk plays a crucial part in assessing losses. Where risk has increased significantly since an instrument was initially recognised, losses are assessed on a lifetime basis. Where risk has not increased significantly or remains low, losses are assessed based on 12month expected losses.

Financial Assets Measured at Fair Value through Profit or Loss (FVPL)

Financial assets that are measured at FVPL are recognised on the Balance Sheet when the Council becomes a party to the contractual provisions of a financial instrument and are initially measured and carried at fair value. Fair value gains and losses are recognised as they arrive in the Surplus or Deficit on the Provision of Services.

The fair value measurements of the financial assets are based on the following techniques:

The inputs to the measurement techniques are categorised in accordance with the following three levels:

Any gains and losses that arise on the derecognition of the asset are credited or debited to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement.

An equity instrument can be elected to a FVOCI treatment rather than a FVPL treatment if it is not held for trading. The Council has reviewed its assets that would be measured at FVPL based on the business model and has elected to classify instruments as either FVPL or FVOCI on an instrument-by-instrument basis based on the assessed benefit to the Council from the chosen classification.

(xii) 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:

Amounts recognised as due to the Council are not credited to the Comprehensive Income and Expenditure Statement until conditions attached to the grant or contribution 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.

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(xiii) Heritage Assets

The Council’s Heritage Assets are predominantly on display in museum buildings and galleries in the city, held in storage or loaned out to other educational or cultural organisations.

These assets are all valued on a historic cost basis or an annual insurance valuation basis.

The Council holds numerous ancient monuments and statues which are not recognised on the Balance Sheet because of the diverse and often unique nature of the assets held and the lack of comparable market values.

There is no depreciation charge against heritage assets because it is estimated that the assets have an extended and indeterminate useful life such that any depreciation charge would be negligible. The carrying values of Heritage Assets are reviewed when there is evidence of impairments for example when an asset has suffered physical deterioration or breakage or where doubts arise as to its authenticity. Any reductions to the carrying value of the assets are recognised and measured in accordance with the Council’s general policy on impairments.

(xiv) Intangible Assets

Expenditure on non-monetary assets that do not have physical substance but are controlled by the Council as a result of past events (for example software licences) is capitalised when it is expected that future economic benefits or service potential will flow from the Intangible Asset to the Council.

Internally generated assets are capitalised where it is demonstrable that the project is technically feasible and is intended to be completed (with adequate resources being available) and the Council will be able to generate future economic benefits or deliver service potential by being able to sell or use the asset. Expenditure is capitalised where it can be measured reliably as attributable to the asset and is restricted to that incurred during the development phase (research expenditure cannot be capitalised).

Expenditure on the development of websites is not capitalised if the website is solely or primarily intended to promote or advertise the Council’s goods or services.

Intangible Assets are measured initially at cost. Amounts are only revalued where the fair value of the assets held by the Council can be determined by reference to an active market. In practice, no Intangible Asset held by the Council meets this criterion, and they are therefore carried at amortised cost. The depreciable amount of an Intangible Asset is amortised over its useful life to the relevant service line in the Comprehensive Income and Expenditure Statement. An asset is tested for impairment whenever there is an indication that the asset might be impaired – any losses recognised are posted to the relevant service line in the Comprehensive Income and Expenditure

(xv) Interests in Companies and Other Entities

(a) Subsidiaries

Subsidiaries are all entities over which the Council has control. The Council controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and can affect those returns through its power over the entity.

The Council’s material subsidiaries are Bristol Holding Limited (which is directly held) and Bristol Waste Company Limited, Bristol Energy Limited and Goram Homes Limited (all of which are indirectly held). There are no non-controlling interests.

In the single entity accounts, the Council has opted to account for its investments in subsidiaries in accordance with Chapter 7 of the Code, Financial Instruments. The investments are accordingly classified as fair value through other comprehensive income (FVPL) and are carried in the Balance Sheet at fair value. Changes in the fair value of the Council’s investments in subsidiaries are recognised in Other Comprehensive Income. Impairments are recognised directly in the Surplus/Deficit on the Provision of Services.

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In the group accounts, the subsidiaries are consolidated on a line-by-line basis with adjustments to eliminate intra-group transactions, balance and unrealised gains on transactions between the group entities. Where necessary, amounts reported by subsidiaries have been adjusted to conform to the Council’s accounting policies.

b) Joint Arrangements

A Joint Arrangement is an arrangement of which two or more parties have joint control where the parties are bound by contractual arrangement and the contractual arrangement gives two or more of those parties joint control of the arrangement. Joint Arrangements are classified as Joint Ventures or Joint Operations.

The Council has no material Joint Ventures.

A Joint Operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement.

The Council has one Joint Operation being the West of England Local Enterprise Partnership. In respect of this, the Council accounts for:

(xvi) Investment Property

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

Investment properties are measured initially at cost and subsequently at fair value, based on “the highest or best price that can be obtained in the most advantageous market, in an arms’ length transaction between knowledgeable participants at the measurement date”. Investment Properties are not depreciated but are revalued annually according to market conditions at the year-end

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.

Rental Income received in relation to investment properties is 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 Balance in the Movement in Reserves Statement and posted to the Capital Adjustment Account and, for sale proceeds, the Capital Receipts Reserve.

(xvii) Leases

Leases are classified as finance leases where the terms of the lease transfer substantially all the risks and rewards incidental to ownership of the property, plant or equipment from the lessor to the lessee. All other leases are classified as operating leases. Where a lease covers both land and buildings, the land and buildings elements are considered separately for classification.

Arrangements that do not have the legal status of a lease but convey a right to use an asset in return for payment are accounted for under this policy where fulfilment of the arrangement is dependent on the use of specific assets.

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The Council as 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:

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 Council 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 and 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.

Operating Leases

Rentals paid under operating leases are charged to the Comprehensive Income and Expenditure Statement as an expense of the services benefitting 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 if there is a rent-free period at the commencement of the lease).

The Council as Lessor

Finance Leases

To date the Council has not granted any Finance Leases.

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 if 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.

(xviii) Minimum Revenue Provision (MRP)

The Council is not required to use Council tax to fund depreciation, revaluation and impairment losses or amortisation of non-current assets. However, it is required to make an annual contribution from revenue towards the reduction in its overall borrowing requirement equal to either an amount calculated on a prudent basis or as determined by the Council in accordance with statutory guidance.

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(xix) Overheads And Support Services

The Council operates and manages its support services within the Resources Directorate, and this is how these services are reported to management. The costs of overheads and support services are therefore not re-apportioned (except for ring-fenced accounts such as the HRA, Public Health and Licencing).

(xx) Prior Period Adjustments

Prior period adjustments arise because of a change in accounting policies or to correct a material error. Changes in accounting estimates are only accounted for prospectively i.e. in the current and future years which are affected by the changes, they 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 in accounting policy is made, it is applied retrospectively (unless stated otherwise) by adjusting opening balances for the current year and comparative amounts for the prior period as if the new policy had always been applied.

Where material errors are discovered in prior period figures they are corrected retrospectively by amending opening balances and comparative amounts for the prior period.

(xxi) Service Concessions

Service concessions are agreements to receive services, where the responsibility for making available the property, plant and equipment needed to provide the services passes to the contractor. As the Council is deemed to control the services that are provided under these schemes, and as ownership of the property, plant and equipment will pass to the Council at the end of the contracts for no additional charge, the Council carries the assets used under the contracts on its Balance Sheet as part of Property, Plant and Equipment.

The original recognition of these assets at fair value (based on the cost to purchase the property, plant and equipment) is balanced by the recognition of a liability for amounts due to the scheme operator to pay for the capital investment.

Non-current assets related to these contracts and recognised on the Balance Sheet are revalued and depreciated in the same way as property, plant and equipment owned by the Council.

The amounts payable to the contract operator are analysed into the following elements:

(xxii) Property, Plant and Equipment

Assets that have physical substance and are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes and that are expected to be used during more than one financial year are classified as Property, Plant and Equipment.

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 will flow to the Council and the cost of the item can be measured reliably. Capital schemes above £0.25m are subject to annual review and any expenditure incurred which has not enhanced the asset’s value is charged as an expense in the financial year that it is incurred. Expenditure on capital

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assets totalling less than £20,000 in any single financial year is classed as de-minimis and therefore is not capitalised but charged as an expense.

Measurement

Assets are initially measured at cost, comprising:

The Council does not capitalise borrowing costs.

The cost of assets acquired other than by purchase is deemed to be its fair value, unless the acquisition does not have commercial substance (i.e. it will not lead to a variation in the cash flows of the Council). In the latter case, where an asset is acquired via an exchange, the cost of the acquisition is the carrying amount of the asset given up by the Council.

Assets are then carried in the Balance Sheet using the following measurement bases:

Where there is no market-based evidence of fair value because of the specialist nature of an asset, depreciated replacement cost (DRC) is used as an estimate of fair value.

Where non-property assets that have short useful lives or low values (or both), depreciated historical cost basis is used as a proxy for fair value.

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 a loss previously charged to a service.

When decreases in value are identified, they are accounted for in the same way as an impairment.

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.

Impairment

Assets are assessed at each year-end as to whether there is any indication that an asset may be impaired. Where indications exist and possible differences are estimated to be material, the recoverable amount of the asset is estimated and, where this is less than the carrying amount of the asset, an impairment loss is recognised for the shortfall.

Where impairment losses are identified, they are accounted for as follows:

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Depreciation

Depreciation is provided for on all Property, Plant and Equipment assets by the systematic allocation of their depreciable amounts over their useful lives. An exception is made for assets without a determinable finite useful life (i.e. freehold land, car parks, quay walls and lock gates, some Community Assets) and assets that are not yet available for use (i.e. assets under construction).

Depreciation is calculated on the following bases:

The Council applies component accounting to all assets with a net book value more than £5m - where the item of Property, Plant and Equipment asset has major components whose cost is significant in relation to the total cost of the item, identified 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 to the Capital Adjustment Account.

Disposals and Non-current Assets Held for Sale

When it becomes probable that the carrying amount of an asset will be recovered principally through a sale transaction rather than through its continuing use, it is reclassified as an Asset Held for Sale. The asset is revalued immediately before reclassification and then carried at the lower of this amount and fair value less costs to sell. Where there is a subsequent decrease to fair value less costs to sell, the loss is posted to the Other Operating Expenditure line in the Comprehensive Income and Expenditure Statement. Gains in fair value are recognised only up to the amount of any previously losses recognised in the Surplus or Deficit on Provision of Services. Depreciation is not charged on Assets Held for Sale.

If assets no longer meet the criteria to be classified as Assets Held for Sale, they are reclassified back to non-current assets and valued at the lower of their carrying amount before they were classified as Held for Sale; adjusted for depreciation, amortisation or revaluations that would have been recognised had they not been classified as Held for Sale, and their recoverable amount at the date of the decision not to sell.

When an asset is disposed of or is decommissioned, 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. Receipts from disposals (if any) are credited to the same line in the Comprehensive Income and Expenditure Statement also as part of the gain or loss on disposal (i.e. netted off against the carrying value of the asset at the time of disposal). Any revaluation gains accumulated for the asset in the Revaluation Reserve are transferred to the Capital Adjustment Account.

Amounts received for a disposal more than £10k are categorised as capital receipts. A proportion of receipts relating to housing disposals 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 HRA'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

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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.

(xxiii) Provisions, Contingent Liabilities and Contingent Assets

Provisions

Provisions are made where an event has taken place whereby the Council has a legal or constructive obligation that probably requires settlement by a transfer of economic benefits or service potential, 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 as an expense to the appropriate service line in the Comprehensive Income and Expenditure Statement in the year that the Council becomes aware of the obligation and are measured at the best estimate at the balance sheet date of the expenditure required to settle the obligation, considering relevant risks and uncertainties.

When payments are eventually made, they are charged to the relevant provision. Estimated settlements are reviewed at the end of each financial year, where it becomes less than probable that a transfer of economic benefits will now be required (or a lower settlement than anticipated is made); the provision is reversed and credited back to the relevant service.

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 are disclosed in a note 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 or otherwise of uncertain future events not wholly within the control of the Council. Contingent assets are not recognised in the Balance Sheet but are disclosed in a note to the accounts.

(xxiv) Reserves

The Council sets aside specific amounts as reserves for future policy purposes or to cover contingencies. Reserves are created by appropriating amounts out of 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 in that year to score against the Surplus or Deficit on the Provision of Services in the Comprehensive Income and Expenditure Statement. The reserve is then appropriated back into the General Fund Balance in the Movement in Reserves Statement so that there is no net charge against council tax for the expenditure.

The category of unusable reserves includes those reserves which 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. These reserves are explained in the relevant notes.

(xxv) Revenue Expenditure Funded from Capital under Statute

Expenditure incurred during the year that may be capitalised under statutory provisions but that does not result in the creation of a non-current asset has been charged as expenditure to the relevant service in the Comprehensive Income and Expenditure Statement 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 reverses out the amounts charged so that there is no impact on the level of council tax.

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(xxvi) Schools

The Code of Practice on Local Authority Accounting in the United Kingdom 2020/21 confirms that the balance of control for local authority-maintained schools (i.e. those categories of school identified in the School Standards and Framework Act 1998, as amended) lies with the local authority. The Code also stipulates that those schools’ assets, liabilities, reserves and cash flows are recognised in the single entity accounts of the Council (and not the Group Accounts). Therefore, schools’ transactions, cash flows and balances are recognised in each of the financial statements of the Council as if they were the transactions, cash flows and balances of the Council.

Schools within the Council’s group fall into the following categories

Other types of school, such as voluntary aided and voluntary controlled schools, academies and free schools are outside of the Council’s control and therefore not included in this Statement of Accounts.

(xxvii) Value Added Tax

The Comprehensive Income and Expenditure Account excludes amounts relating to VAT and will be included as an expense only if it is not recoverable from Her Majesty's Revenue and Customs. VAT receivable is excluded from income within the Council's Income and Expenditure account.

(xxviii) Rounding Convention

Unless otherwise stated the convention used in these Financial Statements is to round amounts to the nearest thousand pounds. All totals are the rounded additions of unrounded figures, and therefore may – from time-to-time – not be the strict sums of the figures presented in the text or tables.

2 Accounting Standards that have been issued but have not yet been adopted

The Code of Practice on Local Council Accounting in the United Kingdom (the Code) requires the Council 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.

At the balance sheet date, the following new standards and amendments to existing standards have been published but not yet adopted by the Code of Practice of Local Authority Accounting in the United Kingdom:

The main change to the Code will be the requirements of International Financial Reporting Standard 16 – Leases adopted in the 2021/22 Code. The required date of application and the date that the Council will adopt IFRS 16 is 1 April 2022. IFRS 16 introduces a single lessee accounting model and requires a lessee to recognise assets and liabilities for most leases with a term of more than 12 months, unless the underlying asset is of low value. A lessee is required to recognise a right-of-use asset representing its right to use the underlying leased asset and a lease liability representing its obligation to make lease payments Whilst this is expected to have little impact on the Council, work will need to be undertaken during 2021/22 to ensure significant lease type arrangements across the Council are identified and accurately recorded. This will include a review of existing and creation of new processes for managing and recording lease arrangements.

Other changes to the Code include,

None of these amendments are anticipated to have a material impact on the Council’s financial performance and financial position.

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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 as follows:

The Council has completed a school-by-school assessment across the different types of school it controls within the city. The Council has assessed the legal framework underlying each type of school and determined the treatment of non-current assets within the financial statements according to whether it owns or has some responsibility for, control over or benefit from the service potential of the premises and land occupied. The Council has considered its accounting classification for each school on an individual case basis in conjunction with the relevant dioceses for voluntary aided and voluntary controlled schools.

There is a high degree of uncertainty about future levels of funding for local government, with the deferral for a second year running of the Government’s medium term Spending Review, postponement of the implementation of the Fair Funding Review, delays to the Adult Social Care funding green paper and uncertainties over the impact of the COVID-19 pandemic and gradual lifting of restrictions on major income streams. 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 because of a need to close facilities and reduce levels of service provision.

The costs of the Schools Private Finance Initiative (PFI) Contracts exceed the income received from the Government Grant and School Contributions, leaving the Council with a liability under the PFI Contracts. All PFI Schools have now transferred to Academy status and these assets have been removed from the Council’s balance sheet. Following a review of the costs and benefits, the Council considers the contract not to be onerous as the benefits significantly outweigh the costs.

In the single entity accounts, the Council has opted to account for its investments in subsidiaries in accordance with Chapter 7 of the Code, Financial Instruments. The investments are accordingly classified as fair value through other comprehensive income (FVOCI) and are carried in the Balance Sheet at fair value. Changes in the fair value of the Council’s investments in subsidiaries are recognised in Other Comprehensive Income. Impairments are recognised directly in the Surplus/Deficit on the Provision of Services.

COVID-19 Funding – the Council has received additional grant funding as part of the government’s response to the COVID-19 pandemic, some to cover the Council’s own expenditure/income shortfalls and some for passing on to local businesses and individuals. The Council has made judgements about whether it is acting as principal or agent in relation to this funding. Where the Council is acting as principal the grant receipts have been recognised as income and associated payments as expenditure. Where the Council is acting as agent the grant receipts and corresponding payments are not included in the Comprehensive Income and Expenditure Statement (CIES), other than any element of the funding relating to administration costs.

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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 considering 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 2021 for which there is a significant risk of material adjustment in the forthcoming financial year are as follows:

Item Uncertainties Consequence if actual results differ
from assumptions
Property, Plant and
Equipment
(excluding Council
dwellings)		 Asset valuations are based on market prices
and are periodically re-valued using a 5-year
rolling programme to ensure that the
Council does not materially misstate its
property, plant and equipment. If market
prices change significantly, over time there
will be a corresponding increase or
reduction in the value of Council land and
buildings.
The outbreak of Covid-19 has and
continues to impact many aspects of daily
life and the global economy – with some
real estate markets having experienced
lower levels of transactional activity and
liquidity.
The pandemic and the measures taken to
tackle COVID-19 continue to affect
economies and real estate markets globally.
Nevertheless, as at the valuation date, some
property markets have started to function
again, with transaction volumes and other
relevant evidence returning to levels where
an adequate quantum of market evidence
exists upon which to base opinions of
value. Accordingly, and for the avoidance
of doubt, our valuation is not reported as
being subject to ‘material valuation
uncertainty’ as defined by VPS 3 and
VPGA 10 of the RICS Valuation – Global
Standards.		 A reduction in estimated valuations would
result in reductions to the Revaluation
Reserve and/or a loss recorded in the
Comprehensive Income and Expenditure
Statement. If the value of the Council's
property, plant and equipment was to
reduce by say 10%, this would result in a
£103m change in cost value charged
against the Revaluation Reserve and/or the
Comprehensive Income and Expenditure
Statement.
A corresponding increase in estimated
valuations would result in a combination of
increases to the Revaluation Reserve and /
or
reversals
of
previous
negative
revaluations
charged
to
the
Comprehensive Income and Expenditure
Statement.
Pensions Liability Estimation of the net liability to pay
pensions depends on several complex
judgements relating to the discount rate
used, the rate at which salaries are projected
to increase, changes in retirement ages,
mortality rates and expected returns on
Pension Fund investments. The Council
has engaged Mercer Ltd, a firm of
consulting actuaries, to provide expert		 Variations in the key assumptions will have
the following impact on the net pension
liability
•
a 0.1% increase in the discount rate will
reduce the net pension liability by
£80m.
•
a 0.1% increase in the assumed level of
pension increases will increase the net
pension liabilityby £85m.

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advice about the assumptions to be
applied.		 •
a 0.1% increase in the assumed level of
pay inflation will increase the net
pension liability by £22m.
•
an increase of one year in longevity will
increase the net pension liability by
£24m.
Fair Value
Estimation		 Asset valuations are based on either:
•
market
prices
for
investment
property, surplus assets and non-
current assets held for sale: or
•
the adjusted net worth of unquoted
companies in which the Council has a
controlling or significant interest.
It remains unclear what impact the COVID
19 pandemic will have on property values
and there is a risk of material changes
during the next year.		 If the value of the Council's investment
property, surplus property and non-
current assets held for sale, was to reduce
by 10%, this would result in a £32m
reduction and a corresponding reduction
to Unusable Reserves in the Balance Sheet.

5 Events after the Balance Sheet Date

The Statement of Accounts was authorised for issue by the Section 151 Officer on 30 July. Events taking place after this date are not reflected in the financial statements or Notes. However there has been one event since the 31 March 2020 up to the date the accounts were authorised for issue by the S151 Officer.

On 3rd June 2021, Bristol Holding Ltd agreed to the reclassification of 27,321,425 redeemable preference shares (at a 7% coupon) held in BE2020 Ltd being converted into ordinary shares held in the company. All accured and future interest and any arrears of preferential dividend attaching to the preference shares have been waived and written off. The total value of the preference share interest is £6.5m. This had been fully provided for on a year-on-year basis in the Council’s accounts.

6 Other Items of Expenditure and Income

Income and expenditure relating to COVID-19

The accounting arrangements for business rates income mean that the General Fund Balance at 31 March 2021 excludes the loss for rate reliefs introduced by the government in 2020/21 to support business sectors during the pandemic. This loss will be charged to the General Fund in 2021/22 as part of the deficit on the Collection Fund being recouped in future years. However, the Council received £84m of government grant in 2020/21 to compensate for this loss. This material grant income has been shown separately within Taxation and Non-Specific Grant Income on the face of the CIES. The additional S31 business rates reliefs grant over and above what was budgeted for in 2020/21 has been transferred to a revenue reserve to be used in 2021/22 to offset the business rates deficit that will be charged to the General Fund (see Note 19 Usable Reserves).

Details of general and specific revenue grant funding for COVID-19 is provided in note 17 Grant Income In the CIES specific grant income is included within the Cost of Services and general grant income is included within Taxation and Non-Specific Grant Income. Where the Council has acted as an agent of the government in administering grants to businesses, social care providers and individuals these are excluded from the CIES.

The financial impact of the Covid-19 pandemic on the Council’s General Fund budget in 20/21 (i.e. excluding Housing Revenue Account, DSG and collection of Council tax or Business Rates income) is £74.7 million for the year. This was made up of £50.6 million additional expenditure and the inability to deliver planned savings, as well as £24.1 million reduction in income from sales, fees and charges.

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These costs have been funded by a mixture of specific and general funding provided by Government departments as well as local mitigations.

7 Expenditure and Funding Analysis for the year ended 31 March 2021

The objective of the Expenditure and Funding Analysis is to demonstrate to council tax and rent payers how the funding available to the Council (i.e. government grants, rents, council tax and business rates) for the year has been used in providing services in comparison with those resources consumed or earned by authorities in accordance with generally accepted accounting practices. The Expenditure and Funding Analysis also shows how this expenditure is allocated for decision making purposes between the Council's directorates. Income and expenditure accounted for under generally accepted accounting practices is presented more fully in the Comprehensive Income and Expenditure Statement.

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People
Resources
Growth & Regen
Housing Revenue Account
Dedicated Schools Grant
Corporate Funding and Expenditure
Other income and expenditure (Notes 9,10,11)
(Surplus) Deficit on the Provision of Services
Opening General Fund and HRA Balance
Less Deficit on General Fund and HRA
Balance in Year
Closing General Fund and HRA Balance at 31
March 2021*		 Revised
outturn
Adjustments
EFA (Note 1)
£'000
£'000
246,804
(46,298)
60,153
3,768
82,651
3,296
(10,915)
(10,851)
7,113
(54)
62,147
(50,934)		 Net
Expenditure
Chargeable to
the General
Fund and
HRA
Balances
Adjustments
for Capital
Purposes
EFA (Note 2)
Net change
for the
Pension
Adjustments
EFA Note 3
Other
Differences
EFA
(Note 4)
£'000
£'000
£'000
£'000
200,506
2,507
1,766
63,921
6,625
4,406
85,947
98,736
4,592
(21,766)
641
2,330
7,059
3,907
11,213
(14,462)
(4,408)
16,612
Total
Adjustments
Net Expenditure
in the
Comprehensive
Income and
Expenditure
Statement
£'000
£'000
4,273
204,779
11,031
74,952
103,328
189,275
2,971
(18,795)
3,907
10,966
(2,257)
8,957
447,953
(101,073)		 346,880
94,047
12,593
16,612		 123,253
470,134
(500,003)
(68,856)
22,523
88,413
(153,123)
(209,219)
(153,123)
362,342		 42,079
(457,923)
165,332
12,211

65

2019/20

Revised
outturn
Adjustments
EFA (Note 1)
£'000
£'000
People
215,668
(14,360)
Resources
58,193
(975)
Growth & Regen
66,197
4,354
Housing Revenue Account
(1,041)
(10,062)
Dedicated Schools Grant
3,661
Corporate Funding and Expenditure
40,018
(14,950)
382,696
(35,993)
Other income and expenditure (Notes 9,10,11)
(Surplus) Deficit on the Provision of Services
Opening General Fund and HRA Balance
Less Deficit on General Fund and HRA Balance in Year
Closing General Fund and HRA Balance at 31 March 2020*		 Revised
outturn
Adjustments
EFA (Note 1)
£'000
£'000
215,668
(14,360)
58,193
(975)
66,197
4,354
(1,041)
(10,062)
3,661
40,018
(14,950)		 Net
Expenditure
Chargeable to
the General
Fund and
HRA
Balances
Adjustments
for Capital
Purposes
EFA (Note 2)
Net change
for the
Pension
Adjustments
EFA Note 3
Other
Differences
EFA
(Note 4)
£'000
£'000
£'000
£'000
201,308
22,415
1,129
57,218
5,961
4,658
70,551
30,925
4,565
(11,103)
(5,503)
2,369
3,661
3,978
25,068
(19,601)
8,075
2,864
Total
Adjustments
Net Expenditure
in the
Comprehensive
Income and
Expenditure
Statement
£'000
£'000
23,544
224,852
10,619
67,837
35,490
106,041
(3,134)
(14,237)
3,978
7,639
(8,662)
16,405
382,696
(35,993)		 346,703
34,197
24,774
2,864		 61,835
408,537
(352,422)
(26,994)
23,029
(351)
(5,720)
(203,499)
(5720)
(209,219)		 (4,317)
(356,739)
57,518
51,798

66

EFA Note 1 – Adjustments

The reallocation of transactions to/from service areas below the net cost of services to Other Income and Expenditure for example interest receivable and interest payable from Corporate Funding and Expenditure to Other Income and Expenditure. The removal of transfers to/from reserves included in outturn in Corporate Funding & Expenditure as these are not shown on the face of the CIES.

EFA Note 2 - Adjustments for Capital Purposes

Adjustments for capital purposes - this column adds in depreciation, impairment and revaluation gains and losses in the services line for:

EFA Note 3 - Net change for Pension Adjustments

Net change for the removal of pension contributions and the addition of IAS 19 Employee Benefits pension related expenditure and income:

EFA Note 4 - Other Differences

Other differences between amounts debited/credited to the Comprehensive Income and Expenditure Statements and amounts payable/receivable to be recognised under statute:

67

8 Expenditure & Income Analysed By Nature

2019/20
2020/21 Revised
Expenditure & Income Analysed By Nature £000 £000
Expenditure
Employee Benefits Expense 387,679 378,049
Depreciation, Amortisation & Impairment 122,875 99,140
Other Service Expenditure 768,202 738,093
Total Expenditure 1,278,756 1,215,282
Income
Fees, Charges and Other Service Income (314,343) (323,950)
Interest & Investment Income (10,938) (7,883)
Income from Council tax & Non-domestic Rates (360,299) (357,352)
Government Grants, Other Grants and Contributions (583,081) (474,299)
Total Income (1,268,661) (1,163,484)
Surplus or deficit on the Provision of Services 10,095 51,798

8a Revenue from Contracts with Service Recipients

The Council contracts with service recipients as part of its normal operating activities. The table below sets out the material items of income within fees, charges and other service income in the table above.

Contributions from Other Organisations
Health Authorities
Other Local Authorities
Social Care Charges
Sales of Services
Car Parking
Housing Revenue Account Income
Commercial Rents
Licencing		 2020/21
£'000
17,805
35,951
6,252
26,685
4,195
4,681
122,440
16,111
6,723		 2019/20
£'000
22,469
24,521
13,885
27,591
7,050
13,098
121,875
14,560
7,529

The Council has identified contractual arrangements in place in relation to Deferred Payments, where care users can use the value of their home to help pay care home costs. The following amounts were recognised in the Comprehensive Income and Expenditure Account as income,

Client Contributions
Deferred Payments
Total		 2020/21
£'000
25,795
635		 2019/20
£'000
26,514
1,077
26,430 27,591

68

The following amounts were included in the Balance Sheet for contracts with service recipients, in relation to the contracts identified above

Adult care and health residential
Adult care and heath
Total		 2020/21
£'000
1,662
383
2,045		 2019/20
£'000
2,121
310
2,431

Except for the above all contracts with service recipients are complete and, therefore, no contract obligations, assets or liabilities continue beyond this financial year.

9 Other Operating Expenditure

Precepts and levies
Payments to the Government housing capital receipts pool
Losses/(gains) on the disposal of non-current assets
Total		 2020/21
£'000
10,953
2115
(5,132)
7,936		 2019/20
£'000
9,226
2,113
(8,963)
2,376

10 Financing and Investment Income and Expenditure

Interest payable and similar charges
Loss Allowance (Financial Guarantee Contracts)
Changes in the fair value of financial instruments*
Pensions net interest cost
Interest receivable and similar income
Income and expenditure in relation to Investment Properties
Changes in fair value of Investments
Total		 2020/21
£'000
34,241
(5,379)
(1,669)
22,523
(9,268)
(10,569)
(22,566)
7,313		 2019/20
£'000
35,268
5,379
17,079
23,029
(10,232)
(11,474)
(3,744)
55,304

.

11 Taxation and Non-Specific Grant Income

Council tax income
Non-domestic rates
Non-service-related government grants
Capital grants and contributions
Total		 2020/21
£'000
(224,419)
(137,300)
(69,849)
(41,605)
(473,173)		 2019/20
£'000
(215,116)
(142,236)
(23,402)
(33,664)
(414,418)

69

12 Pooled Budgets

Better Care Fund

The Better Care Fund (BCF) was established to support the integration of health and social care as a basis for joint planning the delivery of local services. The current BCF was established in April 2018 as part of a joint programme between Bristol City Council and NHS Bristol Clinical Commissioning Group agreed under Section 75 of the National health Service Act 2006. The formal governance of the BCF is through the Joint Commissioning Board and the Bristol Health and Well Being Board.

Under this Section 75 agreement there are five funds totalling £78.638m in 2020/21 and administered by whichever body undertook the contracting arrangements.

Fund 1 is administered by Bristol Clinical Commissioning Group and totals £16.607m. The fund includes contributions from the CCG only, which have been paid to providers contracted to support the sub schemes Reduction in Hospitals Admissions, Frail and Complex, Falls Prevention and Reablement. The CCG controls this fund in its entirety and wholly owns any risk relating to this fund as per the Section 75 agreement.

Fund 2 is administered by Bristol Clinical Commissioning Group and totals £0.812m. The funding is provided to Bristol City Council to offset in-year contract price and cost pressures.

Fund 3 is hosted by Bristol City Council and totals £3.528m, which is wholly made up of the Disabled Facilities Grant. The fund includes contributions from the City Council only, which are paid directly to providers. The City Council controls this fund in its entirety and wholly owns any risk relating to this fund as per the Section 75 agreement.

Fund 4 is a joint arrangement hosted by Bristol City Council and totals £41.176m. Both the CCG and Bristol City Council contribute towards the source of funding. The City Council is the Lead Commissioner for the services commissioned through this fund. The risks are shared based on the area of spend. The CCG owns the risks for Health related spend and Bristol City Council holds the risk for Social Care related spend as per the section 75 agreement.

Fund 5 is hosted by Bristol City Council and totals £16.515m, which is wholly made up of the improved Better Care (iBCF) and Winter Pressures funds. The fund includes contributions from the City Council only, which are paid directly to providers. The City Council controls this fund in its entirety and wholly owns any risk relating to this fund as per the Section 75 agreement.

Better Care Fund
Funding provided to the pooled
budget:
Bristol CCG
Bristol City Council
Total funding into Pooled Budget
Expenditure met from Pooled Budget
Bristol CCG
Bristol City Council
Total expenditure from Pooled Budget
Net surplus/(deficit) on the pooled
budget during the year
Bristol City Council’s share of the net
surplus/(deficit) arising on the pooled
budget		 Fund 1 Fund 2
Fund 3
£’000
£’000
£’000		 Fund 4
Fund 5
£’000
£’000		 Total
£’000
16,607
812
-
-
3,528
16,607
812
3,528
16,607
812
-
-
-
3,528
16,607
812
3,528		 15,629
25,547
16,515
41,176
16,515
15,629
-
27,098
16,515
42,727
16,515		 33,048
45,590
78,638
-
33,048
47,141
80,189
-
-
-		 (1,551)
-		 -
-
-
-		 (1,551)
-		 -

70

13 Members' Allowances

The Council paid the following amounts to members of the Council during the year.

Allowances 2020/21
£'000
1,395		 2019/20
£'000
1,246

In addition to the above, the elected Mayor is paid an annual allowance amounting to £80,871 (2019/20: £72,016)

71

14 Officers' Remuneration & Exit Packages

Where a senior officer’s annual salary is £50,000 or more, but less than £150,000, remuneration is disclosed individually by way of job title. For those senior officers whose salary is £150,000 or more, their name is also disclosed. The remuneration paid during the year was as follows:

2020/21 Salary, Fees
and
Allowances		 Compensation
for Loss of
Office
Pension
Contribution		 Total
Post Title Post Term Post Holder Notes £ £ £ £
Executive Director - Resources - Head of Paid Service Apr ’20 - Mar ‘21 M Jackson 169,538 - - 169,538
Executive Director - People Apr ’20 - Mar ‘21 J Jensen 1 169,538 - 36,163 205,701
Executive Directors - Growth and Regeneration Apr ‘20 – Mar ‘21 S Peacock 169,538 - 36,163 205,701
Director – Homes and Landlord Services Apr ’20 – Dec ‘20 J Higson 2 115,750 26,971 17,259 159,980
Statutory Officers- Director Adult Social Care Apr ’20 – Mar ‘21 H Evans 126,652 - 25,350 152,002
Statutory Officers- Chief Financial (S151) Apr’ 20 – Mar ‘21 123,300 - 26,300 149,600
Statutory Officers- Director Education and Skills Apr ’20 – Mar ‘21 107,888 - 23,013 130,901
Statutory Officers – Director of Public Health Apr ’20 - Mar ‘21 92,475 - 19,725 112,200
Statutory Officers- Service Director Legal and Democratic (Monitoring
Officer)		 Apr ’20 - Mar ‘21 87,338 - 18,629 105,967

1 Post holder left on 31[st] March 2021

2 Post holder left on 31[st] December 2020 3 Local authorities also pay the coroner’s salary or fees and agree other terms and conditions, but there is no contract of employment between the local authority and coroner. Coroners should not be equated in financial or other terms with chief officers.

*Fees paid in respect of individuals engaged on an interim basis

The Council also secured services from various individuals on an interim basis during 2019/20 and 2020/21. The amounts disclosed below in respect of these posts are the costs incurred by the Council to secure the individuals services on this basis and not the amounts these individuals actually received (which will have been lower). The fees payable by the Council in respect of these individuals amounted to £150,000 or more pro rata, in 2020/21 were as follows:

72

2019/20 Salary, Fees
and
Allowances		 Compensation
for Loss of
Office
Pension
Contribution		 Total
Post Title Post Term Post Holder Notes £ £ £ £
Executive Director - Resources - Head of Paid Service Apr ’19 - Mar ‘20 M Jackson 165,000 - - 165,000
Executive Director - People Apr ’19 - Mar ‘20 J Jensen 1 160,613 - 37,262 197,875
Executive Director - Growth and Regeneration (Interim)* Apr ’19 - Nov ‘19 C Molton 146,353 - - 146,353
Executive Directors - Growth and Regeneration Nov ’19 – Mar ‘20 S Peacock 61,875 - 14,355 76,230
Statutory Officers- Director Adult Social Care Apr ’19 – Mar ‘20 120,045 - 25,520 145,565
Statutory Officers- Director Education and Skills (Interim)* Apr’ 19 – Oct ‘19 A Stubbersfield 116,678 - - 116,678
Statutory Officers- Director Education and Skills Sep ’19 – Mar ‘20 56,292 - 13,060 69,351
Statutory Officers- Chief Financial (S151) Apr ’19 - Mar ‘20 120,000 - 27,840 147,840
Statutory Officers- Service Director Legal and Democratic (Monitoring
Officer)		 Apr ’19 - Mar ‘20 84,634 - 19,635 104,269
Statutory Officers – Director of Public Health Apr ’19 - Mar ‘20 90,000 - 20,880 110,880

1 Post previously called Executive Director - Adults, Children and Education

*Fees paid in respect of individuals engaged on an interim basis

The Council also secured services from various individuals on an interim basis during 2019/20. The amounts disclosed below in respect of these posts are the costs incurred by the Council to secure the individuals services on this basis and not the amounts these individuals actually received (which will have been lower). The fees payable by the Council in respect of these individuals amounted to £150,000 or more pro rata, in 2019/20 were as follows:

73

In addition to the remuneration of senior employees set out above, the number of the Council’s employees receiving more than £50,000 remuneration for the year (excluding employer’s contributions) is set out in the table below:

Remuneration band 2020/21
Number of employees		 2020/21
Number of employees		 2019/20
Number of employees		 2019/20
Number of employees
Schools Non-
Schools		 Schools Non-
Schools
£50,000 -£54,999 11 37 15 32
£55,000 -£59,999 13 42 14 39
£60,000 -£64,999 10 20 13 29
£65,000 -£69,999 10 32 15 26
£70,000 -£74,999 10 18 6 24
£75,000 -£79,999 3 27 2 5
£80,000 -£84,999 - 7 1 4
£85,000 – 89,999 - 4 1 2
£90,000 -£94,999 - 3 1 3
£95,000 -£99,999 - 4 - 3
£100,000 -£104,999 - - - 1
£105,000 -£109,999 - 2 - 3
£110,000 -£114,999 - 1 - -
£115,000 -£119,999 - - - 1
£120,000 - £124,999 - 2 - 2
Totals 57 199 68 174

Exit Packages

The numbers of exit packages relating to Council employees during 2020/21, with total cost per band and the total cost of compulsory and other redundancies are set out in the table below. The numbers and costs include packages agreed at the end of the year but not paid. Costs include the costs of early payment of pension in the cases of early retirement.

Exit package cost
band
£0 - £20,000
£20,001 - £40,000
£40,001 - £60,000
£60,001 - £80,000
£80,001 - £100,000
£100,001 - £150,000
£150,001 - £200,000
Total		 Number of
compulsory
redundancies		 Number of
compulsory
redundancies		 Number of other
departures		 Number of other
departures		 Total number of
exit packages by
cost band		 Total number of
exit packages by
cost band		 Total cost of exit
packages in each
band
2020/212019/20
£'000 £'000
98
229
61
227
-
341
-
-
-
92
-
102
-
-
159
991
2020/21 2019/20 2020/21 2019/20 2020/21 2019/20 2020/21
No. No. No. No. No. No. £'000
7 10 6 19 13 29 98
- 3 2 5 2 8 61
- - - 7 - 7 -
- - - - - - -
- - - 1 - 1 -
- - - 1 - 1 -
- - - - - - -
7 13 8 33 15 46 159

74

15 External Audit Costs

The Council has incurred the following costs in relation to the audit of the Statement of Accounts, certification of grant claims and statutory inspections and to non-audit services provided by the Council’s external auditors Grant Thornton.

external auditors Grant Thornton.
Fees payable to the External Auditor regarding external audit services
carried out by the appointed auditor for the year
Fees payable to the External Auditor for the certification of grant
claims and returns for the year
Fees payable in respect of other services provided by the External
Auditor during the year
Total		 2020/21
£'000
157
36
5
198
2019/20

£'000

211

32

-

243

75

16 Dedicated Schools Grant

The Council’s expenditure on schools is funded primarily by grant monies provided by the Education Funding Agency (EFA), the Dedicated Schools Grant (DSG). Once allocated to a local authority an element is recouped by the EFA to fund academy schools in the Council’s area. The DSG is ring-fenced and can only be applied to meet expenditure properly included in the Schools Budget, as defined in the School Finance and Early Years (England) Regulations 2018. The Schools Budget includes elements for a range of educational services provided on a Council wide basis and for the Individual Schools Budget (ISB), which is divided into a budget share for each maintained school.

Details of the deployment of DSG receivable are shown in the following table:

2019/20 2020/21
£’000 £’000
Central Total
Notes		 Central
Expenditure
ISB		 Expenditure
ISB		 Total
355,148
Final DSG before academy recoupment

374,259
189,088
Less: Academy figure recouped for year
1

200,955
166,060
Total DSG after academy recoupment

173,304
1,962
Plus: Brought forward from previous year
2

(2,892)
(2,407)
Less: Carry forward agreed in advance
3

-
170,429
Agreed initial budgeted distribution
27,100
143,329		 29,575
140,837		 170,412
(105)
In year adjustments
4
-
(105)		 -
(435)		 (435)
170,324
Final budgeted distribution
27,100
143,224		 29,575
140,402		 169,977
27,585
Less: actual central expenditure
27,585
-		 29,575
-		 29,575
143,224
Less: actual ISB deployed to schools
-
143,224		 -
150,406		 150,406
-
Plus: LA contribution for year
-
-		 -
-		 -
(485)
Carry forward
(485)
0		 -
(10,004)		 (10,004)
(2,407)
Carry forward agreed in advance
-
(2,892)
Total carried forward (Note 19)
5

(10,004)

  1. The academy recoupment in 2019/20 comprised 80 academies open at the start of the year plus 3 that converted in year and 1 that opened in year. The academy recoupment in 2020/21 comprised 84 academies open at the start of the year plus 2 that converted in year and 1 new that opened in year.

  2. This is the brought forward figure from 2019/20.

  3. Agreement with School Forum and Cabinet in January 2019, to accelerate funding from 2020/21 DSG to reflect in-year pressure in High Needs Block, now expired.

  4. The in-year estimated adjustment for the final early years block funding 2020/21, following the January 2021 census data up-date, due in summer 2021.

  5. The total carry forward deficit is £10.004m for the year. Included in the carry forward are surpluses for dedelegated budgets of £0.553m, £0.621 in Early Years Block, £0.619m Schools Block and the High Needs Transformation Programme of £0.812, with offsetting deficits of (£12.609m) in High Needs Block.

76

17 Grant Income

The Council credited the following grants and contributions to the Comprehensive Income and Expenditure Statement in 2020/21:

Credited to Taxation and Non Specific Grant Income:

Capital grants and contributions (Note 11 & see below)
Non service related government grants (Note 11)
Total		 2020/21
£'000
41,605
69,849
111,454
2019/20

£'000
33,664
23,402

57,066

Capital grants and contributions

Government grants applied:
People
Growth & Regeneration
Resources
Housing Revenue Account
Developer Contributions
Total Government Grants & Contributions applied
Government grants unapplied
Total grants credited to the CIES		 2020/21
£'000

1,955
32,805
50
481
5,918
41,209
396
41,605
2019/20

£'000

7,093

24,938

-

27

1,606

33,664

-

33,664

77

Grants Credited to Services

People
Adult Education
Better Care Fund
COVID-19 - Emergency Response Grants (Adult Social Care)
Dedicated Schools Grant
Education Services Grant
Education and Skills Funding Agency Grants
COVID-19 - Education and Skills Funding Agency Grants
Independent Living Fund Grant
PFI Special Grant
Pupil Premium
Troubled Families Grant
Youth Justice Board Grant
Other Care Grants (Adults)
Other Care Grants (Children)
Other
Growth & Regeneration
Discretionary Housing Payments
Go Ultra Low Grant
Homelessness Reduction & Support Grants
Housing Benefit (rent allowances/council tax benefit) subsidy
Housing Benefit Administration Subsidy
Housing Revenue Grant
Innovate UK Grant
Public Health
COVID-19 - Public Health Grants
Public Heath – Other
SWERCOTS
Travel & Transport Grants
Air Quality Grant
Arts Council England - Museums
Better Bus Area Fund
Bus Service Operators Grant (BSOG)
Sustainable Travel Access Fund
Winter Funding
COVID-19 – Business Support Grant
Other
Resources
COVID-19 – Tax Income Guarantee Grant
COVID-19 – Test & Trace Support Grant
Non City Council elections
Brexit
Local Crisis and Prevention Fund
Other
Total		 31 Mar
2021
£'000

1,582
14,736
9,358
172,870
988
12,840
1,743
1,665
17,652
7,066
1,659
759
3,533
4,390
1,449

1,351
2,307
4,226
127,922
2,804
-
438
33,259
15,810
271
424
157
1,393
2,096
87
-
2,535
1,640
18,662
5,039

1,420
752
25
86
608
477
476,079		 31 Mar
2020
£'000
2,079
14,487
-
165,955
10
11,318
-
1,669
17,433
7,133
1,684
747
1,830
3,481
804
1,154
1,022
4,046
136,205
2,596
76
-
31,628
-
317
402
232
1,146
1,898
172
448
2,336
2,028
13,545
4,735
-
-
615
307
-
467
434,005

78

The Council has received several grants, contributions and donations that have yet to be recognised as income as they have conditions attached to them that could require the monies or property to be returned to the giver. The balances at the year-end are as follows:

Capital Grants and Contributions Received in Advance
Government grants
Section 106 contributions
Total
Due < 1 year
Due > 1 year
Total
Revenue grants (within creditors)
People
Growth & Regeneration
Resources
Total		 31 March
2021
£'000
33,337
44,441
77,778
44,447
33,331		 Restated
31 March
2020
£'000
17,208
38,133
55,341
26,741
28,600
77,778
2,812
3,442
493
6,747		 55,341
-
-
31,919
31,919

79

18 Adjustments between Accounting Basis and Funding Basis under Regulations

This note details the adjustments that are made to the total comprehensive income and expenditure recognised by the Council in the year, in accordance with proper accounting practice to the resources that are specified by statutory provisions as being available to the Council to meet future capital and revenue expenditure.

2020/21
General
fund
balance
Housing
Revenue
Account
Capital
Receipts
£'000
£'000
£'000
Adjustment 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
(88,430)
(29,993)
Movement in the market value of Investment Properties
22,945
(379)
Amortisation of Intangible Assets
(4,137)
(388)
Capital grants and distributions
41,123
481
Revenue and expenditure funded from capital under statute
(18,636)
3,263
Amount of non-current assets written off on disposal or sale as part of the
gain/loss on disposal to the Comprehensive Income and Expenditure
Statement
(16,029)
(20,774)
Changes in Fair Value of Financial Instruments (MiRs)
1,669
Insertion of items not debited or credited to the Comprehensive Income and Expenditure Statement:
Statutory provision for the financing of capital investment
13,611
Capital expenditure charged against the General Fund and HRA balances
4,185
408
Adjustments involving the Capital Receipts Reserve:
Transfer of sale proceeds credited as part of the gain/loss on disposal to the
Comprehensive Income and Expenditure Statement
7,453
33,197
(40,649)
Administrative costs of non-current asset disposals
(163)
163
Use of the Capital Receipts Reserve to finance new capital expenditure
35,128
Contribution from the Capital Receipts Reserve to finance the payments to the
Government capital receipts pool
Adjustment Involving the Major Repairs Reserve (MRR):
HRA depreciation credited to MRR
29,332
Use of the MRR to finance new capital expenditure
Adjustments involving the Capital Grants Unapplied Account:
Application of grants and contributions to capital financing
Adjustments involving the Financial Instruments Adjustment Account:
Amount by which finance costs charged to the Comprehensive Income and
Expenditure Statement are different from finance costs chargeable in the year
in accordance with statutory requirements
177
Adjustments involving the Pensions Reserve:
Reversal of items relating to retirement benefits debited or credited to the
Comprehensive Income and Expenditure Statement (see Note 34)
(74,292)
(9,542)
Employer's pensions contributions and direct payments to pensioners payable
in the year
43,976
4,740
Adjustments involving the Collection Fund Adjustment Account:
Amount by which council tax income credited to the Comprehensive Income
and Expenditure Statement is different from council tax income calculated for
the year in accordance with statutory requirements
(88,413)
Adjustment involving the Accumulating Compensated Absences Adjustment Account:
Amount by which officer remuneration 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
(6,785)
Other Reserve Movements
(8,556)
Total Adjustment
-170,300
7,082
-2,095		 2020/21
General
fund
balance
Housing
Revenue
Account
Capital
Receipts
£'000
£'000
£'000
Adjustment 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
(88,430)
(29,993)
Movement in the market value of Investment Properties
22,945
(379)
Amortisation of Intangible Assets
(4,137)
(388)
Capital grants and distributions
41,123
481
Revenue and expenditure funded from capital under statute
(18,636)
3,263
Amount of non-current assets written off on disposal or sale as part of the
gain/loss on disposal to the Comprehensive Income and Expenditure
Statement
(16,029)
(20,774)
Changes in Fair Value of Financial Instruments (MiRs)
1,669
Insertion of items not debited or credited to the Comprehensive Income and Expenditure Statement:
Statutory provision for the financing of capital investment
13,611
Capital expenditure charged against the General Fund and HRA balances
4,185
408
Adjustments involving the Capital Receipts Reserve:
Transfer of sale proceeds credited as part of the gain/loss on disposal to the
Comprehensive Income and Expenditure Statement
7,453
33,197
(40,649)
Administrative costs of non-current asset disposals
(163)
163
Use of the Capital Receipts Reserve to finance new capital expenditure
35,128
Contribution from the Capital Receipts Reserve to finance the payments to the
Government capital receipts pool
Adjustment Involving the Major Repairs Reserve (MRR):
HRA depreciation credited to MRR
29,332
Use of the MRR to finance new capital expenditure
Adjustments involving the Capital Grants Unapplied Account:
Application of grants and contributions to capital financing
Adjustments involving the Financial Instruments Adjustment Account:
Amount by which finance costs charged to the Comprehensive Income and
Expenditure Statement are different from finance costs chargeable in the year
in accordance with statutory requirements
177
Adjustments involving the Pensions Reserve:
Reversal of items relating to retirement benefits debited or credited to the
Comprehensive Income and Expenditure Statement (see Note 34)
(74,292)
(9,542)
Employer's pensions contributions and direct payments to pensioners payable
in the year
43,976
4,740
Adjustments involving the Collection Fund Adjustment Account:
Amount by which council tax income credited to the Comprehensive Income
and Expenditure Statement is different from council tax income calculated for
the year in accordance with statutory requirements
(88,413)
Adjustment involving the Accumulating Compensated Absences Adjustment Account:
Amount by which officer remuneration 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
(6,785)
Other Reserve Movements
(8,556)
Total Adjustment
-170,300
7,082
-2,095		 Major
Repairs
Reserve
Capital
Gains
Unapplied
£'000
£'000
(29,332)
21,642
(395)		 Total
Movement
Usable
Reserves
£'000
(118,423)
22,566
(4,525)
41,604
(15,373)
(36,803)
1,669
13,611
4,592
-
-
35,128
-
-
21,642
(395)
177
0
(83,834)
48,716
(88,413)
(6,785)
(8,556)
-170,300
7,082
-2,095		 -7,690
-395		 -173,398

80

2019/20 General fund Housing Capital Major Capital Total
balance Revenue Receipts Repairs Grants Movement
Account Reserve Unapplied Usable
Reserves
£'000 £'000 £'000 £'000 £'000 £'000
Adjustment 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 (50,509) (30,790) (81,299)
Movement in the market value of Investment Properties 4,131 (387) 3,744
Amortisation and impairment of Intangible Assets (2,861) (373) (3,234)
Capital grants and distributions 33,636 27 33,663
Revenue and expenditure funded from capital under statute (10,225) 2,809 (7,416)
Amount of non-current assets written off on disposal or sale
as part of the (loss) on disposal to the Comprehensive Income (38,376) (8,473) (46,849)
and Expenditure Statement
Changes in Fair Value of Financial Instruments (17,079) (17,079)
Insertion of items not debited or credited to the Comprehensive Income and Expenditure Statement:
Statutory provision for the financing of capital investment 10,631 12,515 23,146
Capital expenditure charged against the General Fund and
HRA balances		 10,271 10,999 21,270
Adjustments involving the Capital Receipts Reserve:
Transfer of sale proceeds credited as part of the (loss) on
disposal to the Comprehensive Income and Expenditure 46,098 10,359 (56,458) (1)
Statement
Administrative costs of non-current asset disposals (645) 645 -
Use of the Capital Receipts Reserve to finance new capital
expenditure		 30,688 30,688
Contribution from the Capital Receipts Reserve to finance the
payments to the Government capital receipts pool		 (2,113) 2,113 -
Adjustment Involving the Major Repairs Reserve (MRR):
Excess depreciation transferred to the MRR -
HRA depreciation credited to MRR 25,668 (25,668) -
Use of the MRR to finance new capital expenditure 25,668 25,668
Adjustments involving the Capital Grants Unapplied
Account:
Application of grants and contributions to capital financing 1,234 1,234
Adjustments involving the Financial Instruments Adjustment Account:
Amount by which finance costs charged to the Comprehensive
Income and Expenditure Statement are different from finance
costs chargeable in the year in accordance with statutory		 178 178
requirements
Adjustments involving the Pensions Reserve:
Reversal of items relating to retirement benefits debited or
credited to the Comprehensive Income and Expenditure (88,105) (9,829) (97,934)
Statement (see Note 33)
Employer's pensions contributions and direct payments to
pensioners payable in the year		 45,272 4,859 50,131
Adjustments involving the Collection Fund Adjustment Account:
Amount by which council tax income credited to the
Comprehensive Income and Expenditure Statement is
different from council tax income calculated for the year in		 351 351
accordance with statutory requirements
Adjustment involving the Accumulating Compensated Absences Adjustment Account:
Amount by which officer remuneration charged to the
Comprehensive Income and Expenditure Statement on an
accruals basis is different from remuneration chargeable in the		 (233) (233)
year in accordance with statutory requirements
Other Reserve Movements
Total Adjustment (59,578) 2,060 (7,688) 0 1,234 (63,972)

81

19 Usable Reserves

Reserves represent the Council’s net worth and show its spending power. Usable reserves result from the Council’s activities and can be spent in the future. This note sets out the amounts set aside and posted back to Usable Reserves in 2020/21, they include:

Details of specific earmarked reserves are as follows,

RESERVE PURPOSE
Capital Investment
Reserve		 The capital reserve is maintained to provide funding for the Council’s capital
investments and growth in Enterprise areas.
Business Transformation
Reserves		 Invest to save funds. The reserve will be used to fund one-off costs attributed
to delivery of savings in the currently agreed programme.
Risk Reserves Risk Reserves Funds set aside to mitigate known risks not otherwise provided
for including, volatility in Housing Benefit Subsidy and uninsured risks.
Statutory/Ring-fenced
reserves		 Amounts required by statute or accounting code of practice to be set aside and
ring-fenced for specific purposes, for example Public Health Reserve, City
Deal Business Rate Pooling, Stoke Park Dowry Covid 19 Support grant.
Technical/Financing
Reserve		 Technical Financial Reserves - Includes PFI sinking fund, grant income carried
forward in accordance with accounting regulations and resources set aside to
match known contract liabilities.
Service specific reserves Amounts set aside to finance specific projects or to meet known expenditure
plans, including:
- Bristol Futures - to provide new technology to improve public services
- Development Fund primarily to fund Docks Asset Survey
existing and proposed regeneration schemes
- Housing Support to provide support for homelessness issues

82

01 April Transfers Transfers 31-Mar- 01 April Transfers Transfers 31 March
2019 out in 20 2020 out in 2021
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Total General Fund Strategic
Reserve		 (23,258) 0 (3,258) (17,001) (17,001) 0 (18,665) (35,666)
General Fund Earmarked
Reserves
Capital Investment Reserve (14,230) 10,065 (7,500) (25,166) (25,166) 1,501 (11,969) (35,634)
Business Transformation Reserve (4,362) 1,322 - (3,131) (3,131) 798 (1,000) (3,333)
Risk Management Reserve (18,609) 7,253 (4,622) (16,050) (16,050) 10,233 (100,176) (105,993)
Statutory/Ring-fenced Reserve (14,825) 1,502 (1,685) (31,255) (31,255) 32,350 (50,288) (49,192)
Financing Reserve (11,735) 3,107 (1,242) (9,218) (9,218) 3,323 (713) (6,608)
Service Specific Reserves (17,419) 38 (1,997) (12,570) (12,570) 3,978 (11,355) (19,947)
Total (81,179) 23,287 (17,046) (97,390) (97,390) 52,184 (175,501) (220,707)
School Reserves
Schools – DSG (1,962) 0 (2,978) 2,892 2,892 (2892) 0 0
Schools - Balances (8,365) 0 (2,994) (8,910) (8,910) 1,729 0 (7,180)
Schools - Other (2,166) 240 0 (1,284) (1,284) 978 (42) (348)
Total Schools (12,493) 240 (5,972) (7,302) (7,302) (184) (42) (7,529)
HRA
HRA General Reserve (78,718) 0 (7,449) (87,526) (87,526) 601 (10,865) (97,791)
Major Repairs Reserve (3,606) 0 (2,381) (3,606) (3,606) 21,642 (29,332) (11,296)
HRA Earmarked Reserves (7,852) 0 (507) 0 0 601 (1,251) (651)
Total HRA Reserves (90,176) 0 (10,337) (91,132) (91,132) 22,843 (41,448) (109,737)
Capital Reserves
Capital Grants Received in
Advance		 (3,919) 14,765 (22,116) (2,685) (2,685) 107,570 (107,966) (3,080)
Capital Receipts Unapplied (70,824) 0 (915) (78,512) (78,512) 45,138 (45,117) (78,491)
Total Usable Capital Reserves (74,742) 14,765 (23,031) (81,196) (81,196) 152,708 (153,083) (81,571)
TOTAL USABLE RESERVES (281,848) 38,292 (59,644) (294,021) (294,021) 227,550 (388,739) (455,209)

83

20 Property, Plant and Equipment Movements in 2020/21

The valuations, excluding vehicles, plant, equipment, infrastructure assets and community assets are carried out by Richard Fear, MRICS, Property Investment Manager – Growth & Regeneration. The basis for the valuation of all assets is set out in the statement of accounting policies.

Council Dwellings Other Land and
Buildings		 Vehicles, Plant, Furniture and
Equipment		 Infrastructure Assets Community Assets Assets under Construction Surplus Assets Total Property, Plant
and Equipment		 PFI Assets included in Property, Plant and Equipment
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Cost or valuation
At 1 April 2020 1,685,723 656,097 81,595 355,103 7,681 11,711 42,113 2,840,023 27,044
Additions 22,801 14,850 10,762 18,455 263 36,514 104 103,729 -
Revaluation increases/(decreases)
recognised in the Revaluation
Reserve 82,579 52,100 - - - (236) 6,796 141,239 (140)
Revaluation increases/(decreases)
recognised in the surplus/deficit on
the Provision of Services - (29,962) - - - (40,396) (868) (71,226) -
De-recognition - Disposals (8,340) (13,405) (3,951) - - - (4,249) (29,945) -
Assets reclassified to/from Held
for Sale - - - - - (83) (83) -
Assets reclassified to/from
Investment Property (552) - - - - 17 (535) -
Other movements in cost or
valuation 3614 (21,147) 1,538 - (74) 16,069 - - -
At 31 March 2021 1,786,377 657,981 89,944 373,538 7,870 23,662 43,830 2,983,202 26,904
Accumulated Depreciation and Impairment
At 1 April 2020 (12,579) (16,994) (35,150) (55,957) (416) (4) (156) (121,256) (313)
Depreciation Charge (28,756) (18,428) (7,380) (10,874) (260) (65,698) (635)
Depreciation written out to
Revaluation Reserve 26,884 - - - - 26,884 630
Depreciation written out to
Surplus/Deficit on the provision of
Services 18,003 - - 312 257 18,572 -
De-recognition - disposals 65 333 3,951 - 51 4,400 -
Other movements in Depreciation
and Impairment 8 360 - - (312) (16) 40 -
At 31 March 2020 (14,378) (16,726) (38,579) (66,831) (416) (4) (124) (137,058) (318)
Balance Sheet at 31 March 2021 1,771,999 641,255 51,365 306,707 7,454 63,428 43,706 2,846,144 26,586
Balance Sheet at 1 April 2020 1,673,144 639,103 46,445 299,146 7,265 11,707 41,957 2,218,767 26,731

84

Property, Plant and Equipment Comparative movements in 2019/20

Council Dwellings Other Land and
Buildings		 Vehicles, Plant, Furniture and Equipment Infrastructure Assets Community Assets Assets under Construction Surplus Assets Total Property, Plant
and Equipment		 PFI Assets included in Property, Plant and Equipment
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Cost or valuation
At 1 April 2019 1,664,252 585,955 68,595 331,124 8,715 30,383 43,129 2,732,153 22,975
Additions 31,925 29,052 20,102 25,312 1,011 6,988 1,832 116,222 -
Revaluation
increases/(decreases)
recognised in the Revaluation
Reserve (3,244) 75,178 - - 652 - 694 73,280 4,528
Revaluation
increases/(decreases)
recognised in the
surplus/deficit on the
Provision of Services - (27,216) - (208) (2,062) (331) (3,298) (33,115) (459)
De-recognition - Disposals (6,420) (13,318) (7,028) - - (17,990) (2,079) (46,835) -
Assets reclassified to/from
Held for Sale - - - (1,800) (1800) -
Assets reclassified to/from
Investment Property 270 (152) - - 118 -
Other movements in cost or
valuation (1,060) 6,598 (74) (1,125) (635) (7,339) 3,635 - -
At 31 March 2020 1,685,723 656,097 81,595 355,103 7,681 11,711 42,113 2,840,023 27,044
Accumulated Depreciation and Impairment
At 1 April 2019 (12,269) (9,597) (37,120) (45,743) (240) (7) (368) (105,344) (229)
Depreciation Charge (25,158) (16,567) (5,191) (10,539) - - (382) (57,837) (543)
Depreciation written out to
Revaluation Reserve 24,779 - - - - - - 24,779 -
Depreciation written out to
Surplus/Deficit on the
provision of Services - 8,715 - - - - 1015 9,730 459
De-recognition - disposals 51 287 7,013 - - 11 52 7,414 -
Other movements in
Depreciation and Impairment 18 168 148 325 (176) (8) (473) 2 -
At 31 March 2020 (12,579) (16,994) (35,150) (55,957) (416) (4) (156) (121,256) (313)
Balance Sheet at 31 March
2020 1,673,144 639,103 46,445 299,146 7,265 11,707 41,957 2,718,767 26,731
Balance Sheet at 1 April 2019 1,651,983 576,358 31,475 285,381 8,475 30,376 42,761 2,626,809 22,746

85

Depreciation is provided for on all Property, Plant and Equipment assets by the systematic allocation of their depreciable amounts over their useful lives. The following useful lives and depreciation rates have been used:

Capital Commitments

On 31 March 2021 the Council had entered several contracts for the construction or enhancement of Property, Plant and Equipment with outstanding contract commitments of £64.2m.

Significant contractual commitments outstanding at 31 March 2021 were as follows:

£m
Bristol Beacon - Cultural refurbishment scheme Willmott Dixon Construction Ltd 9.5
Avonmouth and Severnside Enterprise Area - Flood defences South Gloucestershire Council 8.5
School rebuild and expansion - Perry Court Primary School Bristol LEP Ltd (Skanska) 5.8
Bristol Waste (agency agreement) - Hartcliffe site construction Bristol Waste Company Ltd 5.2
New Housing Provision - Registered Provider grants Clarion Housing Group Ltd 4.8
School expansion - KnowleDGE Special School 6th form Bristol LEP Ltd (Skanska) 3.8
Transport Cumberland Road Stabilisation works Alun Griffiths (Contractors) Ltd 3.6
Priority Stock - Refurbishment at Silcox Rd Rateavon Ltd 3.4
Energy District Heat Networks - Castle Park Energy Centre Goram Homes Ltd 3.4
School Expansion - Cathedral Schools Trust Trinity Academy Bristol LEP Ltd (Skanska) 2.7
Transport Redcliffe Bridge Refurbishment Cleveland Bridge UK Ltd 2.2
Transport - Floating pontoon walkway Knights Brown Construction Ltd 1.9
New Housing Provision - Multi-disciplinary services Perfect Circle JV Ltd 1.7
Temple Island Development - Multi-disciplinary services Perfect Circle JV Ltd 1.4
Sea Mills Assisted Living Centre Refurbishment Kier Construction Ltd 1.2
Bristol Beacon - Project Management services Arcadis Ltd 1.2
Transport Highways Resurfacing (DfT Challenge Bid 2020) Eurovia Infrastructure Ltd 1.2
Total 61.5

86

Revaluations

The Council carries out a rolling programme that ensures all Property, Plant and Equipment required to be measured at fair value is revalued at least every 5 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. Vehicles, Plant and Equipment are valued at historic cost, which is considered to be a suitable proxy for fair value. The following table shows the effective valuation dates for all Property Plant and Equipment:



Council
Dwellings		 Other Land and
Buildings		 Vehicles, Plant,
etc.		 Infrastructure Community
Assets		 Assets Under
Construction		 Surplus Assets Total Property,
Plant and
Equipment
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Carried at
historical
cost		 - 4,116 89,944 373,538 7,870 11,768 - 487,236
1 Oct 2019 1,786,377 583,102 - - - 1,031 43,830 2,414,340
1 Oct 2018 - 9,154 - - - 1,166 - 10,320
1 Dec 2017 - 12,019 - - - 300 - 12,319
1 Apr 2016 - 9,105 - - - 9,348 - 18,453
1 Apr 2015 - 40,485 - - - 49 - 40,534
Total cost
valuation		 1,786,377 657,981 89,944 373,538 7,870 23,622 43,830 2,983,202

In addition, the Council has instructed its valuers to undertake a review of all assets held in the Other Land and Buildings category to ensure that the carrying value of assets last valued in previous years is not materially different from their fair value. To perform this exercise, the Other Land and Building category was split into subcategories, for example schools, car parks, leisure and culture etc. The review concluded that the fair value was not materially different from the carrying value at the Balance Sheet date.

87

21 Heritage Assets

Reconciliation of the carrying value of Heritage Assets held by the Council.

Cost or valuation
01 April 2020
Additions
Revaluations
31 March 2021
Cost or valuation
01 April 2019
Additions
Revaluations
31 March 2020		 Art
Collection
Ethnography
& Foreign
Archaeology
£'000
£'000		 Antiquarian
books
Other
Total
£'000
£'000
£'000
126,625
42,588
96
0
3,167
6		 7,675
27,168
204,056
0
0
96
0
81
3,254
129,888
42,594		 7,675
27,249
207,406
125,031
42,593
335
1,259
-5		 7,675
26,795
202,094
5
340
-
368
1,622
126,625
42,588		 7,675
27,168
204,056

The above collection of Heritage Assets is predominantly valued on an annual insurance valuation basis, and some items classified as “other” are valued at historic cost.

Heritage Assets: Further Information on the Museum’s collections

Loans

The Museum occasionally makes available loan items from its collection to regional and national museums and borrows collections for specific exhibitions. Collections not on display are held in secure storage but access is permitted on an appointment basis.

Preservation

The collections have been under the care of conservators since the 1940s. They specialise in antiquities, paintings, paper and photographs, and preventive conservation and are based at Bristol Museum and Art Gallery. Our conservators:

88

22 Investment Properties

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

Rental income from Investment Property
Direct operating expenses arising from Investment Property
Net gain		 2020/21
£'000
11,161
(592)
10,569
2019/20

£'000

11,998
(524)

11,474

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 to carry out repairs, maintenance or enhancement.

The following table summarises the movement in the fair value of Investment Properties over the year:

Balance at start of the year
Additions – purchases
Disposals
Net gains/losses from fair value adjustments
Transfers to/from Property, Plant and Equipment
Balance at end of the year		 2020/21
2019/20

£'000
249,251
-
(289)
3,744
(120)

252,586
£'000
252,586
256
-
22,566
495
275,903

Gains or losses arising from changes in the fair value of the investment property are recognised in the surplus or deficit on the provision of services – financing and investment.

Fair Value Hierarchy

Details of the authority’s investment properties and information about the fair value hierarchy are as follows:

Retail
Industrial
Office
Balance at end of the year		 Other significant observable
inputs
(Level2)
2020/21
2019/20
£'000
£'000
67,540
66,834
144,779
121,361
63,584
64,391
275,903
252,586

The investment properties have been valued by the Council’s in-house valuers (all RICS qualified) and by external specialists on an investment income basis which represents highest and best use overall.

There is a strong market for such property within Bristol with different markets for different sectors. Bristol City Council has a significant diverse portfolio of properties in the boundary of Bristol and has significant inhouse experience of managing its estate. In determining the value of each asset, we have considered quoted prices for similar properties within the local market, existing lease terms and rentals, current market rentals and yields, the covenant strength for existing tenants and data and market knowledge from managing the Council’s investment property portfolio, leading to the properties being categorised at Level 2 in the fair value hierarchy.

89

23 Intangible Assets

The Council accounts for its Information Technology (IT) system software as Intangible Assets which includes purchased licenses covering a period of more than a year. All software is amortised over five years (this is based on assessments of the period that the software is expected to be of use to the Council). All software is carried at cost (used as a proxy for fair value) given the short life of the asset.

The carrying amount of Intangible Assets is amortised on a straight-line basis. The amortisation of £4.5m charged to revenue in 2020/21 was charged to the central ICT cost centre and the Housing Revenue Account. The charge to central ICT was absorbed as an overhead across all the service headings in the Net Cost of Service. It is not possible to quantify exactly how much of the amortisation is attributable to each service heading. The main purchases in 2020/21 relate to system improvements from within the IT Transformation programme (ITTP).

The movement on Intangible Asset balances during the year is as follows:

Balance at start of the year
Gross carrying amounts
Accumulated amortisation
Accumulated impairment
Net carrying amount at start of year
Additions:
Purchases
Amortisation for the period
Net carrying amount at the end of year
Comprising:
Gross carrying amounts
Accumulated amortisation
Accumulated impairment
Balance at end of the year		 2020/21
£'000

33,792
-15,820
-2,014
15,958

9,140
-4,525
20,573

42,932
-20,345
-2,014
20,573		 2019/20
£'000
26,172
-12,585
-2,014
11,573
7,620
-3,235
15,958
33,792
-15,820
-2,014
15,958

90

24 Financial Instruments

The borrowings and investments disclosed in the Balance Sheet are made up of the following categories of financial instruments. The value of debtors and creditors reported in the table are those amounts meeting the definition of a financial instrument. The balances of debtors and creditors reported in the balance sheet and associated notes also include balances which do not meet the definition of a financial instrument, such as taxbased debtors and creditors.

based debtors and creditors.
Long-Term Current
31 March 31 March 31 March 31 March
2021 2020 2021 2020
£'000 £'000 £'000 £'000
Financial Liabilities at Amortised
cost
Borrowing (450,488) (450,488) (4,966) (14,778)
Service Concessions (123,910) (131,735) (8,951) (8,820)
Creditors (94) (84) (194,467) (144,019)
Financial Liabilities at Fair Value
through profit and loss
Financial Derivative (5,379)
Total Financial Liabilities (574,492) (582,307) (208,384) (172,996)
Financial Assets at amortised cost
Investments - 1 85,079 102,502
Debtors 11,332 10,487 92,809 70,039
Financial Assets at Fair Value
through Other Comprehensive
Income
Investment 350 350 -
Financial Assets at Fair Value
through profit and loss
Investments 43,220 41,723 101,476 56,017
Total Financial Assets 54,902 52,561 279,364 228,558

Movements

The increase in financial liabilities, circa £27m relates to an increase in the value of general creditors (£50m) during the year primarily due to government grants being received in advance. This was partly offset by the planned repayment of long-term borrowing (£10m) and service concessions (£8m), and the cancelling of parental company guarantees (£5m).

The financial assets increased by circa £53m through a combination of increases in working capital and reserves resulting in additional cash resources to invest in lieu of using these resources.

91

Borrowing

31 March
31 March
2021
2020
Current borrowing £'000
£'000
Deposit loans (repayable at notice - up to 7 days) 101
151
Other short-term borrowing (repayable within 1 year):
- Public Works Loan Board 3,251
13,470
- Banks and other monetary sector 1,334
1,136
- Energy improvement Loans 259
-
- Local bonds and property rent disposals 11
11
- Stocks 10
10
Total 4,966
14,778
31 March
31 March
2021
2020
Non-current borrowing £'000
£'000
Public Works Loan Board 330,439
330,439
Lender Option Borrower Option (Lobo) 70,000
70,000
Market Debt 50,000
50,000
Stocks 49
49
Total 450,488
450,488

92

Income, Expense, Gains or Losses

The gains and losses recognised in the Comprehensive Income and Expenditure Statement for financial instruments are as follows:

follows: follows: follows: follows:
Financial Instruments Gains and Losses 2020/21
Financial
Liabilities Financial Assets
Measured
at
amortised
cost		 Amortised
Cost		 Fair
Value
through
the CI		 Fair
Value
through
the P&L		 Total
£'000 £'000 £'000 £'000 £'000
Interest expense & Impairment
Losses (28,862) - - - (28,862)
Total expense in Surplus or
Deficit on the Provision of
Services (28,862) - - - (28,862)
Interest Income - 5,113 - 109 5,222
Fair Value Movement - - - 1,669 1,669
Dividend Income - - - 4,046 4,046
Total income in Surplus or
Surplus / Deficit on the
Provision of Services (28,862) 5,113 - 5,824 (17,925)
Deficit arising on revaluation of
financial assets in Other
Comprehensive Income and
Expenditure - - - - -
Net gain/(loss) for the year (28,862) 5,113 - 5,824 (17,925)
Financial Instruments Gains and Losses 2019/20
Financial
Liabilities Financial Assets
Measured Fair Fair
at
amortised		 Amortised
Cost		 Value
through		 Value
through		 Total
cost the CI the P&L
£000s £000s £000s £000s £000s
Interest expense (40,647) -
-		 - (40,647)
Total expense in Surplus or
Deficit on the Provision of
Services (40,647) -
-		 - (40,647)
Interest Income -
5,861		 - 301 6,162
Increases in Fair Value - - - (17,079) (17,079)
Dividend Income -
-
-		 4,070 4,070
Total income in Surplus or
Deficit on the Provision of
Services (40,647)
5,861		 - (12,708) (47,494)
Surplus / Deficit arising on
revaluation of financial assets in
Other Comprehensive Income
and Expenditure -
-
-		 - -
Net gain/(loss) for the year (40,647) 5,861 - (12,708) (47,494)

93

Fair Value of Financial Assets and Property Assets

Some of the authority’s financial assets are measured in the Balance Sheet at fair value on a recurring basis and are described in the following table, including the valuation techniques used to measure them.

Fair value measurements at 31
**March 2021 using: **		 Fair value measurements at 31
**March 2021 using: **		 Fair value measurements at 31
**March 2021 using: **		 Fair value measurements at 31
**March 2020 using: **		 Fair value measurements at 31
**March 2020 using: **		 Fair value measurements at 31
**March 2020 using: **
Descriptions Quoted
prices in
active
markets		 Observable
inputs		 Unobservable
inputs		 Quoted
prices in
active
markets		 Observable
inputs		 Unobservable
inputs
Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
£000 £000 £000 £000 £000 £000
Recurring fair value
measurements
Fair Value through
Profit and Loss
MoneyMarket Funds 101,476 - - 56,017 - -
Bristol Port Company
(Non-traded Unquoted
EquityInvestment)		 - - 29,000 - - 27,000
Bristol Holdings
(unquoted equity
investment)		 - - 4,992 - - 5,623
Other unquoted private
companies		 - - 128 - - 100
Pooledpropertyfund - - 9,100 - - 9,000
Fair Value through
Other Comprehensive
Income
Other unquoted private
companies		 - - 350 - - 350
Total Non-traded
securities:		 101,476 - 43,570 56,017
-		 42,073
Investmentproperties - 275,903 - - 252,586 -
Surplusproperties - 43,706 - - 41,957 -
Total recurring fair
value measurements		 101,476 319,609 43,570 56,017 294,543 42,073
Non-recurring fair value
measurements
Assets held for sale 806 -
723
-
Total non-recurring fair
value measurements		 - 806 - -
723		 -

94

Valuation
techniques and
Inputs
Description of
asset		 Valuation
hierarchy		 Basis of Valuation Observable and
Unobservable
inputs		 Key sensitivities
affecting the
valuations provided
Money Market
Funds		 Level 1 Unadjusted quoted prices
in active markets for
identical shares		 Latest quoted prices
Surplus assets Level 2 All surplus assets have
been valued by RICS
qualified valuers to Fair
Value less costs to sell,
reflecting highest and
best use.		 Evidence of title,
floor area, siting and
site conditions,
type/age and
current use of the
property have been
considered together
with general market
conditions and
advertised value of
similar properties
currently up for sale.		 Not all assets are
physically inspected
every year. Latent
defects, repair and
maintenance
backlogs, general
changes in the
market and other
impairments could
have a significant
impact on the values
provided.
Investment
Properties(further detailed
information in note 22)		 Level 2 All investment properties
have been valued by the
Council’s in-house
valuers (all RICS
qualified) on an
investment income basis
which we are satisfied
represents highest and
best use overall.		 All valued on an
investment income
basis, using existing
lease terms and
current yields		 Changes to market
conditions, lease
terms, covenant
strength and
occupancy levels
could all affect the
asset valuations
provided.
Bristol Port
Company		 Level 3 This investment has been
valued by an external
specialist valuation
company for financial
year ending 31stMarch
2020 and refreshed by
Council officers for this
financial year on the
same basis.		 Calculations have
been based an
income approach to
valuation, by
applying a multiple
derived from the
market to a
maintainable profit
figure.		 Changes to market
conditions (local and
global), and the
comparable data used
within the valuations.
If the growth of
future returns is
greater or lesser by
0.5% than the 2%
forecast, the fair
value will be circa
£1.5m higher or
lower respectively.
Bristol Holdings Level 3 This investment has been
valued at the Council’s
share of each company’s
net assets.		 Calculations have
been based on their
unaudited accounts
as at 31 March 2021.		 Valuations could be
affected by the
difference between
audited and
unaudited accounts.

95

Investments in other
unquoted companies		 Level 3 These investments have
been valued at the
Council’s share of each
company.		 Calculations have
been based on their
latest audited
accounts		 The value of these
companies is
relatively low (£478k)
so any change in the
metrics used in the
valuation technique
will not have a
material impact.
Investments in
Pooled Property
Fund		 Level 3 These investments have
been valued at the
Council's share within
the pooled fund.		 The valuation for
Pooled Property
Funds has been
based on the latest
quarterly financial
report		 Changes to housing
market conditions
could affect the
valuation of the
pooled property
fund. If the market
value of the
properties within this
fund is greater or
lesser than 1% the
fair value of the fund
will be £91k higher
or lower respectively.

96

Transfers between levels of the fair value hierarchy

There were no transfers between levels 1 and 2 during the year.

Changes in valuation technique

There has been no change in valuation techniques used during the year.

Reconciliation of fair value measurements for assets at fair value within level 3

31 March
31 March
2021
2020
Non-traded
securities
Non-traded
securities
£000
£000
42,073
51,860
-
-
-
-
1,597
(17,079)
-
-
1,597
(17,079)
100
7,842
(200)
(550)
43,570
42,073
Description
Opening balance
Transfers into level 3
Transfers out of level 3
included in the surplus/(deficit) on the
Provision of Services
included in Other Comprehensive Income and
Expenditure
Total gains/(losses) for the period:
Additions
Disposals
Closing balance

Gains and losses included in the surplus / (deficit) on the provision of services for the current year primarily relates to the investments in Bristol Port (+£2m) and Bristol Holdings (-£631k).

97

The Fair Values of Financial Assets and Financial Liabilities that are not Measured at Fair Value

Except for the financial assets carried at fair value (described in the table above), all other financial liabilities and financial assets represented by loans and receivables and long-term debtors and creditors are carried on the balance sheet at amortised cost. Their fair value can be assessed by calculating the present value of the cash flows that take place over the remaining life of the instruments, using the following assumptions:

Financial Liabilities 31 March 2021 31 March 2020
Carrying
amount
Fair value		 Carrying
amount
Fair value
£000
£000		 £000
£000
Public Works Loan Board (PWLB) 333,690
501,500		 343,909
480,200
Lender Option Borrower Option 70,865
108,400		 70,663
99,400
Market Debt 50,469
74,700		 50,473
69,200
Current Creditors 194,467
194,467		 144,019
144,019
Service Concessions 132,861
204,061		 140,555
212,819
Other 524
524		 305
305
Total Liabilities 782,876
1,083,652		 749,924
1,005,943

The Authority has used a transfer value for the fair value of financial liabilities. We have also calculated an exit price fair value of £1.237m a decrease of £156m which is calculated using early repayment discount rates. The Authority has no contractual obligation to pay these penalty costs and would not incur any additional cost if the loans run to their planned maturity date.

The fair value for financial liabilities and assets has been assessed by calculating the present value of the cash flows that will take place over the remaining term of the instruments, using the assumptions detailed above; the fair value is arrived at by applying the discounted cash flow calculations based on the PWLB premium/discount calculations.

The fair value of the liabilities is higher than the carrying amount because the Authority’s portfolio of loans includes several fixed rate loans where the interest rate payable is higher than the prevailing rates at the Balance Sheet date. This shows a notional future loss (based on economic conditions at 31 March 2021) arising from a commitment to pay interest to lenders above current market rates.

Financial Assets 31 March 2021 31 March 2020
Carrying
amount
Fair value		 Carrying
amount
Fair value
£000
£000		 £000
£000
Current investments 64,983
64,983		 33,076
33,076
Cash and Cash Equivalents 20,096
20,096		 69,426
69,426
Non-current investments -
-		 1
1
Current Debtors 92,809
92,809		 70,039
70,039
Non-current debtors 11,332
11,332		 10,487
10,487
Total Financial Assets 189,220
189,220		 183,029
183,029

98

The fair value of the assets is the same as the carrying value due to the majority of these assets having a maturity of less than 12 months or is a trade or other receivable where the fair value is taken to be the carrying amount or the billed amount.

Short-term debtors and creditors are carried at cost as this is a fair approximation of their value.

Fair value hierarchy for financial assets and financial liabilities that are not measured at fair value

Fair value measurements at 31 Fair value measurements at 31 Fair value measurements at 31 Fair value measurements at 31 Fair value measurements at 31 Fair value measurements at 31
March 2021 using: March 2020 using:
Quoted Observable Unobservable Quoted
Observable		 Unobservable
prices in
inputs		 inputs prices in
inputs		 inputs
active active
markets markets
Descriptions
Level 1
Level 2		 Level 3 Level 1
Level 2		 Level 3
£000
£000		 £000 £000
£000		 £000
Recurring fair value
measurements using:
Financial Liabilities
held at Amortised Cost
Public Works Loan Board
(PWLB) 333,690 343,909
Lender Option Borrower
Options 70,865 70,663
Market debt 50,469 50,473
Service Concessions 132,861 140,555
Other 524 305
Total 588,409 605,905
Financial Assets held at
amortised cost
Current Investments 64,983 33,076
Cash and Cash
Equivalents 20,096 69,426
Non-current Investments - 1
Non-current Debtors 11,332 10,487
Total 96,411 112,990

The fair value for financial liabilities and financial assets that are not measured at fair value included in Levels 2 and 3 in the table above have been arrived at using a discounted cash flow analysis with the most significant inputs being the discount rate detailed above.

The fair value for financial liabilities and financial assets that are not measured at fair value can be assessed by calculating the present value of the cash flows that will take place over the remaining term of the instruments, using the assumptions detailed above, primarily for financial liabilities the fair value is arrived at by applying the discounted cash flow calculations based on the PWLB premium/discount calculations.

99

25 Nature and Extent of Risks Arising from Financial Instruments

The Authority’s activities expose it to a variety of financial risks:

The Council’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the resources available to fund services. Risk management is carried out by a central treasury team, under policies approved by the Council in the annual treasury management strategy, and compliance with the CIPFA Prudential Code of Practice, the CIPFA Treasury Management Code of Practice, and Investment Guidance that is issued under the Local Government Act 2003. The Council provides written principles for overall risk management, as well as written policies covering specific areas, such as interest rate risk, credit risk, and the investment of surplus cash. These are required to be reported and approved at or before the Council’s annual council tax setting budget or before the start of the year to which they relate. These items are reported with the annual treasury management strategy that outlines the detailed approach to managing risk in relation to the Council’s financial instrument exposure. Actual performance is also reported annually to Members.

The annual treasury management strategy which incorporates the prudential indicators was approved by Council on 25 February 2020 and is available on the Council website.

Credit risk

Credit risk arises from deposits with banks and financial institutions, as well as credit exposures to the Council’s customers.

This risk is minimised through the Annual Investment Strategy, which requires that deposits are not made with financial institutions unless they meet identified minimum credit criteria, in accordance with Fitch, Standard and Poor’s and Moody’s Credit Ratings Services. The Annual Investment Strategy also imposes a maximum sum to be invested with a financial institution located within each category.

Details of the Investment Strategy can be found on the Council’s website. The key areas of the Investment Strategy are that the minimum criteria for investment counterparties include:

The Council’s maximum exposure to credit risk in relation to its investments in banks and building societies will vary according to credit ratings assigned by the three main credit rating agencies and cannot be assessed generally as the risk of any institution failing to make interest payments or repay the principal sum will be specific to each individual institution. Recent experience has shown that it is rare for such entities to be unable to meet their commitments. A risk of irrecoverability applies to all the Authority’s deposits, but there was no evidence at the 31 March 2021 that this was likely to crystallise.

100

Allowance for Credit Losses

The following analysis summarises the Council’s potential maximum exposure to credit risk on financial assets valued at amortised cost, based on experience of default and un-collectability over the last five financial years, adjusted to reflect current market conditions.

Amount Historical
experience
of default
Adjustmen
t
for
market
conditions		 Estimate
d
maximu
m
exposure
to default
Estimate
d
maximu
m
exposure
to default
£000 %
%		 £000
£000
A B
C		 (A*C)
Non-Current Investments: 31-Mar-21 31-Mar-21
31-Mar-21		 31-Mar-21
31-Mar-20
Non-traded securities - 0.00%
0.00%		 -
-
Sub-total - -
-
Current Investments:
Local Authorities 45,013 0.00%
0.00%		 -
-
AA rated counterparties 15,585 0.03%
0.03%		 5
-
A rated counterparties 24,481 0.04%
0.04%		 10
18
Sub-total 85,079 15
18
Trade debtors 92,809 -
-
Non-current debtors 11,332 -
-
Total Financial assets 189,220 15
18

The estimated maximum exposure for credit loss for Treasury investments is 15k and therefore no allowance for credit loss have been made for these assets due to materiality.

No credit limits were exceeded during the reporting period and the Council does not expect any losses from non-performance by any of its counterparties in relation to deposits.

The Council does not generally allow credit for its trade debtors, including amounts due from government departments and other Local Authorities.

The risk of loss for trade receivables is minimised by a combination of the following:

The write off of a debt is always the last option available and is only taken when all other appropriate measures have been taken to recover payment, and in cases of bankruptcy.

101

The bad debt provision is calculated by reference to the Council’s historic experience with the provision being applied to debts over 60 days old and the value increasing according to the age of the debt.

Debtor analysis Gross
at		 debtor Allowance
for credit
losses at		 Net
debtor at		 Net
debtor at		 Net
debtor at
31-Mar-21 31-Mar-21 31-Mar-21 31-Mar-
20
£'000 £'000 £'000 £'000
Local taxpayers 35,192 (19,626) 15,566 6,099
Housing rents 13,123 (10,091) 3,032 2,880
Other - sundry debtors 146,708 (32,670) 114,038 83,872
Total Other Entities and
Individuals 195,023 (62,387) 132,636 92,851
Central Government bodies 10,561 - 10,561 11,047
Other local authorities 1,571 - 1,571 1,636
NHS bodies 160 - 160 749
Total debtors 207,315 (62,387) 144,928 106,283
Balance sheet debtors 207,315 (62,387) 144,928 106,283
Current debtors not qualifying
as a financial instrument under
IFRS (71,745) 19,626 (52,119) (36,244)
Current debtors qualifying
as a financial instrument
under IFRS 135,570 (42,761) 92,809 70,039

The following table analyses the Gross debt that is now past due over varying periods. This overdue debt is covered by a provision for bad debt.

31 March
31 March
2021
2020
£'000
£'000
Less than three months 29,971
30,438
1,754
1,521
15,276
9,474
46,848
38,863
Three to four months
Four months to one year
More than oneyear
Total 93,849
80,296

Liquidity risk

The Council has a comprehensive cash flow management system that seeks to ensure that cash is available as needed. If unexpected movements happen, the Council has ready access to borrowings from the money markets to cover day-to-day cash flow need and the Public Works Loans Board and capital markets for access to longer term funds. The Council is also required to provide a balanced budget through the Local Government Finance Act 1992, which ensures sufficient monies are raised to cover annual expenditure. Therefore, there is no significant risk that it will be unable to raise finance to meet its commitments under financial instruments.

102

The maturity analysis of financial assets, excluding sums due from customers, is as follows:

31 March
31 March
2021
2020
£'000
£'000
Less than 1 year 279,364
228,558
Between 1 and 2 years 1,699
1,582
Between 2 and 3 years 1,724
1,191
More than 3years 51,479
49,788
Total 334,266
281,119

The maturity analysis of financial liabilities is as follows:

31 March
2021
31 March
2020
£'000
£'000
Less than 1 year 208,384
172,996
Between 1 and 2 years 13,853
8,651
Between 2 and 3 years 9,146
13,553
More than 3years 551,493
560,103
Total 782,876
755,303

Refinancing and Maturity risk

The Council maintains a significant debt and investment portfolio. Whilst the cash flow procedures above are considered against the refinancing risk procedures, longer-term risk to the Council relates to the exposure to replacing financial instruments as they mature. This risk relates to both the maturing of longer-term financial liabilities and longer-term financial assets.

The approved treasury indicator limits for the maturity structure of debt and the limits on investments placed for greater than one year in duration are the key parameters used to address this risk. The Council approved treasury and investment strategies address the main risks and the central treasury team address the operational risks within the approved parameters. This includes:

The maturity profile of the Council’s debt portfolio along with the Council’s approved minimum and maximum exposure is shown in the table below.

Approved
minimum
limits %
Approved
maximum
limits %		 Actual 31
March
2021
%
£'000		 Actual 31
March
2020
%
£'000
Less than 1 year
-
30		 4,966
1%		 14,778
3%
Between 1 and 2 years
-
40		 5,000
1%		 -
-%
Between 2 and 5 years
-
40		 20,000
4%		 10,000
2%
Between 5 and 10 years
-
50		 34,000
7%		 49,000
11%
More Than 10 Years
25
100		 391,488
87%		 391,488
84%
Total 455,454
100%		 465,266
100%

103

Included within the maturity profile are £70m of LOBOS with maturities averaging 40 years. Inherent within these loan instruments are options (averaging an option every 3 years) that could give rise to the debt being repaid early. These loans are regularly reviewed with the current and expected structure of interest rates. The risk of the lenders exercising their options is currently low for the short to medium term. Therefore, the maturity of these loans in above table are currently based on their maturity date, 10 years and over.

Market risk

The Council is exposed to interest rate movements on its borrowings and investments. Movements in interest rates have a complex impact on the Council. For instance, a rise in variable and fixed interest rates would have the following effects:

Borrowings are not carried at fair value on the balance sheet, so nominal gains and losses on fixed rate borrowings would not impact on the Surplus or Deficit on the Provision of Services or Other Comprehensive Income and Expenditure. However, changes in interest payable and receivable on variable rate borrowings and investments will be posted to the Surplus or Deficit on the Provision of Services and affect the General Fund Balance. Movements in the fair value of fixed rate investments that have a quoted market price will be reflected in the Other Comprehensive Income and Expenditure Statement.

The Council has several strategies for managing interest rate risk. The Annual Treasury Management Strategy draws together the Council’s expected treasury operations, including an expectation of interest rate movements. From this Strategy a treasury indicator is set which provides maximum limits for fixed and variable interest rate exposure. The central treasury team will monitor market and forecast interest rates within the year to adjust exposures appropriately. For instance, during periods of falling interest rates, and where economic circumstances make it favourable, fixed rate investments may be taken for longer periods to secure better long-term returns, similarly the drawing of longer-term fixed rates borrowing would be postponed.

At 31 March 2021, if interest rates had been 1% higher with all other variables held constant, the financial effect would be:

31 March
2021
£'000
Increase in interest receivable on variable rate investments 1,966
Impact on Surplus or Deficit on the Provision of Services 1,966
Share of overall impact debited to the HRA 1,193
Decrease in fair value of fixed rate borrowings liabilities (no impact on the
Surplus or Deficit on the Provision of Services or Other Comprehensive
Income and Expenditure)		 264,600

104

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

Price risk

The Council does not generally invest in equity shares but has recently invested in Bristol Holdings, a wholly owned subsidiary. Whilst this holding is generally illiquid, the Council is exposed to losses arising from movements in the prices of these shares.

As the shareholding has arisen in the acquisition of specific interests, the Council is not able to limit its exposure to price movements by diversifying its portfolio. Instead, it only acquires shareholdings in return for “open book” arrangements with the company so that the Council can monitor factors that might cause a fall in the value of specific holdings.

These shares are valued at fair value.

Foreign exchange risk

During 2020/21 the Council received monies denominated in Euro's relating to the receipt of European grant. The authority also made payments in a variety of currencies for the supply of goods and services. Payments and receipts are converted to Sterling at the earliest opportunity.

26 Capital Expenditure and Capital Financing

The total amount of capital expenditure incurred in the year is shown in the table below (including the value of assets acquired under finance leases and PFI/PP contracts), together with the resources that have been used to finance it. Where capital expenditure is to be financed in future years by charges to revenue as assets are used by the Council, the expenditure results in an increase in the Capital Financing Requirement (CFR), a measure of the capital expenditure incurred historically by the Council that has yet to be financed. Movements on the CFR are also analysed below.

Opening Capital Financing Requirement
Capital investment
Property, Plant and Equipment
Investment Properties
Heritage Assets
Intangible Assets
Long Term Investments / Debtors
Revenue Expenditure Funded from Capital under Statute
Capital Receipts set aside for repayment of debt
Sources of finance
Capital receipts
Government grants and other contributions
Sums set aside from revenue:
• Direct revenue contributions
• MRP – City Council Debt
Closing Capital Financing Requirement
Explanation of movements in year
Less Minimum Revenue Provision
Use of capital receipt for repayment of debt
Increase in underlying need to borrowing (unsupported by
government financial assistance)
Increase in Capital Financing Requirement		 2020/21
£'000
869,923

107,527
256
95
9,140
1,660
18,636
(1,386)

(38,391)
(41,209)

(26,234)
(13,611)
886,406
(13,611)
(1,386)
31,480
16,483
2019/20

£'000
847,021
126,927
-
340
7,620
17,592
10,225
(13,839)
(33,496)
(34,898)
(46,938)
(10,631)
869,923
(10,631)
(13,839)

47,372

22,902

105

27 Leases

Council as Lessor

Operating Leases

The Council leases out property within the commercial trading estate under operating leases for the following purposes:

centres

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

Not later than one year
Later than one year and not later than five years
Later than five years		 31 March
2021
£'000		 31 March
2020

£'000
13,821
52,243
851,243
917,307
13,708

49,370

850,558

913,636

The minimum lease payments receivable at 31 March 2021 and 2020 are based on the current rents receivable at the respective Balance Sheet dates. They do not include estimates of future rents reviews or contingent rents.

28 Service Concessions

Schools PFI Phase 1A

On 31[st] March 2004 the Council entered into a Private Finance Initiative (PFI) contract with Bristol Schools Limited. The contract provided for the design, construction and financing of four new secondary schools, Bedminster Down, Henbury School, Orchard School and Oasis Academy Brightstowe. All four schools were constructed and are operational. Bristol Schools Limited will maintain and operate the facilities for twenty-six years from the date the first school became operational.

A capital contribution of £5.346m was made to the first phase of the project by way of a cash payment. This was in respect of the provision of leisure facilities and of the retention of part of the site of Henbury School by the Council, for subsequent disposal.

As at 31st March 2021 cumulative payments totalling £151m (£141m in 2019/20) have been made to the PFI contractor. The future estimated payments the Council will make under the contract are as follows:

Year
2021/22
2022/23 to 2025/26
2026/27 to 2030/31
2031/32
Total		 Payment
for
Services
£'000
3,225
13,726
19,179
1,557
37,687		 Repayment
of Liability

£'000

2,149

10,720

20,275

1,879
35,023		 Interest

£'000

4,119

13,714

8,706

221
26,760
Other

£'000

251

855

(354)

413
1,165
Total

£'000

9,744

39,015

47,806

4,070
100,635

Over the life of the PFI project, the Council is scheduled to receive government grant of £134.8m.

106

Schools PFI Phase 1B and 1C, Building Schools for the Future

During 2006/07 the Council entered into a PFI contract with Bristol PFI Limited to design, build, finance and operate four additional schools in Bristol. A Local Education Partnership (LEP) was also created to manage the supply chain and deliver the four schools. The partnership is between Skanska Education Partnerships (80%), Partnership for Schools (10%) and Bristol City Council (10%). The schools are Brislington Enterprise College, Bristol Brunel Academy, Bristol Metropolitan Academy and Bridge Learning Campus. Bristol PFI Limited will maintain and operate the facilities for twenty-seven years from the date the first school became operational.

A capital contribution of £9.569m was made to the project by way of a cash payment. This was used towards the cost of the Bridge Learning Campus and provision of leisure facilities at Bristol Brunel Academy.

As at 31st March 2021 cumulative payments totalling £215m (£197m in 2019/20) have been made to the PFI contractor. The future estimated payments the Council will make under this contract are as follows:

Year
2021/22
2022/23 to 2025/26
2026/27 to 2030/31
2031/32 to 2034/35
Total		 Payment
for
Services
Repayment
of Liability Interest
Other
Total
£'000
£'000
£'000
£'000
£'000
5,512
4,008
5,675
4,031
19,226
23,689
16,338
19,611
19,229
78,867
33,690
27,210
16,705
25,481 103,086
25,689
26,134
4,590
16,585
72,998
88,580
73,690
46,581
65,326
274,177

Over the life of the PFI project, the Council is scheduled to receive government grant of £326.3m.

Hengrove Leisure Centre

In April 2010 the Council entered into a PFI contract with Bristol Active Limited to design, build, finance and operate a new leisure centre, and associated car park, in Hengrove. The centre opened in February 2012 and Bristol Active Limited will operate and maintain the facility until 2037.

The assets and associated liability have been included on the Council’s Balance Sheet in accordance with IFRS.

A capital contribution of £7.161m was made to the project by way of a cash payment. This was used to fund the capital works for the Car Park and as a contribution towards the capital works of the Leisure Centre.

As at 31 March 2021 payments totalling £32m (£27m at 31 March 2020) have been made to the PFI Contractor. The future estimated payments the Council will have to make under the Contract are as follows:

Year
2021/22
2022/23 to 2025/26
2026/27 to 2030/31
2031/32 to 2035/36
2036/37
Total		 Payment
for
Services
Repayment
of Liability Interest
Other
Total
£'000
£'000
£'000
£'000
£'000
357
646
1,325
1,212
3,540
1,519
1,908
4,729
6,191
14,347
2,082
3,954
4,531
7,822
18,389
2,197
5,036
2,317
9,407
18,957
605
1,216
126
1,646
3,593
6,760
12,760
13,028
26,278
58,826

107

Over the life of the PFI project, the Council is scheduled to receive government grant of £69.6m.

Property, Plant and Equipment

The PFI assets, and related liabilities, have been recognised on the Council’s balance sheet when made available for use. Movements in their value over the year are detailed in the analysis of the movements on the Property, Plant and Equipment balance in Note 20. The assets will be transferred back to the Council at the end of the contracts for nil consideration.

Locally managed schools transferring to Academy status are granted a 125 year peppercorn lease and, in response to CIPFA guidance, are de-recognised from the Council’s accounts as control of these assets is transferred to the Academy.

Payments are made to the PFI contractors as monthly “unitary payments”. The estimated payments the Council will make under the contracts are shown below.

These payments are commitments and can vary subject to indexation, reductions for performance and availability failures, and possible future variations to the scheme.

The funding of the unitary payment for the School PFI schemes will come from the individual schools budget, the overall schools budget and a special government grant. The Hengrove Leisure unitary payment will be funded by the special government grant, with the balance provided from Sports Services budgets. PFI payments are accounted for in the year in which the service was provided and are allocated to repayment of the liability, finance cost, service charge and other costs (lifecycle cost and contingent rents).

The unitary payments have been calculated to compensate the contractor for the fair value of the services they provide, the capital expenditure incurred, and the interest payable on financing the capital expenditure. The Hengrove Leisure PFI contains a significant amount of third party income, this is income received directly by the PFI Contractor from the users of the facility. The payment for services has been shown net of this estimated income, as the unitary payments have been reduced to reflect the operator’s right to this income. The outstanding liability due to the contractor for reimbursement of capital expenditure is as follows:

Balance outstanding at the start of year
Movement in year
Balance outstanding at year end		 Schools
2020/212019/20
£'000
£'000
114,775
120,098
(6,063)
(5,323)
108,712
**114,775 **		 Hengrove Leisure
2020/21
2019/20
£'000
£'000
13,469
14,284
(708)
(815)
12,761
13,469		 Hengrove Leisure
2020/21
2019/20
£'000
£'000
13,469
14,284
(708)
(815)
12,761
13,469

14,284
(815)

13,469

The above listed commitments are affected by past inflation – previous price rises will be built into future payments. They are also affected by future inflation, which gives rise to uncertainty.

Bristol Waste Contract

In August 2015 the Council entered into a service contract with Bristol Waste Company to provide recycling and waste services. The assets and associated liability have been included on the Council’s Balance Sheet in accordance with IFRS.

During the year Bristol Waste acquired £1.1m of assets to support the provision of waste services, funded from a loan from the Council.

108

The future estimated payments the Council will make under the contract are as follows:

Year
2021/22
2022/23 to 2025/26
2026/27
Total		 Payment for
Services
£'000
Repayment of
Liability
£'000
Interest
£'000
Total
£'000
30,147
2,148
288
32,583
130,796
7,366
595
138,757
10,128
1,874
11
12,013
171,071
11,388
894
183,353

Total Balance Outstanding on all Service Concessions is shown in the table below:

Balance outstanding at the
start of year
Movement in year
Balance outstanding at
year end		 Schools
Hengrove Leisure
Bristol Waste
Contract
Total
2020/21
2019/20
2020/21
2019/20
2020/21
2019/20
2020/21
2019/20
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
114,775
120,098
13,469
13,469
12,311
1,046
140,555
135,428
(6,063)
(5,323)
(708)
(779)
(923)
11,265
(7,694)
5,127
108,712
114,775
12,761
14,284
11,388
12,311
132,861
140,555

29 Debtors

i
Current debtors
Trade receivables
Prepayments
VAT
Other
Total		 31 March
2021
£'000
21,451
3,948
9,632
109,897
144,928		 31 March
2020

£'000
9,611
3,475
8,931
84,266

106,283

Impairments for doubtful debts are detailed in Note 24.

ii
Long-term debtors
Mortgages
Capital loans (Probation/Fire/LEP/Bristol Waste))
South Gloucestershire Council
Former county Council debt
Total		 31 March
2021
£'000
190
10,865
354
37,689
49,098		 31 March
2020

£'000
194
9,996
381
39,260

49,831

109

30 Cash and Cash Equivalents

The balance of Cash and Cash Equivalents is made up of the following elements:

Cash held by the Council
Bank current accounts
Short-term deposits with banks / building societies
Total Cash and Cash Equivalents		 31 March
2021
£'000
271
(20,702)
142,003
121,572		 31 March
2020

£'000
275
8,165
60,986

69,426

31 Creditors

Current liabilities
Trade payables
Other payables
Receipts in advance
Total
Other long-term liabilities
Service Concession contract liabilities (see Note 28)
Retirement benefit obligations (see Note 34)
Deferred liabilities
Deferred capital receipts
Rent Deposits
Total		 31 March
2021
£'000
12,038
142,329
61,006
215,373
31 March
2021
£'000
123,910
1,127,918
39,259
0
94
1,291,181		 31 March
2020

£'000
2,029
119,400
46,018

167,447
31 March
2020

£'000
131,735
993,905
40,895
3
84

1,166,622

Deferred liabilities are amounts which, by arrangement, are payable beyond the next year, at some point in the future or are to be paid off by an annual sum over a period. As at the 31 March 2021 the liability in the Council’s Balance Sheet of £39.3m (2020: £40.9m) comprised of former county Council loan debt.

Deferred capital receipts are amounts derived from sales of assets, which will be received in instalments over agreed periods of time. They arise from mortgages on the sale of Council houses, which form part of mortgages under long term debtors.

110

32 Provisions

2
Provisions
Business
Transformation
Insurance fund
NDR Provision for
appeals
Legal
Winding up of
Bristol Energy Ltd
Other
Due < 1 year
Due > 1 year		 Balance at
31 March
2020
Additional
provisions
made in
2020/21
£'000
£'000
(121)
(1,785)
(298)
(27,454)
(10,430)
(498)
-
-
(3,891)
(296)
(135)		 Amounts
used in
2020/21
£'000
12
475
12,363
-
-
20		 Balance
at 31
March
2021
£'000
(109)
(1,608)
(25,521)
(498)
(3,891)
(411)		 Due <
1 year
£'000
(109)
(1,152)
-
(498)
(3,891)
(111)		 Due >
1 year
£'000
-
(456)
(25,521)
-
-
(300)
(30,154)
(14,754)
(1,898)
(28,257)
(30,154)		 12,870 (32,038)
(5,761)
(26,277)
(32,038)		 (5,761) (26,277)

Details of the provisions are shown in the table below:

Provision Purpose
Business Transformation Covers future exit costs arising from services management of change processes
Insurance fund To meet the known and anticipated liabilities on claims under the Council’s
insurance arrangements.
NDR Provision for appeals Covers the cost of future appeals
Legal Created to cover the costs of various outstanding legal cases within Adult
Social Care
Winding up of Bristol Energy
Ltd		 Covers costs of winding up Bristol Energy Ltd
Other Other provisions are individually not material

111

33 Unusable Reserves

Revaluation Reserve
Capital Adjustment Account
Financial Instruments Adjustment Account
Deferred Capital Receipt Reserve
Pensions Reserve
Collection Fund Adjustment Account – Council
tax
Collection Fund Adjustment Account – NNDR
Collection Fund Adjustment Account – Growth
/ Renewable Energy Disregard
Accumulated Absences Account
Dedicated Schools Grant Adjustment Account		 31 March
2021
£'000
(1,007,648)
(1,510,865)
6,898
(1,448)
1,141,369
4,539
80,159
3,237
13,388
10,004
(1,260,366)		 31 March
2020
£'000
(861,614)
(1,520,227)
7,076
-
993,905
1,446
667
(2,590)
6,604
-
(1,374,733)

Revaluation Reserve

The Revaluation Reserve contains the gains made by the Council arising from increases in the value of its Property, Plant and Equipment. The balance is reduced when assets with accumulated gains are:

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.

Balance at 1 April
Upward revaluation of assets
Downward revaluation of assets and impairment
losses not charged to the Surplus/Deficit on the
Provision of Services
Surplus or deficit on revaluation of non-current
assets not posted to the Surplus/Deficit on the
Provision of Services
Amount written off to the Capital Adjustment
Account
Balance at 31 March		 2020/21
2020/212019/20 2019/20		 2020/21
2020/212019/20 2019/20
£'000
£'000
£'000
£'000
(210,933)
39,555

112

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 and amortisation 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 and gains recognised on donated assets that have yet to be consumed by the Council. The account also contains revaluation gains accumulated on Property, Plant and Equipment before 1 April 2007, the date that the Revaluation Reserve was created to hold such gains.

Note 25 provides details of the source of all the transactions posted to the Account, apart from those involving the Revaluation Reserve.

Balance at 1 April
Reversal of items relating to capital expenditure debited or
credited to the Comprehensive Income and Expenditure
Statement:
Charges for depreciation and impairment of non-current assets
Revaluation losses on Property, Plant and Equipment
Amortisation of Intangible Assets
Movement in the fair value of financial Instruments
Revenue Expenditure Funded from Capital Under Statute
Amounts of non-current assets written off on 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 Reserve
Net written out amount of the cost of non-current assets consumed
in the year
Capital financing applied in the year:
Use of the Capital Receipts Reserve to finance new capital
expenditure
Use of the Major Repairs Reserve to finance new capital expenditure
Capital grants and contributions credited to the Comprehensive
Income and Expenditure Statement that have been applied to capital
financing
Statutory provision for the financing of capital investment charged
against the General Fund and HRA balances
Use of the Capital Receipts Reserve for repayment of Long-Term
Investments financed by borrowing
Long Term Capital Investment repaid
Capital expenditure charged against the General Fund and HRA
balances
Movements in the market value of Investments debited or credited
to the Comprehensive Income and Expenditure Statement
Balance at 31 March		 2020/21
2019/20

£'000
£'000
(1,520,227)
(1,510,028)


57,837

28,820

3,235

11,722

10,225

46,849
65,697
52,654
4,525
(1,597)
18,636
36,802
(1,343,510)
(1,351,340)
(26,662)

(1,378,002)


(33,496)

(25,668)

(34,898)

(10,631)

(13,839)

1,321

(21,270)
(25,344)
(1,368,854)
(38,391)

(21,642)

(41,209)
(13,611)
(1,386)
1,386
(4,592)
(1,488,299)
(1,516,483)

(3,744)
(22,566)
(1,510,865) (1,520,227)

113

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. As a result, the balance on the Account at 31 March 2020 will be charged to the General Fund over the next 40 years.

Balance at 1 April
Premiums incurred in the year and charged to the
Comprehensive Income and Expenditure Statement
Proportion of premiums incurred in previous financial
years to be charged against the General Fund Balance in
accordance with statutory requirements
Amount by which finance 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		 2020/21
2020/21 2019/20 2019/20
£'000
£'000
£'000
£'000
7,076
7,254


(178)
(178)

(178)
(178)
6,898
**7,076 **		 2020/21
2020/21 2019/20 2019/20
£'000
£'000
£'000
£'000
7,076
7,254


(178)
(178)

(178)
(178)
6,898
**7,076 **
**7,076 **

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 authority 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.

Balance at 1 April
Transfer of deferred sale proceeds credited as part of gain/loss
on disposal to the comprehensive income and expenditure
statement
Transfer to the capital receipts reserve upon receipt of cash
Balance at 31 March		 2020/21
£'000
-
(1,448)
-
**(1,448) **		 2019/20
£'000
-
-

Pensions Reserve

The Pensions 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, 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 fund or eventually pays any pensions for which it is directly responsible. The debit balance on the Pensions Reserve

114

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.

Balance at 1 April
Remeasurements on pensions assets and liabilities
Reversal of items relating to retirement 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
payments to pensioners payable in year
Balance at 31 March		 2020/21
£'000
993,905
112,346
83,834
-48,716
1,141,369		 2019/20
£'000
991,850
(45,748)
97,934
(50,131)
993,905

Collection Fund Adjustment Account

The Collection Fund Adjustment Account manages the differences arising from the recognition of council tax and non-domestic rates income in the Comprehensive Income and Expenditure Statement as it falls due from council taxpayers and business rate payers, compared with the statutory arrangements for paying across amounts to the General Fund from the Collection Fund.

Balance at 1 April
Amount by which council tax and non-domestic rates income 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		 2020/21
£'000
(477)
88,412
87,935		 2019/20
£'000
(126)
(351)
(477)

Accumulated Absences Account

The Accumulating Compensated Absences Adjustment 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 be neutralised by transfers to or from the account.

Balance at 1 April
Settlement or cancellation of accrual made at the end of the
preceding year
Amounts accrued at the end of the current year
Amount by which officer remuneration 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		 2020/21
2020/21
2019/20 2019/20
£'000
£'000
£'000
£'000
6,604
6,370
(6,604)
(6,370)
13,388
6,604
6,784
234
13,388
6,604		 2020/21
2020/21
2019/20 2019/20
£'000
£'000
£'000
£'000
6,604
6,370
(6,604)
(6,370)
13,388
6,604
6,784
234
13,388
6,604
6,604

115

Dedicated Schools Grant Adjustment Account

Regulations effective from 1 April 2020 require that a Schools Budget deficit must be carried forward to be funded from future Dedicated Schools Grant (DSG) income, unless permission is sought from the Secretary of State for Education to fund the deficit from the General Fund. They also require that where a local authority has a deficit on its Schools Budget relating to its accounts for a financial year beginning on 1 April 2020, 1 April 2021 or 1 April 2022, it must not charge the amount of that deficit to a revenue account, but instead record any such deficit in a separate account. The Dedicated Schools Grant Adjustment Account has been created for that purpose and the in-year deficit for 2020/21 and cumulative deficit brought forward as at 1 April 2020 have been transferred into that account. Further details on the deployment of DSG are provided in Note 16.

Balance at 1 April
Transfer of the opening Dedicated Schools Grant deficit from
earmarked revenue reserves
Reversal of the Dedicated Schools Grant within the surplus deficit on
the provision of services in the Comprehensive Income and
Expenditure Account
Balance at 31 March		 2020/21
£'000
-
2,892
7,112
10,004		 2019/20
£'000
-
-
-

116

34 Pensions

Participation in Pension Schemes

As part of the terms and conditions of employment of its officers, the Council makes contributions towards the cost of post-employment benefits. Although these benefits will not actually be payable until employees retire, the Council has a commitment to make the payments (for those benefits) and to disclose them at the time that employees earn their future entitlement.

The Council participates in three pension schemes:

The Local Government Pension Scheme (LGPS) - all staff, with the exception of teachers, are eligible to join the Local Government Pension Scheme (LGPS). The scheme is administered by Bath and North East Somerset Council and is called the Avon Pension Fund. The Fund provides members with benefits related to length of service and pensionable salary. The LGPS is a funded defined benefit pension arrangement for local authorities and is governed by statute principally now the Local Government Pension Scheme Regulations 2013.

The Teachers' Pension Scheme - Teachers employed by the Council are members of the Teachers’ Pension Scheme, administered on behalf of the Department for Education. The Scheme provides teachers with specified benefits upon their retirement and the Council contributes towards the costs by making contributions based on a percentage of members’ pensionable salaries. The Scheme is a multi-employer defined benefit scheme. However, the Scheme is unfunded, and the Department for Education uses a notional fund as the basis for calculating the employers’ contribution rate paid by local authorities.

The rate of contribution for 2020/21 was 23.68% resulting in a total payment of £10.309m (£8.645m in 2019/20) to the Teachers' Pension Agency. In addition, the Council made payments totalling £2.505m (£2.474m in 2019/20) in respect of pensions and added years where the early retirement of teachers was agreed. The Council also met its share of the residual liability for former Avon County Council employees, amounting to £1.690m (£1.769m in 2019/20). The estimated liability for unfunded payments has been calculated by the actuary and is included in the Balance Sheet.

The National Health Service Pension Scheme – In 2020/21 a total payment of £0.35m (£0.40m in 2019/20) was made to the NHS Pension Scheme, following the transfer of public health responsibilities from primary care trusts.

117

Accounting Transactions relating to retirement benefits

The Council recognises the cost of retirement benefits in the reported cost of services when they are earned by employees, rather than when the benefits are eventually paid as pensions. However, the charge required to be made against Council tax is based on the cash payable in the year, so the real cost of postemployment/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.

Income and Expenditure Account
Net cost of services
Current service cost
Past service gains/curtailment costs/Settlements
Administration expense
Financing and Investment Income Expenditure
Net interest cost
Total post-employment benefits charged to the Surplus or
Deficit on the Provision of Services
Other Post-employment Benefits charged to the
Comprehensive Income and Expenditure Statement
Remeasurements (assets/liabilities)
Movement in Reserves Statement
Reversal of net charges made for retirement benefits in
accordance with IAS19
Actual amount charged against the General Fund Balance
for pensions in the year:
Employer’s contributions payable to scheme		 Local Government
Pension Scheme
2020/21
2019/20
£'000
£'000
64,432
63,986
(4,332)
9,812
1,211
1,107
21,068
21,429
82,379
96,334
107,833
(42,309)
(82,379)
(96,334)
44,519
45,888		 Teachers' Unfunded
Pensions
2020/21
2019/20
£'000
£'000
1,455
1,600
1,455
1,600
4,513
(3,439)
(1,455)
(1,600)
4,197
4,243		 Teachers' Unfunded
Pensions
2020/21
2019/20
£'000
£'000
1,455
1,600
1,455
1,600
4,513
(3,439)
(1,455)
(1,600)
4,197
4,243
1,600
1,600
(3,439)
(1,600)
4,243

The Housing Revenue Account (HRA) Income and Expenditure Account has also been adjusted in 2020/21 to reflect the current service cost and an appropriate share of the net interest cost. The latter item has been apportioned to the HRA on the basis of pensionable pay.

118

Assets and Liabilities in relation to Retirement Benefits

01-Apr
Current service cost
Interest on pension liabilities
Contributions by scheme
participants
Remeasurement (liabilities)
Experience (gain)/loss
(Gain)/loss on financial
assumptions
(Gain)/loss on demographic
assumptions
Benefits paid
Past service grants, curtailment
costs and settlements
31-Mar		 Funded liabilities:
Unfunded liabilities:
Unfunded
Local Government
Pension Scheme
Local Government
Pension Scheme
Teachers' Unfunded
Pensions
2020/21
2019/20
2020/21
2019/20
2020/21
2019/20
£'000
£'000
£'000
£'000
£'000
£'000
(2,514,914)
(2,589,755)
(33,688)
(41,548)
(62,721)
(68,803)
(64,432)
(63,986)
(59,629)
(61,497)
(776)
(964)
(1,455)
(1,600)
(13,196)
(12,074)
54,877
(13,648)
786
4,374
998
(858)
(404,302)
59,862
(3,408)
434
(5,511)
1,402
0
109,158
0
1,232
0
2,895
69,098
66,838
2,730
2,784
4,197
4,243
7,211
(9,812)
(2,925,287)
(2,514,914)
(34,356)
(33,688)
(64,492)
(62,721)		 liabilities:
Total Liability
Local Government & Teachers
Pensions
2020/21
2019/20
£'000
£'000
(2,611,323)
(2,700,106)
(64,432)
(63,986)
(61,860)
(64,061)
(13,196)
(12,074)
56,661
(10,132)
(413,221)
61,698
0
113,285
76,025
73,865
7,211
(9,812)
(3,024,135)
(2,611,323)		 liabilities:
Total Liability
Local Government & Teachers
Pensions
2020/21
2019/20
£'000
£'000
(2,611,323)
(2,700,106)
(64,432)
(63,986)
(61,860)
(64,061)
(13,196)
(12,074)
56,661
(10,132)
(413,221)
61,698
0
113,285
76,025
73,865
7,211
(9,812)
(3,024,135)
(2,611,323)
(2,700,106)
(63,986)
(64,061)
(12,074)
(10,132)
61,698
113,285
73,865
(9,812)
(2,611,323)

119

Reconciliation of fair value of the Local Government Pension Scheme assets:

01-Apr
Interest on plan assets
Remeasurement (assets)
Administration expense
Settlements
Employer contributions
Contributions by scheme participants
Benefits paid
31-Mar		 2020/21
£'000
1,617,523
39,337
244,214
(1,211)
(2,879)
57,970
13,196
(71,828)
1,896,322		 2019/20
£'000
1,722,618
41,032
(119,103)
(1,107)
0
31,631
12,074
(69,622)
1,617,523

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. Expected returns on equity investments reflect long-term rates of return experienced in the respective markets.

The actual return on plan assets in the year was £283,551m (2019/20 £108,641m).

Scheme History – Pension Assets and Liabilities Recognised in the Balance Sheet:

Present value of liabilities:
Local Government Pension
Scheme
Teachers' unfunded liabilities
Fair value of assets in the Local
Government Pension Scheme
Surplus/(deficit) in the scheme:
Local Government Pension
Scheme
Teachers' unfunded liabilities
Total		 2020/21
£'000
(2,959,643)
(64,492)
1,896,322
(1,063,321)
(64,492)
(1,127,813)		 2019/20
£'000
(2,548,602)
(62,721)
1,617,523
(931,079)
(62,721)
(993,800)		 2018/19
£'000
(2,631,303)
(68,803)
1,722,618
(908,685)
(68,803)
(977,488)

The total liabilities shown in the Balance Sheet comprise the above (£1,127,813m) together with a small amount in respect of pre-1974 liabilities (£0.105m) totalling (£1,127,918m).

120

Basis for Estimating Assets and Liabilities

Liabilities have been assessed using the projected unit credit actuarial cost method, an estimate of the pensions that will be payable in future years dependent on assumptions about mortality rates, salary levels etc. Both the Local Government Pension Scheme and Discretionary Benefits liabilities have been assessed by Mercer Ltd, an independent firm of actuaries, estimates for the Council's Fund being based on the latest full valuation of the scheme as at 31 March 2019.

The principal assumptions used by the actuary have been:

Mortality assumptions:
Longevity at 65 for current pensioners:
Men
Women
Longevity at 75 for current pensioners:
Men
Women
Longevity at 65 for future pensioners:
Men
Women
Rate for discounting scheme liabilities
Rate of inflation - CPI
Rate of increase in salaries
Rate of increase in pensions		 Local Government
Pension Scheme
2020/212019/20




23.3
23.2
25.4
25.3






24.8
24.7
27.4
27.3


%
2.1
2.4
2.7
2.1
4.2
3.6
2.8
2.2		 Teachers
2020/212019/20


23.3
23.2
25.4
25.3

14.4
14.3
16.2
16.1
-
-
-
-

%
2.1
2.4
2.7
2.1
-
-
2.8
2.2

The estimated Macaulay duration of liabilities (at later of 31 March 2019 or admission date) is 16 years retired.

The estimation of the defined benefit obligations is sensitive to the actuarial assumptions set out in the table above. The sensitivity analyses below have been determined based on reasonably possible changes of the assumptions occurring at the end of the reporting period and assumes for each change that the assumption analysed changes, while all the other assumptions remain constant. The assumptions in longevity, for example, assume that life expectancy increases or decreases for men and women. In practice, this is unlikely to occur, and changes in some of the assumptions may be interrelated. The estimations in the sensitivity analysis have followed the accounting policies for the scheme, i.e. on an actuarial basis using the projected unit credit method. The methods and types of assumptions used in preparing the sensitivity analysis below did not change from those used in the previous period.

The actuary has provided a sensitivity analysis for each significant actuarial assumption as at the end of the reporting period. The table below shows how the defined benefit obligation would have been affected by changes in the relevant actuarial assumption that were reasonably possible at the 31 March 2021.

Impact on the Defined Benefit Obligation in the Scheme
(LGPS) 2020/21 2019/20
£'000 £'000
Longevity (increase or decrease by 1 year) 93,692 71,999
Rate of inflation (increase or decrease by 0.1%) 51,775 44,429
Rate of increase in salaries (increase or decrease by 0.1%) 4,865 4,726

121

Rate for discounting scheme liabilities (increase or decrease by 0.1%) (49,860) (42,780)

Impact on the Defined Benefit Obligation in the Scheme
(Teachers) 2020/21 2019/20
£'000 £'000
Longevity (increase or decrease by 1 year) 2,444 2,242
Rate of inflation (increase or decrease by 0.1%) 657 640
Rate for discounting scheme liabilities (increase or decrease by 0.1%) -588 -575

Local Government Pension Scheme assets comprise

Asset Category
Sub-Category
Quoted
(Y/N)
Equities
UK Quoted
Y
Global Quoted
Y
Emerging Markets
Y
Sub-total equities
Bonds
UK Government Indexed
Y
Sterling Corporate Bonds
Y
Sub-total bonds
Property
Property Funds
Sub-total property
Alternatives
Hedge Funds
Y
Diversified Growth Funds
Y
Infrastructure
Y
Secured Income
Y
EFT’s
Y
Sub-total alternatives
Cash and equivalents
Cash Accounts
Y
Sub-total cash
Total Assets		 31 March
2021
£’000
0
608,560
102,582
711,142
267,857
160,392
428,249
136,536
136,536
98,877
179,339
147,399
100,279
38,860
564,754
55,641
55,641
1,896,322		 31 March
2020
£’000
112,828
521,489
70,200
704,517
90,581
146,390
236,971
160,135
160,135
93,008
218,042
129,617
24,398
15,249
480,314
35,586
35,586
1,617,523

Governance and Risk Management

The liability associated with the Council’s pension arrangements is material to the Council, as is the cash funding required.

Local Government Pension Scheme

Governance

As administering authority, Bath and North East Somerset Council (B&NES), has legal responsibility for the pension fund as set out in the Local Government Pension Scheme Regulations. B&NES delegates its responsibility for administering the Fund to the Avon Pension Fund Committee, which is the formal decision making body for the Fund. The Avon Pension Fund Committee is responsible for the investment,

122

funding, administration and communication strategies. It also monitors the performance of the fund and approves and monitors compliance of statutory statements and policies required under the Regulations. The Committee is supported by an Investment Panel which considers the investment strategy and investment performance in greater depth.

Asset and Liability (ALM) Strategy

The Avon Pension Fund does not have an explicit asset and liability matching strategy. The primary objective of its investment strategy is to generate positive real investment return above the rate of inflation for a given level of risk to meet the liabilities as they fall due over time. When setting the investment strategy, the expected volatility of the assets relative to the value placed on the liabilities was measured and taken into account. The aim of the strategy and management structure is to minimise the risk of a reduction in the value of the assets and maximise the opportunity for asset gains across the Fund.

To achieve its investment objective the Fund invests across a diverse range of assets such as equities, bonds, property and other alternative investments, and uses several investment managers. The risk management process identifies and mitigates the risks arising from the Fund’s investment strategy and policies which are reviewed regularly to reflect changes in market conditions. As a result of its investment strategy, the Fund is exposed to a variety of financial risks including market risk (market price, interest rate and currency risk), credit risk and liquidity risk.

As a result of its investment strategy, the Fund is exposed to a variety of financial risks including market risk (market price, interest rate and currency risk), credit risk and liquidity risk.

Impact on the Authority’s Cash Flows

The objectives of the scheme are to keep employers’ contributions at as constant a rate as possible. The Council has agreed a strategy with the scheme’s actuary to achieve a funding level of 100% over the next 16 years. Funding levels are monitored on an annual basis. A new triennial valuation was completed on 31 March 2019 and is effective from 1 April 2020.

The Council made a pension deficit contribution of £20.430m in April 2020.

The provisions of the LGPS and the Fund were amended with effect from 1 April 2014. Prior to that date benefits were paid on members’ final salaries, whereas for service after that date benefits are based on career average salaries.

The total contributions expected to be made to the Local Government Pension Scheme by the Council in the year to 31 March 2022 are £38.242m. Expected contributions for the Teacher Pensions Scheme in the year to 31 March 2022 are £4.197m.

Unfunded Teachers’ Discretionary Benefits

The Council is responsible for any additional discretionary pension benefits awarded to teachers upon early retirement outside of the terms of the teachers’ pension scheme.

Governance

The Teachers’ Pension Scheme arrangements are managed centrally by government departments/agencies, and there is no material involvement for the Council.

Impact on the Council’s Cash Flows

123

The Scheme targets a pension paid throughout life. The amount of pension depends on how long employees are active members of the Scheme and their salary when they leave the Scheme (“final salary scheme”) for service up to 31 March 2015, and on a revalued average salary (“career average scheme”) for service from 1 April 2015.

The Council’s involvement is limited to additional discretionary pension benefits to retired teachers which were rewarded at the point of retirement.

Risks Strategy

Given their unfunded nature, there are no investment risks in relation to this scheme. The greatest single risk is that the Government could change the funding standards relating to the scheme, increasing the Council’s contributions.

Investment Risks

There are no investment risks in relation to these arrangements, given their unfunded nature. The greatest single risk is that the government could change the funding standards relating to them, which could increase the Council’s contributions to them.

35 Cash Flow Statement – Operating Activities

The cash flows for operating activities include the following significant items:

Interest received
Interest paid
Dividends received		 2020/21
£'000
5,842
(33,652)
2,092		 2019/20
£'000
4,257
(35,808)
2,376

The deficit on the provision of services has been adjusted for the following non-cash movements:

Depreciation, impairment and downward revaluations
Amortisation
Increase/(decrease) in impairment for bad debt
(Decrease)/increase in creditors
(Increase)/decrease in debtors
(Increase)/decrease in inventories
Movement in pension liability
Contributions to/(from) Provisions
Carrying amount of non-current assets and non-current assets held for
sale, sold or derecognised
Other non-cash items charged to the net surplus or deficit
On the provision of services
Net cash flows from non-cash movements		 2020/21
£'000
118,351
4,525
2,131
44,001
(34,145)
(2,250)
21,667
(3,495)
25,545
(24,062)
152,268		 2019/20
£'000
86,657
3,245
1,694
18,454
(7,351)
(8,294)
47,803
4,099
46,849
11,269
204,425

124

Adjust for items included in the net surplus or deficit on the provision of services that are investing or financing activities:


ncing activities:
Capital grants credited to surplus or deficit on the provision of services
Proceeds from the sale of Property Plant and Equipment, Investment
Property and Intangible Assets		 2020/21
£'000
(41,604)
(41,934)
(83,538)		 2019/20
£'000
(33,664)
(56,258)
(89,922)

125

36 Cash Flow Statement - Investing Activities

36
Cash Flow Statement - Investing Activities
Purchase of Property, Plant and Equipment, Investment Property and
Intangible Assets
Purchase of short-term and long-term investments
Other (payments)/receipts for investing activities
Proceeds from the sale of Property, Plant and Equipment, Investment
Property and Intangible Assets
Proceeds from short-term and long-term investments
Capital Grants Received
Other receipts from investing activities
Net cash flows from investing activities
37
Cash Flow Statement - Financing Activities
Cash receipts of short- and long-term borrowing
Cash payments for the reduction of outstanding liabilities relating to
finance leases and on-Balance-Sheet PFI contracts
Repayments of short- and long-term borrowing
Council tax and NNDR adjustments
Net cash flows from financing activities		 2020/21
£'000
(106,008)
(294,800)
(5,090)
40,291
318,600
64,041
3,692
20,726
2020/21
£'000
224
(8,809)
(11,586)
(4,928)
(25,099)		 2019/20
£'000
(102,078)
(124,641)
(10,368)
56,290
107,000
46,700
2,056
(25,041)
2019/20
£'000
30,000
(7,363)
0
1,728
24,365

38 Related Parties

The Council is required to disclose material transactions with related parties – bodies or individuals that have the potential to control or influence the Council or to be controlled or influenced by the Council. Disclosure of these transactions allows readers to assess the extent to which the Council might have been 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.

Some Members or members of their close families, have an interest in voluntary organisations and community groups awarded grants by the Council. Both Council members and Executive Directors have been asked to provide information regarding related party transactions. From the information received, it is believed that there have not been any significant transactions involving Executive Directors during the year however one Member has disclosed that a close family member is a Director of Bristol Food Network which has a contract with the Council to deliver a number of food related activities.

Central Government has significant influence over the general operations of the Council - it is responsible for providing the statutory framework within which the Council operates. It provides the majority of its funding in the form of grants, which are disclosed in Note 17.

The Council has interests in a number of companies over which it has significant influence or control as set out below.

126

Name Nature of Council relationship Transactions
with the Council		 Nature
of
transactions		 Balances owed to
/
(from)
the
Council as at 31 3
2021
Bristol
Holdings
Limited		 100% subsidiary
The City Council has one Director post
on the Board.		 £163k
recharges
from
BCC
and
£20k recharges to
BCC		 Recharges £6.5m preference
share interest owed
to BCC
Bristol Waste
Company		 100% subsidiary of Bristol Holding
Limited
The City Council has one Director post
on the Board.		 £41m payments by
Council
to
company
£1.5m
recharges
from Company to
Council		 Contract for
waste collection
and recycling
services
Recharges		 £9.4m loan from
BCC
for
the
acquisition
of
waste vehicles.
BE2020
Limited
(Formally
Bristol Energy
Limited)		 100% subsidiary of Bristol Holdings
Limited
The City Council has one Director post
on the Board.		 £1.6m sales and
recharges from the
Council
£2.4m
sales
of
energy
to
the
Council
£2.7m
agreed
contribution from
Indemnity.		 Purchase and sale
of energy.
Recharges		 £1m owed to BCC
Goram Homes
Ltd		 100% subsidiary of Bristol Holdings
Limited.
The City Council has one Director post
on the Board.		 £1.5m Loan Development
of
building projects		 £1.5m loan
Bristol
Heat
Networks
Limited
(formally
Energy Service
Bristol
Limited)		 100% subsidiary of Bristol Holdings
Limited.
The City Council has one Director post
on the Board.		 None Operation of heat
network
energy
centres		 None
Bristol Energy
& Technology
Services
(Supply)
Limited		 100% subsidiary of Bristol Holdings
Limited
The City Council has one Director post
on the Board.
The companyis currentlydormant.		 None N/A Nil
Bristol is Open
Limited		 100% owned subsidiary
The City Council has one Director posts
on the Board.		 None N/A Nil
Bristol
Local
Education
Partnership
(LEP) Ltd		 Joint venture with BCC holding 10%,
Building
Schools
for
the
Future
Investments (Bristol) Ltd 10% and
Skanska Infrastructure Development UK
Limited 80%
The Council has one director post on the
board.		 £67m payments to
the company		 Provision of ICT
and
construction
services to schools
in Bristol.
City Leap Ltd 100% owned subsidiary.
The Council has one director post on the
board.
The Companyis currentlydormant.		 None N/A Nil

127

City
Leap
Bristol Ltd		 100% owned subsidiary.
The Council has one director post on the
board.
The Companyis currentlydormant.		 None N/A Nil
Bristol
City
Leap Ltd		 100% owned subsidiary.
The Council has one director post on the
board.
The Companyis currentlydormant.		 None N/A Nil
City
Leap
Energy
Partnership
Limited		 100% owned subsidiary.
The Council has one director post on the
board.
The Company is currently dormant.		 None N/A Nil
Bristol
Infrastructure
Limited		 100% owned subsidiary.
The Council has one director post on the
board.
The Company is currently dormant.		 None N/A Nil
Energy Service
Bristol Limited		 100% owned subsidiary.
The Council has one director post on the
board.
The Companyis currentlydormant.		 None N/A Nil

West of England Partnership

Four unitary authorities - Bath & North East Somerset Council, Bristol City Council, North Somerset Council and South Gloucestershire Council - continue to work together and co-ordinate high level planning to improve the quality of life of their residents and provide for a growing population. This joint work focuses on activities that are better planned at the West of England level, rather than at the level of the individual Council areas.

The partnership is not a partnership in law, nor a formal decision making body, and does not have the power to bind the four unitaries. The partnership’s activity is integrated into the West of England Local Enterprise Partnership (LEP), which promotes economic growth and prosperity through its key themes of Place, People and Business

39 Transfer of Functions

As part of the West of England devolution deal, South Gloucestershire, Bristol and Bath & North East Somerset Councils agreed to the establishment of the West of England Combined Authority to support economic growth and development across the region. Under the devolution deal certain functions were transferred from the constituent authorities to the WECA from 1[st] April 2018. These included concessionary fares, community transport, key route network development and bus service information. WECA has commissioned South Gloucestershire Council to provide concessionary fares on its behalf since 2019/20.

WECA levies the constituent authorities for the cost of the services for which it is now responsible. This is shown under Other Operating Expenditure. The value of the levy in 2020/21 is £9.750m (2019/20 £8.120m). There has been no change to the Council’s assets or liabilities arising from the transfer of functions to WECA.

128

40 Contingent Liabilities

The prospective Bristol Arena operator has challenged the Councils termination of their Agreement for Lease in respect of the Arena on Temple Island and has claimed loss of profits, or costs, over the life of the potential lease. As at 31 March 2021 litigation proceedings had not commenced and no claims have been received.

There is currently a claim against the Council for £2.7 million in relation to compensation in respect of part of the AVTM Metrobus programme for the site at Ashton Fields. The claim concerns the valuation of the site. This is going to the Upper tribunal with the likely hearing being at the beginning of 2022.

129

HRA Income and Expenditure Statement

The HRA reflects a statutory obligation to account separately for Council housing provision. The HRA Income and Expenditure Statement shows the major elements of HRA expenditure and how they are met from rents, service charges and other income. The account does not reflect all of the transactions required by statute to be charged or credited to the HRA for the year. The movement on the HRA Statement gives details of the additional transactions, which are required by statute.

Note
Expenditure
Repairs and maintenance
Supervision and management
Special services
Rent, rates, taxes and other charges
Depreciation and impairment of non-current assets
4
Debt management
Debt write offs and movement in the allowance for bad debts
Total expenditure
Income
Dwelling rents
2
Non-dwelling rents
Charges for services and facilities
Contributions towards expenditure
Total income
Net cost of HRA services as included in the
Comprehensive Income and Expenditure Statement
Net cost of HRA services
(Gain) on sale of HRA non-current assets
Movement in the Fair Value of Investment Properties
Interest payable and similar charges
HRA interest and investment income
Pensions interest costs and expected return on assets
5
Capital Grants and Contributions Receivable
(Surplus) for the year on HRA services
2020/21
2019/20

Net

£'000
Net
£'000
32,537
28,920
9,155
1,296
31,164
42
2,460
31,450
29,959
9,769
1,117
30,381
37
1,628
104,341 105,574


(109,997)
(961)
(8,755)
(98)
(113,814)
(1,017)
(8,301)
(4)
(123,136) (119,811)
(18,795)
(14,237)
(14,237)
(1,886)

387

11,459
(1,312)

2,601
(27)
(18,795)
(12,423)
379
11,210
(359)
2,472
(481)
(17,997) (3,015)

130

Statement of movement on the HRA Balance

Note
HRA balance brought forward
(Surplus) for the year on the HRA Income and
Expenditure Account
Adjustments between accounting basis and funding basis
under statute
(Increase) before reserve transfers
Transfer from/to reserves
Net (increase) on HRA balance
HRA balance carried forward
Note to the statement of movement on the HRA Balance
Note
Items included in the HRA Income and Expenditure
Account but excluded from the movement on HRA
Balance for the year
Depreciation and impairment of property, plant &
equipment
4
Amortisation of Intangible Fixed Assets
4
Fair value movements on investment properties
Net charges made for retirement benefits in accordance
with IAS19
5
Net gain/loss on disposal of assets
Capital Grants and Other Contributions
6
Items not included in the HRA Income and
Expenditure Account but included in the movement
on HRA Balance for the year
Capital expenditure funded by the HRA
6
Employer’s contributions payable to the Avon Pension
Fund and retirement benefits payable direct to pensioners
5
Transfer to Major Repairs Reserve
8
HRA depreciation to Major Repairs Reserve
8
Amortisation of premiums
Net additional amount required by statute to be
debited or
credited to the HRA Balance for the year		 31 March
2021
Net
£'000
(87,526)
(17,997)
7,082
(10,915)
50
(10,865)
(98,391)
31 March
2021
Net
£'000

(29,993)
(388)
(379)
(9,542)
12,423
481		 31 March
2020
Net
£'000
(78,718)
(3,015)
2,059
(956)
(7,852)
(8,808)
(87,526)
31 March
2020
Net
£'000
(30,790)
(373)
(387)
(9,829)
1,886
27
(27,398)
408
4,740
29,332
34,480
7,082		 (39,466)
10,999
4,859
-
25,668
-
41,526
2,060

131

Notes to the Housing Revenue Account

1 Dwelling numbers as at 31 March 2021

Houses
Bungalows
Flats
Total Dwellings held at 31 March 2021		 31 March
2021		 31 March
2020
11,214
1,081
14,472
26,767		 11,271

1,077

14,485

26,833

2 Rent and Rent Arrears

The total value of dwelling rents in 2020/21, less rent attributable to empty properties (voids), is £113.8m (£110m in 2019/20). The amount of rent arrears, including recoverable housing benefit, water charges, defect charges, etc are:

Former tenants
Current tenants
Balance Sheet Provision
Former tenants
Current tenants		 31 March
2021
£'000
3,081
10,042
13,123
2,698
7,393
10,091		 31 March
2020

£'000
3,472
9,013

12,485
3,056
6,549

9,605

Vacant Possession

The vacant possession value of dwellings as at 1st April 2021 was £5.063bn. The value of dwellings in the balance sheet (excluding dwellings leased to Registered Social Landlords) was £1.772bn, a difference of £3.291bn This difference reflects the economic cost of providing Council housing at less than market rent. This cost is determined by applying the Government prescribed discount rate of 35% of the Market Value to the vacant possession value.

3 Sums Directed by the Secretary of State to be Debited or Credited to the HRA

In 2020/21 there were no sums approved by the Secretary of State to be debited to the HRA in relation to the transfer of rent rebates from the HRA to the General Fund.

132

4 Depreciation and Impairment

Depreciation
Operational Assets
- Dwellings
- Other, including leased
Intangible Fixed Assets
Total depreciation
Revaluation losses
Reversal of impairment losses
Total depreciation and impairment		 2020/21
£'000
28,756
576
2019/20

£'000
25,158
510
29,332
388
29,720
661
30,381
25,668
373

26,041

5,123
-

31,164

Impairment

There was a loss on revaluation of £0.661m charged to the surplus on provision of Services (2019/20: £5.123m).

5 HRA Share of Contributions to/from Pension Reserve

For 2020/21 the HRA has been attributed with a share of the interest cost, net of the expected return on pension assets, as calculated by the actuary to the pension fund £2.5m (2019/20 £2.6m). This share has been calculated using the proportion of HRA pensionable pay to the total of that for the Council. The net cost of services shown in the HRA statement also includes the current service cost as required by IAS19 of £9.5m (2019/20 (£9.8m). This is excluded from the HRA Balance for the year and replaced with Employers Contributions payable £4.7m (2019/20(£4.9m) with the net movement on the Pension reserves of £4.8m (2019/20 £4.9m). Further information regarding the accounting for pensions is included in the notes to the consolidated revenue account and balance sheet, see note 33.

6 Capital Expenditure and financing

Total expenditure during the year and its financing was as follows:

Expenditure
Dwellings
Other Assets
Financing
Usable capital receipts
Revenue contributions to capital
Major Repairs Reserve
Other		 2020/21
£'000
38,637
408
39,045
16,514
408
21,642
481
39,045
2019/20

£'000
49,143
74

49,217
12,523
11,026
25,668

49,217

133

7 Capital Receipts

Capital receipts received during the year from disposals of land, houses and other property within the HRA was £35.3m (£10.4m in 2019/20). The receipts are summarised as follows:

Receipts unapplied brought forward - 1 April
Right to Buy sales
Mortgage repayments
Disposal of Land and Buildings
Allowable reductions
Repaid to MHCLG
Capital receipts applied
Capital receipts applied to GF
Capital receipts unapplied carried forward - 31 March
Major Repairs Reserve
Balance brought forward - 1 April
Capital expenditure (dwellings)
Major Repairs Allowance set aside in year
Excess depreciation credited to Statement of Movement on HRA
Balance
Balance carried forward - 31 March		 2020/21
£'000
50,550
8,021
3
27,287
85,861

(2,115)
(16,515)
67,231
2020/21
£'000
(3,606)
21,642
(29,332)
(11,296)
2019/20

£'000
54,827
10,188
-
171

65,186
(2,113)
(12,523)

50,550

2019/20

£'000
(3,606)
25,668
(25,668)
(3,606)

8 Major Repairs Reserve

Depreciation has been calculated in accordance with our accounting policies for all HRA assets. We have used the Keystone component accounting information for Dwelling as a proxy for component accounting and Corporate Asset Management system for Non-Dwelling.

The MRA balance was £29.3m for 2020/21 (2019/20 - £25.7m). £21.6m was used to finance appropriate Housing Revenue Account capital expenditure.

9 Balance Sheet Value of Land and Houses, etc.

Dwellings
Land
Other assets		 2020/21
£'000
1,771,999
38,785
28,562
1,839,346
2019/20

£'000
1,678,285
38,722
20,071
1,737,078

134

10 Asset Split

Asset Split
Operational - dwellings
Operational - other land and buildings
Non-operational
Intangible
Other		 2020/21
£'000
1,771,999
60,848
6,199
1,587

1,840,633
2019/20

£'000
1,678,285
52,282
6,512
1,568
3
1,738,650

135

Collection Fund

Collection Fund Income and Expenditure Account

£'000
£'000
£'000
Business
Rates
Council Tax
Total
Note
Income
-
255,560
255,560 Council Tax
31 March 2020		 £'000
£'000
£'000
Business Rates
Council Tax
Total
-
-
266,356
266,356
31 March 2021
227,650
-
227,650 Non-Domestic Rates
(2,879)
-
(2,879) Transitional Protection Payment		 137,951
-
137,951
(3,254)
-
(3,254)
Contributions towards previous years
Collection Fund Deficit:
-
-
-
Central Government		 -
-
-
-
-
-
Bristol City Council		 1,673
-
1,673
Avon & Somerset Police and Crime
-
-
-
Commissioner
-
-
-
Avon Fire Authority
-
-
-
West of England Combined Authority
224,771
255,560
480,331
Expenditure
Apportionment of Previous Years
Surplus
-
-
-
Central Government		 -
-
-
18
-
18
89
-
89
136,478
266,356
402,834
-
-
-
1,012
1,886
2,898
Bristol City Council		 -
37
37
Avon & Somerset Police and Crime
-
225
225
Commissioner
1
83
84
Avon Fire Authority
3
-
3
West of England Combined Authority
1,016
2,194
3,210
Precepts, Demands and Shares
197,330
214,733
412,063 Bristol City Council		 -
4
4
-
2
2
-
-
-
0
43
43
197,854
226,055
423,910

Avon & Somerset Police and Crime
-
27,662
27,662 Commissioner		 -
29,289
29,289
2,111
9,511
11,622 Avon Fire Authority
10,547
-
10,547 West of England Combined Authority		 2,105
9,635
11,740
10,524
-
10,524
209,988
251,906
461,894
Charges to the Collection Fund		 210,483
264,979
475,462
2,003
2,457
4,460 Write offs of uncollectable amounts
586
2,890
3,476 Increase/(Decrease) in bad debt provision
704
-
704 Cost of Collection Allowance
8,297
-
8,297 Disregarded amounts
-
-
-
Prior year adjustment
575
-
575 Increase/(Decrease) in provision for appeals		 649
1,237
1,885
6,551
3,723
10,274
702
-
702
4,716
-
4,716
-
-
-
(2,056)
-
(2,056)
12,165
5,347
17,512		 10,561
4,960
15,521
1,602
(3,887)
(2,285) Surplus/ (Deficit) for the year
(1,288)
2,192
904 Surplus/ (Deficit) as at 1 April		 (84,567)
(3,626)
(88,193)
314
(1,695)
(1,381)
314
(1,695)
(1,381) Surplus/ (Deficit) as at 31 March		 (84,253)
(5,321)
(89,574)

136

Notes to the Collection Fund Income and Expenditure Account

1 General

The Collection Fund is an agent’s statement that reflects the statutory obligation for billing authorities to maintain a separate Collection Fund. The statement shows the transactions of the billing authority in relation to the collection from taxpayers and distribution to local authorities and the Government of council tax and non-domestic rates. Only the elements attributable to the City Council are recognised with the Council’s other accounts.

2 Council tax

Council tax income derives from charges raised according to the value of residential properties, which have been classified into 8 valuation bands based upon 1 April 1991 values for this specific purpose. Individual charges are calculated by estimating the amount of income required to be taken from the Collection Fund by the City Council, the Avon and Somerset Police and Crime Commissioner and the Avon Fire Authority for the forthcoming year and dividing this by the council tax base of 128,566 for 2020/21 (126,999 for 2019/20). This represents the total number of properties in each band adjusted by a proportion to convert the number to a Band D equivalent and adjusted for discounts and the estimated collection rate. This basic amount of council tax for a Band D property of £2,061.03 for 2020/21 (£1,982.11 for 2019/20) is multiplied by the proportion specified for the particular band to give an individual amount due.

Calculation of the council tax Base used in setting the 2020/21 council tax:

A Entitled to
Disabled Relief
-
31
-
59		 A
52,737
2,838
-
5,502
-		 B
74,080
1,419
-
5,623
-		 C
39,455
1,405
-
2,733
-		 D
18,659
1,192
-
1,140
-
BAND		 E
9,780
1,037
-
505
-
S		 F
4,799
172
-
213
-		 G
2,852
44
-
131
-		 H
338
6
64
-		 Total
202,700
8,132
-
15,850
-
No of Properties
Exemptions and disabled relief
Less Discounts
Total Equivalent Dwellings
Ratio
Band D Equivalents
Add Changes re: Additional Properties
Additional Exemptions
Council Tax Support
Adjustments to reflect Discretionary
Discounts
Rate of Collection 98.5%
Council Tax Base
28
5/9		 44,397
6/9		 67,039
7/9		 35,317
8/9		 16,327
1		 8,238
11/9		 4,414
13/9		 2,677
15/9		 280
18/9		 178,718
15 29,598 52,141 31,393 16,327 10,069 6,376 4,462 561 150,943
1,715
2,190
-
19,944
-
1,958
-
128,566

137

3 Collection Fund balance sheet items have been apportioned as shown in the table below.

----- Start of picture text -----
Total Bristol City Police & Crime Avon Fire
Council Commissioner Authority
Council Tax
£'000 £'000 £'000 £'000
Debtors 22,897 19,536 2,553 809
Bad debt allowance (13,392) (11,426) (1,493) (473)
Prepayments and overpayments (3,729) (3,181) (416) (132)
Surplus/ (Deficit) at 31 March (5,321) (4,539) (588) (194)
Total Bristol City West of England Avon Fire Central
Council Combined Authority Government
Authority
Business Rates
£'000 £'000 £'000 £'000 £'000
Debtors 16,554 15,560 828 166
Bad debt allowance (8,724) (8,201) (436) (87)
Prepayments ans overpayments (2,898) (2,724) (145) (29)
Appeals provision (27,150) (25,521) (1,357) (271)
Surplus/ (Deficit) at 31 March (84,253) (80,160) (4,287) (837) 1,030
----- End of picture text -----

4 National Non-Domestic Rates (NNDR)

The Council collects NNDR for its area based on rateable values as determined by the Valuation Office Agency and reviewed on a 5 yearly basis. The last revaluation date was on 1 April 2017. The next revaluation was expected to be 1 April 2021, with valuations being effective from this date, but has been delayed due to COVID-19.

Each year the Government specifies an amount known as the non-domestic rating multiplier and (subject to the effects of transitional arrangements) local businesses pay rates calculated by multiplying their rateable value by that multiplier. A second multiplier known as the small business non-domestic rating multiplier was introduced from 1 April 2005 and this multiplier is applicable to those businesses that qualify for small business relief.

In 2020/21 the non-domestic rating multiplier was 51.2p (50.4p in 2019/20) and the small business nondomestic rating multiplier was 49.9p (49.1p in 2019/20).

As part of the governments West of England devolution deal Bristol, Bath and North East Somerset and South Gloucestershire Councils agreed to the establishment of the West of England Combined Authority (WECA) to support economic growth and development across the region. This also enabled the three Council’s to take part in a 100% business rates retention pilot. As a result Bristol City Council is now responsible not only for collection of rates due from the ratepayers in its area but also for redistribution of the sums paid according to the following percentages: Bristol City Council: 94%, West of England Combined Authority 5% and Avon Fire Authority: 1%.

The NNDR income after reliefs and provisions was £132.808m for 2020/21 (£224.484m for 2019/20). The significant change is due to specific COVID-19 reliefs given. The total rateable value at 31 March 2021 was £556.356m (£560.880m at 31 March 2020).

138

5 City Region Deal Growth Disregard

From 2015/16, the Council is allowed to retain 100% of the growth in Business Rates in its Enterprise area and Enterprise Zone. The growth is transferred to the Council’s General Fund before being pooled with other participating authorities

City Region Deal

Background

Under the City Region Deal, Bristol City, Bath & North East Somerset, North Somerset and South Gloucestershire Councils (“the Authorities”) are part of a Business Rates Retention Scheme, introduced by the Government in April 2013, allowing Authorities to retain a proportion of the business rates collected locally. The Authorities are allowed to retain 100% of the growth in business rates raised in the City Regions network of Enterprise Areas over a 25 year period ending on 31/3/2039 to create an Economic Development Fund for the West of England and to manage local demographic and service pressures arising from economic growth.

A ‘baseline’ level of rates for each Authority has been agreed with the government for the areas designated within the Non-Domestic Rating (Designated Areas) Regulations 2015. Rates collected up to this figure (the baseline) are subject to the national rates retention system. Rates collected in excess of this figure (the ‘growth figure’) are retained by the Authorities under the Non-Domestic Rates Designated Area Regulations 2013 and 2014 in a pooling arrangement. The governance of the distribution of retained pooled funds will occur through a Business Rates Pooling Board constituted under the Business Rates Pooling Principles Agreement (BRPPA) signed by the four Authorities.

Transactions

Each participating Council pays an annual growth figure to South Gloucestershire Council, as the Accountable Body for the BRP, representing business rates collected in the Enterprise Areas in excess of an agreed baseline figure. Retained funds will be distributed or invested annually in accordance with the 2014 Regulations and the BRPPA as:

• Tier 1: to ensure that no individual Council is any worse off than it would have been under the national local government finance system,

• Tier 2: to an Economic Development Fund (EDF) for reinvestment within the designated areas through approved programmes,

Cash receivable and disbursements payable by the BRP and the Council’s share of these are reflected under “Cash Transactions” in the table below. Expenditure and revenue recognised in the Council’s CIES is also disclosed.

139

----- Start of picture text -----
CASH TRANSACTIONS REVENUE & EXPENDITURE
Business Rates of which the Council Council Revenue
Pool Total Council's share Expenditure
£'000 £'000 £'000 £'000
Funds held by BRP at 1 April (41,689) (11,169) - -
Receipts into the Pool in-year
- Growth sums payable by Council's to BRP in year (28,529) (7,628) 7,044 -
Distributions out of the Pool in-year
- Tier 1 no worse off 10,158 3,631 - (3,631)
- BRP management fee 33 8 - -
- EDF management fee 64 16 - -
- Tier 2 EDF funding 1,164 128 - -
-Tier 3 demographic and service pressures 2,969 650 - (774)
Funds held by BRP at 31 March (55,830) (14,363)
Analysed between:
Uncommitted cash (Tier 2 inc contingency) (15,251) (4,564) (2,098) n/a
Committed cash (Tier 3) (40,579) (9,800) n/a n/a
Expenditure/(Revenue) recognised (55,830) (14,363) 4,947 (4,406)
----- End of picture text -----

As stated under the accounting policies, growth paid over to the BRP is recognised as expenditure by each Council to the extent that the use of the funds by the BRP has been committed. Uncommitted cash is recognised by each Council as a debtor.

The uncommitted cash of £4,564m contributed by the Council and held by the BRP is recognised by the Council as a debtor and is held in an earmarked reserve to smooth the impact of City Region Deal transactions and match the release of revenue support and charges for projects. The BRP has not made a payment to Bristol City Council on behalf of the EDF in 2020/21 (2019/20 £1.813m.)

The Council itself has recognised revenue income of £4.406m (2019/20 £7.010m) from the BRP and expenditure of £4.947m (2019/20 £5.598m) to the BRP for the year.

140

Group Accounts

Introduction

The Code of Practice on Local Authority Accounting in the United Kingdom 2020/21 (The Code) requires local authorities with interests in subsidiaries, associates and/or joint ventures to prepare group accounts in addition to their own single entity financial statements, unless their interest is not considered material. The aim of the Group Accounts is to provide the reader with an overall view of the material economic activities of the Council.

The Council has interests in a number of companies that are classified as a subsidiary or joint venture, all of which have been considered for consolidation. Three of these, Bristol Holding Limited, Bristol Waste Company Limited and BE2020 Limited (formally Bristol Energy Limited) are considered to be material to the financial statements. Details of the companies considered for consolidation are shown below. Although not material, Goram Homes Limited, and Bristol Heat Networks Limited as subsidiaries of Bristol Holdings Limited has also been consolidated into the group financial statements.

The Group Accounts contain the core statements similar in presentation to the Council’s single entity accounts but consolidating the figures of the Council with, Bristol Holding Limited, Bristol Waste Company Limited, Bristol Energy Limited, Goram Homes Limited and Bristol Heat Networks Limited. Copies of the individual audited accounts are available from Companies House.

The purpose of each of the core statements is explained in the relevant sections of the single entity accounts. No amendments have been necessary to the accounts of the group entities as a result of material differences arising from the variation in accounting policies.

The following pages include:

141

Group Financial Statements

The Group Comprehensive Income and Expenditure Account as at 31 March 2021

This statement shows the accounting cost in the year of providing the Group’s services in accordance with generally accepted accounting practices.

----- Start of picture text -----
2019/20 2020/21
Gross Gross
Gross Exp Net Exp Gross Exp Net Exp
Income Income
£’000 £’000 £’000 £’000 £’000 £’000
391,416 (166,564) 224,852 Adults, Children and Education 417,307 (212,528) 204,779
228,165 (160,328) 67,837 Resources 240,163 (164,415) 75,748
303,791 (184,194) 119,597 Growth & Regeneration 299,882 (117,207) 182,675
105,574 (119,811) (14,237) Housing Revenue Account 104,341 (123,136) (18,795)
204,487 (196,848) 7,639 Designated Schools Grant 212,076 (201,110) 10,966
17,657 (1,252) 16,405 Corporate Funding & Expenditure 9,860 (903) 8,957
1,251,090 (828,997) 422,093 Cost of services (Note G1) 1,283,629 (819,299) 464,330
2,099 Other operating expenditure 5,821
37,869 Financing and investment income and expenditure (Note G2) 8,781
(414,418) Taxation and non-specific grant income (473,173)
47,643 (Surplus)Deficit on provision of services 5,759
(99,683) Deficit on revaluation of Property, Plant and Equipment assets (171,378)
(45,764) Remeasurement of the net defined benefit liability/asset 112,632
- -
Surplus/deficit on financial assets measured at fair value
(145,447) Other comprehensive (income) and expenditure (58,746)
(97,804) Total comprehensive (income) and expenditure (52,987)
----- End of picture text -----

142

Group Movement in Reserves Statement

This statement shows the movement in the year on the different reserves held by the group, analysed into usable reserves and other reserves.

Note General Fund
Balance		 Earmarked
Reserves
Restated		 School
Reserves
Sub Total -
General Fund		 Housing
Revenue
Account		 Housing
Revenue
Account
Earmarked
Reserves		 Capital
Receipts
Major
Repairs
Reserve		 Capital
Grants
Unapplied		 Total
Usable
Reserves		 Unusable
Reserves
(Note 32)
Total
Council
Reserves		 Council
Share of
Subsidiaries		 Total Group
Reserves
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Balance at 31 March 2019 Carried Forward 23,258 81,179 12,493 116,930 78,718 7,852 70,824 3,606 3,919 281,849 1,293,274 1,575,122 (19,122) 1,556,000
Movement in Reserves during 2019/20
Surplus or (deficit) on the provision of services
Other Comprehensive Expenditure and Income
Adjustments between group accounts and authority accounts
Total Comprehensive Expenditure and Income
Adjustments between accounting basis and funding basis under
regulations
Net Increase/(Decrease) before Transfers to Earmarked Reserves		 Note
17		 -
(16,866)
-
(37,948)
(54,814)

59,578
4,763		 -
-
-
-		 -
-
-
-		 -
(16,866)
-
(37,948)
(54,814)
50,078
4,763		 -
3,016
-
3,016
(2,060)
956		 -
-
-
-		 -
-
-
7,688
7,688		 -
-
-
-		 -
-
-
(1,234)
(1,234)		 -
(13,850)
-
(37,948)
(51,798)
54,472
12,173		 -
-
145,431
145,431
(63,972)
81,459		 -
(13,849)
145,431
(37,948)
93,633
93,633		 -
42,119
(37,948)
4,172
4,172		 -
28,270
145,431
(75,896)
97,805
-
97,805
Transfers to/(from) Earmarked Reserves Note
18
(11,020)		 16,211 (5,191) - 7,852 (7,852) - - - -
Increase/(Decrease) in 2019/20
Balance at 31 March 2020 Carried Forward		 (6,257)
17,001		 16,211
97,390		 (5,191)
7,302		 4,763
121,694		 8,808
87,526		 (7,852)
0		 7,688
78,513		 -
3,606		 (1,234)
2,685		 12,173
294,024		 81,459
1,374,733		 93,633
1,668,754		 4,173
(14,949)		 97,805
-
1,653,805
Movement in Reserves during 2020/21
Surplus or (deficit) on the provision of services 15,060 15,060 17,997 33,057 - 33,057 47,202 80,259
Other Comprehensive Expenditure and Income - - - - - - - - - - 59,032 59,032 59,032
Adjustments between group accounts and authority accounts (43,152) (43,152) (43,152) (43,152) (43,152) (86,304)
Total Comprehensive Expenditure and Income
Adjustments between accounting basis and funding basis under
regulations		 Note
18		 (28,092)

170,300		 - - (28,092)
170,300		 17,997
(7,082)		 - -
2,095		 -
7,690		 -
395		 (10,095)
173,398		 59,032
(173,398)		 48,937 4,050 52,987
-
Net Increase/(Decrease) before Transfers to Earmarked Reserves 142,207 - - 142,207 10,915 - 2,095 7,690 395 163,302 (114,366) 48,937 4,050 52,987
Transfers to/(from) Earmarked Reserves Note
19
(123,543)		 123,317 226 - (651) 651 - - - -
Increase/(Decrease) in 2020/21 18,664 123,317 226 142,207 10,264 651 2,095 7,690 395 163,302 (114,366) 48,937 4,050 52,987
Balance at 31 March 2021 Carried Forward 35,665 220,707 7,528 263,901 97,790 651 80,608 11,296 3,080 457,325 1,260,367 1,717,691 (10,899) 1,706,792

143

Group Consolidated Balance Sheet as at 31 March 2021
31-Mar-20
Note
£'000
2,720,789
Property, Plant & Equipment
204,056
Heritage Assets
15,958
Intangible Assets
252,586
Investment Property
36,551
Long Term Investments
G10
40,253
Long Term Debtors
3,270,193
Long Term Assets
89,093
Short Term Investments
G10
10,804
Inventories
130,024
Short Term Debtors
G3
79,927
Cash and Cash Equivalents
759
Assets held for sale
310,607
Current assets
(14,778)
Short Term Borrowing
G10
(213,838)
Short Term Creditors
G4
(2,406)
Provisions
(5,379)
Derivative Financial Instrument
(26,741)
Capital grants received in advance
(263,142)
Current liabilities
(450,488)
Long Term Borrowing
G10
(28,257)
Provisions
(1,156,508)
Other Long Term Liabilities
(28,600)
Capital Grants Receipts in Advance
(1,663,853)
Long-term liabilities
1,653,805
Net assets
(282,498)
Usable Reserves
(1,371,307)
Unusable Reserves
G5
(1,653,805)
Total reserves		 31-Mar-21
£'000
2,848,032
207,406
20,573
275,903
38,678
38,466
3,429,058
64,983
13,259
147,299
127,568
806
353,915
(4,966)
(226,326)
(5,760)
0
(44,448)
(281,500)
(450,488)
(26,277)
(1,284,585)
(33,331)
(1,794,681)
1,706,792
(454,062)
(1,252,730)
(1,706,792)

144

Group Cash Flow Statement for the year ended 31 March 2021

The cash flow statement shows the changes to cash and cash equivalents of the Group during the reporting period. The statement shows how the group generates and uses cash and cash equivalents by classifying cash flows as operating, investing and financing activities.

2019/20
£'000
Note
(47,643) Net surplus on the provision of services
192,798 Adjustment to net surplus on the provision of services for non-cash
movements
G6
(90,100) Adjust for items included in the net surplus or deficit on the
provision of services that are investing and financing activities
G6
55,055 Net cash flows from Operating Activities
(20,924) Investing Activities
G7
24,365 Financing Activities
G8
58,496 Net increase (decrease) in Cash and Cash Equivalents
21,431 Cash and Cash Equivalents at the beginning of the reporting period
79,927 Cash and Cash Equivalents at the end of the reporting period		 2020/21

£'000
(5,759)

141,642

(83,538)
52,345

20,396

(25,099)
47,641
79,927
127,568

Notes to the Group Accounts

Accounting Policies

Generally, the accounting policies for the group accounts are the same as those applied to the single entity financial statements, except for the following policies which are specific to the group accounts:

Basis of Identification of the Group Boundary

Group accounts are prepared by aggregating the transactions and balances of the Council and all its material subsidiaries, associates and joint arrangements. In its preparation of these Group Accounts, the Council has considered its relationship with entities that fall into the following categories:

145

In accordance with this requirement, the Council has determined its Group relationships as follows :

Bristol Holding Ltd Direct Subsidiary Consolidated
Bristol Waste Company Ltd Indirect Subsidiary Consolidated
BE2020 Limited (formally Bristol Energy
Limited)		 Indirect Subsidiary Consolidated
Bristol Energy and Technology Services
(Supply) Ltd		 Indirect Subsidiary Not Material – Dormant
company
Local Education Partnership Joint Venture Not Material
Bristol is Open Ltd Direct Subsidiary Not Material
Goram Homes Indirect Subsidiary Consolidated
Bristol Heat Networks Limited Indirect Subsidiary Consolidated

The grounds for exclusion from consolidation of certain entities are not material to the true and fair view of the financial statements or to the understanding of the users.

Basis of Consolidation – Group Accounts

The Group Accounts have been prepared using the group accounts requirements of the Code. Companies or other reporting entities that are under the ultimate control of the Council have been included in the Council’s group accounts to the extent that they are material to users of the financial statements in relation to their ability to see the complete economic activities of the Council and its exposure to risk through interests in other entities and participation in their activities.

Subsidiaries have been consolidated on a line by line basis, subject to the elimination of intra-group transactions from the statements, in accordance with the Code. Accounting policies have been aligned where applicable.

Bristol Holding Limited

Bristol Holding is a wholly owned subsidiary of the City Council, incorporated on 12 March 2015. The principal activity of the company is that of a holding company and the activities of the group are the provision of waste services, housing development and a gas and electric supply business in the UK with particular focus on residential customers.

On the 13 July 2015 the company acquired Bristol Energy and Technology Services (Supply) Limited for £100,000 and on 31 March 2016, the company acquired Bristol Waste Limited from Bristol City Council.

As at the 31 March 2021 the Council has invested £37.153m in Bristol Holding Limited. This was made up of £9.228m ordinary shares and £27.925m cumulative redeemable preference shares.

Bristol Waste Company Limited

Bristol Waste Company Limited is a wholly owned subsidiary of Bristol Holding Limited. The company was incorporated on 5 March 2015. From the 8 August 2015 the company has been providing waste collection, street cleaning and other maintenance services in Bristol.

BE2020 Bristol Energy Limited (formally Bristol Energy Limited)

BE2020 is a wholly owned subsidiary of Bristol Holding Limited incorporated on 17 July 2014. The company commenced trading on 23 November 2015 and launched its product offering to customers in February 2016. On 2 October 2020 a resolution was passed to authorise the Company to change its name to BE2020

146

Bristol Energy and Technology Services (Supply) Limited (formally Bristol Energy

Limited)

Bristol Energy and Technology Services (Supply) Limited is a wholly owned subsidiary of Bristol Holding Limited incorporated on 14 March 2016. The company is currently dormant. On 14 February 2018 a resolution was passed to authorise the Company to change its name to Bristol Energy and Technology Services (Supply) Limited.

Goram Homes Limited

Goram Homes is a wholly owned subsidiary of Bristol Holding Limited incorporated on 1 October 2018. The company aims to increase the provision of new homes in the city and to meet housing requirements without compromising on build quality particularly around the provision of affordable housing, space standards and sustainability.

Bristol Heat Networks Limited

Bristol Heat Networks Limited is a wholly owned subsidiary of Bristol Holding Limited incorporated on 31 October 2018. The company aims to deliver affordable, low carbon heat and is fundamental to the Council’s drive to make the city carbon neutral by 2030.

None of the other entities in which the City Council has an interest are considered material enough to merit consolidation into the Council’s Group Accounts. Details of these can be found within the Related Parties note in the Council’s single entity accounts (Note 38)

Events after the Balance Sheet Date

The Statement of Accounts was authorised for issue by the Section 151 Officer on 30 July. Events taking place after this date are not reflected in the financial statements or Notes. However there has been one event since the 31 March 2020 up to the date the accounts were authorised for issue by the S151 Officer.

On 3rd June 2021, Bristol Holding Ltd agreed to the reclassification of 27,321,425 redeemable preference shares (at a 7% coupon) held in BE2020 Ltd being converted into ordinary shares held in the company. All accrued and future interest and any arrears of preferential dividend attaching to the preference shares have been waived and written off.

Group financial position

The closing net deficit balance of the group is £43.060m which takes into account previous years losses carried forward.

Where there are no material changes to the statements the notes are as per the Council’s single entity accounts. Where consolidation has resulted in material changes additional notes are set out below.

G1 Net Cost of Services

The Net cost of Services in the consolidated CIES includes gross income of £45.8m and gross expenditure of £40m associated outside of the group boundary.

Revenue from Contracts with Customers

Further to a review of this area, the Group can confirm that there is no material contractual revenue income from customers to disclose. There is therefore nothing to disclose in relation to the introduction of IFRS 15-Revenues from Contracts with Customers.

147

G2 Financing and Investment Income and Expenditure

Interest payable and similar charges
Loss Allowance (Financial guarantee contracts)
Changes in the fair value of financial instruments
Pensions net interest cost
Interest receivable and similar income
Income and expenditure in relation to Investment Properties
Changes in fair value of Investment Properties
Total		 2020/21
£'000
36,261
(5,379)
(2,301)
22,523
(9,189)
(10,569)
(22,566)
8,780		 2019/20
£'000
37,291
5,379
(2,350)
23.029
(10,262)
(11,474)
(3,744)
37,869

G3 Current Debtors

Current debtors
Trade Receivables
Prepayments
VAT
Other Receivable Amounts
Total		 31 March 2021
£'000
24,080
4,677
9,632
108,910
147,299		 31 March 2020

£'000
16,725
19,614
8,931
84,754

130,024

G4 Creditors

Current liabilities
Trade Payables
Other Payables
Receipts In Advance
Total
nusable Reserves
Revaluation Reserve
Capital Adjustment Account
Financial Instruments Adjustment Account
Deferred Capital Receipts Reserve
Pensions Reserve
Collection Fund Adjustment Account
Accumulated Absences Account
Dedicated Schools Grant Adjustment Account		 31 March 202131 March 2020
£'000
£'000
10,949
16,470
144,956
127,667
70,421
69,701
226,326
213,838
31 March
2021
31 March
2020
£'000
£'000
(1,007,648)
(861,614)
(1,505,872)
(1,514,604)
6,898
7,076
(1,448)
-
1,133,437
991,708
87,935
(477)
13,388
6,604
10,004
(1,252,730)
(1,371,307)		 31 March 2020

£'000		 31 March 2020

£'000
16,470
127,667
69,701
213,838
31 March
2020

£'000
(861,614)
(1,514,604)

7,076
-

991,708

(477)

6,604
(1,371,307)

G5 Unusable Reserves

148

G6 Cash Flow Statement

The cash flows for operating activities include the following significant items:

Interest received
Interest paid
Dividends received		 2020/21
£'000
634
(34,003)
1,954		 2019/20
£'000
4,288
(37,832)
2,376

The deficit on the provision of services has been adjusted for the following non-cash movements:

Depreciation, impairment and downward revaluations
Amortisation
Increase/(decrease) in impairment for bad debt
(Decrease)/increase in creditors
(Increase)/decrease in debtors
(Increase)/decrease in inventories
Movement in pension liability
Contributions to/(from) provisions
Carrying amount of non-current assets held for sale, sold or derecognised
Other non-cash items charged to the net surplus or deficit
On the provision of services
Net cash flows from non-cash movements		 2020/21
£'000
120,197
4,525
2,131
10,711
(12.774)
(2,455)
21,109
3,495
25,545
(30,842)
141,642		 2019/20
£'000
82,681
4,431
1,694
27,642
(10,155)
(8,816)
47,008
4,099
46,849
(2,635)
190,798

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 deficit on the provision of services
Net adjustment from the sale of short- and long-term investments
Premiums or discounts on the repayment of financial liabilities
Proceeds from the sale of Property Plant and Equipment, Investment
Property and Intangible Assets		 2020/21
£'000
(41,934)
(41,604)
(83,538)		 2019/20
£'000
(33,664)
-
(56,436)
(90,100)

149

G7 Cash Flow Statement - Investing Activities

Purchase of Property, Plant and Equipment, Investment Property and
Intangible Assets
Purchase of short-term and long-term investments
Other (payments)/receipts for investing activities
Proceeds from the sale of Property, Plant and Equipment, Investment
Property and Intangible Assets
Proceeds from short-term and long-term investments
Capital Grants Received
Other receipts from investing activities
Net cash flows from investing activities		 2020/21
£'000
(107,018)
(294,800)
(4,410)
40,291
318,600
64,041
3,692
20,396		 2019/20
£'000
(117,110)
(116,900)
(173)
57,503
107,000
46,700
2,056
(20,924)

G8 Cash flow Statement - Financing Activities

Cash receipts of short- and long-term borrowing
Cash payments for the reduction of outstanding liabilities relating to
Finance leases and on-Balance Sheet PFI contracts
Repayments of short and long-term borrowing
Council tax and NNDR adjustments
Other payments/(receipts) in respect of financing activities
Net cash flows from financing activities		 2020/21
£'000
224
-
(8,809)
(11,586)
(4,928))
(25,099)		 2019/20
£'000
30,000
(7,363)
-
1,728
-
24,365

150

G9 Directors Remuneration and Exit Packages

Where a Directors annual salary is £50,000 or more, but less than £150,000, remuneration is disclosed by way of job title. For those Directors whose salary is £150,000 or more, their name is also disclosed.

2020/21 Salary, Fees
and
Allowances		 Compensation
for Loss of
Office
Pension
Contribution		 Total
Post Title Post Term Post Holder Notes £ £ £ £
Bristol Energy Company
Interim Managing Director Apr 20 – Nov 20 A Booth 1 111,209 - - 111,209
Consultant to the Board Apr’ 20 – Mar’ 21 C Smith 1 242,101 242,101
Bristol Waste Company
Managing Director Apr’ 20 – Mar’21 125,744 - 5,368 131,112
Operations Manager Apr’ 20 – Mar 21 103,783 - 4,407 108,190
Finance Director Apr’ 20 – Mar’21 110,431 - 4,789 115,220
Goram Homes
Managing Director Apr’ 20 – Mar’ 21 113,300 - 10,300 123,600
Finance Director Apr’ 20 – Mar’ 21 1 61,233 6,123 67,356
Bristol Holding Company
Executive Chair (CEO) Apr’ 20 – Mar’ 21 88,365 18,848 66,369
Interim Director of Finance Apr’ 20 – Mar’ 21 1 110,000 - - 110,000

Note 1 (Interim) – The amounts disclosed in the table in respect of these posts are the costs incurred by the Company to secure the individuals services on and not the amounts the individuals actually received (which will have been lower).

Note 2 - The table above is presented in a format as prescribed in Schedule 1 of the Accounts and Audit Regulations 2015. This presentation differs from disclosure in the Companies audited accounts as these are prepared in accordance with FRS 102.

151

2019/20 Salary, Fees
and
Allowances		 Compensation
for Loss of
Office
Pension
Contribution		 Total
Post Title Post Term Post Holder Notes £ £ £ £
Bristol Energy Company
Managing Director Apr’19 – Mar’20 M Majewicz 306,081 7,800 9,079 322,960
Interim Managing Director Mar’20 A Booth 1 33,917 - - 33,917
Interim Director of Finance Oct’19 – Mar’20 C Smith 1 113,333 - - 113,333
Bristol Waste Company
Managing Director Apr’19 – Mar’20 119,587 - 5,187 124,774
Operations Manager Apr’19 – Mar’20 97,344 - 4,096 101,440
Finance Director Apr’19 – Mar’20 73,179 - 3,307 76,486
Goram Homes
Managing Director Apr’19 – Sept’19 S Blake 104,046 - - 104,046
Managing Director Sept’19 – Mar’20 52.678 - 4,167 63,845
Finance Director Oct’19 – Mar’20 1 37,800 37,800
Bristol Holding Company
Executive Chair (CEO) Aug’19 – Mar’20 53,871 12,498 66,369
Interim Director of Finance July’19 – Mar’20 1 121,344 - - 121,344

Note 1 (Interim) – The amounts disclosed in the table in respect of these posts are the costs incurred by the Company to secure the individuals services on this basis and not the amounts the individuals actually received (which will have been lower).

Note 2 - The table above is presented in a format as prescribed in Schedule 1 of the Accounts and Audit Regulations 2015. This presentation differs from that of the disclosure in the Companies audited accounts as these are prepared in accordance with FRS 102

152

G10 Financial Instruments

The borrowings and investments disclosed in the Balance Sheet are made up of the following categories of financial instruments. The value of debtors and creditors reported in the table are those amounts meeting the definition of a financial instrument. The balances of debtors and creditors reported in the balance sheet and associated notes also include balances which do not meet the definition of a financial instrument, such as tax-based debtors and creditors.

Long-Term Long-Term Current Current
31 March 31 March 31 March 31 March
2021 2020 2021 2020
£'000 £'000 £'000 £'000
Financial Liabilities at Amortised
cost
Borrowing (450,488) (450,488) (4,966) (14,778)
Service Concessions (114,670) (119,424) (6,803) (8,820)
Creditors (2,738) (2,281) (207,569) (190,410)
Financial Liabilities at Fair Value
through profit and loss
Financial Derivative - - - (5,379)
Total Financial Liabilities (567,896) (572,193) (219,338) (219,387)

Financial Assets at amortised cost
Investments - 1 91,705 113,003
Debtors 800 1,009 96,008 93,780
Financial Assets at Fair Value
through Other Comprehensive
Income
Investment 350 350 - -
Financial Assets at Fair Value
through profit and loss
Investments 38,228 36,100 101,476 56,016
Total Financial Assets 39,378 37,460 288,559 262,799

Movements

The net increase of financial assets and liabilities (circa £32m) was through a combination of increases in working capital and reserves resulting in additional cash resources to invest in lieu of using these resources.

153

Borrowing

31 March
31 March
2021
2020
Current borrowing £'000
£'000
Deposit loans (repayable at notice - up to 7 days) 102
151
Other short-term borrowing (repayable within 1 year):
- Public Works Loan Board 3,251
13,470
- Banks and other monetary sector 1,334
1,136
- Energy Improvement Loans 259
-
- Local Bonds and Property rent deposits 11
11
- Stocks 10
10
Total 4,966
14,778
31 March
31 March
2021
2020
Non-current borrowing £'000
£'000
Public Works Loan Board 330,439
330,439
Lender Option Borrower Option (Lobo) 70,000
70,000
Market Debt 50,000
50,000
Stocks 49
49
Total 450,488
450,488

154

Income, Expense, Gains or Losses

The gains and losses recognised in the Comprehensive Income and Expenditure Statement for financial instruments are as follows:

Financial Instruments Gains and Losses 2020/21 Financial Instruments Gains and Losses 2020/21 Financial Instruments Gains and Losses 2020/21
Financial
Liabilities Financial Assets
Measured at
Amortised
Cost		 Amortised Cost Fair
Value
through
the CI		 Fair Value
through the
P&L		 Total
£'000 £'000 £'000 £'000 £'000
Interest expense & Impairment
Losses (28,862) - - - (28,862)
Total expense in Surplus or
Deficit on the Provision of
Services (28,862) - - - (28,862)
Interest Income 4,754 109 4,863
Fair Value Movement 2,300 2,300
Dividend Income 2,092 2,092
Total income in Surplus or
Deficit on the Provision of
Services (28,862) 4,754 - 4,501 (19,607)
Deficit arising on revaluation
of financial assets in Other
Comprehensive Income and
Expenditure - - - - -
Net gain/(loss) for the year (28,862) 4,754 - 4,501 (19,607)
Financial Instruments Gains and Losses 2019/20 Financial Instruments Gains and Losses 2019/20 Financial Instruments Gains and Losses 2019/20
Financial
Liabilities Financial Assets
Measured at
amortised
cost		 Loans and
receivables		 Fair Value
through the
CI		 Fair
Value
through
the I&E		 Total
£000s £000s £000s £000s £000s
Interest expense & Impairment
Losses (40,647) -
-
-
(40,647)
Total expense in Surplus or
Deficit on the Provision of
Services (40,647) -
-
-		 (40,647)
Interest Income -
5,531		 -
301
5,832
Fair Value Movement - - - 2,350
2,350
Dividend Income -
-
-
2,376
2,376
Total income in Surplus or
Deficit on the Provision of
Services (40,647)
5,531		 - 5,027 (30,089)

155

Deficit arising on revaluation of
financial assets in Other
Comprehensive Income and
Expenditure -
-
-
-		 -
Net gain/(loss) for the year (40,647) 5,531 - 5,027 (30,089)

Fair Value of Financial Assets and Property Assets

Some of the Groups’ financial assets are measured in the Balance Sheet at fair value on a recurring basis and are described in the following table, including the valuation techniques used to measure them.

Fair value measurements at 31 Fair value measurements at 31 March 2021 using: March 2020 using:

Quoted Observable Unobservable Quoted Quoted Observable Observable
Unobservable
prices in inputs inputs prices in inputs inputs
Descriptions active
markets		 active
markets
Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
£000 £000 £000 £000 £000 £000
Recurring fair value
measurements
Fair Value through Profit and
Loss
Money Market Funds 101,476 - - 56,017 -
-
Bristol Port Company (Non-
traded Unquoted Equity
Investment) - - 29,000 - -
27,000
Other Unquoted private
companies - - 128 - -
100
Pooled property fund - - 9,100 - -
9,000
Fair Value through Other
Comprehensive Income
Other unquoted private
companies - - 350 - -
350
Total Non-traded securities: 101,476 - 38,578 56,017 -
36,450

Investment properties		 - 275,903 -
-

**252,586 **

-

Surplus properties		 - 43,706 -
-

**41,957 **

-
Total recurring fair value
measurements 101,476 319,609 38,578 56,017 294,543
**36,450 **

156

Non-recurring fair value
measurements		 Non-recurring fair value
measurements		 Non-recurring fair value
measurements		 Non-recurring fair value
measurements		 Non-recurring fair value
measurements
Assets held for sale
806
-
-
723
-
Total non-recurring fair value
measurements
-
806
-
-
723
-
Valuation
techniques and
Inputs
Description of
asset		 Valuation
hierarchy		 Basis of Valuation Observable
and
Unobservable
inputs		 Key sensitivities affecting the
valuations provided
Money Market
Funds		 Level 1 Unadjusted quoted
prices in active markets
for identical shares		 Latest quoted
prices
Surplus assets Level 2 All surplus assets have
been valued by RICS
qualified valuers to Fair
Value less costs to sell,
reflecting highest and
best use.		 Evidence of
title, floor area,
siting and site
conditions,
type/age and
current use of
the property
have been taken
into account
together with
general market
conditions and
advertised value
of similar
properties
currently up for
sale.		 Not all assets are physically
inspected every year. Latent
defects, repair and maintenance
backlogs, general changes in the
market and other impairments
could have a significant impact on
the values provided.
Investment
Properties(further
detailed information in note 21)		 Level 2 All investment
properties have been
valued by the Group’s
in-house valuers (all
RICS qualified) on an
investment income
basis which we are
satisfied represents
highest and best use
overall.		 All valued on an
investment
income basis,
using existing
lease terms and
current yields		 Changes to market conditions,
lease terms, covenant strength and
occupancy levels could all affect
the asset valuations provided.

157

Bristol Port
Company		 Level 3 This investment has
been valued by an
external specialist
valuation company for
financial year ending
31stMarch 2021 and
refreshed by Council
officers for this
financial year on the
same basis.		 Calculations
have been based
an income
approach to
valuation, by
applying a
multiple derived
from the market
to a
maintainable
profit figure.		 Changes to market conditions
(local and global), and the
comparable data used within the
valuations. If the growth of
future returns is greater or lesser
by 0.5% than the 2% forecast, the
fair value will be circa £1.5m
higher or lower respectively.
Investments in
other unquoted
companies		 Level 3 These investments have
been valued at the
Group’s share of each
company.		 Calculations
have been based
on their latest
audited accounts		 The value of these companies are
relatively low (£478k) so any
change in the metrics used in the
valuation technique will not have
a material impact.
Investments in
Pooled Property
Fund		 Level 3 These investments have
been valued at the
Group's share within
the pooled fund.		 The valuation
for Pooled
Property Funds
have been based
on the latest
quarterly
financial report.		 Changes to housing market
conditions could affect the
valuation of the pooled property
fund. If the market value of the
properties within this fund is
greater or lesser than 1% the fair
value of the fund will be £91k
higher or lower respectively.

Transfers between levels of the fair value hierarchy

There were no transfers between levels 1 and 2 during the year.

Changes in valuation technique

There has been no change in valuation techniques used during the year.

158

Reconciliation of fair value measurements for assets at fair value within level 3

31 March
31 March
2021
2020
Description Non-traded
securities
Non-
traded
securities
£000
£000
Opening balance 36,450
34,550
Transfers into level 3 -
-
Transfers out of level 3 -
-
included in the surplus/(deficit) on the
Provision of Services		 2,228
2,350
included in Other Comprehensive Income and
Expenditure		 -
-
Total gains/(losses) for the period: 2,228
2,350
Additions 100
100
Disposals (200)
(550)
Closing balance 38,578
**36,450 **

Gains and losses included in the surplus / (deficit) on the provision of services for the current year primarily relates to the investment in the Bristol Port Company (+£2m) .

159

The Fair Values of Financial Assets and Financial Liabilities that are not Measured at Fair Value

Except for the financial assets carried at fair value (described in the table above), all other financial liabilities and financial assets represented by loans and receivables and long term debtors and creditors are carried on the balance sheet at amortised cost. Their fair value can be assessed by calculating the present value of the cash flows that take place over the remaining life of the instruments, using the following assumptions:

For loans from the PWLB payable, prevailing market rates have been applied to provide the fair value under PWLB debt redemption procedures. An additional note to the tables sets out the alternative fair value measurement applying the premature repayment, highlighting the impact of the alternative valuation;

For non-PWLB loans payable, prevailing interest rates have been applied to provide the fair value; No early repayment or impairment is recognised;

Where an instrument has a maturity of less than 12 months or is a trade or other receivable the fair value is taken to be the carrying amount or the billed amount;

The fair value of trade and other receivables is taken to be the invoiced or billed amount.

Financial Liabilities 31 March 2021
31 March 2020
Carrying
amount
Fair value
Carrying
amount
Fair value
£000
£000
£000
£000
Public Works Loan Board (PWLB) 333,690
501.500
343,909
480,200
Lender Option Borrower Option 70,865
108,400
70,663
99,400
Market Debt 50,469
74,700
50,473
69,200
Current Creditors 210,213
210,213
192,607
192,607
Service Concessions 121,473
192,673
128,244
200,508
Other 524
524
305
305
Total Liabilities 787,234
1,088,010
786,201
1,042,220

The Group has used a transfer value for the fair value of financial liabilities. We have also calculated an exit price fair value of £1.244bn an increase of £156m which is calculated using early repayment discount rates. The Group has no contractual obligation to pay these penalty costs and would not incur any additional cost if the loans run to their planned maturity date.

The fair value for financial liabilities and assets has been assessed by calculating the present value of the cash flows that will take place over the remaining term of the instruments, using the assumptions detailed above, the fair value is arrived at by applying the discounted cash flow calculations based on the PWLB premium/discount calculations.

The fair value of the liabilities is higher than the carrying amount because the Group’s portfolio of loans includes a number of fixed rate loans where the interest rate payable is higher than the prevailing rates at the Balance Sheet date. This shows a notional future loss (based on economic conditions at 31 March 2021) arising from a commitment to pay interest to lenders above current market rates.

160

Financial Assets 31 March 2021
31 March 2020
Carrying
amount
Fair value
Carrying
amount
Fair value
£000
£000
£000
£000
Current investments 64,983
64,983
33,076
33,076
Cash and Cash Equivalents 26,092
26,092
74,153
74,153
Non-current investments -
-
1
1
Current Debtors 96,008
96,008
82,203
82,203
Non-current debtors 800
800
10,786
10,786
Total Financial Assets 187,883
187,883
200,219
200,219

The fair value of the assets is the same as the carrying value due to the majority of these assets having a maturity of less than 12 months or is a trade or other receivable where the fair value is taken to be the carrying amount or the billed amount.

Short-term debtors and creditors are carried at cost as this is a fair approximation of their value.

161

Fair value hierarchy for financial assets and financial liabilities that are not measured at fair value

Fair value measurements at 31 Fair value measurements at 31 March 2021 using: March 2020 using:

Quoted Observabl Unobservable Quoted Observable Unobserva
prices in e inputs inputs prices in inputs ble inputs
active active
markets markets
Descriptions
Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
£000 £000 £000 £000 £000 £000
Recurring fair value
measurements using:
Financial Liabilities
held at Amortised Cost
Public Works Loan Board
(PWLB) 333,690 343,909
Lender Option Borrower
Options 70,865 70,663
Market debt 50,469 50,473
Service Concessions 123,621 128,244
Other 524 305
Total 579,169 593,594
Financial Assets held at
amortised cost
Current Investments 64,983 33,076
Cash and Cash
Equivalents 26,092 79,927
Non-current Investments - 1
Non-current Debtors 800 1,009
Total 91,875 114,013

The fair value for financial liabilities and financial assets that are not measured at fair value included in Levels 2 and 3 in the table above have been arrived at using a discounted cash flow analysis with the most significant inputs being the discount rate detailed above.

The fair value for financial liabilities and financial assets that are not measured at fair value can be assessed by calculating the present value of the cash flows that will take place over the remaining term of the instruments, using the assumptions detailed above, primarily for financial liabilities the fair value is arrived at by applying the discounted cash flow calculations based on the PWLB premium/discount calculations.

162

G11 Nature and Extent of Risks Arising from Financial Instruments

The Group’s activities expose it to a variety of financial risks:

Credit risk – the possibility that other parties might fail to pay amounts due to the Group. Liquidity risk – the possibility that the Group might not have funds available to meet its commitments to make payments. Re-financing risk – the possibility that the Group might be requiring to renew a financial instrument on maturity at disadvantageous interest rates or terms.

Market risk – the possibility that financial loss might arise for the Group as a result of changes in such measures as interest rates and money market movements.

The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the resources available to fund services. Risk management is carried out by a central treasury team, under policies approved by the Council in the annual treasury management strategy, and compliance with the CIPFA Prudential Code of Practice, the CIPFA Treasury Management Code of Practice, and Investment Guidance that is issued under the Local Government Act 2003. The Group provides written principles for overall risk management, as well as written policies covering specific areas, such as interest rate risk, credit risk, and the investment of surplus cash. These are required to be reported and approved at or before the Council’s annual council tax setting budget or before the start of the year to which they relate. These items are reported with the annual treasury management strategy that outlines the detailed approach to managing risk in relation to the Group’s financial instrument exposure. Actual performance is also reported annually to Members.

The annual treasury management strategy which incorporates the prudential indicators was approved by Council on 25 February 2020 and is available on the Council website.

Credit risk

Credit risk arises from deposits with banks and financial institutions, as well as credit exposures to the Group’s customers.

This risk is minimised through the Annual Investment Strategy, which requires that deposits are not made with financial institutions unless they meet identified minimum credit criteria, in accordance with Fitch, Standard and Poor’s and Moody’s Credit Ratings Services. The Annual Investment Strategy also imposes a maximum sum to be invested with a financial institution located within each category.

Details of the Investment Strategy can be found on the Council’s website. The key areas of the Investment Strategy are that the minimum criteria for investment counterparties include:

Credit ratings of Short Term of F1, Long Term A-, with the lowest available rating being applied to the criteria; UK institutions provided with support from the UK Government;

The Group’s maximum exposure to credit risk in relation to its investments in banks and building societies will vary according to credit ratings assigned by the three main credit rating agencies and cannot be assessed generally as the risk of any institution failing to make interest payments or repay the principal sum will be specific to each individual institution. Recent experience has shown that it is rare for such entities to be unable to meet their commitments. A risk of irrecoverability applies to all of the Group’s deposits, but there was no evidence at the 31 March 2021 that this was likely to crystallise.

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Allowance for Credit Losses

The following analysis summarises the Group’s potential maximum exposure to credit risk on financial assets valued at amortised cost, based on experience of default and un-collectability over the last five financial years, adjusted to reflect current market conditions.

Amount
Historical
experience of
default
Adjustment
for market
conditions		 Estimated
maximum
exposure to
default
Estimated
maximum
exposure to
default
£000
%
%		 £000
£000
A
B
C		 (A*C)
31-Mar-21
31-Mar-21
31-Mar-21		 31-Mar-21
31-Mar-20
Current Investments:
Local Authorities 45,013
0.00%
0.00%
-
-
AA rated counterparties 15,585
0.02%
0.02%
3
-
A rated counterparties 30,477
0.06%
0.06%
18
24
Sub-total 91,073 21
**24 **
Trade debtors 96,008 -
-
Non-current debtors 800 -
-
Total Financial assets 187,883 21
**24 **

The estimated maximum exposure for credit loss for Treasury investments is £21k and therefore no allowance for credit loss have been made for these assets.

No credit limits were exceeded during the reporting period and the Group does not expect any losses from nonperformance by any of its counterparties in relation to deposits.

The Group does not generally allow credit for its trade debtors, including amounts due from government departments and other Local Authorities.

The risk of loss for trade receivables is minimised by a combination of the following:

Wherever possible obtaining payment in advance of service delivery Availability and encouragement to pay by direct debit

A wide range of payment options available, including by telephone, internet, banks and retail networks (via the Allpay solution i.e. Payzone, Paypoint and Post Offices)

Having a standardised recovery process including reminder letters and statement of accounts

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Utilising a corporate Debt Management Team to take an ethical debt approach to all types of debt with referral to External Debt Collection agencies or instigating Court claims only used as a last resort Negotiating flexible repayment plans for overdue debt where necessary

The write off of a debt is always the last option available and is only taken when all other appropriate measures have been taken to recover payment, and in cases of bankruptcy.

The bad debt provision is calculated by reference to the Group’s historic experience with the provision being applied to debts over 60 days old and the value increasing according to the age of the debt.

Current debtor analysis Gross debtor at Allowance
for credit
losses at		 Net debtor
at		 Net debtor
at		 Net
debtor at
31-Mar-21 31-Mar-21 31-Mar-21 31-Mar-
20
£'000 £'000 £'000 £'000
Local tax payers 35,192 (19,626) 15,566 6,099
Housing rents 13,123 (10,091) 3,032 2,880
Other - sundry debtors 149,961 (32,724) 117,237 107,613
Total Other Entities and
Individuals 198,276 (62,441) 135,835 116,592
Central Government bodies 10,561 - 10,561 11,047
Other local authorities 1,571 - 1,571 1,636
NHS bodies 160 - 160 749
Total debtors 210,568 - 148,127 130,024
Balance sheet debtors 210,568 (62,441) 148,127 130,024
Current debtors not qualifying as
a financial instrument under IFRS
(71,745)		 19,626 (52,119) (36,244)
Current debtors qualifying as a
financial instrument under
IFRS 138,823 (42,815) 96,008 93,780

The following table analyses the Gross debt that is now past due over varying periods. This overdue debt is covered by a provision for bad debt.

31 March
31 March
2021
2020
£'000
£'000
Less than three months 30,047
34,073
1,759
4,313
15,276
9,474
46,848
38,862
Three to four months
Four months to one year
More than oneyear
Total 93,930
86,722

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Liquidity risk

The Group has a comprehensive cash flow management system that seeks to ensure that cash is available as needed. If unexpected movements happen, the Group has ready access to borrowings from the money markets to cover day-to-day cash flow need and the Public Works Loans Board and capital markets for access to longer term funds. The Council is also required to provide a balanced budget through the Local Government Finance Act 1992, which ensures sufficient monies are raised to cover annual expenditure. Therefore, there is no significant risk that it will be unable to raise finance to meet its commitments under financial instruments.

The maturity analysis of financial assets, excluding sums due from customers, is as follows:

31 March
31 March
2021
2020
£'000
£'000
Less than 1 year 288,559
262,800
Between 1 and 2 years 339
438
Between 2 and 3 years 324
15
More than 3years 38,715
37,006
Total 327,937
300,259

The maturity analysis of financial liabilities is as follows:

31 March
2021
31 March
2020
£'000
£'000
219,338
219,387
11,786
6,803
7,163
11,786
548,947
553,604
787,234
791,580
Less than 1 year
Between 1 and 2 years
Between 2 and 3 years
More than 3years
Total

Refinancing and Maturity risk

The Group maintains a significant debt and investment portfolio. Whilst the cash flow procedures above are considered against the refinancing risk procedures, longer-term risk to the Group relates to the exposure to replacing financial instruments as they mature. This risk relates to both the maturing of longer-term financial liabilities and longer-term financial assets.

The approved treasury indicator limits for the maturity structure of debt and the limits on investments placed for greater than one year in duration are the key parameters used to address this risk. The Council approved treasury and investment strategies address the main risks and the central treasury team address the operational risks within the approved parameters. This includes:

Monitoring the maturity profile of financial liabilities and amending the profile through either new borrowing or the rescheduling of the existing debt; and

Monitoring the maturity profile of investments to ensure sufficient liquidity is available for the Group’s day-to-day cash flow needs, and monitoring the spread of longer-term investments provides stability of maturities and returns in relation to the longer-term cash flow needs.

166

The maturity profile of the Group’s debt portfolio along with the Groups’ approved minimum and maximum exposure is shown in the table below.

Approved
minimum
limits %
Approved
maximum
limits %		 Actual 31
March 2021
%
£'000		 Actual 31
March 2020
%
£'000
Less than 1 year
-
30		 4,966
1		 14,778
3
Between 1 and 2 years
-
40		 5,000
1		 -
-
Between 2 and 5 years
-
40		 20,000
4		 10,000
2
Between 5 and 10 years
-
50		 34,000
7		 49,000
11
More Than 10 Years
25
100		 391,488
87		 391,488
84
Total 455,454
100		 465,266
100

Included within the maturity profile are £50m of LOBOS with maturities averaging 40 years. Inherent within these loan instruments are options (averaging an option every 3 years) that could give rise to the debt being repaid early. These loans are regularly reviewed with the current and expected structure of interest rates. The risk of the lenders exercising their options is currently low for the short to medium term. Therefore, the maturity of these loans in above table are currently based on their maturity date, 10 years and over.

Market risk

The Group is exposed to interest rate movements on its borrowings and investments. Movements in interest rates have a complex impact on the Group. For instance, a rise in variable and fixed interest rates would have the following effects:

Borrowings at variable rates – the interest expense charged to the Comprehensive Income and Expenditure Statement will rise; Borrowings at fixed rates – the fair value of the borrowing will fall (no impact on revenue balances); Investments at variable rates – the interest income credited to the Comprehensive Income and Expenditure Statement will rise; and

Investments at fixed rates – the fair value of the assets will fall (no impact on revenue balances).

Borrowings are not carried at fair value on the balance sheet, so nominal gains and losses on fixed rate borrowings would not impact on the Surplus or Deficit on the Provision of Services or Other Comprehensive Income and Expenditure. However, changes in interest payable and receivable on variable rate borrowings and investments will be posted to the Surplus or Deficit on the Provision of Services and affect the General Fund Balance. Movements in the fair value of fixed rate investments that have a quoted market price will be reflected in the Other Comprehensive Income and Expenditure Statement.

The Group has a number of strategies for managing interest rate risk. The Annual Treasury Management Strategy draws together the Group’s expected treasury operations, including an expectation of interest rate movements. From this Strategy a treasury indicator is set which provides maximum limits for fixed and variable interest rate exposure. The central treasury team will monitor market and forecast interest rates within the year to adjust exposures appropriately. For instance during periods of falling interest rates, and where economic circumstances make it favourable, fixed rate investments may be taken for longer periods to secure better long term returns, similarly the drawing of longer term fixed rates borrowing would be postponed.

167

At 31 March 2021, if interest rates had been 1% higher with all other variables held constant, the financial effect would be:

31 March
2021
£'000
Increase in interest receivable on variable rate investments 1,966
Impact on Surplus or Deficit on the Provision of Services 1,966
Share of overall impact debited to the HRA 1,193
Decrease in fair value of fixed rate borrowings liabilities (no impact on the
Surplus or Deficit on the Provision of Services or Other Comprehensive
Income and Expenditure)		 264,600

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

Foreign exchange risk

During 2020/21 the Group received monies denominated in Euro's relating to the receipt of European grant. The Group also made payments in a variety of currencies for the supply of goods and services. Payments and receipts are converted to Sterling at the earliest opportunity.

168