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2022-05-01-accounts

THE BRITISH EMPIRE AND COMMONWEALTH COLLECTION

Charity registration number: 1148714

Annual Trustees Report 2021-22

1. Use of BECM legacy monies

Two full time equivalent (fte) posts of archivist (job shared between two people) and Documentation Assistant continued to be funded by the legacy money.

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.

A major piece of work during this year was the creation of a new online collections search function on the Bristol Archives website British Empire & Commonwealth Collection - Epexio (bristol.gov.uk). This new facility has radically improved the accessibility of the collections which have been digitised and improved the profile of the collection as a whole.

Towards the end of the financial year steps have been taken to try to seek new funding to commence from April 2023 when the current legacy funding is expected to run out.

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 2022
(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
2021/22 (the Code) published by
the Chartered Institute of Public
Finance and Accountancy (CIPFA).
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Page 1

Contents

1. Glossary of Terms

2. Written Statements and Director of Finance Narrative Report

• Councillor Preface 6
• Director of Finance Narrative Report 8
• Statement of Responsibilities 26
• Auditor's Report - (to follow on completion of the audit) 27
• Annual Governance Statement (presented to Audit Committee June 27) 28
Fin ancial Statements
• Comprehensive Income and Expenditure Statement 44
• Movement in Reserves Statement 45
• Balance Sheet 46
• Cash Flow Statement 47

3. Core Financial Statements

4. Notes To The Accounts

4. Notes To The Accounts
Notes supporting the Core Statements
Note 1 - Accounting Policies 48
Note 2 - Accounting Standards that have been issued but have not yet been adopted 65
Note 3 - Critical Judgements in applying Accounting Policies 66
Note 4 - Assumptions and Estimation Uncertainty 68
Note 5 - Events after the Balance Sheet Date 69
Note 6 - Other Items of Expenditure and Income 69
Notes supporting the Comprehensive Income and Expenditure Statement
Note 7 - Expenditure & Funding Analysis 70
Note 8 - Expenditure & Income Analysed by Nature 74
Note 9 - Other Operating Expenditure 75
Note 10 - Financing & Investment Income and Expenditure 75
Note 11 - Taxation and Non-Specific Grant Income 75
Note 12 - Pooled Budgets 76
Note 13 - Members' Allowances 77
Note 14 - Officers Remuneration and Exit Packages 78
Note 15 - External Audit Costs 81
Note 16 - Dedicated Schools Grant 82
Note 17 - Grant Income 83
Notes supporting the Movement in Reserves Statement
Note 18 - Adjustments between Accounting Basis and Funding Basis under Regulations 86
Note 19 - Usable Reserves 88
Notes supporting the Balance Sheet
Note 20 - Property, Plant and Equipment 90
Note 21 - Heritage Assets 94
Note 22 - Investment Properties 95
Note 23 - Intangible Assets 96
Note 24 - Financial Instruments 97
Note 25 - Nature and Extent of Risks from Financial Instruments 106
Note 26 - Capital Expenditure and Financing 112
Note 27 - Leases 113
Note 28 - Service Concessions 113
Note 29 - Debtors 116
Note 30 - Inventories 117
Note 31 - Cash and Cash Equivalents 117
Note 32 - Creditors 117
Note 33 - Provisions 118
Note 34 - Unusable Reserves 119
Note 35 - Pensions 124

Notes supporting the Cash Flow Statemen t

Note 36 - Cash Flow Statement - Operating Activities 131
Note 37 - Cash Flow Statement - Investing Activities 133
Note 38 - Cash Flow Statement - Financing Activities 133

Other Notes

Note 39 Related Parties 133
Note 40 Transfer of Functions 135
Note 41 Contingent Liabilities 136

5. Supplementary Accounting Statements

• Housing Revenue Account 137
• Collection Fund 143

6. Group Accounts

148

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 2021/22.

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:

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.

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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).

INVENTORIES – Goods that are acquired in advance of their use in providing services of their resale.

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.

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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.

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 2022

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Introduction
An introduction to the 2021/22 statement of accounts
by the deputy mayor and portfolio holder for finance,
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The 2021/22 financial year provided several challenges and opportunities unlike any year before it. Although the year began with the city still firmly in the grip of the global pandemic, over the course of 12 months, the collective effort of residents, agencies, businesses and volunteers across the city ensured that Bristol was firmly on a road of recovery and looking towards a brighter future.

Whilst the year presented several financial challenges associated with the pandemic and the emerging cost of living crisis, we have made significant progress on a number of our key priorities. Over £1bn was spent on local services and projects aimed at meeting the ambitions of our Corporate Strategy and the goals of the One City Plan. We have also laid foundations for major investments in social housing, sustainable heat networks and local transport networks – vital infrastructure that will deliver economic and social value for the city for generations to come.

This past year’s highlights include:

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Statement of Accounts Bristol City Council - For the Year Ended 31 March 2022

In a year unlike any we have experienced before, the dedication, energy and commitment of colleagues from across the council and our city partners has helped see us through the challenges we have faced. We remain determined to continue to build on the progress we have made this year to deliver the infrastructure and support communities need to grow and thrive.

Our financial performance remains strong, and we welcome the opportunity to reflect on the year gone by and look ahead with renewed energy and purpose. As we continue to respond to the lasting impacts of the pandemic, Brexit and the cost of living crisis we remain focussed on ensuring that we deliver value for money for tax-payers and ensure our financial position is sufficiently robust to meet the challenges we face.

Councillor Craig Cheney

Deputy Mayor – City Economy Finance and Performance

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J4 Narrative Report li

Statement of Accounts Bristol City Council - For the Year Ended 31 March 2022

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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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Welcome to our Narrative Report which aims to demonstrate a clear link between our resources, our strategy and our performance in a transparent and accessible way. It shows how we’ve helped deliver intended outcomes and created value throughout 2021/22, and how we are planning ahead to respond as effectively as possible to future challenges.

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 a growing global reputation and has been recognised for its efforts across many different sectors. The city is a UNESCO City of Film as well an UNESCO Learning City. Bristol has been awarded a prestigious A List rating from not-for-profit charity, CDP, in recognition of our efforts to tackle the climate crisis, and our One City Approach has been held up by the European Commission as a world class initiative to tackle urban challenges.

Despite Bristol’s ongoing recovery from the COVID-19 pandemic, a number of challenges continue to impact the city and its population:

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Statement of Accounts Bristol City Council - For the Year Ended 31 March 2022

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Our Services 2O21/22
The following core services are provided by the council:
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Core Services:

Adults, Children, Education and Public Health:

Growth & Regeneration:

Resources:

Provides internal support services including:

Ring-fenced Accounts:

Housing Revenue Account:

Dedicated Schools Grant:

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.

Our Leadership and Workforce:

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

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Statement of Accounts Bristol City Council - For the Year Ended 31 March 2022

Our Services 2O21/22

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Statement of Accounts Bristol City Council - For the Year Ended 31 March 2022

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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: Communities & living 74% of residents 71% felt that are satisfied with their people from different local area as a place to backgrounds get on well live. (2021 Bristol together in their local area. Quality of Life survey) ( 80% 2020/21) 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: Key facts:
1,589
Housing Adult Social Care
new homes built in
Bristol in 2020/21
( 1,350 2019/20)
Nearly 3,500
student units have
been completed 3,995
between 2006 adults received a community-based
Over
£ affordable homes built in 3,800 and 2021 social care support during 2021/22
homes Bristol since 2006
543
Prevented
1,512
households from
becoming homeless a further
1,858
during 2020/21
care home places were funded
26 people
people housed in
emergency COVID-19
accommodation had
subsequently been
resettled as at
31 Dec 2020.
night in Bristol compared with 50 in November 2020.
(National annual count - January 2022)
sleeping rough in a single
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Statement of Accounts Bristol City Council - For the Year Ended 31 March 2022

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Key facts:
Culture & Creativity
32% participate
in cultural activities at
least once a month
( 33% 2020/21)
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Key facts:
Education
81.3% [rated as Good or Better for overall ]
effectiveness by OFSTED (March 2022)
( 78.9% March 2021)
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Key facts:
Transport and sustainability
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32 bus journeys
per head of population in 2020/21
(from 87 in 2019/20)
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Number of people
who ride a bike
at least per head of population in 2020/21
weekly 27% (from 87 in 2019/20)
( 28% 2020/21)
44% of all
household waste was
sent for reuse, recycling
83kg of waste per and composting in 2021/22
household was ( 45% 2020/21) CO2
landfilled in 2021/22
Citywide CO2 emissions
have decreased by
43%
compared with 122.5kg in 2020/21
(2005-2019)
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Key facts: Economy & employment

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263,000 working age 78.4%
residents were in Average earnings
employment in 80.7%
December 2021.
£32,885 £31,866
Bristol UK
( £31,900 in 2020)
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 2022

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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 2021/22.
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Revenue Financial Summary 2021/22

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

The net General Fund outturn expenditure is £423.4m which compared to the original budget agreed by Council in February 2021 of £424.4m gives an in-year underspend of £1.0m after utilisation of Covid funding and other drawdowns from earmarked reserves. This was largely driven by the improved income in Adult Social Care from the CCG and NHS.

The impact of the Covid-19 pandemic and resulting lockdowns has continued to have a significant impact on the financial position of the Council in 2021/22. Throughout the year the financial impact on the Council caused by Covid-19 resulting in additional expenditure being incurred, disruption to the delivery of planned efficiencies and reduced income. There was a wide variety of additional funding that was provided by Central Government to support Councils in addressing the additional need relating to Covid-19 both in 2020/21 (of which various amounts were able to be carried forward and utilised in 2021/22) and amounts allocated in 2021/22.

The Council’s assessed pressure from lost income, undeliverable Covid-19 related savings and from additional service expenditure associated to Covid-19 equates to £56.6m

for 2021/22 (this compares to £74.7m in 2020/21). This additional expenditure is fully met by the range of Covid-19 grants received during the year, totalling £35.7m and the utilisation of amounts carried forward from 2020/21. This leaves a further £10.1m to be carried forward to meet further pressures.

This improved outturn position means that our finances are better placed to meet the ongoing challenges over the medium term, ensures the continued delivery of organisational priorities, and provides for increasing financial resilience in 2022/23 and beyond. The retention of an appropriate level of general reserves is essential in order to mitigate financial risk (including future funding uncertainties and expenditure pressures caused by high inflation and changes in social care legislation) and is a key indicator of sound financial governance.

The gross cost of services during the year was £1.285bn (£1.243bn 2020/21). 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 £504.1 m (£470.1m in 2020/21).

A reconciliation between the £423.4m outturn against the £504.1m net cost of service is shown in the following table.

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Statement of Accounts Bristol City Council - For the Year Ended 31 March 2022

Financial erformance p

EFA table

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Outturn Adjustments to Outturn Net
agreed cost of
by Cabinet (Note 1) (Note 2) (Note 3) (Note 4) service
£’000 £’000 £’000 £’000 £’000 £’000
People 242,726 (19,578) 13,331 7,648 244,127
Resources 69,827 (10) 11,215 8,037 89,068
Growth and Regeneration 67,573 9,186 62,658 9,171 148,588
Housing Revenue Account (3,785) (9,655) 1,710 4,664 (7,066)
(Note 5)
Dedicated Schools Grant 14,647 1,109 0 7,778 23,534
Corporate Funding and 32,395 (18,063) 16,348 (5,153) (19,724) 5,803
Expenditure
423,383 (37,012) 105,262 32,145 (19,724) 504,054
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Statement of Accounts Bristol City Council - For the Year Ended 31 March 2022

Financial erformance p

Sources of Funding

During 2021/22 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 £181.9m of business rates of which £156.3m (net of reliefs) is retained in year by the Council. This is also net of the tariff of £84.5m which the Council returns to central government and £12.6m transferred to the Avon Fire Authority and the West of England Combined Authority.

The Council also collects £283.3m of Council Tax (on behalf of Avon and Somerset Police and Crime Commissioner, Avon Fire Authority, and itself), of which £236.2m is retained in year by the Council.

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 £29.7m were specifically related to business rates reliefs offered during Covid.

Reserves

Useable reserves have reduced overall by £37.6m . This is largely because of the utilisation of Covid related funding received in 2020/21 but required for use in 2021/22. This includes the use of £83.1m of grant funding 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. Similarly, £29.7m of grant funding has been carried forward to offset collection fund losses in 2022/23. The accounting arrangements for business rates and council tax mean that the deficits on the Collection Fund in 2021/22 are charged to the General Fund in future years. Further Covid funding of £10m , received in 2021/22 has also been carried forward to manage the pandemic over the medium term and meet future commitments and ongoing loss of income..

Other significant contributions to reserves during 2021/22 include:

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 2022

Financial erformance p

Dedicated Schools Grant

At the end of 2021/22 the deficit on the Dedicated Schools Grant (DSG) adjustment account has increased to over £24.6m, 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 and Early Years’ SEN budget where an in-year overspend of £0.499m was recorded in Early Years’ SEN panel expenditure which is reflected in the overall £0.149m reduction in the end of year cumulative position of the Early Years’ block to £0.472m underspend, from £0.621m brought forward balance at the start of the year.

The main areas of need, driving the overspend in the High Needs Block continue to be topups, which have seen an increase of 10% in number of children and young people with an Educational Health Care (EHC) plan at January 2022. Number of live cases increased by 25.6% (461 cases at the end of 2021 compared to 367 cases at the end of 2020) and an increased proportion of children with higher banding due to complexity of needs. Nationally the pressures in this area have been recognised by government and an increase in funding (of £9.848m) has been announced for 2022/23.

The additional funding allocation for 2022/23 recognises the pressure nationally but is still not sufficient to meet any increase in need or to tackle the historic deficit. The high level strategy for dealing with the funding pressures in the High Needs Block, continues to be:

High Needs block overall spend in 2021/22 was £83.78m (excluding £1.472m on Transformation Project). The budget for 2022/23 has been set, with the High Needs Block having a total budget of £78.214m which is £5.566m less than 2021/22 total expenditure.

The DSG is a ring-fenced budget and regulations state that it cannot be subsidised by the General Fund, so must balance in the longer term. The transfer of 0.5% (approximately £1.5m) from the Schools Block to fund the Education Transformation Programme for another year to enable further work on DSG improvements plans in order to achieve a balanced in-year position and deliver DSG within a sustainable envelope in the long term.

In addition to the DSG deficit 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 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 needing support in 2022/23.

Councils with an overall deficit on their DSG account at the end of a financial year must be able to present a plan to the Department for Education 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 implemented a template with a focus on High Needs, to help local authorities manage their DSG and Bristol is using this template.

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.

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Statement of Accounts Bristol City Council - For the Year Ended 31 March 2022

Financial erformance p

Schools Reserves – Individual Schools Balances at the end of March 2022, overall school’s revenue balances have decreased by £2.103m from £6.361m to £4.258m.

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.

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 2021/22 was originally set at £321.4m. Capital spending (including revenue expenditure allowed to be funded by capital) during the year totalled £167.3m. An analysis of capital investment by directorate and sources of capital funding are shown in the table below. The Capital Programme was financed from a combination of borrowing (£42.6m) and from grants, contributions, and reserves (£124.7m).

----- Start of picture text -----
Approved
Budget Revised Outturn Variance
Council Budget Outturn Variance from
£m Directorate £m £m £m budget %
31.4 People 19.7 20.3 0.60 (3)
8.3 Resources 5.9 5.5 (0.40) 7
159.1 Growth and Regeneration 124.2 102.1 (22.1) 18
12.0 Corporate 1.3 0 (1.3) -
110.6 Housing Revenue Account 52.6 39.4 (13.2) 25
321.4 Total 203.7 167.3 (36.4) 18
Financed by:
76.9 Prudential Borrowing 45.2
106.0 Capital Grants 72.9
26.8 Capital Receipts 7.2
110.6 HRA 39.4
1.1 Revenue Contributions 2.6
321.4 Total 167.3
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Statement of Accounts Bristol City Council - For the Year Ended 31 March 2022

Financial erformance p

The major areas of investment have included:

The Council holds £3.31bn of fixed assets, comprising £2.759bn of operational assets for delivering services, £207m of Heritage Assets for cultural benefit and £344m of nonoperational assets.

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Statement of Accounts Bristol City Council - For the Year Ended 31 March 2022

Financial erformance p

Service Investments

The Council has investments in subsidiary companies and other service investments. These investments are primarily for outcomes and benefits delivered rather than for yield.

In June 2021, Bristol Energy (BE2020) entered into a members voluntary liquidation process. FRP were appointed liquidators and the BE2020 Board stepped down. The liquidation process remained on-going during 2021/22.

In September 2021 the Council approved Goram Homes joint venture plans for 268 new homes at Romney House, Lockleaze. The site was transferred during 2021/22 to Goram Homes joint venture in return for £12.9m of repayable loan notes. 147 homes (55%) will be affordable and managed by Bristol City Council.

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. These totaled £27.6m and were in line with business plans and investment reports approved by Cabinet.

Transactions with Council Owned Subsidiaries

Bristol Heat Networks

A loan facility of up to £12.7m is in place to Bristol Heat Networks related to the Heat Network Investment Project (HNIP), assets Old Market and Redcliffe Phase 2, with £0.3m drawn down during 2021/22.

Goram Homes

Two working capital loans have been agreed for Goram Homes, one of £3.3m for pipeline activities 1 of which £2m has been drawn down as of 31 March 2022 and further \ facility of £4m (pipeline 2) of which Goram has not drawn down yet. In addition, the

Council also holds £12.9m repayable loan notes representing its transfer of the Romney site in Lockleaze, Bristol to Goram Home’s Joint Venture for the development of that same site.

Bristol Waste

A loan facility is in place to Bristol Waste for fleet vehicles replacement of £12.7m, of which £11.3m has been drawn down. £8.4m plus interest remains outstanding as at 31 March 2022). A further loan of £2.8m has been entered in to for Phase 2 of the Avonmouth site redevelopment.

BE 2020

The Council invested £36.5m in Bristol Energy Limited between the period 2015/16 when it was agreed to be established and 2019/20 financial years. In June 2020 the Council took the decision to progress the accelerated sale of the Council’s interests in Bristol Energy, which included its commercial and residential customer books. During 2020/21 this investment was written down to zero in the Council’s accounts.

Following the sale of Bristol Energy in 2020 a process began of entering the successor company, BE 2020 Limited into a Members voluntary liquidation. The Council granted a Parent Company Guarantee (PCG) (£3.9m) and an overarching indemnity of up to £7.3m to cover all liabilities which may fall due as a consequence of the sale and orderly winding up of BE 2020 as at 31 March 2022, a total of £5.47m (net of income received from BE 2020) had been drawn down against this indemnity of which £3.75m was attributed to 2021/22.

The winding-up process continues which may result in positive or adverse movements and should the totality of the indemnity be called upon the total loss associated with BE 2020 would be £43.8m (the ordinary and preference shares £36.5m plus £7.3m indemnity).

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Statement of Accounts Bristol City Council - For the Year Ended 31 March 2022

Financial erformance p

The City Leap Partnership and Bristol Heat Networks Ltd (BHNL)

In April 2022, Cabinet noted the appointment of Ameresco Limited, with Vattenfall Heat UK Limited as an essential Sub Contractor, as the City Leap Preferred Bidder; and approved the principle of the establishment of City Leap Energy Partnership Limited as a 50/50 joint venture between the Council and Ameresco Limited.

The arrangement is intended to be for a 20year period with the aim of delivering up to £1bn of inward investments in low carbon energy to support the aim of Bristol becoming a carbon neutral city by 2030. The council will grant access to its estate to deliver low carbon energy infrastructure and facilitate delivery in the wider city, including with existing community energy groups and networks. The Partner will contribute capital funding, capacity and expertise in the delivery of low carbon energy infrastructure projects.

The transition phase of City Leap has commenced, which include the proposed transfer of the heat network and its assets from the Council to Bristol Heat Networks Limited (BHNL), a wholly owned company of the Council and the subsequent sale of BHNL to the Strategic Partner.

Subject to approval the Heat Network Assets to be transferred comprise of HNIP (Old Market, Redcliffe Phase 2, Bedminster and Temple Networks) and Non HNIP funded assets (comprising completed Phase 1 Temple & Redcliffe Networks, including a small portfolio of HRA owned assets at Broughton House).

The precise value of the HNA to be transferred into BHNL is expected to be at the recorded book value less associated grant funding received by the Council, circa. £20.4m (30 June 2022). The assets are in part, still under construction, any additional costs incurred to the transfer date will be included in the transfer price to BHNL.

projected cash flows, and assuming a transaction date in Q4 2022, additional lending would amount to a minimum of £11.1m (£23.8m) allowing some headroom for unforeseen delays and/or SDLT liabilities crystalise & become due.

The above is a post balance sheet event and further details will be provided as the transactions conclude and the accounts are finalised.

Treasury Management

The 2021–2026 Treasury Strategy identified a medium term net borrowing requirement of £260m 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 (£237m at March 2022). 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 £213m at the end of the year. The average level of treasury funds available for investment purposes during the year was £242m. The return for the period was 0.13% compared to the recognised benchmark of -0.04% LIBID (7 day London Interbank Bid Rate average for period).

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 and complied with the ethical and equitable investment policy.

The current loan facility agreed by the Council is £12.7m. To date, only £300k has been utilised as a working capital facility. Based on the current

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Statement of Accounts Bristol City Council - For the Year Ended 31 March 2022

Pensions

Equity markets were strong in 2021/22 as the impact of COVID-19 restrictions on economy activity abated. In contrast bond markets fell initially due to central banks raising interest rates to dampen the inflation emerging as economic growth recovered. As the year closed, inflation increased sharply driven by oil, gas and commodity prices as a result of the conflict in Ukraine.

The combination of high inflation and lower growth will be a challenge to many pension schemes over the next 2-3 years and if persistent for longer, it could present 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 2022 is £1.026bn . 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 fell by £249m over the last year, this was mainly due to a rise in yields from corporate bonds due to a combination of higher interest rates and concerns of inflation, partially offset by a rise in benefit values which are indexed to inflation.

The current funding level at 31 March 2022 is an estimated 100% based on the 2019 funding plans.

Contingencies

The Council has set aside a provision of £25.2m within the collection fund for any business rates appeals against rateable values in future years. The magnitude of the provision reflects the ongoing fact that the Council, as a business rates retention pilot, has a significantly greater exposure to the risk of business rates appeals.

The Council saw a marked increase in successful appeals during 2021/22 so has maintained the provision at 2020/21 levels. There were approximately 267 appeals outstanding as at 31 March 2022.

Budget for 2022/23 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 March 2022 the Council agreed a balanced budget for 2022/23. This included a net revenue budget for 2022/23 of £431.1 m but also a ten-year capital programme totalling £1,906.1m 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.

Whilst the Council, like many others across the country, remains subject to financial challenges in its funding, it has prioritised the revenue resources available to fund key services such as social care, sought to protect the most vulnerable, and to invest in our city infrastructure during these uncertain times, to build confidence and to facilitate a sustainable future.

The on-going economic uncertainty has led to the government only providing a single year financial settlement for local authorities and retaining commitment to return to multiyear spending reviews when appropriate. This continues to hamper financial planning and financial sustainability.

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Statement of Accounts Bristol City Council - For the Year Ended 31 March 2022

Given these uncertainties 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 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 ongoing uncertainty in relation to the pandemic, and its impact on economic recovery, ongoing demand, and cost of social care for both Adults and Children and families, the delivery of Special Education Needs and Disability (SEND), homelessness, 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 budget position of the Council can be sustained within the overall level of resources available.

Key Risks

Risk management is the culture, process and structures that are directed towards effective management of potential opportunities and threats to the council achieving its priorities and objectives and a key element of the council’s governance framework. Risk Management is an integral part of good governance to which the Council is committed and provides the framework and processes that enables the Council to manage uncertainty in a systematic way.

Key non-financial risks identified in 2021/22 include delivery of the Council’s capital programme, provision of enough affordable homes to meet the City’s needs, safeguarding venerable children and delivering suitable planning measures to respond to emergencies as they occur.

All risks are monitored, and the Audit Committee receives updates on risks and their management actions on a quarterly basis. The last Corporate Risks Register went to Audit Committee on the 26 July 2022, details of which can be found on the Councils Internet page (Public Pack)Agenda Document for Audit Committee,

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’s 2020/21 index data. 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.

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Statement of Accounts Bristol City Council - For the Year Ended 31 March 2022

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

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 and have been prepared in accordance with the proper accounting practices primarily comprising the Code of Practice on Local Authority Accounting and the International Financial Reporting Standards. The Statement of Accounts have been prepared on a ‘going concern’ basis.

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).

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Statement of Accounts Bristol City Council - For the Year Ended 31 March 2022

Group Accounts

The Council operates through a variety of undertakings, through either majority shareholding (subsidiaries) or in partnership with other organisations.

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 of the Statement of Accounts fully incorporate the results of The Council with its subsidiary companies, Goram Homes Limited and Bristol Heat Networks 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 2021/22 and our system of internal control, which is a critical component of our overall governance arrangements.

Denise Murray Director of Finance (Section 151 Officer)

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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 2022.

Denise Murray

Denise Murray Director of Finance (Section 151 Officer) 26 July 2022

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Independent Auditorfs Report (To Follow) 27

ANNUAL GOVERNANCE STATEMENT 2021/22

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

28

1. Introduction

2. Conclusions and Statement of Commitment

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Signed:
Signed: Date: 27 July 2022
Date: 27 July 2022
Marvin Rees - Elected Mayor of Bristol Mike Jackson – Head of Paid Service
Signed:
Signed: Date: 28 July 2022
Date: 28 July 2022
Denise Murray – Chief Finance Officer (s151 Tim O’Gara – Monitoring Officer
Officer)
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3. Governance Framework

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The Monitoring Officer ensures that all decisions made are legal and supports the audit and value and ethics committees in promoting high standards of conduct amongst members.

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

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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 (CIPFA/Solace,
2016)”
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 (2021/22)
A. Behaving with
integrity,
demonstrating
strong commitment
to ethical values and
respecting the rule
of law		 The Council'sConstitutionsets out the legal framework for decision making and
professional legal advice is taken to support decision making across all executive
and non-executive functions, including where appropriate external legal advice.
The Monitoring Officer has oversight of decisions through theDecision Pathway
and the legal service is consulted on the legal implications of all reports to ensure
compliance with all relevant laws and regulations. The Monitoring Officer has
confirmed that all decisions have been made in accordance with the relevant
policy framework.
The Council’s Corporate Strategy sets out thevalues and behavioursit expects
from its employees. Managers are required to review performance against the
values and behaviours as part of the individual performance management
framework. Assurances from line managers have confirmed a good level of
compliance with this.
Codes of conductare 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 where there are conflicts. Assurances from line managers
have confirmed a good level of compliance in terms of staff conduct. Minutes of
meetings record declarations of interests by Councillors.
The Council developed and implemented a comprehensiveMember Induction
Programmefollowing the May 2021 local elections. The Member Induction
Programme covered ethical standards, obligations under the Member Code of
Conduct as well as a range of other development modules, such as safeguarding,
health and safety and equalities. This Programme has achieved the highest level
of accreditation from South West Councils. The Monitoring Officer has confirmed
that there have been no reports or investigations in respect of Members conduct
in 2021/22.
Re-certification of ourEnvironmental Management systems (ISO 14001) was
achieved during 2021/22
Focus of future improvement: Consistent and effective management of
potential conflicts of interest.
B. Ensuring openness
and comprehensive
stakeholder
engagement		 OurCommunications Strategy 2019/2023sets 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.
The council has engaged comprehensively with partners during 2021/22,
including regular city partner meetings in relation toCovid-19. These include the
Local Engagement Board, the BNSSG Local Outbreak and Management group,
the Health Protection Advisory Committee, the Health and Wellbeing Board, and
Healthier Together Executive.

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Partnership working in One City Boards was refreshed, including reviews of
Terms of Reference and an open expressions of interest process for people to
apply to sit on the boards. Actions to formally establish a One City Governance
Board and to identify more opportunities for pro-active engagement with Scrutiny
on BCC-related elements of the system will continue in to 2022/23.
The council engaged widely with stakeholders in producing key strategic
documents, including the Economic Recovery and Renewal Strategy , and the
refresh of the council's overarching Corporate Strategy . This latter strategy
benefitted from extensive engagement including a cross-party Scrutiny Task and
Finish Group, partner workshops with organisational strategy leads, input from
Mayoral Commissions, the Citizens' Assembly and more. It was also subject to
formal public consultation and Scrutiny.
The Council's budget process included a Scrutiny task and finish group and was
subject to formal public consultation and Scrutiny.
During the year, the refreshed Partnerships Policy was launched and set out
clear requirements of formal partnership arrangements. This was presented at
multiple management forums and a process was established for senior managers
to review the council's partnerships and collaborations register via Executive
Director Meetings. Management assurances provided in this area confirmed a
good level of compliance with requirements to ensure the benefits of partnership
working are clear and that governance and accountability between partners is
clear.
Focus of future improvement: Establishing a One City Governance Board and
scrutiny engagement in BCC elements of One City, including OSMB update.
C. Defining outcomes During 2021/22 significant work was undertaken to review and define strategic
in terms of objectives and outcomes related to sustainable economic, social and
sustainable environmental benefits. This included the updating of the council's medium term
economic, social Corporate Strategy 2022-27 and an aligned review of the Medium-Term
and environmental Financial Plan.
benefits
Work was undertaken council-wide to action plan against cross-cutting Corporate
Strategy principles around inclusion, sustainability and resilience; and this in turn
helped inform service-level planning through a council-wide Service and
Business Planning process for 2022/23.
Significant work was also undertaken to plan actions against the city-wide One
City Economic Recovery and Renewal Strategy , One City Climate Strategy
and One City Ecological Emergency Strategy , delivered in part by the City
Council alongside a wide range of city partners. A new Strategic Climate and
Ecological Emergency Board has been established to improve governance over
action delivery
Further work was also undertaken at a tactical and operational policy level to
embed sustainability, inclusion and environmental considerations in business
processes, including the development of a Sustainable Procurement Policy and
an Ethical and Sustainable Investment Policy .
Focus of future improvement: Strengthening governance and monitoring of
activities that contribute to carbon reduction ambitions.
D. Determining the The single council-wide Business Plan - populated with selected content from
interventions departmental Service Plans - is approved by CLB and its development included
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necessary to
optimise the
achievement of the
intended outcomes		 cross-party scrutiny engagement. It articulates key interventions and actions
required to deliver Corporate Strategy priorities within the coming business year.
This system creates a clear, auditable link from high-level strategic priorities
through to tactical and operational delivery, down to individual staff objectives.
A council-wide systematicService and Business Planning processhas been
undertaken, with sign-off of departmental level plans by Directors and Cabinet
Members; and Divisional Summaries approved by Executive Directors and
Cabinet Members. The Policy and Strategy Team confirm a good level of
compliance with this requirement
Delivery of priorities is supported by anoutcomes-focused performance
framework, using a mixture of quantitative and qualitative measures and
methodologies to provide a rounded view of delivery against intended objectives.
There is full visibility of this across officer management, member scrutiny and
political leaderships forums, enabling Public Forum and both formal and informal
scrutiny. Quarter 4 performance reports suggest that 45% of business plan targets
are performing on or above target.
Focus of future improvement:
A new performance management framework has been developed for 2022/23
which focuses on reporting on the Business plan themes with Directors leading
performance review and monitoring. It is also planned to introduce a performance
hub and scorecard to retain focus on performance and necessary interventions to
meet targets.
E. Developing capacity
including the
capability of its
leadership and the
individuals within it		 A newWorkforce Strategywas in place for the start of 2021/22. Actions included
prioritise 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 develop talent within the
organisation.Diverse Voicesis a positive action scheme to bring diverse
perspective to senior decision-making whist offering experience of working at a
more senior level. It is currently being rolled out for new team leaders.
A comprehensiveleadership development programmeis in place to offer
training and coaching at all levels include new and aspiring team management.A
talent development programmewas introduced, which includes support for
managers in identifying talent and succession planning, and guidance for
colleagues on career development – including the introduction of ‘Grow your
Career’ hub on the Source, with advice on identifying skills, career development
plans, application and interview skills
Amanagement capacity reviewincludinga succession planning policywas
introduced. At the same time as reducing costs, this aims to secure future
managers for the council and provide leadership resilience going forward.

Organisational health and wellbeing is one of the major priorities of the workforce
strategy. The CouncilsHealth and Safety arrangementshave been refreshed to
ensure we keep our staff and the people of Bristol safe whilst delivering services.
AStrategic Partnering business modelhas been introduced to several areas to
support delivery. These include capital programme delivery and audit services.
Other services are also exploring the benefits of this approach.

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Significant progress has been made in aligninglearning and development
activitiesto annual service planning. The introduction ofa new e-learning
platformand improved functionality of HR reporting system has enabled better
quality management information about compliance with mandatory and statutory
training. Assurances from managers confirm a reasonable level of compliance
with the requirement to identify learning and development.
Delivery of a comprehensiveMember Development Programmewhich included
more tailored development modules for planning, licensing, audit and HR
functions.
F. Managing risk and
performance
through robust
internal control and
strong public
financial
management		 A refresh of thePerformance Frameworktakes place annually as part of the
business planning process - this involves extensive internal consultation around
the setting of measures and actions. Scrutiny and lead Cabinet Members are
engaged throughout and are ultimately signed off by Corporate Leadership Board
(CLB) and Cabinet. In 2021/22, progress against actions and measures has been
monitored and reported quarterly through Executive Director Meetings, CLB,
relevant Scrutiny Commissions, Overview and Scrutiny Management Board, and
Cabinet. The council's quarterly performance reports are public documents that
are open to public questioning through the scrutiny/Cabinet process, and they
also appear on the performance pages of the Council's website.
An annual review takes place at the end of each financial year that details
progress against our commitments and actions, as well as against wider city
metrics to which the Council contributes but is not solely accountable for.
All service, directorate and corporate risks are reviewed regularly in line with the
risk management policy. Anew risk management system(Pentana Risk) was
implemented during the year to support and improve the monitoring of progress
being made in relation to timely delivery of key mitigating actions. Internal Audit
review of risk management concluded that many actions have been completed to
improve risk management arrangements but these now need time to embed to be
effective. The review concluded limited assurance during 2021/22.
A self-assessment againstCIPFA Financial Management (FM) Codehas been
completed and shows good levels of compliance against many of the code’s
standards. There is work to do to enhance compliance with some of the
standards required by the code. (See Appendix A of this statement). Development
and approval of theCorporate Debt Management Policyto provide consistency
in ethical debt management across the council.
Governance overcapital projectdelivery was improved and delivery is supported
by a Strategic Partner. An internal audit review confirmed that many improvement
actions planned least year have been implemented. At year end, the Capital
budget showed an underspend of £36m on the budget that was revised following
a significant finance led over hall of the budget.
A number of policies have been refreshed or created to enhance Information
security approaches.A compliance tool has been introduced to manage
compliance and improve training. Work is ongoing to implement an Information
Security Management Standard. Actions are being taken to strengthen
Information Asset ownership following a recent internal audit review. The
Council’s Common Activities programme will bring together expertise into a
centralised disclosures team to ensure a robust approach across the Council to
the effective management of data.

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----- Start of picture text -----
Focuses of future improvements: There are a number of improvement
programmes in progress within the Council which continue to strengthen and
redesign how services and projects are delivered more effectively. The progress
relating to delivery of the improvements in these areas will be monitored through
regular updates to Corporate Leadership Board and assurance from Internal Audit.
These include the following:
 Procurement and Contract Management
 Risk Management
 Capital Project delivery
 Education Transformation - Including High Needs (SEND and Deficit)
 ICT
 Information Governance
 Performance Management
G. Implementing good The Council has a decision pathway that is used to manage the production of
practices in reports for public meetings. Reports will be published in accordance with the
transparency, statutory timelines and will be available for members of the public unless the
reporting and audit reports contain exempt information, as defined in law and set out in the Council's
to deliver effective Constitution. Forward plans are published on a monthly basis for Mayoral and
accountability Cabinet decisions. Reports are prepared and EDMs have oversight of reports and
Cabinet members will be briefed on reports in their portfolios. Reports are
published for Cabinet within 5 working days of the date of the Cabinet meeting.
Officer Executive decisions are overseen by EDMs and Executive Support
Managers have procedures in place to ensure the publication of OEDs.
Emergency Officer decisions are sometimes required and will be reported to the
next meeting of Cabinet.
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. The Council has implemented the recommendations from
external auditors relating to the governance of the Council's companies . This
has included improved processes to consider professional advice, options
appraisals and greater transparency around reserved matters decision making.
The new Audit Committee has received relevant training to support them in
discharging its responsibilities effectively. The Committee has received regular
assurances and updates on implementation of actions identified as a result of
both internal and external audit reviews.
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5. Impact of COVID-19 on our Governance Arrangements

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recovery arrangements. It was concluded that governance of Covid recovery activities was sound with sufficient opportunity for both Members and officers to codesign solutions through engagement at different internal and external boards and platforms which is a good example of working together across the organisation and in the City. All recommendations arising from this work have bene fully implemented.

5 Review of Effectiveness

First Line Assurances - Management Self Assurance is provided:

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Second Line Assurances – Oversight and Monitoring Functions Assurance

39

underlying principles of the FM Code and demonstrates financial sustainability. However we recognise that more could be done to improve compliance with some of the standards and an action plan is in place to address these.

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

40

Actions to address the matters raised have been identified and will be monitored by the Audit Committee.

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7. Significant Governance Issues 2021/22

Item Issue Key Actions
1 Dedicated Schools Grant (DSG)
The in-year forecast deficit on the
DSG is significant at £14.6m, which
when added to the brought forward
balance of £10.0m means that the
DSG is carrying forward a total deficit
at the end of the year of £24.6m. The
main financial challenge continues to
be the High Needs block, which has
an in-year overspend of £15.3m

A separate, more detailed High Needs Block Recovery
Plan is in development, which details the key
mitigations required to achieve a sustainable position.
The actions will sit alongside the DSG Deficit
Management Plan and will be agreed with Bristol
Schools Forum.
Equalities Impact Assessments (EQiAs) are being
(Carry forward deficit of £27.9m)
resulting from increases in EHCP		 completed and public consultations will commence
where required.
assessments and need; this is offset
by an underspend of £0.9m in the		 Bristol has accepted the DfE's offer to engage in the
Schools’ block and £0.1m overspend 'Delivering Better Value in SEND' Programme’.
on the other blocks. Diagnostic analysis will inform further actions and
access to funding from the DfE to support an 18-month
programme aimed at bringing spend in line with budget.

2. Procurement Breaches

The number of breaches of the Council’s procurement rules during 2021/22 significantly increased from 2021/21. The 20/21 VFM report by the Council’s external auditors has recommended urgent action be taken

Whilst full compliance can never be guaranteed and ‘under-reporting’ of breaches, in particular, is an inherent possibility, an effective and transparent breaches governance process is in place to detect instances of non-compliance.

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----- Start of picture text -----
||| |---|---| |to address the high level of|Procurement compliance training will be more widely| |breaches.|rolled out via e-learning and actual compliance activity| |When the procurement rules are|reported quarterly to Audit Committee via Internal Audit.| |breached, there is an increased risk| |that the Council enters into a contract| |which is not Best Value and/or is not| |the best way of achieving| |organisational objectives. Breaches| |also reduce transparency and| |fairness of decision making, which| |can increase the risk of fraud,| |conflicts of interest and reputational| |damage.| |3|Savings| |The Council continues to face|The Council has experienced a period of sustained| |challenges in delivering required|increase in demand resulting from current global| |savings.|market factors (such as supply chain and fuel| |shortages) and for some of the services provided for| |Out of the £11.7m of savings planned|the most vulnerable members of the community (as a| |for delivery within the 2021/22 budget|result of Covid and subsequent economic impact),| |only 46% was achieved on a|particularly within adult and children’s social care.| |recurrent basis. If these savings| |continue to be unachievable in the|Following the announcement of government grant| |future the Council will need to identify|allocations and estimates of the Council’s funding, a| |other ways of delivering these|significant challenge remained in the Council budgets.| |savings which could result in| |significant impact on service delivery.|The Council identified six key areas for service reviews:| |• Property and capital| |• Be more business-like and secure more external| |resource| |• Improving efficiencies| |• Digital transformation| |• Reducing the need for direct services| |• Redesigning, reducing, or stopping services.| |Savings, efficiencies and income generation| |opportunities in the region of £34.3 million, subject to| |final due diligence, optimism bias, engagement, impact| |assessment and consultation has been identified over| |the medium term.| |The development of detailed plans and activity is being| |closely monitored by EDM, CLB and Delivery Executive| |and details will be included in the quarterly Finance| |reports to Cabinet.| |In addition work has commenced early in 2022/23 to| |refresh the MTFP model assumptions and identify any| |new emerging pressures which may need to be| |addressed for 2023/24.|

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7.2 The progress relating to the significant governance issues identified in 2020/21was presented to the Audit Committee in March 2022 through The Annual Governance Statement 2020/21 - Progress Update Report.

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Core Statements

Comprehensive Income and Expenditure Statement for the year ended 31 March 2022

2020/21 2021/22 2021/22
Gross
Exp		 Gross
Income		 Net
Exp		 Gross
Exp		 Gross
Income		 Net Exp
£’000 £’000 £’000 £’000 £’000 £’000
417,307 (212,528) 204,779
People		 454,856 (210,728) 244,127
239,408 (164,456) 74,952
Resources		 237,601 (148,532) 89,069
260,538 (71,263) 189,275
Growth & Regeneration		 241,495 (92,907) 148,588
104,341 (123,136) (18,795)
Housing Revenue Account		 115,959 (123,026) (7,066)
212,076 (201,110) 10,966
Dedicated Schools Grant		 228,498 (204,964) 23,534
9,860 (903) 8,957
Corporate Funding& Expenditure		 6,692 (889) 5,803
1,243,530 (773,396) 470,134
Cost of services		 1,285,100 (781,046) 504,054
7,937
Other operating expenditure (Note 9)		 11,786
7,313
Financing and investment income
and expenditure (Note 10)		 (45,078)
(473,173)
Taxation and non-specific grant
income(Note 11)		 (454,781)
12,211
(Surplus)Deficit on provision of
services		 15,980
Items that will not be reclassified
to the (Surplus) or Deficit on the
Provision on Services
(150,901)
(Surplus) or deficit on revaluation of
Property, Plant and Equipment assets
(Note 20)		 (243,430)
112,346
Remeasurement of the net defined
benefit liability/asset (Note 34)		 (164,056)
Items that may be reclassified to
the (Surplus) or Deficit on the
Provision on Services
(Surplus)/ deficit on financial assets
measured at fair value (Notes 24)
(38,555)
Other comprehensive income and
expenditure		 (407,486)
(26,344)
Total comprehensive income and
expenditure		 (391,506)

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Movement in Reserves Statement for the year ended 31 March 2022

----- Start of picture text -----
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Adjusted Balance at 1 April 2020 17,001 97,390 7,302 121,693 87,526 - 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 - - - - - - - - - - - 38,555 38,555
Total Comprehensive Expenditure and Income (30,208) - - (30,208) 17,997 - 17,997 - - - (12,211) 38,555 26,344
Adjustments between accounting basis and funding basis Note 18 172,416 - - 172,416 (7,082) - (7,082) (20) 7,690 395 173,399 (173,399) -
under regulations
Net Increase/(Decrease) before Transfers to Earmarked Reserves 142,208 - - 142,208 10,915 - 10,915 (20) 7,690 395 161,188 (134,844) 26,344
Transfers to/(from) Earmarked Reserves Note 19 (123,543) 123,317 226 - (651) 651 - - - - - - -
Increase/(Decrease) in 2020/21 18,665 123,317 226 142,208 10,264 651 10,915 (20) 7,690 395 161,188 (134,844) 26,344
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 1,239,889 1,695,099
Movement in Reserves during 2021/22
Surplus or (deficit) on the provision of services (13,403) (13,403) (2,577) (2,577) (15,980) (15,980)
Other Comprehensive Expenditure and Income - - - 407,486 407,486
Total Comprehensive Expenditure and Income (13,403) - - (13,403) (2,577) - (2,577) - - - (15,980) 407,486 391,506
Adjustments between accounting basis and funding basis Note 18 (31,385) (31,385) 6,367 6,367 1,283 1,606 475 (21,654) 21,654 -
under regulations
Net Increase/(Decrease) before Transfers to Earmarked Reserves (44,788) - - (44,788) 3,789 - 3,789 1,283 1,606 475 (37,634) 429,140 391,506
Transfers to/(from) Earmarked Reserves Note 19 49,196 (47,272) (1,924) - (4) 4 - - - -
Increase/(Decrease) in 2021/22 4,408 (47,272) (1,924) (44,788) 3,785 4 3,789 1,283 1,606 475 (37,634) 429,140 391,506
Balance at 31 March 2022 Carried Forward 40,074 173,435 5,604 219,113 101,576 655 102,231 79,775 12,902 3,555 417,575 1,669,030 2,086,605
Note
School Reserves Revenue Account Capital Receipts
General Fund Balance Earmarked Reserves Earmarked Reserves Sub Total - Housing Major Repairs Reserve Total Usable Reserves Unusable Reserves Total Council Reserves
Sub Total - General Fund Housing Revenue Account Housing Revenue Account Capital Grants Unapplied
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45

Balance Sheet as at 31 March 2022

31-Mar-21
Note		 31-Mar-22
£'000 £'000
2,825,667
Property, Plant & Equipment
20		 3,053,348
207,406
Heritage Assets
21		 215,256
20,573
Intangible Assets
23		 14,991
275,903
Investment Property
22		 356,640
43,570
Long Term Investments
24		 44,287
49,098
LongTerm Debtors
29		 60,807
3,422,217
Long Term Assets		 3,745,329
64,983
Short Term Investments
24		 103,948
12,416
Inventories
30		 26,978
144,928
Short Term Debtors
29		 160,856
142,274
Cash and Cash Equivalents
31		 133,444
806
Assets held for sale		 806
365,407
Current assets		 426,032
(20,702)
Cash and Cash Equivalents
31		 (19,709)
(4,966)
Short Term Borrowing
24		 (9,952)
(215,373)
Short Term Creditors
32		 (297,725)
(5,760)
Provisions
33		 (2,849)
(44,447)
Capitalgrants received in advance
17		 (71,814)
(291,248)
Current liabilities		 (402,049)
(450,488)
Long Term Borrowing
24		 (445,488)
(26,277)
Provisions
33		 (26,005)
(1,291,181)
Other Long Term Liabilities
32		 (1,179,908)
(33,331)
Capital Grants Receipts in Advance
17		 (31,306)
(1,801,277)
Long-term liabilities		 (1,682,707)
1,695,099
Net assets		 2,086,605
(455,209)
Usable Reserves
19		 (417,575)
(1,239,890)
Unusable Reserves
34		 (1,669,030)
(1,695,099)
Total reserves		 (2,086,605)

46

Cash Flow Statement for the year ended 31 March 2022

2020/21 2021/22
£'000
Note		 £'000
(12,211)
Net deficit on the provision of services		 (15,980)
152,268
Adjustment to net surplus on the provision of services
for non-cash movements
36		 166,603
(83,538)
Adjust for items included in the net surplus or deficit
on the provision of services that are investing and
financing activities
36		 (73,289)
56,519
Net cash flows from Operating Activities		 77,334
20,726
Investing Activities
37		 (78,083)
(25,099)
FinancingActivities
38		 (7,088)
52,146
Net increase (decrease) in Cash and Cash Equivalents		 (7,837)
69,426
Cash and Cash Equivalents at the beginning of the
reporting period
31		 121,572
121,572
Cash and Cash Equivalents at the end of the
reporting period		 113,735

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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 2021/22 financial year and its position at the year-end of 31 March 2022. 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 2021/22 (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

48

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.

(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).

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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.

(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.

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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

51

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.

There is a temporary imbalance between the Net Pensions Liability and the Pensions Reserve, which is due to the Council opting to pay three years past service costs upfront during 2021/22 (see above). It immediately reduced the net pensions liability, but the payment will be released to the Pensions Reserve over the respective three financial years, in accordance with proper accounting practice.

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.

(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.

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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 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:

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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 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

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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.

(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

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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 Heat Networks 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.

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.

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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) Inventories (Stock)

Inventories are measured at the lower of cost and net realisable value, except where inventories are acquired through a non-exchange basis in which case their cost is deemed to be fair value at the date of acquisition. Inventories are also measured at the lower of cost and current replacement cost where they are held for distribution at no charge or for a nominal charge; or consumption in the production process of goods to be distributed at no charge or for a nominal charge. The cost of inventories comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. In this context inventories do not include work in progress under construction contracts and financial instruments.

(xvii) 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.

(xviii) 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.

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(xix) 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.

(xx) 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).

(xxi) 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.

(xxii) 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:

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(xxiii) 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 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.

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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:

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

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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

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.

(xxiv) 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.

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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.

(xxv) 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.

(xxvi) 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.

(xxvii) 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.

(xxviii) 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.

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(xxix) 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.

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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 by the 2021/22 Code. The Code also requires that changes in accounting policy are to be applied retrospectively unless transitional arrangements are specified, this would, therefore result in an impact on disclosures spanning two financial years.

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:

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. 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.

Debt Impairment at 31 March 2022, the Council had a balance of short-term debtors of £160.9m. A review of significant balances suggested that an expected credit loss of £81.6m was appropriate. However, in the current climate it is not certain that such an allowance would be sufficient. If collection rates were to deteriorate an increase in the amount of the impairment of the doubtful debts would be required.

Business Rates following the introduction of the Business Rates Retention Scheme in April 2013, Local Authorities are liable for a share of the cost of successful appeals by businesses against their rateable value in 2021/22 and earlier financial years. A provision has therefore been recognised in the statement of accounts. The estimated provision has been calculated using the latest Valuation Office Agency (VOA)

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ratings list of ratings appeals and the analysis of successful appeals to date. The Council’s share of the balance of business rate appeals provisions at 31 March 2022 was £25.2m.

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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 2022 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) Carrying
value £1.08bn		 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 continues to
affect economies and real estate markets
globally. Nevertheless, as at the Valuation
Date,
property
markets
are
mostly
functioning
again,
with
transaction
volumes and other relevant evidence at
levels where enough 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
£108m 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
advice about the assumptions to be
applied.		 Variations in the key assumptions will have
the following impact on the net pension
liability of £1bn

a 0.1% increase in the discount rate will
reduce the net pension liability by
£81m.

a 0.1% increase in the assumed level of
pension increases will increase the net
pension liability by £86m.

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----- Start of picture text -----
 a 0.1% increase in the assumed level of
pay inflation will increase the net
pension liability by £27m.
 an increase of one year in longevity will
increase the net pension liability by
£29m.
----- End of picture text -----


a 0.1% increase in the assumed level of
pay inflation will increase the net
pension liability by £27m.

an increase of one year in longevity will
increase the net pension liability by
£29m.
a 0.1% increase in the assumed level of
pay inflation will increase the net
pension liability by £27m.

an increase of one year in longevity will
increase the net pension liability by
£29m.
a 0.1% increase in the assumed level of
pay inflation will increase the net
pension liability by £27m.

an increase of one year in longevity will
increase the net pension liability by
£29m.
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.
The outbreak of COVID-19 continues to
affect economies and real estate markets
globally. Nevertheless, as at the Valuation
Date,
property
markets
are
mostly
functioning
again,
with
transaction
volumes and other relevant evidence at
levels where enough 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. In recognition of the potential
for market conditions to move rapidly in
response to changes in the control or
future spread of COVID-19, we highlight
the importance of the Valuation Date.		 If the value of the Council's investment
property, surplus property and non-
current assets held for sale, (total carrying
value £387m) was to reduce by 10%, this
would result in a £38m 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 Director of Finance on 26[th] July 2022. Events taking place after this date are not reflected in the financial statements or notes. Where events taking place before this date provided information about conditions existing at 26[th] July 2022, the figures in the financial statements and notes have been adjusted in all material respects to reflect the impact of this information. There are no non-adjusting events after the Balance Sheet date.

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[st] March 2022 excludes the loss for rate reliefs introduced by the government in 2021/22 to support business sectors during the pandemic. This loss will be charged to the General Fund in 2022/23 as part of the deficit on the Collection Fund being recouped in future years. However, the Council received £29.7m of government grant in 2021/22 to compensate for this loss. This material grant income has been shown separately within

69

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 2021/22 has been transferred to a revenue reserve to be used in 2022/23 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 Council’s assessed pressure from lost income, undeliverable Covid-19 related savings and from additional service expenditure associated to Covid-19 equates to £56.6m for 2021/22 (this compares to £74.7m in 2020/21). This additional expenditure is fully met by the range of Covid-19 grants received during the year, totalling £35.7m and the utilisation of amounts carried forward from 2020/21.

7 Expenditure and Funding Analysis for the year ended 31 March 2022

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.

70

2021/22

People
Resources
Growth & Regeneration
Housing Revenue Account
Dedicated Schools Grant
Corporate Funding & 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 2022*		 Revised
outturn
Adjustments
EFA (Note 1)
£'000
£'000
242,726
(19,578)
69,827
(10)
67,573
9,186
(3,785)
(9,655)
14,647
1,109
32,395
(18,063)		 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
223,148
13,331
7,648
69,817
11,215
8,037
76,759
62,658
9,171
(13,440)
1,710
4,664
15,756
-
7,778
14,332
16,348
(5,153)
(19,724)
Total
Adjustments
Net Expenditure
in the
Comprehensive
Income and
Expenditure
Statement
£'000
£'000
20,979
244,127
19,252
89,068
71,829
148,588
6,374
(7,066)
7,778
23,534
(8,529)
5,803
423,383
(37,012)		 386,371
105,262
32,145
(19,724)		 117,683
504,054
(345,373)
(127,123)
23,171
(38,749)
40,998
(362,342)
40,998
(321,344)		 (142,701)
(488,074)
(25,019)
15,980

71

2020/21

People
Resources
Growth & Regeneration
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

72

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:

73

8 Expenditure & Income Analysed By Nature

Expenditure & Income Analysed By Nature
2021/22 2020/21
£'000 £'000
Expenditure & Income Analysed By Nature
Expenditure
Employee Benefits Expense 408,619 387,678
Depreciation, Amortisation & Impairment 116,188 122,876
Other Service Expenditure 746,426 770,318
Total Expenditure 1,271,233 1,280,872
Income
Fees, Charges and Other Service Income (348,346) (314,343)
Interest & Investment Income (5,957) (10,938)
Income from Council tax & Non-domestic Rates (334,584) (360,299)
Government Grants, Other Grants and Contributions (566,365) (583,081)
Total Income (1,255,253) (1,268,661)
Surplus or deficit on the Provision of Services 15,980 12,211

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		 2021/22
£'000
18,412
52,063
9,566
28,318
6,540
9,916
122,363
15,533
7,287		 2020/21
£'000
17,805
35,951
6,252
26,685
4,195
4,681
122,440
16,111
6,723

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		 2021/22
£'000
27,453
522
27,975		 2020/21
£'000
25,795
635
26,430

74

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		 2021/22
£'000
1,790
446
2,236		 2020/21
£'000
1,662
383
2,045

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

Other Operating Expenditure
Precepts and levies
Payments to the Government housing capital receipts pool
Losses/(gains) on the disposal of non-current assets
Total		 2021/22
£’000
10,820
2,112
(1,146)
11,786		 2020/21
£’000
10,953
2,115
(5,132)
7,936

10 Financing and Investment Income and Expenditure

Interest payable and similar charges
Loss Allowance (Financial Guarantee Contracts)
Changes in the Fair Values 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		 2021/22
£’000
33,695
-
(148)
23,171
(7,251)
(11,696)
(82,849)
(45,078)		 2020/21
£’000
34,241
(5,379)
(1,669)
22,523
(9,268)
(10,569)
(22,566)
7,313

11 Taxation and Non-Specific Grant Income

Council tax income
Non-domestic rates
Non-service-related government grants
Capital grants and contributions
Total		 2021/22
£’000
(230,662)
(120,581)
(59,107)
(44,432)
(454,781)		 2020/21
£’000
(224,419)
(55,493)
(151,656)
(41,605)
(473,173)

75

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 two year programme between Bristol City Council and NHS Bristol, North Somerset and South Gloucestershire Clinical Commissioning Group (BNSSG) 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 £83.501m in 2021/22 and administered by whichever body undertook the contracting arrangements.

Fund 1 is administered by BNSSG and totals £17.522m. The fund includes contributions from the BNSSG 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 BNSSG 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 BNSSG and totals £0.631m. 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 £45.305m. Both the BNSSG 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 BNSSG 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
Fund 4
Fund 5
Total
£’000
£’000
£’000
£’000
£’000
£’000
17,522
631
-
16,716
-
34,869
-
-
3,528
28,589
16,515
48,632
17,522
631
3,528
45,305
16,515
83,501
17,522
631
-
16,716
-
34,869
-
-
3,528
28,589
16,515
48,632
17,522
631
3,528
45,305
16,515
83,501
-
-
-
-
-
-
-
-
-
-
-
-

76

13 Members' Allowances

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

Allowances 2021/22
£'000
1,404		 2020/21
£'000
1,395

In addition to the above, the elected Mayor is paid an annual allowance amounting to £83,082 (2020/21: £80,871).

77

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:

2021/22 Salary, Fees and Compensation for Pension Total
Allowances Loss of Office Contribution
Post Title Post Term Post Holder Notes £ £ £ £
Chief Executive & Head of Paid Service Apr ’21 - Mar ‘22 M Jackson 174,073 - - 174,073
Executive Director - People Apr ’21 - Mar ‘22 H Evans 140,793 - 29,566 170,359
Executive Directors - Growth and Regeneration Apr ’21 - Mar ‘22 S Peacock 172,413 - 12,046 184,458
Director Homes and Landlord Services (Interim)* Apr ’21 - Mar ‘22 D Graham 280,634 - - 280,634
Director Management of Place Apr ’21 - Mar ‘22 P Mellor 125,931 - 26,281 152,212
Statutory Officers- Chief Financial (S151) Apr ’21 - Mar ‘22 D Murray 125,150 - 26,281 151,431
Director Workforce and Change Apr ’21 - Mar ‘22 J Walsh 125,150 - 26,281 151,431
Statutory Officers- Director Education and Skills Apr ’21 - Mar ‘22 109,506 - 22,996 132,502
Statutory Officers- Director Adult Social Care Apr ’21 - Mar ‘22 98,034 - 20,587 118,621
Statutory Officers – Director of Public Health Apr ’21 - Mar ‘22 93,862 - 19,711 113,573
Statutory Officers- Director Children and Family Apr ’21 - Jan ‘22 1 93,102 - 18,730 111,832
Services
Statutory Officers- Service Director Legal and Apr ’21 - Mar ‘22 88,648 - 18,616 107,264
Democratic (Monitoring Officer)
Statutory Officers- Director Children and Family Jan ’22 - Mar ‘22 S Parker 54,938 - - 54,938
Services (Interim)*

1 Post holder left on 30th January 2022.

2 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 2020/21 and 2021/22. 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 2021/22 were as follows:

78

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 13,750 - - 13,750
Chief Executive & Head of Paid Services May ’20 – Mar ‘21 M Jackson 155,788 - - 155,788
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 Children and Family
Services		 Apr ’20 – Mar ‘21 107,374 - 22,903 130,277
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:

79

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:

----- Start of picture text -----
2021/22 2020/21
Remuneration band
Number of employees Number of employees
Schools Non-Schools Schools Non-Schools
£50,000 - £54,999 17 92 11 37
£55,000 - £59,999 13 24 13 42
£60,000 - £64,999 8 39 10 20
£65,000 - £69,999 18 31 10 32
£70,000 - £74,999 10 30 10 18
£75,000 - £79,999 3 26 3 27
£80,000 - £84,999 - 4 - 7
£85,000 – 89,999 - 5 - 4
£90,000 - £94,999 1 6 - 3
£95,000 - £99,999 - 3 - 4
£100,000 - £104,999 - 3 - -
£105,000 - £109,999 - 1 - 1
£110,000 - £114,999 1 1 - 1
- - - -
£115,000 - £119,999
£120,000 - £124,999 - 3 - 2
Totals 71 268 57 198
----- End of picture text -----

The variation in employee numbers between bands shown in the above table is largely down to a combination of progression from appointment rate to competence rate as well as nationally agreed pay awards that have inflated pay and moved the boundaries against these ranges.

Exit Packages

The numbers of exit packages relating to Council employees during 2021/22, 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
2021/22
2020/21
No.
No.
40
7
4
-
1
-
1
-
-
-
-
-
-
-
46
7		 Number of other
departures
2021/22
2020/21
No.
No.
13
6
3
2
3
-
1
-
-
-
1
-
-
-
21
8		 Total number of
exit packages by
cost band
2021/22
2020/21
No.
No.
53
13
7
2
4
-
2
-
-
-
1
-
-
-
67
15		 Total cost of exit
packages in each
band
2021/22
2020/21
£'000
£'000
364
98
197
61
183
-
136
-
-
-
120
-
-
-
1,000
159

80

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.

xternal 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		 2021/22
£'000
168
36
35
239		 2020/21
£'000
265
42
43
350

81

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:

2020/21
£’000		 2021/22
£’000		 2021/22
£’000
Central
Expenditure
ISB
Total		 Central
Expenditure
ISB
Total
Notes
374,259
Final DSG before academy and high
needs recoupment		 403,690
200,955
Academy and high needs figure
recouped foryear		 1
223,289
173,304
Total DSG after academy and high
needs recoupment for year		 180,401
(2,892)
Plus: Brought forward from previous
year		 -
-
Less: Carry forward agreed in advance		 -
29,575
140,837
170,412
Agreed initial budgeted distribution in
year		 29,264
151,137
180,401
-
(435)
(435)
Inyear adjustments		 2 -
246
246
29,575
140,402
169,977
Final budgeted distribution for year		 29,264
151,383
180,647
29,575
-
29,575
Less: actual central expenditure		 29,264
-
29,264
-
150,406
150,406
Less: actual ISB deployed to schools		 -
166,029
166,029
-
-
-
Plus: LA contribution foryear		 -
-
-
-
(10,004)
(10,004)
In Year Carry forward		 -
(14,646)
(14,646)
-
Carry forward agreed in advance		 -
-
Carried Forward		 -
-
DSG unusable reserve at the end of
the previous year		 3
(10,004)
(10,004)
Addition to DSG unusable reserve at
the end of year		 (14,646)
Total DSG unusable reserve at the
(10,004)
end of theyear		 4 (24,650)
(10,004)
Net DSG position at the end of the
year (Note 34)		 (24,650)

  1. 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 one that opened in year. The academy recoupment in 2021/22 comprised 87 academies open at the start of the year plus 2 that converted in year.

  2. The in-year estimated adjustment for the final early years block funding 2021/22, following the January 2022 census data up-date, due in summer 2022.

  3. This is the brought forward figure from 2020/21.

  4. The total carry forward deficit is £24.650m for the year. Included in the carry forward are surpluses for dedelegated budgets of £0.504m, £0.472m in Early Years Block, £1.517m Schools Block and the High Needs Transformation Programme of £0.740m, with offsetting deficits of £27.876m in High Needs Block.

82

17 Grant Income

The Council credited the following grants and contributions to the Comprehensive Income and Expenditure Statement in 2021/22:

Credited to Taxation and Non Specific Grant Income

Credited to Taxation and Non Specific Grant Income
2021/22 2020/21
£'000 £'000
Capital grants and contributions (Note 11 & see below) 44,432 41,605
Non service relatedgovernmentgrants(Note 11) 59,107 151,656
Total 103,539 193,261

Capital grants and contributions

2021/22 2020/21
£'000 £'000
Government grants applied:
People 5,373 1,955
Growth & Regeneration 26,471 32,805
Resources 1,828 50
Housing Revenue Account 477 481
Developer Contributions 10,282 5,918
Total Government Grants & Contributions applied 44,432 41,209
Government grants unapplied - 396
Total grants credited to the CIES 44,432 41,605

83

Grants Credited to Services

Grants Credited to Services
31-Mar 31-Mar
2022 2021
£'000 £'000
People
Adult Education 1,681 1,582
Better Care Fund - 14,736
COVID-19 - Emergency Response Grants (Adult Social Care) 10,988 9,358
Dedicated Schools Grant 180,647 172,870
Education Services Grant 10 988
Education and Skills Funding Agency Grants 8,217 12,840
Covid 19 - Education and Skills Funding Agency Grants 684 1,743
Independent Living Fund Grant 1,662 1,665
PFI Special Grant 17,103 17,652
Pupil Premium 6,918 7,066
Troubled Families Grant 1,686 1,659
Youth Justice Board Grant 714 759
Other Care Grants (Adults) 3,403 3,533
Other Care Grants (Children) 6,368 4,390
Other 7,025 1,449
Growth & Regeneration
Discretionary Housing Payments 1,045 1,351
Go Ultra Low Grant 109 2,307
Homelessness Reduction & Support Grants 9,573 4,226
Housing Benefit (rent allowances/council tax benefit) subsidy 117,834 127,922
Housing Benefit Administration Subsidy 2,377 2,804
Innovate UK Grant 77 438
Public Health 33,643 33,259
COVID-19 - Public Health Grants 5,288 15,810
Public Heath – Other 2,208 271
SWERCOTS 420 424
Travel & Transport Grants 564 157
Air Quality Grant 657 1,393
Arts Council England - Museums 2,105 2,096
Better Bus Area Fund - 87
Sustainable Travel Access Fund 976 2,535
Winter Funding 6,913 1,640
Covid-19 - Business Support Grants 3,804 18,662
North & South Bristol Enterprise Support Grants 635 -
Other 5,323 5,039
Resources
Covid 19 - Tax Income Guarantee Grant - 1,420
Covid 19 - Test & Trace Support Grant 4,568 752
Non City Council elections - 25
Brexit - 86
Local Crisis and Prevention Fund - 608
Other 1,490 479
Total 446,712 476,079

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:

84

31 March
2022		 31 March
2022		 31 March
2021
£'000 £'000
Capital Grants and Contributions Received in Advance
Government grants 61,378 33,337
Section 106 contributions 41,741 44,441
Total 103,120 77,778
Due < 1 year 71,814 44,447
Due > 1year 31,306 33,331
Total 103,120 77,778
Revenue grants (within creditors)
People 4,693 2,812
Growth & Regeneration 1,943 3,442
Resources 1,155 493
Total 7,791 6,747

85

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.

2021/22
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
Movement in the market value of Investment Properties
Amortisation of Intangible Assets
Capital grants and distributions
Revenue and expenditure funded from capital under statute
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
Changes in Fair Value of Financial Instruments (MiRs)
Insertion of items not debited or credited to the Comprehensive Income and
Expenditure Statement:
Statutory provision for the financing of capital investment
Capital expenditure charged against the General Fund and HRA balances
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
Administrative costs of non-current asset disposals
Use of the Capital Receipts Reserve to finance new capital expenditure
Contribution from the Capital Receipts Reserve to finance the payments to the
Government capital receipts pool
Adjustment Involving the Major Repairs Reserve (MRR):
Excess depreciation transferred to the MRR
HRA depreciation credited to MRR
Use of the MRR to finance new capital expenditure
Adjustments involving the Capital Grants Unapplied Account:
Application of grants to capital financing transferred to the Unapplied Capital
Grants
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
Adjustments involving the Pensions Reserve:
Reversal of items relating to retirement benefits debited or credited to the
Comprehensive Income and Expenditure Statement (see Note 35)
Employer's pensions contributions and direct payments to pensioners payable in
the year
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
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
Other Reserve Movements
Total Adjustment		 General
fund
balance
Housing
Revenue
Account
Capital
Receipts
Major
Repairs
Reserve
Capital
Gains
Unapplied
Total
Movement
Usable
Reserves
£'000
£'000
£'000
£'000
£'000
£'000
(76,750)
(33,567)
-
-
-
(110,317)
82,057
792
-
-
-
82,849
(5,475)
(470)
-
-
-
(5,945)
43,955
477
-
-
-
44,432
(5,483)
-
-
-
-
(5,483)
(20,992)
(9,306)
-
-
-
(30,298)
148
-
-
-
-
148
14,381
-
-
-
-
14,381
2,601
177
-
-
-
2,778
4,762
14,020
(18,781)
-
-
-
(188)
-
188
-
-
-
-
-
16,646
-
-
16,646
-
(2,112)
2,112
-
-
-
-
-
-
-
-
-
-
30,896
(30,896)
-
-
-
-
29,290
-
29,290
-
-
-
-
-
-
-
-
-
-
(475)
(475)
177
-
-
-
-
177
-
(92,969)
(12,169)
-
-
-
(105,138)
44,926
4,896
-
-
-
49,822
38,749
-
-
-
-
38,749
3,280
-
-
-
-
3,280
(1,795)
-
(1,448)
-
-
(3,243)
31,385
(6,367)
(1,283)
(1,606)
(475)
21,654

86

2020/21
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
Movement in the market value of Investment Properties
Amortisation of Intangible Assets
Capital grants and distributions
Revenue and expenditure funded from capital under statute
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
Changes in Fair Value of Financial Instruments (MiRs)
Insertion of items not debited or credited to the Comprehensive Income
and Expenditure Statement:
Statutory provision for the financing of capital investment
Capital expenditure charged against the General Fund and HRA balances
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
Administrative costs of non-current asset disposals
Use of the Capital Receipts Reserve to finance new capital expenditure
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
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
Adjustments involving the Pensions Reserve:
Reversal of items relating to retirement benefits debited or credited to the
Comprehensive Income and Expenditure Statement (see Note 35)
Employer's pensions contributions and direct payments to pensioners payable
in the year
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
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
Other Reserve Movements
Total Adjustment		 General
fund
balance
Housing
Revenue
Account
Capital
Receipts
Major
Repairs
Reserve
Capital
Gains
Unapplied
Total
Movement
Usable
Reserves
£'000
£'000
£'000
£'000
£'000
£'000
(88,430)
(29,993)
(118,423)
22,945
(379)
22,566
(4,137)
(388)
(4,525)
41,123
481
41,604
(18,636)
3,263
(15,373)
(16,029)
(20,774)
(36,803)
1,669
1,669
13,611
13,611
4,185
408
4,592
7,453
33,197
(40,649)
-
(163)
163
-
35,128
35,128
(2,115)
2,115
-
29,332
(29,332)
-
21,642
21,642
(395)
(395)
177
177
-
(74,292)
(9,542)
(83,834)
43,976
4,740
48,716
(88,413)
(88,413)
(6,785)
(6,785)
(8,557)
(8,557)
(172,416)
7,082
20
(7,690)
(395)
(173,399)

87

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 2021/22, 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

88

01 April Transfers Transfers 31 March 01 April Transfers Transfers 31 March
2020 out in 2021 2021 out in 2022
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Total General Fund Strategic
Reserve		 (17,001) - (18,665) (35,666) (35,666) 6,100 (10,508) (40,074)
General Fund Earmarked Reserves
Capital Investment Reserve (25,166) 1,501 (11,969) (35,634) (35,634) 11,656 (13,116) (37,094)
Business Transformation Reserve (3,131) 798 (1,000) (3,333) (3,333) 1,899 (1,414) (2,848)
Risk Management Reserve (16,050) 10,233 (100,176) (105,993) (105,993) 134,247 (82,701) (54,447)
Statutory/Ring-fenced Reserve (31,255) 32,350 (50,288) (49,192) (49,192) 19,481 (27,077) (56,788)
Financing Reserve (9,218) 3,323 (713) (6,608) (6,608) 2,559 (547) (4,596)
Service Specific Reserves (12,570) 3,978 (11,355) (19,947) (19,947) 9,699 (7,415) (17,663)
Total (97,390) 52,184 (175,501) (220,707) (220,707) 179,540 (132,268) (173,435)
School Reserves
Schools – DSG 2,892 (2,892) - - - - - -
Schools - Balances (8,910) 1,729 - (7,180) (7,180) 2,103 - (5,077)
Schools - Other (1,284) 978 (42) (348) (348) - (178) (526)
Total Schools (7,302) (184) (42) (7,529) (7,529) 2,103 (178) (5,604)
Total Dedicated Schools Grant
Reserve
HRA
HRA General Reserve (87,526) 601 (10,865) (97,791) (97,791) - (3,785) (101,576)
Major Repairs Reserve (3,606) 21,642 (29,332) (11,296) (11,296) 58,920 (60,526) (12,902)
HRA Earmarked Reserves - 601 (1,251) (651) (651) - (4) (655)
Total HRA Reserves (91,132) 22,843 (41,448) (109,737) (109,737) 58,920 (64,315) (115,133)
Capital Reserves
Capital Receipts (2,685) 107,570 (107,966) (3,080) (3,080) 20,537 (21,012) (3,555)
Capital Grants Unapplied (78,512) 45,138 (45,117) (78,491) (78,491) 33,757 (35,041) (79,774)
Total Usable Capital Reserves (81,196) 152,708 (153,083) (81,571) (81,571) 54,294 (56,052) (83,329)
TOTAL USABLE RESERVES (294,021) 227,550 (388,739) (455,209) (455,209) 300,957 (263,323) (417,575)

89

20 Property, Plant and Equipment Movements in 2021/22

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 & Buildings Vehicles, Plant, Furniture & Equipment Infrastructure Assets Community Assets Assets Under Construction Surplus Assets Total Property, Plant &
Equipment		 PFI Assets Included in Property, Plant & Equipment
£000s £000s £000s £000s £000s £000s £000s £000s £000s
Cost or Valuation
At 1 April 2021 1,765,900 657,981
89,944		 373,538 7,870 23,662 43,830 2,962,725 26,904
Additions 34,042 14,619
9,362		 21,634 559 48,682 150 129,048 -
Donations - - - - - - - - -
Revaluation Increases / (decreases) recognised in the
Revaluation Reserve 158,521 50,013 - - 114 (1,686) (560) 206,402 1,452
Revaluation Increases / (decreases) recognised in the
Surplus / Deficit on the Provision of Services - (25,139) - - - (32,862) (822) (58,823) (641)
Derecognition - Disposals (8,363) (5,769) - - (3) - (13,011) (27,146) -
Derecognition - Other - - - - - - - - -
Assets reclassified to / from Held for Sale - - - - - - - - -
Assets reclassified to / from Investment Property - - - - - - - - -
Other movements in cost or valuation 10,183 (6,884) (74) (42) 74 (3,257) - - -
At 31 March 2022 1,960,283 684,821
99,232		 395,130 8,614 34,539 29,587 3,212,206 27,715
Accumulated Depreciation and Impairment
At 1 April 2021 (14,378) (16,726)
(38,579)		 (66,831) (416) (4) (124) (137,058) (318)
Depreciation Charge (30,188) (19,250)
(8,698)		 (11,219) - - (247) (69,602) (658)
Depreciation written out to Revaluation Reserve 29,403 - - - - - - 29,403 -
Depreciation written out to the Surplus / Deficit on the
Provision of Services - 17,938 - - - - 245 18,183 641
Derecognition - Disposals 68 148 - - - - - 216 -
Derecognition - Other - - - - - - - - -
Other movements in depreciation and Impairment 1 174 148 - (148) (175) - - -
At 31 March 2022 (15,094) (17,716)
(47,129)		 (78,050) (564) (179) (126) (158,858) (335)
Balance Sheet at 31 March 2022 1,945,189 667,105
52,103		 317,080 8,050 34,360 29,461 3,053,348 27,380
Balance Sheet at 1 April 2021 1,751,522 641,255
51,365		 306,707 7,454 23,658 43,706 2,825,667 26,586

90

Property, Plant and Equipment Comparative movements in 2020/21

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 18,435 263 36,514 104 103,729 -
Revaluation increases/(decreases)
recognised in the Revaluation
Reserve 62,102 52,100 - - - (236) 6,796 120,762 (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 3,614 (21,147) 1,538 - (74) 16,069 - - -
At 31 March 2021 1,765,900 657,981 89,944 373,538 7,870 23,662 43,830 2,962,725 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 1,751,522 641,255 51,365 306,707 7,454 23,658 43,706 2,825,667 26,586
Balance Sheet at 1 April 2020 1,673,144 639,103 46,445 299,146 7,265 11,707 41,957 2,718,767 26,731

91

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 2022 the Council had entered several contracts for the construction or enhancement of Property, Plant and Equipment with outstanding contract commitments of £108.1m.

Significant contractual commitments outstanding at 31 March 2022 were as follows:

----- Start of picture text -----
£m
Bristol Beacon - Cultural refurbishment scheme Willmott Dixon Construction Ltd 23.3
Avonmouth and Severnside Enterprise Area - Flood defences South Gloucestershire Council 21.5
Design, Supply & Installation of New Kitchens and Electrical Rewires Bell Group 11.2
Design, Supply & Installation of New Kitchens and Electrical Rewires Jeff Way Construction Ltd 11.2
Refurbishment - Bishport 5 Blocks Rateavon Ltd 9.2
Refurbishment & Replacement of EWI system to Eccleston & Phoenix SERS Energy Solutions Group Ltd 6.7
House
SEND Expansion Programme: Bristol Education Centre redevelopment Vercity Management Services Limited t/a 6.4
Bristol LEP Limited
Hawkfield Business Park Conversion ISG Construction Ltd 3.4
Refurbishment & Replacement of EWI system to Corbett House Synergise Ltd 2.9
Bedminster Heat Network - Infrastructure CSW Process Ltd 2.7
Transport Cumberland Road Stabilisation works Alun Griffiths (Contractors) Ltd 2.6
Portway Park & Ride Rail Platform Network Rail Infrastructure Limited 2.3
Transport - Floating pontoon walkway Knights Brown Construction Ltd 1.9
Refurbishment - Roegate House Rateavon Ltd 1.4
Bristol Waste (agency agreement) - Hartcliffe site construction Bristol Waste Company Ltd 1.2
Total 108.1
----- End of picture text -----

92

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:

----- Start of picture text -----
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Carried at
historical
cost - 27,189 97,992 395,130 8,614 34,383 - 563,308
01 Oct 2021 1,960,283 596,472 1,240 - - - 29,589 2,587,584
01 Oct 2020 - 29,841 - - - - - 29,841
01 Oct 2019 - 9,161 - - - - - 9,161
01 Oct 2018 - 12,019 - - - 156 - 12,175
01 Dec 2017 - 10,139 - - - - - 10,139
Total cost
valuation 1,960,283 684,821 99,232 395,130 8,614 34,539 29,589 3,212,208
Council Dwellings Other Land and Buildings Vehicles, Plant, etc Infrastructure Community Assets Assets Under Construction Surplus Assets Total Property, Plant and Equipment
----- End of picture text -----

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. It was considered appropriate to increase the properties within Property Plant and Equipment by £126.9m, primarily relating to Council Dwellings (£110.7m).

93

21 Heritage Assets

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

Art
Collection
Ethnography &
Foreign
Archaeology
Antiquarian
books
Other
Total
£'000
£'000
£'000
£'000
£'000
Cost or valuation
01 April 2021 129,888
42,594
7,675
27,249
207,406
Additions 475
-
-
-
475
Revaluations 2,790
(250)
-
4,835
7,375
31 March 2022 133,153
42,344
7,675
32,084
215,256
Cost or valuation
01 April 2021 126,625
42,588
7,675
27,168
204,056
Additions 96
-
-
-
96
Revaluations 3,167
6
-
81
3,254
31 March 2021 129,888
42,594
7,675
27,249
207,406

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:

94

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:

2021/22 2020/21
£'000 £'000
Rental income from Investment Property 12,014 11,161
Direct operatingexpenses arisingfrom Investment Property (318) (592)
Net gain 11,696 10,569

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:

2021/22 2020/21
£'000 £'000
Balance at start of the year 275,903 252,586
Additions – purchases - 256
Disposals (2,112) -
Net gains/losses from fair value adjustments 82,849 22,566
Transfers to/from Property, Plant and Equipment - 495
Balance at end of the year 356,640 275,903

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 income and expenditure line.

Fair Value Hierarchy

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

Other significant
observable inputs (Level2)		 Other significant
observable inputs (Level2)		 Other significant
observable inputs (Level2)
2021/22 2020/21
£'000 £'000
Retail 78,487 67,540
Industrial 209,606 144,779
Office 68,547 63,584
Balance at end of the year 356,640 275,903

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.

95

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 £5.9m charged to revenue in 2021/22 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 relate to system improvements from within the IT Transformation programme (ITTP), the majority of which was spent in 2020/21, with a residual amount in 2021/22.

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

2021/22 2020/21
£'000 £'000
Balance at start of the year
Gross carrying amounts 42,932 33,792
Accumulated amortisation (20,345) (15,820)
Accumulated impairment (2,014) (2,014)
Net carrying amount at start of year 20,573 15,958
Additions:
Purchases 362 9,140
Amortisation for theperiod (5,944) (4,525)
Net carrying amount at the end ofyear 14,991 20,573
Comprising:
Gross carrying amounts 43,294 42,932
Accumulated amortisation (26,289) (20,345)
Accumulated impairment (2,014) (2,014)
Balance at end of the year 14,991 20,573

96

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
2022 2021 2022 2021
£'000 £'000 £'000 £'000
Financial Liabilities at Amortised cost
Borrowing (445,488) (450,488) (9,952) (4,966)
Service Concessions (116,238) (123,910) (9,101) (8,951)
Creditors (93) (94) (266,205) (194,467)
Financial Liabilities at Fair Value through profit
and loss
Financial Derivative - - - (20,702)
Total Financial Liabilities (561,819) (574,492) (285,258) (229,086)
Financial Assets at amortised cost
Investments - - 109,498 105,781
Debtors 24,548 11,332 96,972 92,809
Financial Assets at Fair Value through Other
Comprehensive Income
Investment 350 350 - -
Financial Assets at Fair Value through profit and
loss
Investments 43,938 43,220 108,184 101,476
Total Financial Assets 68,836 54,902 314,654 300,066

Movements

The increase in financial liabilities, circa £44m relates to an increase in the value of general creditors (£72m) during the year primarily due to government grants being received in advance. This was partly offset by the planned repayment of an overdraft (£20m) and service concessions (£8m).

The financial assets increased by circa £29m through a combination of increases in working capital and reserves resulting in additional cash resources to invest in lieu of using these resources.

97

Borrowing

31 March
31 March
2022
2021
Current borrowing £'000
£'000
Deposit loans (repayable at notice - up to 7 days) 285
101
Other short-term borrowing (repayable within 1 year):
- Public Works Loan Board 8,251
3,251
- Banks and other monetary sector 1,137
1,334
- Energy improvement Loans 259
259
- Local bonds and Stocks 21
21
Total 9,952
4,966
31 March
31 March
2022
2021
Non-current borrowing £'000
£'000
Public Works Loan Board 325,439
330,439
Lender Option Borrower Option (Lobo) 70,000
70,000
Market Debt 50,000
50,000
Stocks 49
49
Total 445,488
450,488

98

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 2021/22 Financial Instruments Gains and Losses 2021/22 Financial Instruments Gains and Losses 2021/22 Financial Instruments Gains and Losses 2021/22
Financial Financial
Liabilities 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		 (33,695) - - - (33,695)
Total expense in Surplus or
Deficit on the Provision of (33,695) - - - (33,695)
Services
Interest Income - 4,953 - 78 5,031
Fair Value Movement - - - 148 148
Dividend Income - - - 2,220 2,220
Total income in Surplus or
Surplus / Deficit on the (33,695) 4,953 - 2,446 (26,296)
Provision of Services
Deficit arising on revaluation of
financial assets in Other - - - - -
Comprehensive Income and
Expenditure
Net gain/(loss) for the year (33,695) 4,953 - 2,446 (26,296)
Financial Instruments Gains and Financial Instruments Gains and Losses 2020/21
Financial Financial
Liabilities 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 (28,862) - - - (28,862)
Services
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 (28,862) 5,113 - 5,824 (17,925)
Provision of Services
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)

99

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.

----- Start of picture text -----
Fair value measurements at 31 March Fair value measurements at 31 March
2022 using: 2021 using:
Quoted prices Observable Unobservable Quoted prices Observable Unobservable
in active in active
markets inputs inputs markets inputs inputs
Descriptions
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 108,184 - - 101,476 - -
Bristol Port Company
- - - -
(Non-traded Unquoted 28,000 29,000
Equity Investment)
Bristol Holdings
- - - -
(unquoted equity 5,465 4,992
investment)
Other unquoted private - - 192 - - 128
companies
Pooled property fund - - 10,281 - - 9,100
Fair Value through
Other
Comprehensive
Income
Other unquoted private - - 350 - - 350
companies
Total Non-traded
- -
108,184 44,288 101,476 43,570
securities:
Investment
- - - -
356,640 275,903
properties
Surplus properties - 29,462 - - 43,706 -
Total recurring fair
108,184 386,102 44,288 101,476 319,609 43,570
value measurements
Non-recurring fair
value measurements
Assets held for sale - 806 - - 806 -
Total non-recurring
fair value - 806 - - 806 -
measurements
----- End of picture text -----

100

----- Start of picture text -----
Valuation
techniques and
Inputs
Observable and Key sensitivities
Description of Valuation Unobservable affecting the
asset hierarchy Basis of Valuation inputs valuations provided
Money Market Level 1 Unadjusted quoted prices Latest quoted prices
Funds in active markets for
identical shares
Surplus assets Level 2 All surplus assets have Evidence of title, Not all assets are
been valued by RICS floor area, siting and physically inspected
qualified valuers to Fair site conditions, every year. Latent
Value less costs to sell, type/age and defects, repair and
reflecting highest and current use of the maintenance
best use. property have been backlogs, general
considered together changes in the
with general market market and other
conditions and impairments could
advertised value of have a significant
similar properties impact on the values
currently up for sale. provided.
Investment Level 2 All investment properties All valued on an Changes to market
Properties [(further detailed ] have been valued by the investment income conditions, lease
information in Note 22) Council’s in-house basis, using existing terms, covenant
valuers (all RICS lease terms and strength and
qualified) on an current yields occupancy levels
investment income basis could all affect the
which we are satisfied asset valuations
represents highest and provided.
best use overall.
Bristol Port Level 3 This investment has been Calculations have Changes to market
Company valued by an external been based an conditions (local and
specialist valuation income approach to global), and the
company for financial valuation, by comparable data used
year ending 31 [st] March applying a multiple within the valuations.
2020 and refreshed by derived from the If the growth of
Council officers for this market to a future returns is
financial year on the maintainable profit greater or lesser by
same basis. figure. 0.5% than the 2%
forecast, the fair
value will be circa
£1.7m higher or
lower respectively.
Bristol Holdings Level 3 This investment has been Calculations have Valuations could be
valued at the Council’s been based on their affected by the
share of each company’s unaudited accounts difference between
net assets. as at 31 March 2022. audited and
unaudited accounts.
----- End of picture text -----

101

----- Start of picture text -----
Investments in other Level 3 These investments have Calculations have The value of these
unquoted companies been valued at the been based on their companies is
Council’s share of each latest audited relatively low (£542k)
company. accounts so any change in the
metrics used in the
valuation technique
will not have a
material impact.
Investments in Level 3 These investments have The valuation for Changes to housing
Pooled Property been valued at the Pooled Property market conditions
Fund Council's share within Funds has been could affect the
the pooled fund. based on the latest valuation of the
quarterly financial pooled property
report. 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 £89k higher
or lower respectively.
----- End of picture text -----

102

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
2022
2021
Description Non-traded
securities
Non-traded
securities
£'000
£'000
Opening balance 43,570
42,073
included in the surplus/(deficit) on the Provision of
Services		 112
1,597
included in Other Comprehensive Income and
Expenditure		 -
-
Total gains/(losses) for the period: 112
1,597
Additions 831
100
Disposals (225)
(200)
Closing balance 44,287
43,570

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 (-£1m), Homelessness Property fund (+£675k) and Bristol Holdings (+£473k).

103

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 2022
31 March 2021
Carrying
amount
Fair value
Carrying
amount
Fair value
£'000
£'000
£'000
£'000
Cash & Cash Equivalents -
-
20,702
20,702
Public Works Loan Board (PWLB) 333,690
459,400
333,690
501,500
Lender Option Borrower Option 70,667
98,100
70,865
108,400
Market Debt 50,470
68,100
50,469
74,700
Current Creditors 266,205
266,205
194,467
194,467
Service Concessions 125,339
177,629
132,861
204,061
Other 707
707
524
524
Total Liabilities 847,078
1,070,141
803,578
1,104,354

The Authority has used a transfer value for the fair value of financial liabilities. We have also calculated an exit price fair value of £1.238bn an increase 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 2022) arising from a commitment to pay interest to lenders above current market rates.

Financial Assets 31 March 2022
31 March 2021
Carrying
amount
Fair value
Carrying
amount
Fair value
£'000
£'000
£'000
£'000
Current investments 103,948
103,948
64,983
64,983
Cash and Cash Equivalents 5,550
5,550
40,798
40,798
Non-current investments -
-
-
-
Current Debtors 96,972
96,972
92,809
92,809
Non-current debtors 24,548
24,548
11,332
11,332
Total Financial Assets 231,018
231,018
209,922
209,922

104

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 Fair value measurements
March 2022 using: at 31 March 2021 using:
Quoted Quoted
prices in Observable
Unobservable
prices in		 Observable
Unobservable
active inputs inputs active inputs
inputs
Descriptions markets markets
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
Cash & Cash Equivalent - 20,702
Public Works Loan Board (PWLB) 333,690 333,690
Lender Option Borrower Options 70,667 70,865
Market debt 50,470 50,469
Service Concessions 125,339 132,861
Other 707 524
Total
Financial Assets held at		 580,873 609,111
amortised cost
Current Investments 103,948 64,983
Cash and Cash Equivalents 5,550 40,798
Non-current Investments - -
Non-current Debtors 24,548 11,332
Total 134,046 117,113

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.

105

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 15[th] February 2021 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 2022 that this was likely to crystallise.

106

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
Adjustment
for market
conditions

Estimated
maximum
exposure
to default
Estimated
maximum
exposure to
default
£0
%
%		 £0
**£0 **
A
B
C		 (A*C)
Non-Current Investments: 31-Mar-22
31-Mar-22
31-Mar-22		 31-Mar-22
31-Mar-21
Non-traded securities -
0.00%
0.00%		 -
-
Sub-total - -
-
Current Investments:
Local Authorities 53,537
0.00%
0.00%		 -
-
AA rated counterparties 15,076
0.02%
0.02%		 3
5
A rated counterparties 40,885
0.05%
0.05%		 20
10
Sub-total 109,498 23
15
Trade debtors 96,972 -
-
Non-current debtors 24,548 -
-
Total Financial assets 231,018 23
15

The estimated maximum exposure for credit loss for Treasury investments is £23k and a general allowance of £100k has been set aside for this.

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:

107

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 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
debtor at		 Allowance for
credit losses		 Net debtor
at		 Net
debtor at
at
31-Mar-22 31-Mar-22 31-Mar-22 31-Mar-21
£'000 £'000 £'000 £'000
Local taxpayers 59,488 (37,635) 21,853 15,566
Housing rents 11,935 (8,934) 3,001 3,032
Other - sundry debtors 158,061 (35,047) 123,014 114,038
Total Other Entities and
Individuals		 229,484 (81,616) 147,868 132,636
Central Government bodies 10,970 - 10,970 10,561
Other local authorities 1,509 - 1,509 1,571
NHS bodies 509 - 509 160
Total debtors 242,472 (81,616) 160,856 144,928
Balance sheet debtors 242,472 (81,616) 160,856 144,928
Current debtors not qualifying as a
financial instrument under IFRS
(101,520)		 37,635 (63,885) (52,119)
Current debtors qualifying as a
financial instrument under 140,952 (43,981) 96,971 92,809
IFRS

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
2022
2021
£'000
£'000
Less than three months 35,031
29,971
2,218
1,754
17,837
15,276
50,514
46,848
Three to four months
Four months to one year
More than one year
Total 105,599
93,849

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 Loan 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

108

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:

The maturity analysis of financial assets, excluding sums due from customers, is as follows:
31 March
31 March
2022
2021
£'000
£'000
Less than 1 year 314,654
300,066
Between 1 and 2 years 1,712
1,699
Between 2 and 3 years 1,738
1,724
More than 3years 65,386
51,479
Total 383,490
354,968

The maturity analysis of financial liabilities is as follows:

The maturity analysis of financial liabilities is as follows:
31 March
31 March
2022
2021
£'000
£'000
Less than 1 year 285,258
229,086
1 - 2 Years 18,492
13,853
2 - 5 Years 59,646
44,162
5 - 10 Years 76,191
90,722
10+ Years 407,490
425,754
Total 847,077
803,577

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.

109

Approved
minimum		 Approved
maximum		 Actual 31
March
2022		 % Actual 31
March
2021		 %
limits % limits %
£'000 £'000
Less than 1 year
Between 1 and 2 years		 -
-
30

40		 9,952
-		 2%
0%		 4,966
5,000		 1%
1%
Between 2 and 5 years -
40		 32,000 7% 20,000 4%
Between 5 and 10 years -
50		 22,000 5% 34,000 7%
More Than 10 Years 25 100 391,488 86% 391,488 87%
Total 455,441 100% 455,454 100%

Included within the maturity profile are £70m of LOBOS with maturities averaging 39 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.

110

At 31 March 2022, if interest rates had been 1% higher with all other variables held constant, the financial effect would be:

effect would be:
31-Mar
2022
£'000
Increase in interest receivable on variable rate investments 2,429
Impact on Surplus or Deficit on the Provision of Services 2,429
Share of overall impact debited to the HRA 1,740
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)		 236,700

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 2021/22 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.

111

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
· Use of Major Repairs Reserve
· 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		 2021/22
£'000
886,406
129,299
-
475
362
1,131
5,483
(1,970)
(16,646)
(43,957)
(2,778)
(29,290)
(14,381)
914,134
(14,380)
(1,970)
44,078
27,728		 2020/21
£'000
869,923
107,527
256
95
9,140
1,660
18,636
(1,386)
(38,391)
(41,209)
(4,592)
(21,642)
(13,611)
886,406
(13,611)
(1,386)
31,480
16,483

112

27 Leases

Council as Lessor

Operating Leases

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

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
2022
£'000
14,149
49,012
865,425
928,586		 31 March
2021
£'000
13,821
48,837
851,243
913,901

The minimum lease payments receivable at 31 March 2022 and 2021 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 2022 cumulative payments totalling £161m (£151m in 2020/21) have been made to the PFI contractor. The future estimated payments the Council will make under the contract are as follows:

Year
2022/23
2023/24 to 2026/27
2027/28 to 2031/32
Total		 Payment
for
Services
Repayment
of Liability
Interest
Other
Total
£'000
£'000
£'000
£'000
£'000
3,306
2,339
3,867
(199)
9,313
14,069
11,716
12,453
1,642
39,880
17,087
18,819
6,322
(529)
41,698
34,461
32,874
22,642
914
90,891

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

113

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 2022 cumulative payments totalling £234m (£215m in 2020/21) have been made to the PFI contractor. The future estimated payments the Council will make under this contract are as follows:

Year
2022/23
2023/24 to 2026/27
2027/28 to 2031/32
2032/33 to 2034/35
Total		 Payment
for Services
Repayment
of Liability
Interest
Other
Total
£'000
£'000
£'000
£'000
£'000
5,671
3,951
5,366
4,455
19,443
24,375
17,044
18,353
19,975
79,748
34,671
29,322
14,610
25,621
104,224
18,351
19,364
2,577
11,550
51,842
83,068
69,682
40,906
61,601
255,256

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 2022 payments totalling £35m (£32m at 31 March 2021) have been made to the PFI Contractor. The future estimated payments the Council will have to make under the Contract are as follows:

Year
2022/23
2023/24 to 2026/27
2027/28 to 2031/32
2032/33 to 2036/37
Total		 Payment
for Services
Repayment
of Liability
Interest
Other
Total
£'000
£'000
£'000
£'000
£'000
366
496
1,258
1,438
3,558
1,556
2,041
4,531
6,296
14,424
2,135
4,028
4,120
8,214
18,497
2,346
5,549
1,794
9,117
18,806
6,403
12,114
11,703
25,065
55,285

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

114

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
2021/22
2020/21
£'000
£'000
108,712
114,775
(6,157)
(6,063)
102,555
108,712		 Hengrove Leisure
2021/22
2020/21
£'000
£'000
12,761
13,469
(646)
(708)
12,115
12,761

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 £1.5m of assets to support the provision of waste services, funded from a loan from the Council.

115

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

Year
2022/23
2023/24 to 2026/27
Total		 Payment for
Services
Repayment
of Liability
Interest
Total
£'000
£'000
£'000
£'000
30,782
2,315
265
33,362
108,595
8,354
459
117,408
139,377
10,669
724
150,770

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
2021/22
2020/21
2021/22
2020/21
2021/22
2020/21
2021/22
2020/21
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
108,712
114,775
12,761
13,469
11,388
12,311
132,861
140,555
(6,157)
(6,063)
(646)
(708)
(2,214)
(923)
(9,017)
(7,694)
102,555
108,712
12,115
12,761
9,174
11,388
123,844
132,861

29 Debtors

Debtors
31 March
2022		 31 March
2021
i
Current debtors		 £'000 £'000
Trade receivables 28,981 21,451
Prepayments 7,089 3,948
VAT 11,462 9,632
Other 113,324 109,897
Total 160,856 144,928

Impairments for doubtful debts are detailed in Note 24.

31 March
2022		 31 March
2022		 31 March
2021
ii
Long-term debtors		 £'000 £'000
Mortgages 190 190
Capital loans (Probation/Fire/LEP/Bristol Waste) 24,109 10,865
South Gloucestershire Council 327 354
Former countyCouncil debt 36,181 37,689
Total 60,807 49,098

116

30 Inventories

Inventories
Stock
Work in Progress
Property constructed for sale
Total		 2021/22
£'000
1,861
25,117
-
26,978		 2020/21
£'000
1,841
9,819
756
12,416

31 Cash and Cash Equivalents

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

2021/22 2020/21
£'000 £'000
Cash held by the Council 260 271
Bank current accounts (19,709) (20,702)
Short-term deposits with banks / buildingsocieties 133,184 142,003
Total Cash and Cash Equivalents 113,735 121,572

32 Creditors

Creditors
2021/22 2020/21
Current liabilities £'000 £'000
Trade payables 25,217 12,038
Other payables 179,339 142,329
Receipts in advance 93,169 61,006
Total 297,725 215,373
2021/22 2020/21
Other long-term liabilities £'000 £'000
Service Concession contract liabilities (see Note 28) 116,238 123,910
Retirement benefit obligations (see Note 35) 1,025,888 1,127,918
Deferred liabilities 37,689 39,260
Rent Deposits 93 94
Total 1,179,908 1,291,181

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 2022 the liability in the Council’s Balance Sheet of £37.7m (2021: £39.3m) 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.

117

33 Provisions

Balance at
31 March
2021		 Additional
provisions
made in
2021/22		 Amounts
used in
2021/22
Balance at
March 2022
Due <
1 year
Due > 1
year		 Amounts
used in
2021/22
Balance at
March 2022
Due <
1 year
Due > 1
year		 Amounts
used in
2021/22
Balance at
March 2022
Due <
1 year
Due > 1
year
£'000 £'000 £'000 £'000
£'000
£'000
Business Transformation (109) - 109 -
-
-
Succession Planning - (1,080) - (1,080)
(1,080)
-
Insurance fund (1,608) (796) 629 (1,775)
(1,271)
(504)
NDR Provision for
appeals		 (25,521) (18,143) 18,464 (25,200)
-
(25,200)
Legal (498) - - (498)
(498)
-
Winding up of Bristol
Energy Ltd		 (3,891) - 3,891 -
-
-
Other (411) - 110 (301)
-
(301)
(32,038) (20,019) 23,203 (28,854)
(2,849)
(26,005)
Due < 1 year (5,761) (2,849)
Due > 1year (26,277) (26,005)
(32,038) (28,854)

Details of the provisions are shown in the table below:

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

118

34 Unusable Reserves

Unusable Reserves
2021/22 31 March
2021
£'000
(1,199,657)		 £'000
Revaluation Reserve (987,171)
Capital Adjustment Account (1,579,816) (1,510,865)
Financial Instruments Adjustment Account 6,721 6,898
Deferred Capital Receipt Reserve (12,851) (1,448)
Pensions Reserve 1,032,629 1,141,369
Collection Fund Adjustment Account – Council tax 7,526 4,539
Collection Fund Adjustment Account – NNDR 38,988 80,159
Collection Fund Adjustment Account – Growth /
Renewable Energy Disregard		 2,671 3,237
Accumulated Absences Account 10,108
24,650
(1,669,030)		 13,388
Dedicated Schools Grant Adjustment Account 10,004
(1,239,890)

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.

on the Capital Adjustment Account.
2021/22 2021/22
2020/21		 2020/21
£'000 £'000
£'000		 £'000
Balance at 1 April (987,171) (861,614)
Upward revaluation of assets
(257,767)		 (190,456)
Downward revaluation of assets and impairment
losses not charged to the Surplus/Deficit on the
Provision of Services
14,337
39,555
Surplus or deficit on revaluation of non-current
assets not posted to the Surplus/Deficit on the
Provision of Services		 (243,430) (150,901)
Amount written off to the Capital Adjustment
Account		 30,944 25,344
Balance at 31 March (1,199,657) (987,171)

119

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

involving the Revaluation Reserve.
2021/22 2020/21
£'000 £'000
Balance at 1 April (1,510,865) (1,520,227)
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 69,603 65,697
Revaluation losses on Property, Plant and Equipment 40,640 52,654
Amortisation of Intangible Assets 5,945 4,525
Movement in the fair value of financial Instruments (75) (1,597)
Revenue Expenditure Funded from Capital Under Statute 5,483 18,636
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		 30,298 36,802
(1,358,971) (1,343,510)
Adjusting amounts written out of the Revaluation Reserve (30,944) (25,344)
Net written out amount of the cost of non-current assets
consumed in the year		 (1,389,915) (1,368,854)
Capital financing applied in the year:
Use of the Capital Receipts Reserve to finance new capital
expenditure		 (16,646) (38,391)
Use of the Major Repairs Reserve to finance new capital
expenditure		 (29,290) (21,642)
Capital grants and contributions credited to the Comprehensive
Income and Expenditure Statement that have been applied to
capital financing		 (43,957) (41,209)
Statutory provision for the financing of capital investment
charged against the General Fund and HRA balances		 (14,381) (13,611)
Use of the Capital Receipts Reserve for repayment of Long-
Term Investments financed by borrowing		 (1,970) (1,386)
Long Term Capital Investment repaid 1,970 1,386
Capital expenditure charged against the General Fund and HRA
balances		 (2,778) (4,592)
(1,496,967) (1,488,299)
Movements in the market value of Investments debited or
credited to the Comprehensive Income and Expenditure
Statement		 (82,849) (22,566)
Balance at 31 March (1,579,816) (1,510,865)

120

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 2022 will be charged to the General Fund over the next 38 years.

years.
2021/22 2021/22
2020/21		 2020/21
£'000 £'000
£'000		 £'000
Balance at 1 April 6,898 7,076
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
(177)		 (178)
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) (178)
Balance at 31 March 6,721 6,898

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		 2021/22
£'000
(1,448)
(12,851)
1,448
(12,851)		 2020/21
£'000
-
(1,448)
-
(1,448)

121

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 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		 2021/22
£'000
1,141,369
(164,056)
105,138
(49,822)
1,032,629		 2020/21
£'000
993,905
112,346
83,834
(48,716)
1,141,369

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		 2021/22
£'000
87,935
(38,749)
49,186		 2020/21
£'000
(477)
88,412
87,935

122

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		 2021/22 2021/22
2020/21
£'000
£'000		 2020/21
£'000
£'000
13,388
(6,604)		 6,604
6,784
(13,388)
10,108 13,388
(3,280)
10,108
 13,388

Dedicated Schools Grant Adjustment Account

Regulations effective from 1[st] 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[st] April 2020, 1[st] April 2021 or 1[st] 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[st] April 2020 have been transferred into that account. Prior to 2020/21 this was treated as a useable reserve. 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		 2021/22
£'000
10,004
-
14,646
24,650		 2020/21
£'000
-
2,892
7,112
10,004

123

35 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 2021/22 was 24.99% resulting in a total payment of £10.864m (£10.309m in 2020/21) to the Teachers' Pension Agency. In addition, the Council made payments totalling £2.492m (£2.506m in 2020/21) 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 £1.586m (£1.690m in 2020/21). 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 2021/22 a total payment of £0.402m (£0.35m in 2020/21) was made to the NHS Pension Scheme, following the transfer of public health responsibilities from primary care trusts.

124

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		 Local Government Pension
Scheme		 Teachers' Unfunded
Pensions
2021/22
2020/21
£'000
£'000
-
-
-
-
-
-
1,311
1,455
1,311
1,455
177
4,513
(1,311)
(1,455)
4,081
4,197		 Teachers' Unfunded
Pensions
2021/22
2020/21
£'000
£'000
-
-
-
-
-
-
1,311
1,455
1,311
1,455
177
4,513
(1,311)
(1,455)
4,081
4,197
2021/22 2020/21
£'000 £'000
-
-
-
1,455
1,455
4,513
(1,455)
4,197
84,900 64,432
(4,184) (4,332)
1,251 1,211
21,860 21,068
103,827 82,379
(164,233) 107,833
(103,827) (82,379)
45,741 44,519

The Housing Revenue Account (HRA) Income and Expenditure Account has also been adjusted in 2021/22 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.

125

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:
Local Government Pension
Scheme
2021/22
2020/21
£'000
£'000
(2,925,287)
(2,514,914)
(84,900)
(64,432)
(60,666)
(59,629)
(13,731)
(13,196)
(8,018)
54,877
1,601
(404,302)
22,566
-
72,863
69,098
9,974
7,211
(2,985,598)
(2,925,287)		 Unfunded liabilities:
Local Government
Pension Scheme
2021/22
2020/21
£'000
£'000
(34,356)
(33,688)
-
-
(692)
(776)
-
-
(94)
786
-
(3,408)
237
-
2,705
2,730
-
-
(32,200)
(34,356)		 Unfunded liabilities:
Teachers' Unfunded
Pensions
2021/22
2020/21
£'000
£'000
(64,492)
(62,721)
-
-
(1,311)
(1,455)
-
-
(180)
998
(617)
(5,511)
620
-
4,081
4,197
-
-
(61,899)
(64,492)		 Total Liability
Local Government &
Teachers Pensions
2021/22
2020/21
£'000
£'000
(3,024,135)
(2,611,323)
(84,900)
(64,432)
(62,669)
(61,860)
(13,731)
(13,196)
(8,292)
56,661
984
(413,221)
23,423
-
79,649
76,025
9,974
7,211
(3,079,697)
(3,024,135)		 Total Liability
Local Government &
Teachers Pensions
2021/22
2020/21
£'000
£'000
(3,024,135)
(2,611,323)
(84,900)
(64,432)
(62,669)
(61,860)
(13,731)
(13,196)
(8,292)
56,661
984
(413,221)
23,423
-
79,649
76,025
9,974
7,211
(3,079,697)
(3,024,135)
(2,611,323)
(64,432)
(61,860)
(13,196)
56,661
(413,221)
-
76,025
7,211
(3,024,135)

126

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		 2021/22
£'000
1,896,322
39,337
244,214
(1,211)
(2,879)
57,970
13,196
(71,828)
2,175,121		 2020/21
£'000
1,617,523
39,337
244,214
(1,211)
(2,879)
57,970
13,196
(71,828)
1,896,322

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 £187,439m (2020/21 £283,551m).

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		 2021/22
£'000
(3,017,798)
(61,899)
2,053,915
(963,883)
(61,899)
(1,025,782)		 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)

The total liabilities shown in the Balance Sheet comprise the above (£1,025,782m) together with a small amount in respect of pre-1974 liabilities (£0.105m) totalling (£1,025,887m).

127

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 2020.

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
2021/22
2020/21
23.1
23.3
25.3
25.4
-
-
-
-
24.6
24.8
27.3
27.4
%
%
2.8
2.1
3.4
2.7
4.9
4.2
3.5
2.8		 Teachers’
Unfunded Pensions
2021/22
2020/21
23.1
23.3
25.3
25.4
14.3
14.4
16.1
16.2
-
-
-
-
%
%
2.8
2.1
3.5
2.7
-
-
2.8
2.8

The estimated Macaulay duration of liabilities (at later of 31 March 2020 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 2022.

Impact on the Defined Benefit Obligation in the Scheme (LGPS) 2021/22 2020/21
£'000 £'000
Longevity (increase or decrease by 1 year) 95,116 93,692
Rate of inflation (increase or decrease by 0.1%) 53,125 51,775
Rate of increase in salaries (increase or decrease by 0.1%) 4,325 4,865
Rate for discounting scheme liabilities (increase or decrease by 0.1%) (51,281) (49,860)

128

Impact on the Defined Benefit Obligation in the Scheme (Teachers) 2021/22 2020/21
£'000 £'000
Longevity (increase or decrease by 1 year) 2,396 2,444
Rate of inflation (increase or decrease by 0.1%) 635 657
Rate for discounting scheme liabilities (increase or decrease by 0.1%) (568) (588)

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
Private Debt
Y
Y
Sub-total alternatives
Cash and equivalents
Cash Accounts
Y
Sub-total cash
Total Assets		 31 March
2022
£’000
-
834,765
-
834,765
254,567
153,395
407,962
136,639
136,639
59,239
188,636
179,772
163,665
36,646
14,053
778,650
32,538
32,538
2,053,915		 31 March
2021
£’000
-
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

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, 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.

129

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 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 £39.032m. Expected contributions for the Teacher Pensions Scheme in the year to 31 March 2022 are £4.081m.

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

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.

130

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.

36 Cash Flow Statement – Operating Activities

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

Interest received
Interest paid
Dividends received		 2021/22
£'000
4,901
(33,806)
2,221		 2020/21
£'000
5,842
(33,652)
2,092

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
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		 2021/22
£'000
110,243
5,945
1,317
75,619
(16,628)
(14,562)
62,027
29,293
(86,651)
166,603		 2020/21
£'000
118,351
4,525
2,131
44,001
(34,145)
(2,250)
21,667
25,545
(27,557)
152,268

131

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

Any other items for which the cash effects are investing or financing cash
flows
Proceeds from the sale of Property Plant and Equipment, Investment
Property and Intangible Assets		 2021/22
£'000
(43,957)
(29,332)
(73,289)		 2020/21
£'000
(41,604)
(41,934)
(83,538)

132

37 Cash Flow Statement - Investing Activities

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
Other receipts from investing activities
Net cash flows from investing activities		 2021/22
£'000
(132,850)
(183,000)
(1,710)
15,635
144,000
79,842
(78,083)		 2020/21
£'000
(106,008)
(294,800)
(5,090)
40,291
318,600
67,733
20,726

38 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		 2021/22
£'000
-
(9,017)
(1,570)
3,500
(7,088)		 2020/21
£'000
224
(8,809)
(11,586)
(4,928)
(25,099)

39 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.

133

----- Start of picture text -----
Name Nature of Council relationship Transactions Nature of Balances owed to
with the Council transactions / (from) the
Council as at 31 3
2022
Bristol Holdings 100% subsidiary £112.6k recharges Recharges £178.5k preference
Limited The Council has one Director post from BCC and share interest owed
on the Board. £3.5k recharges to to BCC
BCC
Bristol Waste 100% subsidiary of Bristol Holding £50.5m payments Contract for waste £8.4m loan from
Company Limited by Council to collection and BCC for the
The Council has one Director post company recycling services acquisition of
on the Board. £1.3m recharges Recharges waste vehicles.
from Company to
Council
Goram Homes 100% subsidiary of Bristol Holdings £15.4m loan Development of £15.4m loan
Ltd Limited. building projects
The Council has one Director post
on the Board.
Bristol Heat 100% subsidiary of Bristol Holdings £0.3m loan Operation of heat £0.3m loan
Networks Limited. network energy
Limited The Council has one Director post centres
(formally Energy on the Board.
Service Bristol
Limited)
Bristol Energy & 100% subsidiary of Bristol Holdings None N/A Nil
Technology Limited
Services (Supply) The Council has one Director post
Limited on the Board.
The company is currently dormant.
Bristol is Open 100% owned subsidiary None N/A Nil
Limited The Council has one Director posts
on the Board.
Bristol Local Joint venture with BCC holding £13.9m payments Provision of ICT and Nil
Education 10%, Building Schools for the to the company construction services
Partnership Future Investments (Bristol) Ltd to schools in Bristol.
(LEP) Ltd 10% and IIC Bristol Infrastructure
Limited 80%.
The Council has one director post
on the board.
City Leap Ltd 100% owned subsidiary. None N/A Nil
The Council has one director post
on the board.
The Company is currently dormant.
City Leap Bristol 100% owned subsidiary. None N/A Nil
Ltd The Council has one director post
on the board.
The Company is currently dormant.
Bristol City Leap 100% owned subsidiary. None N/A Nil
Ltd The Council has one director post
on the board.
The Company is currently dormant.
City Leap 100% owned subsidiary. None N/A Nil
Energy The Council has one director post
Partnership on the board.
Limited The Company is currently dormant.
----- End of picture text -----

134

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.

40 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 2021/22 is £10.261m (2020/21 £9.750m). There has been no change to the Council’s assets or liabilities arising from the transfer of functions to WECA.

135

41 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 2022, litigation proceedings had not commenced and no claims have been received.

136

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		 2021/22
Net
£'000
35,786
32,309
12,501
662
34,037
36
627
115,959
(112,501)
(919)
(9,614)
9
(123,025)
(7,066)
(7,066)
(2,602)
(792)
11,193
(288)
2,609
(477)
2,577		 2020/21
Net
£'000
31,450
29,959
9,769
1,117
30,381
37
1,628
104,341
(113,814)
(1,017)
(8,301)
(4)
(123,136)
(18,795)
(18,795)
(12,423)
379
11,210
(359)
2,472
(481)
(17,997)

137

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
2022
Net
£'000
(98,391)
2,577
(6,367)
(3,789)
-
(3,789)
(102,180)
31 March
2022
Net
£'000
(33,567)
(470)
792
(12,169)
2,602
477
(42,335)
177
4,896
-
30,896
35,969
(6,367)		 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
(27,398)
408
4,740
-
29,332
34,480
7,082

138

Notes to the Housing Revenue Account

1 Dwelling numbers as at 31 March 2022

Dwelling numbers as at 31 March 2022
Houses
Bungalows
Flats
Total Dwellings held at 31 March 2022		 31 March
2022
11,222
1,079
14,560
26,861		 31 March
2021
11,285
1,081
14,561
26,927

2 Rent and Rent Arrears

The total value of dwelling rents in 2021/22, less rent attributable to empty properties (voids), is £112.5m (£113.8m in 2020/21). 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
2022
£'000
2,222
9,713
11,935
1,784
7,150
8,934		 31 March
2021
£'000
3,081
10,042
13,123
2,698
7,393
10,091

Vacant Possession

The vacant possession value of dwellings as at 1st April 2022 was £5.264bn. The value of dwellings in the balance sheet (excluding dwellings leased to Registered Social Landlords) was £1.942bn, a difference of £3.322bn. 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 2021/22 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.

139

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		 2021/22
£'000
30,188
708		 2020/21
£'000
28,756
576
30,896
470
31,366
2,671
-
34,037		 29,332
388
29,720
661
-
30,381

Impairment

There was a loss on revaluation of £2.7m charged to the surplus on provision of Services (2020/21: £0.661m).

5 HRA Share of Contributions to/from Pension Reserve

For 2021/22 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 £2.6m (2020/21 £2.5m). 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 £12.2m (2020/21 (£9.5m)). This is excluded from the HRA Balance for the year and replaced with Employers Contributions payable £4.9m (2020/21(£4.7m)) with the net movement on the Pension reserves of £7.3m (2020/21 £4.8m). Further information regarding the accounting for pensions is included in the notes to the consolidated revenue account and balance sheet, see Note 35.

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		 2021/22
£'000
39,241
177
39,418
9,474
177
29,290
477
39,418		 2020/21
£'000
38,637
408
39,045
16,514
408
21,642
481
39,045

140

7 Capital Receipts

Capital receipts received during the year from disposals of land, houses and other property within the HRA was £14m (£35.3m in 2020/21). 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		 2021/22
£'000
67,231
12,616
-
1,404
81,251
(2,112)
9,474
-
88,613		 2020/21
£'000
50,550
8,021
3
27,287
85,861
(2,115)
(16,515)
-
67,231

8 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		 2021/22
£'000
(11,296)
29,290
(30,896)
-
(12,902)		 2020/21
£'000
(3,606)
21,642
(29,332)
-
(11,296)

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 £30.9m for 2021/22 (2020/21 - £29.3m). £29.3m was used to finance appropriate Housing Revenue Account capital expenditure.

9 Balance Sheet Value of Land and Houses, etc.

Dwellings
Land
Other assets		 2021/22
£'000
1,945,189
41,624
18,149
2,004,962		 2020/21
£'000
1,751,522
38,785
28,562
1,818,869

141

10 Asset Split

Operational - dwellings
Operational - other land and buildings
Non-operational
Intangible
Other		 2021/22
£'000
1,945,189
52,782
6,991
1,294
-
2,006,256		 2020/21
£'000
1,751,522
60,848
6,199
1,587
-
1,820,156

142

Collection Fund

Collection Fund Income and Expenditure Account

31 March 2021 31 March 2022
£'000
£'000
£'000		 £'000
£'000
£'000
Business
Rates
Council
Tax
Total
Note		 Business
Rates
Council
Tax
Total
Income
-
266,356
266,356
Council Tax		 -
283,272
283,272
137,951
-
137,951
Non-Domestic Rates		 181,924
-
181,924
(3,254)
-
(3,254)
Transitional Protection Payment		 (3,743)
-
(3,743)
Contributions towards previous years
Collection Fund Deficit:
-
-
-
Central Government		 -
-
-
1,673
-
1,673
Bristol City Council		 84,946
2,549
87,495
Avon & Somerset Police and Crime
-
-
-
Commissioner		 -
330
330
18
-
18
Avon Fire Authority		 904
109
1,013
89
-
89
West of England Combined Authority		 4,518
-
4,518
136,478
266,356
402,834		 268,549
286,260
554,809
Expenditure
Apportionment of Previous Years
Surplus
-
-
-
Central Government		 -
-
-
-
37
37
Bristol City Council		 -
-
-
Avon & Somerset Police and Crime
-
4
4
Commissioner		 -
-
-
-
2
2
Avon Fire Authority		 -
-
-
-
-
-
West of England Combined Authority		 -
-
-
-
43
43		 -
-
-
Precepts, Demands and Shares
197,854
226,055
423,910
Bristol City Council		 197,435
236,198
433,634
Avon & Somerset Police and Crime
-
29,289
29,289
Commissioner		 -
30,862
30,862
2,105
9,635
11,740
Avon Fire Authority		 2,100
9,779
11,880
10,524
-
10,524
West of England Combined Authority		 10,502
-
10,502
210,483
264,979
475,462		 210,038
276,839
486,877
Charges to the Collection Fund
649
1,237
1,885
Write offs of uncollectable amounts		 104
1,280
1,384
6,551
3,723
10,274
Increase/(Decrease) in bad debt
provision		 8,594
11,662
20,256

702
-
702
Cost of Collection Allowance		 698
-
698
4,716
-
4,716
Disregarded amounts		 5,657
-
5,657
-
-
-
Prior year adjustment		 -
-
-
(2,056)
-
(2,056)
Increase/(Decrease) in provision for
appeals		 (341)
-
(341)
10,561
4,960
15,521		 14,712
12,941
27,654
(84,567)
(3,626)
(88,193)
Surplus/(Deficit) for theyear		 43,799
(3,520)
40,279
314
(1,695)
(1,381)
Surplus/ (Deficit) as at 1 April		 (84,253)
(5,321)
(89,574)
(84,253)
(5,321)
(89,574)
Surplus/ (Deficit) as at 31 March		 (40,454)
(8,841)
(49,295)

143

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 127.950 for 2021/22 (128,566 for 2020/21). 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 £2,163.65 for 2021/22 (£2,061.03 for 2020/21) 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 2021/22 council tax

BANDS BANDS BANDS BANDS BANDS BANDS BANDS BANDS BANDS BANDS BANDS BANDS BANDS BANDS BANDS BANDS BANDS BANDS BANDS BANDS BANDS BANDS BANDS BANDS BANDS BANDS
A Entitled
to Disabled
Relief
A
B
C
D
E
F
G
H		 Total
No of Properties
0		 53,191 74,349 39,792 18,833 9,825 4,819 2,861 341 204,011
Exemptions and
disabled relief
(36)
(2,865)
(1,529)
(1,469)
(1,301)
(1,094)
(210)
(51)
10		 (8,545)
Less Discounts
68		 (5,546) (5,596) (2,760) (1,132) (517) (209) (130) (63) (15,883)
Total Equivalent
Dwellings
32
44,781
67,224
35,563
16,400
8,215
4,400
2,680
288		 179,583
Ratio
5/9		 6/9 7/9 1 1 11/9 13/9 15/9 18/9
Band D Equivalents
18		 29,854 52,286 31,612 16,400 10,040 6,355 4,467 577 151,608
Add Changes re:
Additional Properties		 2,045
Additional
Exemptions		 (2,673)
Council Tax Support (21,081)
Rate of Collection
98.5%		 (1,948)
Council Tax Base 127,950

144

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

Council Tax Total Bristol City Police & Crime
Avon Fire
Council Commissioner Authority
£'000 £'000 £'000 £'000
Debtors 38,188 32,552 4,301 1,335
Bad debt allowance (25,053) (21,356) (2,822) (876)
Prepayments and overpayments (3,571) (3,044) (402) (125)
Surplus/ (Deficit) at 31 March (8,841) (7,526) (998) (317)
Business Rates Total Bristol City West of England Avon Fire Central
Council Combined Authority Government
Authority
£'000 £'000 £'000 £'000 £'000
Debtors 28,655 26,936 1,433 287
Bad debt allowance (17,318) (16,279) (866) (173)
Prepayments and overpayments (8,750) (8,225) (438) (88)
Appeals provision (26,809) (25,200) (1,340) (268)
Surplus/ (Deficit) at 31 March (43,125) (41,660) (325) (86) (1,055)

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 2021/22 the non-domestic rating multiplier was 51.2p (51.2p in 2020/21) and the small business nondomestic rating multiplier was 49.9p (49.9p in 2020/21).

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 £173.567m for 2021/22 (£132.808m for 2020/21). The significant change is due to specific COVID-19 reliefs given. The total rateable value at 31 March 2022 was £545.728m (£556.356m at 31 March 2021).

145

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 March 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,

 Tier 3: for the relief of demographic and service pressures associated with growth.

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.

146

CASH
TRANSACTIONS		 CASH
TRANSACTIONS		 REVENUE &
EXPENDITURE
Business Rates
Pool Total
of which the
Council's
share		 Council
Expenditure
Council
Revenue
£'000
£'000		 £'000
£'000
Funds held by BRP at 1 April (55,830)
(14,363)		 -
-
Receipts into the Pool in-year
- Growth sums payable by Council's to
BRP in year		 (25,826)
(5,820)		 3,954
-
Distributions out of the Pool in-year
- Tier 1 no worse off 9,066
2,787		 -
(2,729)
- BRP management fee 35
9		 -
-
- EDF management fee 65
16		 -
-
- Tier 2 EDF funding 3,397
640		 -
(703)
-Tier 3 demographic and service pressures 2,739
501		 -
(646)
Funds held by BRP at 31 March (66,354)
(16,230)
Analysed between:
Uncommitted cash (Tier 2 inc contingency) (4,055)
(2,017)		 n/a
n/a
Committed cash (Tier 3) (62,299)
(14,213)		 n/a
n/a
Expenditure/(Revenue) recognised (66,354)
(16,230)		 3,954
(4,078)

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 £2,017m 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 made a payment of £0.703m to Bristol City Council on behalf of the EDF in 2021/22 (2020/21: £0m.)

The Council itself has recognised revenue income of £4.078m (2020/21 £4.406m) from the BRP and expenditure of £3.954m (2020/21 £4.947m) to the BRP for the year.

147

Group Accounts

Introduction

The Code of Practice on Local Authority Accounting in the United Kingdom 2021/22 (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 and Bristol Waste Company Limited and Goram Homes Limited are considered to be material to the financial statements. Details of the companies considered for consolidation are shown below. Although not material, Bristol Heat Networks Limited as a subsidiary 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, 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:

148

Group Financial Statements

The Group Comprehensive Income and Expenditure Account as at 31 March 2022

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

2020/21 2020/21 2021/22 2021/22
Gross
Exp		 Gross
Income		 Net
Exp		 Gross
Exp
Gross
Income		 Net Exp
£’000 £’000 £’000 £’000
£’000		 £’000
417,307 (212,528) 204,779
People		 454,856
(210,728)		 244,128
240,082 (164,300) 75,782
Resources		 238,121
(148,474)		 89,647
297,632 (115,130) 182,502
Growth & Regeneration		 244,831
(95,557)		 149,274
104,341 (123,136) (18,795)
Housing Revenue Account		 115,959
(123,026)		 (7,067)
212,076 (201,110) 10,966
Dedicated Schools Grant		 228,498
(204,964)		 23,534
9,860 (903) 8,957
Corporate Funding& Expenditure		 6,692
(889)		 5,803
1,281,298 (817,107) 464,191
Cost of services (Note G1)		 1,288,957
(783,638)		 505,319
7,937
Other operating expenditure		 11,780
9,097
Financing and investment income
and expenditure (Note G2)		 (50,705)
(473,173)
Taxation and non-specific grant
income		 (454,781)
8,052
(Surplus)Deficit on provision of
services		 11,613
(150,901)
Deficit on revaluation of Property,
Plant and Equipment assets		 (243,430)
112,632
Remeasurement of the net defined
benefit liability/asset		 (162,172)
-
Surplus/deficit on financial assets
measured at fair value		 -
(38,269)
Other comprehensive (income)
and expenditure		 (405,602)
(30,217)
Total comprehensive (income)
and expenditure		 (393,989)

149

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.

----- Start of picture text -----
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Adjusted Balance at 1 April 2020 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 (14,949) 1,653,805
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) 48,313 36,102
Other Comprehensive Expenditure and Income - - - - - - - - - - - 38,555 38,555 (286) 38,269
Adjustments between group accounts and -
authority accounts - - - (44,154) (44,154)
Total Comprehensive Expenditure and Income (30,208) - - (30,208) 17,997 - 17,997 - - - (12,211) 38,555 26,344 3,873 30,217
Adjustments between accounting basis and funding basis under regulations 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 (134,844) 26,344 3,873 30,217
Transfers to/(from) Earmarked Reserves 19 (123,543) 123,317 226 - (651) 651 - - - - - - - -
Increase/(Decrease) in 2020/21 18,665 123,317 226 142,208 10,264 651 10,915 (20) 7,690 395 161,188 (134,844) 26,344 3,873 30,217
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 1,239,889 1,695,099 (11,077) 1,684,021
Movement in Reserves during 2021/22
Surplus or (deficit) on the provision of services (13,403) - - (13,403) (2,577) - (2,577) - - - (15,980) - (15,980) 56,751 40,770
Other Comprehensive Expenditure and Income - - - - - - - - - - - 407,486 407,486 (1,884) 405,602
Adjustments between group accounts and authority accounts - - - - - - - - - - - - - (52,382) (52,383)
Total Comprehensive Expenditure and Income (13,403) - - (13,403) (2,577) - (2,577) - - - (15,980) 407,486 391,506 2,485 393,989
Adjustments between accounting basis and funding basis under regulations 18 (31,385) - - (31,385) 6,367 - 6,367 1,283 1,606 475 (21,654) 21,654 - - -
Net Increase/(Decrease) before Transfers to Earmarked Reserves (44,788) - - (44,788) 3,789 - 3,789 1,283 1,606 475 (37,634) 429,140 391,506 2,485 393,989
Transfers to/(from) Earmarked Reserves 19 49,196 (47,272) (1,924) - (4) 4 - - - - - - - - -
Increase/(Decrease) in 2021/22 4,408 (47,272) (1,924) (44,788) 3,785 4 3,789 1,283 1,606 475 (37,634) 429,140 391,506 2,485 393,989
Balance at 31 March 2022 Carried Forward 40,074 173,435 5,604 219,113 101,576 655 102,231 79,775 12,902 3,555 417,575 1,669,030 2,086,605 (8,592) 2,078,010
Note
General Fund Balance Earmarked Reserves School Reserves Sub Total - General Fund Housing Revenue Account Housing Revenue Account Earmarked R Sub Total - Housing Revenue Account Capital Receipts Major Repairs Reserve Capital Grants Unapplied Total Usable Reserves Unusable Reserves Total Council Reserves Council Share of Subsidiaries Total Group Reserves
----- End of picture text -----

150

Group Consolidated Balance Sheet as at 31 March 2022

Consolidated Balance Sheet as at 31 March 2022
31-Mar-21
Note		 31-Mar-22
£'000 £'000
2,827,555
Property, Plant & Equipment		 3,055,966
207,406
Heritage Assets		 215,256
20,573
Intangible Assets		 14,991
275,903
Investment Property		 356,640
38,678
Long Term Investments
G10		 48,848
38,666
Long Term Debtors		 34,627
3,408,781
Long Term Assets		 3,726,328
64,983
Short Term Investments
G10		 103,948
12,431
Inventories		 26,998
148,071
Short Term Debtors
G3		 171,569
148,308
Cash and Cash Equivalents		 142,542
806
Assets held for sale		 806
374,599
Current assets		 445,863
(20,702)
Cash and Cash Equivalents		 (19,709)
(4,966)
Short Term Borrowing
G10		 (9,952)
(227,860)
Short Term Creditors
G4		 (308,917)
(5,760)
Provisions		 (2,849)
(44,448)
Capital grants received in advance		 (71,814)
(303,736)
Current liabilities		 (413,241)
(450,488)
Long Term Borrowing
G10		 (445,488)
(26,277)
Provisions		 (26,005)
(1,285,527)
Other Long Term Liabilities		 (1,178,141)
(33,331)
Capital Grants Receipts in Advance		 (31,306)
(1,795,623)
Long-term liabilities		 (1,680,940)
1,684,021
Net assets		 2,078,010
(451,769)
Usable Reserves		 (422,437)
(1,232,252)
Unusable Reserves
G5		 (1,655,573)
(1,684,021)
Total reserves		 (2,078,010)

151

Group Cash Flow Statement for the year ended 31 March 2022

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.

----- Start of picture text -----
2020/21 2021/22
£'000 Note £'000
(8,057) Net surplus on the provision of services (11,613)
Adjustment to net surplus on the provision of services for non-cash G6
143,977 165,347
movements
Adjust for items included in the net surplus or deficit on the G6
(83,538) (73,289)
provision of services that are investing and financing activities
52,382 Net cash flows from Operating Activities 80,445
20,396 Investing Activities G7 (78,132)
(25,099) Financing Activities G8 (7,088)
47,679 Net increase (decrease) in Cash and Cash Equivalents (4,774)
79,927 Cash and Cash Equivalents at the beginning of the reporting period 127,606
127,606 Cash and Cash Equivalents at the end of the reporting period 122,832
----- End of picture text -----

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:

152

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

----- Start of picture text -----
Bristol Holding Ltd Direct Subsidiary Consolidated
Bristol Waste Company Ltd Indirect Subsidiary Consolidated
BE2020 Limited (formally Bristol Energy Indirect Subsidiary In liquidation therefore
Limited) no requirement to
produce accounts. Not
consolidated.
Bristol Energy and Technology Services Indirect Subsidiary Not Material – Dormant
(Supply) Ltd 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
----- End of picture text -----

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 2022 the Council has invested £37.153m in Bristol Holding Limited. This was made up of £36.550m ordinary shares and £603m 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.

153

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.

In September 2021, the Council approved Goram Homes joint venture plans for 268 new homes at Romney House, Lockleaze. The site was transferred during 2021/22 to Goram Homes joint venture in return for £12.9m of repayable loan notes. 147 homes (55%) will be affordable and managed by Bristol City Council.

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 39).

Events after the Balance Sheet Date

The Statement of Accounts was authorised for issue by the Director of Finance on 26 July 2022. Events taking place after this date are not reflected in the financial statements or notes. Where events taking place before this date provided information about conditions existing at 26 July 2022, the figures in the financial statements and notes have been adjusted in all material respects to reflect the impact of this information. There are no non-adjusting events after the Balance Sheet date.

Group financial position

The closing net deficit balance of the group is £40.3m 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 £2.6m and gross expenditure of £3.9m 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.

154

G2 Financing and Investment Income and Expenditure

Interest payable and similar charges
Loss Allowance (Financial Guarantee Contracts)
Changes in the Fair Values 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
rrent Debtors
Current debtors
Trade Receivables
Prepayments
VAT
Other
Total*		 31 March
2022
£'000
27,402
-
325
23,171
(7,058)
(11,696)
(82,849)
(50,705)
31 March
2022
£'000
34,443
12,340
11,462
113,324
171,569		 31 March
2021
£'000
36,671
(5,379)
(2,301)
22,523
(9,282)
(10,569)
(22,566)
9,097
31 March
2021
£'000
24,836
4,677
9,632
108,926
148,071

G3 Current Debtors

G4 Creditors

Current liabilities
Trade Payables
Other Payables
Receipts In Advance
Total		 31 March
2022
£'000
21,106
183,694
104,117
308,917		 31 March
2021
£'000
10,690
147,659
69,511
227,860

G5 Unusable Reserves

Revaluation Reserve
Capital Adjustment Account
Financial Instruments Adjustment Account
Deferred Capital Receipt Reserve
Pensions Reserve
Collection Fund Adjustment Account
Accumulated Absences Account
Dedicated Schools Grant Adjustment Account		 31 March
2022
£'000
(1,199,657)
(1,571,526)
6,721
(12,851)
1,037,796
49,186
10,108
24,650
(1,655,573)		 31 March
2021
£'000
(987,171)
(1,505,872)
6,898
(1,448)
1,144,014
87,935
13,388
10,004
(1,232,252)

155

G6 Cash Flow Statement

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

The cash flows for operating activities include the following significant items:
Interest received
Interest paid
Dividends received		 2021/22
£'000
4,901
(33,870)
2,221		 2020/21
£'000
634
(34,003)
1,954

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
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		 2021/22
£'000
110,243
5,945
1,317
74,700
(16,245)
(14,567)
61,469
29,293
(86,808)
165,347		 2020/21
£'000
120,197
4,525
2,131
12,827
(12.774)
(2,455)
21,109
25,545
(27,128)
143,977

The surplus or deficit on the provision of services has been adjusted for the following items that are investing and financing activities:


nvesting and financing activities:
Any other items for which the cash effects are investing or financing cash
flows
Proceeds from the sale of Property Plant and Equipment, Investment
Property and Intangible Assets		 2021/22
£'000
(43,957)
(29,332)
(73,289)		 2020/21
£'000
(41,934)
(41,604)
(83,538)

156

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
Other receipts from investing activities
Net cash flows from investing activities		 2021/22
£'000
(132,899)
(183,000)
(1,710)
15,635
144,000
79,842
(78,132)		 2020/21
£'000
(107,018)
(294,800)
(4,410)
40,291
318,600
67,733
20,396

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
Net cash flows from financing activities		 2021/22
£'000
-
(9,017)
(1,570)
3,500
(7,088)		 2020/21
£'000
224
(8,809)
(11,586)
(4,928)
(25,099)

157

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.

2021/22 Salary, Fees
and
Allowances		 Compensation
for Loss of
Office
Pension
Contribution		 Total
Post Title Post Term Post Holder Notes £ £ £ £
Bristol Waste Company
Managing Director Apr’ 21 – Mar’ 22 126,586 - 10,815 137,401
Finance Director Apr’ 21 – Mar’ 22 114,827 - 13,563 128,390
Goram Homes
Managing Director Apr’ 21 – Mar’ 22 114,587 - 10,428 125,015
Finance Director Apr’ 21 – Mar’ 22 56,231 - 5,623 61,854
Bristol Holding Company
Executive Chair (CEO) Apr’ 21 – Oct’ 21 43,334 - 9,063 52,397
Group Finance Director & Executive Lead Apr’ 21 – Mar’ 22 130,900 - - 130,900
Bristol Heat Networks
Consulting Officer Apr’ 21 – Mar’ 22 J Bungey 121,296 - - 121,296

Note 1 - 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.

158

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
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
Bristol Holding Company
Executive Chair (CEO) Apr’ 20 – Mar’ 21 88,365 18,848 107,213

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

159

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
31 March 31 March 31 March 31 March
2022 2021 2022 2021
£'000 £'000 £'000 £'000
Financial Liabilities at Amortised
cost
Borrowing (445,488) (450,488) (9,952) (4,966)
Service Concessions (107,884) (114,670) (6,786) (6,803)
Creditors (6,680) (2,738) (279,712) (209,684)
Financial Liabilities at Fair Value
through profit and loss
Financial Derivative - - (20,702)
Total Financial Liabilities (560,052) (567,896) (296,450) (242,155)

Financial Assets at amortised cost
Investments - - 118,596 111,777
Debtors 8,394 800 107,685 96,008
Financial Assets at Fair Value
through Other Comprehensive
Income
Investment 350 350 - -
Financial Assets at Fair Value
through profit and loss
Investments 38,473 38,228 108,184 101,476
Total Financial Assets 47,217 39,378 334,465 309,261

Movements

The net increase of financial assets and liabilities (circa £13m) was through a combination of increases in working capital and reserves resulting in additional cash resources to invest in lieu of using these resources.

160

Borrowing

31 March
31 March
2022
2021
Current borrowing £'000
£'000
Deposit loans (repayable at notice - up to 7 days) 285
102
8,251
3,251
1,137
1,334
259
259
21
21
Other short-term borrowing (repayable within 1 year):
- Public Works Loan Board
- Banks and other monetary sector
- Energy Improvement Loans
- Local Bonds and Stocks
Total 9,952
4,966
31 March
31 March
2022
2021
Non-current borrowing £'000
£'000
Public Works Loan Board 325,439
330,439
70,000
70,000
50,000
50,000
49
49
Lender Option Borrower Option (Lobo)
Market Debt
Stocks
Total 445,488
450,488

161

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 2021/22 Financial Instruments Gains and Losses 2021/22 Financial Instruments Gains and Losses 2021/22
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 (33,695) - - - (33,695)
Total expense in Surplus or
Deficit on the Provision of
Services (33,695) - - - (33,695)
Interest Income 4,595 78 4,673
Fair Value Movement (325) (325)
Dividend Income 2,220 2,220
Total income in Surplus or
Deficit on the Provision of
Services (33,695) 4,595 - 1,973 (27,127)
Deficit arising on revaluation
of financial assets in Other
Comprehensive Income and
Expenditure - - - - -
Net gain/(loss) for the year (33,695) 4,595 - 1,973 (27,127)

162

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)

163

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 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 2022 using: March 2021 using:
Quoted Observable Unobservable Quoted 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 108,184 - - 101,476 - -
Bristol Port Company (Non-
traded Unquoted Equity
Investment) - - 28,000 - - 29,000
Other Unquoted private
companies - - 192 - - 128
Pooled property fund - - 10,281 - - 9,100
Fair Value through Other
Comprehensive Income
Other unquoted private
companies - - 350 - - 350
Total Non-traded securities: 108,184 - 38,822 101,476 - 38,578
Investment properties - 356,640 - - 275,903 -
Surplus properties - 29,462 - - 43,706 -
Total recurring fair value
measurements 108,184 386,102 38,822 101,476 319,609 38,578
Non-recurring fair value
measurements
Assets held for sale - 806 - 806 -
Total non-recurring fair value
measurements - 806 - - 806 -

164

----- Start of picture text -----
Valuation
techniques and
Inputs Observable
and
Description of Valuation Unobservable Key sensitivities affecting the
asset hierarchy Basis of Valuation inputs valuations provided
Money Market Level 1 Unadjusted quoted Latest quoted
Funds prices in active markets prices
for identical shares
Surplus assets Level 2 All surplus assets have Evidence of Not all assets are physically
been valued by RICS title, floor area, inspected every year. Latent
qualified valuers to Fair siting and site defects, repair and maintenance
Value less costs to sell, conditions, backlogs, general changes in the
reflecting highest and type/age and market and other impairments
best use. current use of could have a significant impact on
the property the values provided.
have been taken
into account
together with
general market
conditions and
advertised value
of similar
properties
currently up for
sale.
Investment Level 2 All investment All valued on an Changes to market conditions,
Properties [ (further ] properties have been investment lease terms, covenant strength and
detailed information in note 22) valued by the Group’s income basis, occupancy levels could all affect
in-house valuers (all using existing the asset valuations provided.
RICS qualified) on an lease terms and
investment income current yields
basis which we are
satisfied represents
highest and best use
overall.
Bristol Port Level 3 This investment has Calculations Changes to market conditions
Company been valued by an have been based (local and global), and the
external specialist an income comparable data used within the
valuation company for approach to valuations. If the growth of
financial year ending valuation, by future returns is greater or lesser
31 [st] March 2020 and applying a by 0.5% than the 2% forecast, the
refreshed by Council multiple derived fair value will be circa £1.7m
officers for this from the market higher or lower respectively.
financial year on the to a
same basis. maintainable
profit figure.
----- End of picture text -----

165

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 (£542k) 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 £89k
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.

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

31 March
31 March
2022
2021
Description Non-traded
securities
Non-traded
securities
£000
£000
Opening balance 38,578
36,450

(361)
2,228
-
-
(361)
2,228
831
100
(225)
(200)
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 38,822
38,578

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 (-£1m) and Homelessness Property fund (+£675k).

166

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 2022 31 March 2021
Carrying
amount
Fair value		 Carrying
amount
Fair value
£000
£000		 £000
£000
Cash & Cash Equivalents -
-		 20,702
20,702
333,690
501.500
70,865
108,400
50,469
74,700
212,328
212,328
121,473
192,673
524
524
Public Works Loan Board (PWLB) 333,690
459,400
Lender Option Borrower Option 70,667
98,100
Market Debt 50,470
68,100
Current Creditors 286,299
286,299
Service Concessions 114,670
166,960
Other 707
707
Total Liabilities 856,503
1,079,566		 810,051
1,110,827

The Group has used a transfer value for the fair value of financial liabilities. We have also calculated an exit price fair value of £1.238bn 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 2022) arising from a commitment to pay interest to lenders above current market rates.

167

Financial Assets 31 March 2022 31 March 2021
Carrying
amount
Fair value		 Carrying
amount
Fair value
£000
£000		 £000
£000
Current investments 103,948
103,948		 64,983
64,983
46,794
46,794
96,008
96,008
800
800
Cash and Cash Equivalents 14,648
14,648
Current Debtors 107,685
107,685
Non-current debtors 8,394
8,394
Total Financial Assets 234,675
234,675		 208,585
208,585

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.

168

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 2022 using: March 2021 using:

Descriptions
Quoted
prices in
active
markets
Observable
inputs
Level 1
Level 2
£000
£000		 Unobservable
inputs
Quoted
prices in
active
markets
Observable
inputs
Unobservabl
e inputs
Level 3
Level 1
Level 2
Level 3
£000
£000
£000
£000
Recurring fair value
measurements using:
Financial Liabilities held
at Amortised Cost
Cash & Cash Equivalent
-		 20,702
333,690
70,865
50,469
123,621
524

Public Works Loan Board
(PWLB)
333,690
Lender Option Borrower
Options
70,667
Market debt
50,470
Service Concessions
116,985
Other
707
Total
572,519		 579,169
64,983
46,794
-
800
Financial Assets held at
amortised cost
Current Investments
103,948
Cash and Cash Equivalents
14,648
Non-current Investments
-
Non-current Debtors
8,394
Total
126,990		 112,577

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.

169

G11 Nature and Extent of Risks Arising from Financial Instruments

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

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 15 February 2021 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:

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 2022 that this was likely to crystallise.

170

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-22
31-Mar-22
31-Mar-22		 31-Mar-22
31-Mar-21
Current Investments:
Local Authorities 53,537
0.00%
0.00%		 -
-
3
3
30
18
AA rated counterparties 15,076
0.02%
0.02%
A rated counterparties 49,983
0.05%
0.05%
Sub-total 118,596 33
21
Trade debtors 107,685 -
-
-
-
33
21
Non-current debtors 8,394
Total Financial assets 234,675

The estimated maximum exposure for credit loss for Treasury investments is £33k and a general allowance has been set aside for this.

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:

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.

171

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.

Debtor analysis Gross
debtor at		 Allowance for
credit losses		 Net debtor
at		 Net
debtor at
at
31-Mar-22 31-Mar-22 31-Mar-22 31-Mar-21
£'000 £'000 £'000 £'000
Local taxpayers 59,488 (37,635) 21,853 15,566
Housing rents 11,935 (8,934) 3,001 3,032
Other - sundry debtors 168,774 (35,047) 133,727 117,237
Total Other Entities and
Individuals		 240,197 (81,616) 158,581 135,835
Central Government bodies 10,970 - 10,970 10,561
Other local authorities 1,509 - 1,509 1,571
NHS bodies 509 - 509 160
Total debtors 253,185 (81,616) 171,569 148,127
Balance sheet debtors 253,185 (81,616) 171,569 148,127
Current debtors not qualifying as a
financial instrument under IFRS
(101,520)		 37,635 (63,885) (52,119)
Current debtors qualifying as a
financial instrument under 151,665 (43,981) 107,684 96,008
IFRS

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
2022
2021
£'000
£'000
Less than three months 35,342
30,047
2,240
1,759
17,837
15,276
50,514
46,848
Three to four months
Four months to one year
More than oneyear
Total 105,932
93,930

172

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
2022
2021
£'000
£'000
Less than 1 year 334,465
288,559
314
339
301
324
46,602
38,715
Between 1 and 2 years
Between 2 and 3 years
More than 3years
Total 381,682
327,937

The maturity analysis of financial liabilities is as follows:

31 March
2022
31 March
2021
£'000
£'000
Less than 1 year 296,450
219,338
1 - 2 years 14,364
11,786
2 - 5 years 57,659
42,179
5 - 10 years 80,539
88,177
10+years 407,490
425,754
Total 856,502
787,234

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:

173

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 2022
%
£'000		 Actual 31
March
2021
%
£'000
Less than 1 year
-
30		 9,952
2%		 4,966
1%
5,000
1%
20,000
4%
34,000
7%
391,488
87%
455,454
100%
Between 1 and 2 years
-
40		 -
-%
Between 2 and 5 years
-
40		 32,000
7%
Between 5 and 10 years
-
50		 22,000
5%
More Than 10 Years
25
100		 391,488
86%
Total 455,441
100%

Included within the maturity profile are £70m of LOBOS with maturities averaging 39 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 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.

174

At 31 March 2022, if interest rates had been 1% higher with all other variables held constant, the financial effect would be:

31 March
2022
£'000
Increase in interest receivable on variable rate investments 2,429
Impact on Surplus or Deficit on the Provision of Services 2,429
Share of overall impact debited to the HRA 1,740
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)		 236,700

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

Foreign exchange risk

During 2021/22 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.

175

----- Start of picture text -----
Draft
Statement
of Accounts
Bristol City Council,
for the year ended
31 March 2022
(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
2021/22 (the Code) published by
the Chartered Institute of Public
Finance and Accountancy (CIPFA).
----- End of picture text -----

1

Page 1

Contents

1. Glossary of Terms

2. Written Statements and Director of Finance Narrative Report

• Councillor Preface 6
• Director of Finance Narrative Report 8
• Statement of Responsibilities 26
• Auditor's Report - (to follow on completion of the audit) 27
• Annual Governance Statement (presented to Audit Committee June 27) 28
Fin ancial Statements
• Comprehensive Income and Expenditure Statement 44
• Movement in Reserves Statement 45
• Balance Sheet 46
• Cash Flow Statement 47

3. Core Financial Statements

4. Notes To The Accounts

4. Notes To The Accounts
Notes supporting the Core Statements
Note 1 - Accounting Policies 48
Note 2 - Accounting Standards that have been issued but have not yet been adopted 65
Note 3 - Critical Judgements in applying Accounting Policies 66
Note 4 - Assumptions and Estimation Uncertainty 68
Note 5 - Events after the Balance Sheet Date 69
Note 6 - Other Items of Expenditure and Income 69
Notes supporting the Comprehensive Income and Expenditure Statement
Note 7 - Expenditure & Funding Analysis 70
Note 8 - Expenditure & Income Analysed by Nature 74
Note 9 - Other Operating Expenditure 75
Note 10 - Financing & Investment Income and Expenditure 75
Note 11 - Taxation and Non-Specific Grant Income 75
Note 12 - Pooled Budgets 76
Note 13 - Members' Allowances 77
Note 14 - Officers Remuneration and Exit Packages 78
Note 15 - External Audit Costs 81
Note 16 - Dedicated Schools Grant 82
Note 17 - Grant Income 83
Notes supporting the Movement in Reserves Statement
Note 18 - Adjustments between Accounting Basis and Funding Basis under Regulations 86
Note 19 - Usable Reserves 88
Notes supporting the Balance Sheet
Note 20 - Property, Plant and Equipment 90
Note 21 - Heritage Assets 94
Note 22 - Investment Properties 95
Note 23 - Intangible Assets 96
Note 24 - Financial Instruments 97
Note 25 - Nature and Extent of Risks from Financial Instruments 106
Note 26 - Capital Expenditure and Financing 112
Note 27 - Leases 113
Note 28 - Service Concessions 113
Note 29 - Debtors 116
Note 30 - Inventories 117
Note 31 - Cash and Cash Equivalents 117
Note 32 - Creditors 117
Note 33 - Provisions 118
Note 34 - Unusable Reserves 119
Note 35 - Pensions 124

Notes supporting the Cash Flow Statemen t

Note 36 - Cash Flow Statement - Operating Activities 131
Note 37 - Cash Flow Statement - Investing Activities 133
Note 38 - Cash Flow Statement - Financing Activities 133

Other Notes

Note 39 Related Parties 133
Note 40 Transfer of Functions 135
Note 41 Contingent Liabilities 136

5. Supplementary Accounting Statements

• Housing Revenue Account 137
• Collection Fund 143

6. Group Accounts

148

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 2021/22.

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:

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.

3

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).

INVENTORIES – Goods that are acquired in advance of their use in providing services of their resale.

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.

4

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.

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 2022

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Introduction
An introduction to the 2021/22 statement of accounts
by the deputy mayor and portfolio holder for finance,
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The 2021/22 financial year provided several challenges and opportunities unlike any year before it. Although the year began with the city still firmly in the grip of the global pandemic, over the course of 12 months, the collective effort of residents, agencies, businesses and volunteers across the city ensured that Bristol was firmly on a road of recovery and looking towards a brighter future.

Whilst the year presented several financial challenges associated with the pandemic and the emerging cost of living crisis, we have made significant progress on a number of our key priorities. Over £1bn was spent on local services and projects aimed at meeting the ambitions of our Corporate Strategy and the goals of the One City Plan. We have also laid foundations for major investments in social housing, sustainable heat networks and local transport networks – vital infrastructure that will deliver economic and social value for the city for generations to come.

This past year’s highlights include:

6

Statement of Accounts Bristol City Council - For the Year Ended 31 March 2022

In a year unlike any we have experienced before, the dedication, energy and commitment of colleagues from across the council and our city partners has helped see us through the challenges we have faced. We remain determined to continue to build on the progress we have made this year to deliver the infrastructure and support communities need to grow and thrive.

Our financial performance remains strong, and we welcome the opportunity to reflect on the year gone by and look ahead with renewed energy and purpose. As we continue to respond to the lasting impacts of the pandemic, Brexit and the cost of living crisis we remain focussed on ensuring that we deliver value for money for tax-payers and ensure our financial position is sufficiently robust to meet the challenges we face.

Councillor Craig Cheney

Deputy Mayor – City Economy Finance and Performance

7

J4 Narrative Report li

Statement of Accounts Bristol City Council - For the Year Ended 31 March 2022

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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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Welcome to our Narrative Report which aims to demonstrate a clear link between our resources, our strategy and our performance in a transparent and accessible way. It shows how we’ve helped deliver intended outcomes and created value throughout 2021/22, and how we are planning ahead to respond as effectively as possible to future challenges.

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 a growing global reputation and has been recognised for its efforts across many different sectors. The city is a UNESCO City of Film as well an UNESCO Learning City. Bristol has been awarded a prestigious A List rating from not-for-profit charity, CDP, in recognition of our efforts to tackle the climate crisis, and our One City Approach has been held up by the European Commission as a world class initiative to tackle urban challenges.

Despite Bristol’s ongoing recovery from the COVID-19 pandemic, a number of challenges continue to impact the city and its population:

9

Statement of Accounts Bristol City Council - For the Year Ended 31 March 2022

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Our Services 2O21/22
The following core services are provided by the council:
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Core Services:

Adults, Children, Education and Public Health:

Growth & Regeneration:

Resources:

Provides internal support services including:

Ring-fenced Accounts:

Housing Revenue Account:

Dedicated Schools Grant:

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.

Our Leadership and Workforce:

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

10

Statement of Accounts Bristol City Council - For the Year Ended 31 March 2022

Our Services 2O21/22

11

Statement of Accounts Bristol City Council - For the Year Ended 31 March 2022

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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: Communities & living 74% of residents 71% felt that are satisfied with their people from different local area as a place to backgrounds get on well live. (2021 Bristol together in their local area. Quality of Life survey) ( 80% 2020/21) 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: Key facts:
1,589
Housing Adult Social Care
new homes built in
Bristol in 2020/21
( 1,350 2019/20)
Nearly 3,500
student units have
been completed 3,995
between 2006 adults received a community-based
Over
£ affordable homes built in 3,800 and 2021 social care support during 2021/22
homes Bristol since 2006
543
Prevented
1,512
households from
becoming homeless a further
1,858
during 2020/21
care home places were funded
26 people
people housed in
emergency COVID-19
accommodation had
subsequently been
resettled as at
31 Dec 2020.
night in Bristol compared with 50 in November 2020.
(National annual count - January 2022)
sleeping rough in a single
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12

Statement of Accounts Bristol City Council - For the Year Ended 31 March 2022

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Key facts:
Culture & Creativity
32% participate
in cultural activities at
least once a month
( 33% 2020/21)
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Key facts:
Education
81.3% [rated as Good or Better for overall ]
effectiveness by OFSTED (March 2022)
( 78.9% March 2021)
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Key facts:
Transport and sustainability
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32 bus journeys
per head of population in 2020/21
(from 87 in 2019/20)
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Number of people
who ride a bike
at least per head of population in 2020/21
weekly 27% (from 87 in 2019/20)
( 28% 2020/21)
44% of all
household waste was
sent for reuse, recycling
83kg of waste per and composting in 2021/22
household was ( 45% 2020/21) CO2
landfilled in 2021/22
Citywide CO2 emissions
have decreased by
43%
compared with 122.5kg in 2020/21
(2005-2019)
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Key facts: Economy & employment

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263,000 working age 78.4%
residents were in Average earnings
employment in 80.7%
December 2021.
£32,885 £31,866
Bristol UK
( £31,900 in 2020)
B
S
T R
I T
EA IT
R
A
O
GR IN
B L
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13

Statement of Accounts Bristol City Council - For the Year Ended 31 March 2022

----- 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 2021/22.
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Revenue Financial Summary 2021/22

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

The net General Fund outturn expenditure is £423.4m which compared to the original budget agreed by Council in February 2021 of £424.4m gives an in-year underspend of £1.0m after utilisation of Covid funding and other drawdowns from earmarked reserves. This was largely driven by the improved income in Adult Social Care from the CCG and NHS.

The impact of the Covid-19 pandemic and resulting lockdowns has continued to have a significant impact on the financial position of the Council in 2021/22. Throughout the year the financial impact on the Council caused by Covid-19 resulting in additional expenditure being incurred, disruption to the delivery of planned efficiencies and reduced income. There was a wide variety of additional funding that was provided by Central Government to support Councils in addressing the additional need relating to Covid-19 both in 2020/21 (of which various amounts were able to be carried forward and utilised in 2021/22) and amounts allocated in 2021/22.

The Council’s assessed pressure from lost income, undeliverable Covid-19 related savings and from additional service expenditure associated to Covid-19 equates to £56.6m

for 2021/22 (this compares to £74.7m in 2020/21). This additional expenditure is fully met by the range of Covid-19 grants received during the year, totalling £35.7m and the utilisation of amounts carried forward from 2020/21. This leaves a further £10.1m to be carried forward to meet further pressures.

This improved outturn position means that our finances are better placed to meet the ongoing challenges over the medium term, ensures the continued delivery of organisational priorities, and provides for increasing financial resilience in 2022/23 and beyond. The retention of an appropriate level of general reserves is essential in order to mitigate financial risk (including future funding uncertainties and expenditure pressures caused by high inflation and changes in social care legislation) and is a key indicator of sound financial governance.

The gross cost of services during the year was £1.285bn (£1.243bn 2020/21). 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 £504.1 m (£470.1m in 2020/21).

A reconciliation between the £423.4m outturn against the £504.1m net cost of service is shown in the following table.

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Statement of Accounts Bristol City Council - For the Year Ended 31 March 2022

Financial erformance p

EFA table

----- Start of picture text -----
Outturn Adjustments to Outturn Net
agreed cost of
by Cabinet (Note 1) (Note 2) (Note 3) (Note 4) service
£’000 £’000 £’000 £’000 £’000 £’000
People 242,726 (19,578) 13,331 7,648 244,127
Resources 69,827 (10) 11,215 8,037 89,068
Growth and Regeneration 67,573 9,186 62,658 9,171 148,588
Housing Revenue Account (3,785) (9,655) 1,710 4,664 (7,066)
(Note 5)
Dedicated Schools Grant 14,647 1,109 0 7,778 23,534
Corporate Funding and 32,395 (18,063) 16,348 (5,153) (19,724) 5,803
Expenditure
423,383 (37,012) 105,262 32,145 (19,724) 504,054
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Statement of Accounts Bristol City Council - For the Year Ended 31 March 2022

Financial erformance p

Sources of Funding

During 2021/22 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 £181.9m of business rates of which £156.3m (net of reliefs) is retained in year by the Council. This is also net of the tariff of £84.5m which the Council returns to central government and £12.6m transferred to the Avon Fire Authority and the West of England Combined Authority.

The Council also collects £283.3m of Council Tax (on behalf of Avon and Somerset Police and Crime Commissioner, Avon Fire Authority, and itself), of which £236.2m is retained in year by the Council.

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 £29.7m were specifically related to business rates reliefs offered during Covid.

Reserves

Useable reserves have reduced overall by £37.6m . This is largely because of the utilisation of Covid related funding received in 2020/21 but required for use in 2021/22. This includes the use of £83.1m of grant funding 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. Similarly, £29.7m of grant funding has been carried forward to offset collection fund losses in 2022/23. The accounting arrangements for business rates and council tax mean that the deficits on the Collection Fund in 2021/22 are charged to the General Fund in future years. Further Covid funding of £10m , received in 2021/22 has also been carried forward to manage the pandemic over the medium term and meet future commitments and ongoing loss of income..

Other significant contributions to reserves during 2021/22 include:

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 2022

Financial erformance p

Dedicated Schools Grant

At the end of 2021/22 the deficit on the Dedicated Schools Grant (DSG) adjustment account has increased to over £24.6m, 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 and Early Years’ SEN budget where an in-year overspend of £0.499m was recorded in Early Years’ SEN panel expenditure which is reflected in the overall £0.149m reduction in the end of year cumulative position of the Early Years’ block to £0.472m underspend, from £0.621m brought forward balance at the start of the year.

The main areas of need, driving the overspend in the High Needs Block continue to be topups, which have seen an increase of 10% in number of children and young people with an Educational Health Care (EHC) plan at January 2022. Number of live cases increased by 25.6% (461 cases at the end of 2021 compared to 367 cases at the end of 2020) and an increased proportion of children with higher banding due to complexity of needs. Nationally the pressures in this area have been recognised by government and an increase in funding (of £9.848m) has been announced for 2022/23.

The additional funding allocation for 2022/23 recognises the pressure nationally but is still not sufficient to meet any increase in need or to tackle the historic deficit. The high level strategy for dealing with the funding pressures in the High Needs Block, continues to be:

High Needs block overall spend in 2021/22 was £83.78m (excluding £1.472m on Transformation Project). The budget for 2022/23 has been set, with the High Needs Block having a total budget of £78.214m which is £5.566m less than 2021/22 total expenditure.

The DSG is a ring-fenced budget and regulations state that it cannot be subsidised by the General Fund, so must balance in the longer term. The transfer of 0.5% (approximately £1.5m) from the Schools Block to fund the Education Transformation Programme for another year to enable further work on DSG improvements plans in order to achieve a balanced in-year position and deliver DSG within a sustainable envelope in the long term.

In addition to the DSG deficit 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 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 needing support in 2022/23.

Councils with an overall deficit on their DSG account at the end of a financial year must be able to present a plan to the Department for Education 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 implemented a template with a focus on High Needs, to help local authorities manage their DSG and Bristol is using this template.

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.

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Statement of Accounts Bristol City Council - For the Year Ended 31 March 2022

Financial erformance p

Schools Reserves – Individual Schools Balances at the end of March 2022, overall school’s revenue balances have decreased by £2.103m from £6.361m to £4.258m.

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.

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 2021/22 was originally set at £321.4m. Capital spending (including revenue expenditure allowed to be funded by capital) during the year totalled £167.3m. An analysis of capital investment by directorate and sources of capital funding are shown in the table below. The Capital Programme was financed from a combination of borrowing (£42.6m) and from grants, contributions, and reserves (£124.7m).

----- Start of picture text -----
Approved
Budget Revised Outturn Variance
Council Budget Outturn Variance from
£m Directorate £m £m £m budget %
31.4 People 19.7 20.3 0.60 (3)
8.3 Resources 5.9 5.5 (0.40) 7
159.1 Growth and Regeneration 124.2 102.1 (22.1) 18
12.0 Corporate 1.3 0 (1.3) -
110.6 Housing Revenue Account 52.6 39.4 (13.2) 25
321.4 Total 203.7 167.3 (36.4) 18
Financed by:
76.9 Prudential Borrowing 45.2
106.0 Capital Grants 72.9
26.8 Capital Receipts 7.2
110.6 HRA 39.4
1.1 Revenue Contributions 2.6
321.4 Total 167.3
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Statement of Accounts Bristol City Council - For the Year Ended 31 March 2022

Financial erformance p

The major areas of investment have included:

The Council holds £3.31bn of fixed assets, comprising £2.759bn of operational assets for delivering services, £207m of Heritage Assets for cultural benefit and £344m of nonoperational assets.

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Statement of Accounts Bristol City Council - For the Year Ended 31 March 2022

Financial erformance p

Service Investments

The Council has investments in subsidiary companies and other service investments. These investments are primarily for outcomes and benefits delivered rather than for yield.

In June 2021, Bristol Energy (BE2020) entered into a members voluntary liquidation process. FRP were appointed liquidators and the BE2020 Board stepped down. The liquidation process remained on-going during 2021/22.

In September 2021 the Council approved Goram Homes joint venture plans for 268 new homes at Romney House, Lockleaze. The site was transferred during 2021/22 to Goram Homes joint venture in return for £12.9m of repayable loan notes. 147 homes (55%) will be affordable and managed by Bristol City Council.

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. These totaled £27.6m and were in line with business plans and investment reports approved by Cabinet.

Transactions with Council Owned Subsidiaries

Bristol Heat Networks

A loan facility of up to £12.7m is in place to Bristol Heat Networks related to the Heat Network Investment Project (HNIP), assets Old Market and Redcliffe Phase 2, with £0.3m drawn down during 2021/22.

Goram Homes

Two working capital loans have been agreed for Goram Homes, one of £3.3m for pipeline activities 1 of which £2m has been drawn down as of 31 March 2022 and further \ facility of £4m (pipeline 2) of which Goram has not drawn down yet. In addition, the

Council also holds £12.9m repayable loan notes representing its transfer of the Romney site in Lockleaze, Bristol to Goram Home’s Joint Venture for the development of that same site.

Bristol Waste

A loan facility is in place to Bristol Waste for fleet vehicles replacement of £12.7m, of which £11.3m has been drawn down. £8.4m plus interest remains outstanding as at 31 March 2022). A further loan of £2.8m has been entered in to for Phase 2 of the Avonmouth site redevelopment.

BE 2020

The Council invested £36.5m in Bristol Energy Limited between the period 2015/16 when it was agreed to be established and 2019/20 financial years. In June 2020 the Council took the decision to progress the accelerated sale of the Council’s interests in Bristol Energy, which included its commercial and residential customer books. During 2020/21 this investment was written down to zero in the Council’s accounts.

Following the sale of Bristol Energy in 2020 a process began of entering the successor company, BE 2020 Limited into a Members voluntary liquidation. The Council granted a Parent Company Guarantee (PCG) (£3.9m) and an overarching indemnity of up to £7.3m to cover all liabilities which may fall due as a consequence of the sale and orderly winding up of BE 2020 as at 31 March 2022, a total of £5.47m (net of income received from BE 2020) had been drawn down against this indemnity of which £3.75m was attributed to 2021/22.

The winding-up process continues which may result in positive or adverse movements and should the totality of the indemnity be called upon the total loss associated with BE 2020 would be £43.8m (the ordinary and preference shares £36.5m plus £7.3m indemnity).

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Statement of Accounts Bristol City Council - For the Year Ended 31 March 2022

Financial erformance p

The City Leap Partnership and Bristol Heat Networks Ltd (BHNL)

In April 2022, Cabinet noted the appointment of Ameresco Limited, with Vattenfall Heat UK Limited as an essential Sub Contractor, as the City Leap Preferred Bidder; and approved the principle of the establishment of City Leap Energy Partnership Limited as a 50/50 joint venture between the Council and Ameresco Limited.

The arrangement is intended to be for a 20year period with the aim of delivering up to £1bn of inward investments in low carbon energy to support the aim of Bristol becoming a carbon neutral city by 2030. The council will grant access to its estate to deliver low carbon energy infrastructure and facilitate delivery in the wider city, including with existing community energy groups and networks. The Partner will contribute capital funding, capacity and expertise in the delivery of low carbon energy infrastructure projects.

The transition phase of City Leap has commenced, which include the proposed transfer of the heat network and its assets from the Council to Bristol Heat Networks Limited (BHNL), a wholly owned company of the Council and the subsequent sale of BHNL to the Strategic Partner.

Subject to approval the Heat Network Assets to be transferred comprise of HNIP (Old Market, Redcliffe Phase 2, Bedminster and Temple Networks) and Non HNIP funded assets (comprising completed Phase 1 Temple & Redcliffe Networks, including a small portfolio of HRA owned assets at Broughton House).

The precise value of the HNA to be transferred into BHNL is expected to be at the recorded book value less associated grant funding received by the Council, circa. £20.4m (30 June 2022). The assets are in part, still under construction, any additional costs incurred to the transfer date will be included in the transfer price to BHNL.

projected cash flows, and assuming a transaction date in Q4 2022, additional lending would amount to a minimum of £11.1m (£23.8m) allowing some headroom for unforeseen delays and/or SDLT liabilities crystalise & become due.

The above is a post balance sheet event and further details will be provided as the transactions conclude and the accounts are finalised.

Treasury Management

The 2021–2026 Treasury Strategy identified a medium term net borrowing requirement of £260m 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 (£237m at March 2022). 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 £213m at the end of the year. The average level of treasury funds available for investment purposes during the year was £242m. The return for the period was 0.13% compared to the recognised benchmark of -0.04% LIBID (7 day London Interbank Bid Rate average for period).

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 and complied with the ethical and equitable investment policy.

The current loan facility agreed by the Council is £12.7m. To date, only £300k has been utilised as a working capital facility. Based on the current

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Statement of Accounts Bristol City Council - For the Year Ended 31 March 2022

Pensions

Equity markets were strong in 2021/22 as the impact of COVID-19 restrictions on economy activity abated. In contrast bond markets fell initially due to central banks raising interest rates to dampen the inflation emerging as economic growth recovered. As the year closed, inflation increased sharply driven by oil, gas and commodity prices as a result of the conflict in Ukraine.

The combination of high inflation and lower growth will be a challenge to many pension schemes over the next 2-3 years and if persistent for longer, it could present 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 2022 is £1.026bn . 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 fell by £249m over the last year, this was mainly due to a rise in yields from corporate bonds due to a combination of higher interest rates and concerns of inflation, partially offset by a rise in benefit values which are indexed to inflation.

The current funding level at 31 March 2022 is an estimated 100% based on the 2019 funding plans.

Contingencies

The Council has set aside a provision of £25.2m within the collection fund for any business rates appeals against rateable values in future years. The magnitude of the provision reflects the ongoing fact that the Council, as a business rates retention pilot, has a significantly greater exposure to the risk of business rates appeals.

The Council saw a marked increase in successful appeals during 2021/22 so has maintained the provision at 2020/21 levels. There were approximately 267 appeals outstanding as at 31 March 2022.

Budget for 2022/23 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 March 2022 the Council agreed a balanced budget for 2022/23. This included a net revenue budget for 2022/23 of £431.1 m but also a ten-year capital programme totalling £1,906.1m 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.

Whilst the Council, like many others across the country, remains subject to financial challenges in its funding, it has prioritised the revenue resources available to fund key services such as social care, sought to protect the most vulnerable, and to invest in our city infrastructure during these uncertain times, to build confidence and to facilitate a sustainable future.

The on-going economic uncertainty has led to the government only providing a single year financial settlement for local authorities and retaining commitment to return to multiyear spending reviews when appropriate. This continues to hamper financial planning and financial sustainability.

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Statement of Accounts Bristol City Council - For the Year Ended 31 March 2022

Given these uncertainties 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 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 ongoing uncertainty in relation to the pandemic, and its impact on economic recovery, ongoing demand, and cost of social care for both Adults and Children and families, the delivery of Special Education Needs and Disability (SEND), homelessness, 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 budget position of the Council can be sustained within the overall level of resources available.

Key Risks

Risk management is the culture, process and structures that are directed towards effective management of potential opportunities and threats to the council achieving its priorities and objectives and a key element of the council’s governance framework. Risk Management is an integral part of good governance to which the Council is committed and provides the framework and processes that enables the Council to manage uncertainty in a systematic way.

Key non-financial risks identified in 2021/22 include delivery of the Council’s capital programme, provision of enough affordable homes to meet the City’s needs, safeguarding venerable children and delivering suitable planning measures to respond to emergencies as they occur.

All risks are monitored, and the Audit Committee receives updates on risks and their management actions on a quarterly basis. The last Corporate Risks Register went to Audit Committee on the 26 July 2022, details of which can be found on the Councils Internet page (Public Pack)Agenda Document for Audit Committee,

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’s 2020/21 index data. 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.

23

Statement of Accounts Bristol City Council - For the Year Ended 31 March 2022

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

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 and have been prepared in accordance with the proper accounting practices primarily comprising the Code of Practice on Local Authority Accounting and the International Financial Reporting Standards. The Statement of Accounts have been prepared on a ‘going concern’ basis.

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).

24

Statement of Accounts Bristol City Council - For the Year Ended 31 March 2022

Group Accounts

The Council operates through a variety of undertakings, through either majority shareholding (subsidiaries) or in partnership with other organisations.

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 of the Statement of Accounts fully incorporate the results of The Council with its subsidiary companies, Goram Homes Limited and Bristol Heat Networks 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 2021/22 and our system of internal control, which is a critical component of our overall governance arrangements.

Denise Murray Director of Finance (Section 151 Officer)

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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 2022.

Denise Murray

Denise Murray Director of Finance (Section 151 Officer) 26 July 2022

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Independent Auditorfs Report (To Follow) 27

ANNUAL GOVERNANCE STATEMENT 2021/22

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

28

1. Introduction

2. Conclusions and Statement of Commitment

29

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Signed:
Signed: Date: 27 July 2022
Date: 27 July 2022
Marvin Rees - Elected Mayor of Bristol Mike Jackson – Head of Paid Service
Signed:
Signed: Date: 28 July 2022
Date: 28 July 2022
Denise Murray – Chief Finance Officer (s151 Tim O’Gara – Monitoring Officer
Officer)
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3. Governance Framework

30

The Monitoring Officer ensures that all decisions made are legal and supports the audit and value and ethics committees in promoting high standards of conduct amongst members.

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

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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 (CIPFA/Solace,
2016)”
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 (2021/22)
A. Behaving with
integrity,
demonstrating
strong commitment
to ethical values and
respecting the rule
of law		 The Council'sConstitutionsets out the legal framework for decision making and
professional legal advice is taken to support decision making across all executive
and non-executive functions, including where appropriate external legal advice.
The Monitoring Officer has oversight of decisions through theDecision Pathway
and the legal service is consulted on the legal implications of all reports to ensure
compliance with all relevant laws and regulations. The Monitoring Officer has
confirmed that all decisions have been made in accordance with the relevant
policy framework.
The Council’s Corporate Strategy sets out thevalues and behavioursit expects
from its employees. Managers are required to review performance against the
values and behaviours as part of the individual performance management
framework. Assurances from line managers have confirmed a good level of
compliance with this.
Codes of conductare 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 where there are conflicts. Assurances from line managers
have confirmed a good level of compliance in terms of staff conduct. Minutes of
meetings record declarations of interests by Councillors.
The Council developed and implemented a comprehensiveMember Induction
Programmefollowing the May 2021 local elections. The Member Induction
Programme covered ethical standards, obligations under the Member Code of
Conduct as well as a range of other development modules, such as safeguarding,
health and safety and equalities. This Programme has achieved the highest level
of accreditation from South West Councils. The Monitoring Officer has confirmed
that there have been no reports or investigations in respect of Members conduct
in 2021/22.
Re-certification of ourEnvironmental Management systems (ISO 14001) was
achieved during 2021/22
Focus of future improvement: Consistent and effective management of
potential conflicts of interest.
B. Ensuring openness
and comprehensive
stakeholder
engagement		 OurCommunications Strategy 2019/2023sets 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.
The council has engaged comprehensively with partners during 2021/22,
including regular city partner meetings in relation toCovid-19. These include the
Local Engagement Board, the BNSSG Local Outbreak and Management group,
the Health Protection Advisory Committee, the Health and Wellbeing Board, and
Healthier Together Executive.

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Partnership working in One City Boards was refreshed, including reviews of
Terms of Reference and an open expressions of interest process for people to
apply to sit on the boards. Actions to formally establish a One City Governance
Board and to identify more opportunities for pro-active engagement with Scrutiny
on BCC-related elements of the system will continue in to 2022/23.
The council engaged widely with stakeholders in producing key strategic
documents, including the Economic Recovery and Renewal Strategy , and the
refresh of the council's overarching Corporate Strategy . This latter strategy
benefitted from extensive engagement including a cross-party Scrutiny Task and
Finish Group, partner workshops with organisational strategy leads, input from
Mayoral Commissions, the Citizens' Assembly and more. It was also subject to
formal public consultation and Scrutiny.
The Council's budget process included a Scrutiny task and finish group and was
subject to formal public consultation and Scrutiny.
During the year, the refreshed Partnerships Policy was launched and set out
clear requirements of formal partnership arrangements. This was presented at
multiple management forums and a process was established for senior managers
to review the council's partnerships and collaborations register via Executive
Director Meetings. Management assurances provided in this area confirmed a
good level of compliance with requirements to ensure the benefits of partnership
working are clear and that governance and accountability between partners is
clear.
Focus of future improvement: Establishing a One City Governance Board and
scrutiny engagement in BCC elements of One City, including OSMB update.
C. Defining outcomes During 2021/22 significant work was undertaken to review and define strategic
in terms of objectives and outcomes related to sustainable economic, social and
sustainable environmental benefits. This included the updating of the council's medium term
economic, social Corporate Strategy 2022-27 and an aligned review of the Medium-Term
and environmental Financial Plan.
benefits
Work was undertaken council-wide to action plan against cross-cutting Corporate
Strategy principles around inclusion, sustainability and resilience; and this in turn
helped inform service-level planning through a council-wide Service and
Business Planning process for 2022/23.
Significant work was also undertaken to plan actions against the city-wide One
City Economic Recovery and Renewal Strategy , One City Climate Strategy
and One City Ecological Emergency Strategy , delivered in part by the City
Council alongside a wide range of city partners. A new Strategic Climate and
Ecological Emergency Board has been established to improve governance over
action delivery
Further work was also undertaken at a tactical and operational policy level to
embed sustainability, inclusion and environmental considerations in business
processes, including the development of a Sustainable Procurement Policy and
an Ethical and Sustainable Investment Policy .
Focus of future improvement: Strengthening governance and monitoring of
activities that contribute to carbon reduction ambitions.
D. Determining the The single council-wide Business Plan - populated with selected content from
interventions departmental Service Plans - is approved by CLB and its development included
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34

necessary to
optimise the
achievement of the
intended outcomes		 cross-party scrutiny engagement. It articulates key interventions and actions
required to deliver Corporate Strategy priorities within the coming business year.
This system creates a clear, auditable link from high-level strategic priorities
through to tactical and operational delivery, down to individual staff objectives.
A council-wide systematicService and Business Planning processhas been
undertaken, with sign-off of departmental level plans by Directors and Cabinet
Members; and Divisional Summaries approved by Executive Directors and
Cabinet Members. The Policy and Strategy Team confirm a good level of
compliance with this requirement
Delivery of priorities is supported by anoutcomes-focused performance
framework, using a mixture of quantitative and qualitative measures and
methodologies to provide a rounded view of delivery against intended objectives.
There is full visibility of this across officer management, member scrutiny and
political leaderships forums, enabling Public Forum and both formal and informal
scrutiny. Quarter 4 performance reports suggest that 45% of business plan targets
are performing on or above target.
Focus of future improvement:
A new performance management framework has been developed for 2022/23
which focuses on reporting on the Business plan themes with Directors leading
performance review and monitoring. It is also planned to introduce a performance
hub and scorecard to retain focus on performance and necessary interventions to
meet targets.
E. Developing capacity
including the
capability of its
leadership and the
individuals within it		 A newWorkforce Strategywas in place for the start of 2021/22. Actions included
prioritise 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 develop talent within the
organisation.Diverse Voicesis a positive action scheme to bring diverse
perspective to senior decision-making whist offering experience of working at a
more senior level. It is currently being rolled out for new team leaders.
A comprehensiveleadership development programmeis in place to offer
training and coaching at all levels include new and aspiring team management.A
talent development programmewas introduced, which includes support for
managers in identifying talent and succession planning, and guidance for
colleagues on career development – including the introduction of ‘Grow your
Career’ hub on the Source, with advice on identifying skills, career development
plans, application and interview skills
Amanagement capacity reviewincludinga succession planning policywas
introduced. At the same time as reducing costs, this aims to secure future
managers for the council and provide leadership resilience going forward.

Organisational health and wellbeing is one of the major priorities of the workforce
strategy. The CouncilsHealth and Safety arrangementshave been refreshed to
ensure we keep our staff and the people of Bristol safe whilst delivering services.
AStrategic Partnering business modelhas been introduced to several areas to
support delivery. These include capital programme delivery and audit services.
Other services are also exploring the benefits of this approach.

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Significant progress has been made in aligninglearning and development
activitiesto annual service planning. The introduction ofa new e-learning
platformand improved functionality of HR reporting system has enabled better
quality management information about compliance with mandatory and statutory
training. Assurances from managers confirm a reasonable level of compliance
with the requirement to identify learning and development.
Delivery of a comprehensiveMember Development Programmewhich included
more tailored development modules for planning, licensing, audit and HR
functions.
F. Managing risk and
performance
through robust
internal control and
strong public
financial
management		 A refresh of thePerformance Frameworktakes place annually as part of the
business planning process - this involves extensive internal consultation around
the setting of measures and actions. Scrutiny and lead Cabinet Members are
engaged throughout and are ultimately signed off by Corporate Leadership Board
(CLB) and Cabinet. In 2021/22, progress against actions and measures has been
monitored and reported quarterly through Executive Director Meetings, CLB,
relevant Scrutiny Commissions, Overview and Scrutiny Management Board, and
Cabinet. The council's quarterly performance reports are public documents that
are open to public questioning through the scrutiny/Cabinet process, and they
also appear on the performance pages of the Council's website.
An annual review takes place at the end of each financial year that details
progress against our commitments and actions, as well as against wider city
metrics to which the Council contributes but is not solely accountable for.
All service, directorate and corporate risks are reviewed regularly in line with the
risk management policy. Anew risk management system(Pentana Risk) was
implemented during the year to support and improve the monitoring of progress
being made in relation to timely delivery of key mitigating actions. Internal Audit
review of risk management concluded that many actions have been completed to
improve risk management arrangements but these now need time to embed to be
effective. The review concluded limited assurance during 2021/22.
A self-assessment againstCIPFA Financial Management (FM) Codehas been
completed and shows good levels of compliance against many of the code’s
standards. There is work to do to enhance compliance with some of the
standards required by the code. (See Appendix A of this statement). Development
and approval of theCorporate Debt Management Policyto provide consistency
in ethical debt management across the council.
Governance overcapital projectdelivery was improved and delivery is supported
by a Strategic Partner. An internal audit review confirmed that many improvement
actions planned least year have been implemented. At year end, the Capital
budget showed an underspend of £36m on the budget that was revised following
a significant finance led over hall of the budget.
A number of policies have been refreshed or created to enhance Information
security approaches.A compliance tool has been introduced to manage
compliance and improve training. Work is ongoing to implement an Information
Security Management Standard. Actions are being taken to strengthen
Information Asset ownership following a recent internal audit review. The
Council’s Common Activities programme will bring together expertise into a
centralised disclosures team to ensure a robust approach across the Council to
the effective management of data.

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Focuses of future improvements: There are a number of improvement
programmes in progress within the Council which continue to strengthen and
redesign how services and projects are delivered more effectively. The progress
relating to delivery of the improvements in these areas will be monitored through
regular updates to Corporate Leadership Board and assurance from Internal Audit.
These include the following:
 Procurement and Contract Management
 Risk Management
 Capital Project delivery
 Education Transformation - Including High Needs (SEND and Deficit)
 ICT
 Information Governance
 Performance Management
G. Implementing good The Council has a decision pathway that is used to manage the production of
practices in reports for public meetings. Reports will be published in accordance with the
transparency, statutory timelines and will be available for members of the public unless the
reporting and audit reports contain exempt information, as defined in law and set out in the Council's
to deliver effective Constitution. Forward plans are published on a monthly basis for Mayoral and
accountability Cabinet decisions. Reports are prepared and EDMs have oversight of reports and
Cabinet members will be briefed on reports in their portfolios. Reports are
published for Cabinet within 5 working days of the date of the Cabinet meeting.
Officer Executive decisions are overseen by EDMs and Executive Support
Managers have procedures in place to ensure the publication of OEDs.
Emergency Officer decisions are sometimes required and will be reported to the
next meeting of Cabinet.
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. The Council has implemented the recommendations from
external auditors relating to the governance of the Council's companies . This
has included improved processes to consider professional advice, options
appraisals and greater transparency around reserved matters decision making.
The new Audit Committee has received relevant training to support them in
discharging its responsibilities effectively. The Committee has received regular
assurances and updates on implementation of actions identified as a result of
both internal and external audit reviews.
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5. Impact of COVID-19 on our Governance Arrangements

37

recovery arrangements. It was concluded that governance of Covid recovery activities was sound with sufficient opportunity for both Members and officers to codesign solutions through engagement at different internal and external boards and platforms which is a good example of working together across the organisation and in the City. All recommendations arising from this work have bene fully implemented.

5 Review of Effectiveness

First Line Assurances - Management Self Assurance is provided:

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Second Line Assurances – Oversight and Monitoring Functions Assurance

39

underlying principles of the FM Code and demonstrates financial sustainability. However we recognise that more could be done to improve compliance with some of the standards and an action plan is in place to address these.

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

40

Actions to address the matters raised have been identified and will be monitored by the Audit Committee.

41

7. Significant Governance Issues 2021/22

Item Issue Key Actions
1 Dedicated Schools Grant (DSG)
The in-year forecast deficit on the
DSG is significant at £14.6m, which
when added to the brought forward
balance of £10.0m means that the
DSG is carrying forward a total deficit
at the end of the year of £24.6m. The
main financial challenge continues to
be the High Needs block, which has
an in-year overspend of £15.3m

A separate, more detailed High Needs Block Recovery
Plan is in development, which details the key
mitigations required to achieve a sustainable position.
The actions will sit alongside the DSG Deficit
Management Plan and will be agreed with Bristol
Schools Forum.
Equalities Impact Assessments (EQiAs) are being
(Carry forward deficit of £27.9m)
resulting from increases in EHCP		 completed and public consultations will commence
where required.
assessments and need; this is offset
by an underspend of £0.9m in the		 Bristol has accepted the DfE's offer to engage in the
Schools’ block and £0.1m overspend 'Delivering Better Value in SEND' Programme’.
on the other blocks. Diagnostic analysis will inform further actions and
access to funding from the DfE to support an 18-month
programme aimed at bringing spend in line with budget.

2. Procurement Breaches

The number of breaches of the Council’s procurement rules during 2021/22 significantly increased from 2021/21. The 20/21 VFM report by the Council’s external auditors has recommended urgent action be taken

Whilst full compliance can never be guaranteed and ‘under-reporting’ of breaches, in particular, is an inherent possibility, an effective and transparent breaches governance process is in place to detect instances of non-compliance.

42

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||| |---|---| |to address the high level of|Procurement compliance training will be more widely| |breaches.|rolled out via e-learning and actual compliance activity| |When the procurement rules are|reported quarterly to Audit Committee via Internal Audit.| |breached, there is an increased risk| |that the Council enters into a contract| |which is not Best Value and/or is not| |the best way of achieving| |organisational objectives. Breaches| |also reduce transparency and| |fairness of decision making, which| |can increase the risk of fraud,| |conflicts of interest and reputational| |damage.| |3|Savings| |The Council continues to face|The Council has experienced a period of sustained| |challenges in delivering required|increase in demand resulting from current global| |savings.|market factors (such as supply chain and fuel| |shortages) and for some of the services provided for| |Out of the £11.7m of savings planned|the most vulnerable members of the community (as a| |for delivery within the 2021/22 budget|result of Covid and subsequent economic impact),| |only 46% was achieved on a|particularly within adult and children’s social care.| |recurrent basis. If these savings| |continue to be unachievable in the|Following the announcement of government grant| |future the Council will need to identify|allocations and estimates of the Council’s funding, a| |other ways of delivering these|significant challenge remained in the Council budgets.| |savings which could result in| |significant impact on service delivery.|The Council identified six key areas for service reviews:| |• Property and capital| |• Be more business-like and secure more external| |resource| |• Improving efficiencies| |• Digital transformation| |• Reducing the need for direct services| |• Redesigning, reducing, or stopping services.| |Savings, efficiencies and income generation| |opportunities in the region of £34.3 million, subject to| |final due diligence, optimism bias, engagement, impact| |assessment and consultation has been identified over| |the medium term.| |The development of detailed plans and activity is being| |closely monitored by EDM, CLB and Delivery Executive| |and details will be included in the quarterly Finance| |reports to Cabinet.| |In addition work has commenced early in 2022/23 to| |refresh the MTFP model assumptions and identify any| |new emerging pressures which may need to be| |addressed for 2023/24.|

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7.2 The progress relating to the significant governance issues identified in 2020/21was presented to the Audit Committee in March 2022 through The Annual Governance Statement 2020/21 - Progress Update Report.

43

Core Statements

Comprehensive Income and Expenditure Statement for the year ended 31 March 2022

2020/21 2021/22 2021/22
Gross
Exp		 Gross
Income		 Net
Exp		 Gross
Exp		 Gross
Income		 Net Exp
£’000 £’000 £’000 £’000 £’000 £’000
417,307 (212,528) 204,779
People		 454,856 (210,728) 244,127
239,408 (164,456) 74,952
Resources		 237,601 (148,532) 89,069
260,538 (71,263) 189,275
Growth & Regeneration		 241,495 (92,907) 148,588
104,341 (123,136) (18,795)
Housing Revenue Account		 115,959 (123,026) (7,066)
212,076 (201,110) 10,966
Dedicated Schools Grant		 228,498 (204,964) 23,534
9,860 (903) 8,957
Corporate Funding& Expenditure		 6,692 (889) 5,803
1,243,530 (773,396) 470,134
Cost of services		 1,285,100 (781,046) 504,054
7,937
Other operating expenditure (Note 9)		 11,786
7,313
Financing and investment income
and expenditure (Note 10)		 (45,078)
(473,173)
Taxation and non-specific grant
income(Note 11)		 (454,781)
12,211
(Surplus)Deficit on provision of
services		 15,980
Items that will not be reclassified
to the (Surplus) or Deficit on the
Provision on Services
(150,901)
(Surplus) or deficit on revaluation of
Property, Plant and Equipment assets
(Note 20)		 (243,430)
112,346
Remeasurement of the net defined
benefit liability/asset (Note 34)		 (164,056)
Items that may be reclassified to
the (Surplus) or Deficit on the
Provision on Services
(Surplus)/ deficit on financial assets
measured at fair value (Notes 24)
(38,555)
Other comprehensive income and
expenditure		 (407,486)
(26,344)
Total comprehensive income and
expenditure		 (391,506)

44

Movement in Reserves Statement for the year ended 31 March 2022

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£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Adjusted Balance at 1 April 2020 17,001 97,390 7,302 121,693 87,526 - 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 - - - - - - - - - - - 38,555 38,555
Total Comprehensive Expenditure and Income (30,208) - - (30,208) 17,997 - 17,997 - - - (12,211) 38,555 26,344
Adjustments between accounting basis and funding basis Note 18 172,416 - - 172,416 (7,082) - (7,082) (20) 7,690 395 173,399 (173,399) -
under regulations
Net Increase/(Decrease) before Transfers to Earmarked Reserves 142,208 - - 142,208 10,915 - 10,915 (20) 7,690 395 161,188 (134,844) 26,344
Transfers to/(from) Earmarked Reserves Note 19 (123,543) 123,317 226 - (651) 651 - - - - - - -
Increase/(Decrease) in 2020/21 18,665 123,317 226 142,208 10,264 651 10,915 (20) 7,690 395 161,188 (134,844) 26,344
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 1,239,889 1,695,099
Movement in Reserves during 2021/22
Surplus or (deficit) on the provision of services (13,403) (13,403) (2,577) (2,577) (15,980) (15,980)
Other Comprehensive Expenditure and Income - - - 407,486 407,486
Total Comprehensive Expenditure and Income (13,403) - - (13,403) (2,577) - (2,577) - - - (15,980) 407,486 391,506
Adjustments between accounting basis and funding basis Note 18 (31,385) (31,385) 6,367 6,367 1,283 1,606 475 (21,654) 21,654 -
under regulations
Net Increase/(Decrease) before Transfers to Earmarked Reserves (44,788) - - (44,788) 3,789 - 3,789 1,283 1,606 475 (37,634) 429,140 391,506
Transfers to/(from) Earmarked Reserves Note 19 49,196 (47,272) (1,924) - (4) 4 - - - -
Increase/(Decrease) in 2021/22 4,408 (47,272) (1,924) (44,788) 3,785 4 3,789 1,283 1,606 475 (37,634) 429,140 391,506
Balance at 31 March 2022 Carried Forward 40,074 173,435 5,604 219,113 101,576 655 102,231 79,775 12,902 3,555 417,575 1,669,030 2,086,605
Note
School Reserves Revenue Account Capital Receipts
General Fund Balance Earmarked Reserves Earmarked Reserves Sub Total - Housing Major Repairs Reserve Total Usable Reserves Unusable Reserves Total Council Reserves
Sub Total - General Fund Housing Revenue Account Housing Revenue Account Capital Grants Unapplied
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45

Balance Sheet as at 31 March 2022

31-Mar-21
Note		 31-Mar-22
£'000 £'000
2,825,667
Property, Plant & Equipment
20		 3,053,348
207,406
Heritage Assets
21		 215,256
20,573
Intangible Assets
23		 14,991
275,903
Investment Property
22		 356,640
43,570
Long Term Investments
24		 44,287
49,098
LongTerm Debtors
29		 60,807
3,422,217
Long Term Assets		 3,745,329
64,983
Short Term Investments
24		 103,948
12,416
Inventories
30		 26,978
144,928
Short Term Debtors
29		 160,856
142,274
Cash and Cash Equivalents
31		 133,444
806
Assets held for sale		 806
365,407
Current assets		 426,032
(20,702)
Cash and Cash Equivalents
31		 (19,709)
(4,966)
Short Term Borrowing
24		 (9,952)
(215,373)
Short Term Creditors
32		 (297,725)
(5,760)
Provisions
33		 (2,849)
(44,447)
Capitalgrants received in advance
17		 (71,814)
(291,248)
Current liabilities		 (402,049)
(450,488)
Long Term Borrowing
24		 (445,488)
(26,277)
Provisions
33		 (26,005)
(1,291,181)
Other Long Term Liabilities
32		 (1,179,908)
(33,331)
Capital Grants Receipts in Advance
17		 (31,306)
(1,801,277)
Long-term liabilities		 (1,682,707)
1,695,099
Net assets		 2,086,605
(455,209)
Usable Reserves
19		 (417,575)
(1,239,890)
Unusable Reserves
34		 (1,669,030)
(1,695,099)
Total reserves		 (2,086,605)

46

Cash Flow Statement for the year ended 31 March 2022

2020/21 2021/22
£'000
Note		 £'000
(12,211)
Net deficit on the provision of services		 (15,980)
152,268
Adjustment to net surplus on the provision of services
for non-cash movements
36		 166,603
(83,538)
Adjust for items included in the net surplus or deficit
on the provision of services that are investing and
financing activities
36		 (73,289)
56,519
Net cash flows from Operating Activities		 77,334
20,726
Investing Activities
37		 (78,083)
(25,099)
FinancingActivities
38		 (7,088)
52,146
Net increase (decrease) in Cash and Cash Equivalents		 (7,837)
69,426
Cash and Cash Equivalents at the beginning of the
reporting period
31		 121,572
121,572
Cash and Cash Equivalents at the end of the
reporting period		 113,735

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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 2021/22 financial year and its position at the year-end of 31 March 2022. 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 2021/22 (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

48

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.

(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).

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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.

(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.

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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

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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.

There is a temporary imbalance between the Net Pensions Liability and the Pensions Reserve, which is due to the Council opting to pay three years past service costs upfront during 2021/22 (see above). It immediately reduced the net pensions liability, but the payment will be released to the Pensions Reserve over the respective three financial years, in accordance with proper accounting practice.

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.

(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.

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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 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:

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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 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

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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.

(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

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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 Heat Networks 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.

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.

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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) Inventories (Stock)

Inventories are measured at the lower of cost and net realisable value, except where inventories are acquired through a non-exchange basis in which case their cost is deemed to be fair value at the date of acquisition. Inventories are also measured at the lower of cost and current replacement cost where they are held for distribution at no charge or for a nominal charge; or consumption in the production process of goods to be distributed at no charge or for a nominal charge. The cost of inventories comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. In this context inventories do not include work in progress under construction contracts and financial instruments.

(xvii) 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.

(xviii) 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.

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(xix) 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.

(xx) 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).

(xxi) 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.

(xxii) 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:

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(xxiii) 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 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.

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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:

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

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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

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.

(xxiv) 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.

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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.

(xxv) 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.

(xxvi) 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.

(xxvii) 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.

(xxviii) 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.

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(xxix) 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.

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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 by the 2021/22 Code. The Code also requires that changes in accounting policy are to be applied retrospectively unless transitional arrangements are specified, this would, therefore result in an impact on disclosures spanning two financial years.

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:

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. 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.

Debt Impairment at 31 March 2022, the Council had a balance of short-term debtors of £160.9m. A review of significant balances suggested that an expected credit loss of £81.6m was appropriate. However, in the current climate it is not certain that such an allowance would be sufficient. If collection rates were to deteriorate an increase in the amount of the impairment of the doubtful debts would be required.

Business Rates following the introduction of the Business Rates Retention Scheme in April 2013, Local Authorities are liable for a share of the cost of successful appeals by businesses against their rateable value in 2021/22 and earlier financial years. A provision has therefore been recognised in the statement of accounts. The estimated provision has been calculated using the latest Valuation Office Agency (VOA)

66

ratings list of ratings appeals and the analysis of successful appeals to date. The Council’s share of the balance of business rate appeals provisions at 31 March 2022 was £25.2m.

67

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 2022 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) Carrying
value £1.08bn		 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 continues to
affect economies and real estate markets
globally. Nevertheless, as at the Valuation
Date,
property
markets
are
mostly
functioning
again,
with
transaction
volumes and other relevant evidence at
levels where enough 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
£108m 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
advice about the assumptions to be
applied.		 Variations in the key assumptions will have
the following impact on the net pension
liability of £1bn

a 0.1% increase in the discount rate will
reduce the net pension liability by
£81m.

a 0.1% increase in the assumed level of
pension increases will increase the net
pension liability by £86m.

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----- Start of picture text -----
 a 0.1% increase in the assumed level of
pay inflation will increase the net
pension liability by £27m.
 an increase of one year in longevity will
increase the net pension liability by
£29m.
----- End of picture text -----


a 0.1% increase in the assumed level of
pay inflation will increase the net
pension liability by £27m.

an increase of one year in longevity will
increase the net pension liability by
£29m.
a 0.1% increase in the assumed level of
pay inflation will increase the net
pension liability by £27m.

an increase of one year in longevity will
increase the net pension liability by
£29m.
a 0.1% increase in the assumed level of
pay inflation will increase the net
pension liability by £27m.

an increase of one year in longevity will
increase the net pension liability by
£29m.
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.
The outbreak of COVID-19 continues to
affect economies and real estate markets
globally. Nevertheless, as at the Valuation
Date,
property
markets
are
mostly
functioning
again,
with
transaction
volumes and other relevant evidence at
levels where enough 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. In recognition of the potential
for market conditions to move rapidly in
response to changes in the control or
future spread of COVID-19, we highlight
the importance of the Valuation Date.		 If the value of the Council's investment
property, surplus property and non-
current assets held for sale, (total carrying
value £387m) was to reduce by 10%, this
would result in a £38m 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 Director of Finance on 26[th] July 2022. Events taking place after this date are not reflected in the financial statements or notes. Where events taking place before this date provided information about conditions existing at 26[th] July 2022, the figures in the financial statements and notes have been adjusted in all material respects to reflect the impact of this information. There are no non-adjusting events after the Balance Sheet date.

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[st] March 2022 excludes the loss for rate reliefs introduced by the government in 2021/22 to support business sectors during the pandemic. This loss will be charged to the General Fund in 2022/23 as part of the deficit on the Collection Fund being recouped in future years. However, the Council received £29.7m of government grant in 2021/22 to compensate for this loss. This material grant income has been shown separately within

69

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 2021/22 has been transferred to a revenue reserve to be used in 2022/23 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 Council’s assessed pressure from lost income, undeliverable Covid-19 related savings and from additional service expenditure associated to Covid-19 equates to £56.6m for 2021/22 (this compares to £74.7m in 2020/21). This additional expenditure is fully met by the range of Covid-19 grants received during the year, totalling £35.7m and the utilisation of amounts carried forward from 2020/21.

7 Expenditure and Funding Analysis for the year ended 31 March 2022

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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2021/22

People
Resources
Growth & Regeneration
Housing Revenue Account
Dedicated Schools Grant
Corporate Funding & 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 2022*		 Revised
outturn
Adjustments
EFA (Note 1)
£'000
£'000
242,726
(19,578)
69,827
(10)
67,573
9,186
(3,785)
(9,655)
14,647
1,109
32,395
(18,063)		 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
223,148
13,331
7,648
69,817
11,215
8,037
76,759
62,658
9,171
(13,440)
1,710
4,664
15,756
-
7,778
14,332
16,348
(5,153)
(19,724)
Total
Adjustments
Net Expenditure
in the
Comprehensive
Income and
Expenditure
Statement
£'000
£'000
20,979
244,127
19,252
89,068
71,829
148,588
6,374
(7,066)
7,778
23,534
(8,529)
5,803
423,383
(37,012)		 386,371
105,262
32,145
(19,724)		 117,683
504,054
(345,373)
(127,123)
23,171
(38,749)
40,998
(362,342)
40,998
(321,344)		 (142,701)
(488,074)
(25,019)
15,980

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2020/21

People
Resources
Growth & Regeneration
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

72

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:

73

8 Expenditure & Income Analysed By Nature

Expenditure & Income Analysed By Nature
2021/22 2020/21
£'000 £'000
Expenditure & Income Analysed By Nature
Expenditure
Employee Benefits Expense 408,619 387,678
Depreciation, Amortisation & Impairment 116,188 122,876
Other Service Expenditure 746,426 770,318
Total Expenditure 1,271,233 1,280,872
Income
Fees, Charges and Other Service Income (348,346) (314,343)
Interest & Investment Income (5,957) (10,938)
Income from Council tax & Non-domestic Rates (334,584) (360,299)
Government Grants, Other Grants and Contributions (566,365) (583,081)
Total Income (1,255,253) (1,268,661)
Surplus or deficit on the Provision of Services 15,980 12,211

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		 2021/22
£'000
18,412
52,063
9,566
28,318
6,540
9,916
122,363
15,533
7,287		 2020/21
£'000
17,805
35,951
6,252
26,685
4,195
4,681
122,440
16,111
6,723

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		 2021/22
£'000
27,453
522
27,975		 2020/21
£'000
25,795
635
26,430

74

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		 2021/22
£'000
1,790
446
2,236		 2020/21
£'000
1,662
383
2,045

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

Other Operating Expenditure
Precepts and levies
Payments to the Government housing capital receipts pool
Losses/(gains) on the disposal of non-current assets
Total		 2021/22
£’000
10,820
2,112
(1,146)
11,786		 2020/21
£’000
10,953
2,115
(5,132)
7,936

10 Financing and Investment Income and Expenditure

Interest payable and similar charges
Loss Allowance (Financial Guarantee Contracts)
Changes in the Fair Values 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		 2021/22
£’000
33,695
-
(148)
23,171
(7,251)
(11,696)
(82,849)
(45,078)		 2020/21
£’000
34,241
(5,379)
(1,669)
22,523
(9,268)
(10,569)
(22,566)
7,313

11 Taxation and Non-Specific Grant Income

Council tax income
Non-domestic rates
Non-service-related government grants
Capital grants and contributions
Total		 2021/22
£’000
(230,662)
(120,581)
(59,107)
(44,432)
(454,781)		 2020/21
£’000
(224,419)
(55,493)
(151,656)
(41,605)
(473,173)

75

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 two year programme between Bristol City Council and NHS Bristol, North Somerset and South Gloucestershire Clinical Commissioning Group (BNSSG) 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 £83.501m in 2021/22 and administered by whichever body undertook the contracting arrangements.

Fund 1 is administered by BNSSG and totals £17.522m. The fund includes contributions from the BNSSG 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 BNSSG 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 BNSSG and totals £0.631m. 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 £45.305m. Both the BNSSG 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 BNSSG 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
Fund 4
Fund 5
Total
£’000
£’000
£’000
£’000
£’000
£’000
17,522
631
-
16,716
-
34,869
-
-
3,528
28,589
16,515
48,632
17,522
631
3,528
45,305
16,515
83,501
17,522
631
-
16,716
-
34,869
-
-
3,528
28,589
16,515
48,632
17,522
631
3,528
45,305
16,515
83,501
-
-
-
-
-
-
-
-
-
-
-
-

76

13 Members' Allowances

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

Allowances 2021/22
£'000
1,404		 2020/21
£'000
1,395

In addition to the above, the elected Mayor is paid an annual allowance amounting to £83,082 (2020/21: £80,871).

77

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:

2021/22 Salary, Fees and Compensation for Pension Total
Allowances Loss of Office Contribution
Post Title Post Term Post Holder Notes £ £ £ £
Chief Executive & Head of Paid Service Apr ’21 - Mar ‘22 M Jackson 174,073 - - 174,073
Executive Director - People Apr ’21 - Mar ‘22 H Evans 140,793 - 29,566 170,359
Executive Directors - Growth and Regeneration Apr ’21 - Mar ‘22 S Peacock 172,413 - 12,046 184,458
Director Homes and Landlord Services (Interim)* Apr ’21 - Mar ‘22 D Graham 280,634 - - 280,634
Director Management of Place Apr ’21 - Mar ‘22 P Mellor 125,931 - 26,281 152,212
Statutory Officers- Chief Financial (S151) Apr ’21 - Mar ‘22 D Murray 125,150 - 26,281 151,431
Director Workforce and Change Apr ’21 - Mar ‘22 J Walsh 125,150 - 26,281 151,431
Statutory Officers- Director Education and Skills Apr ’21 - Mar ‘22 109,506 - 22,996 132,502
Statutory Officers- Director Adult Social Care Apr ’21 - Mar ‘22 98,034 - 20,587 118,621
Statutory Officers – Director of Public Health Apr ’21 - Mar ‘22 93,862 - 19,711 113,573
Statutory Officers- Director Children and Family Apr ’21 - Jan ‘22 1 93,102 - 18,730 111,832
Services
Statutory Officers- Service Director Legal and Apr ’21 - Mar ‘22 88,648 - 18,616 107,264
Democratic (Monitoring Officer)
Statutory Officers- Director Children and Family Jan ’22 - Mar ‘22 S Parker 54,938 - - 54,938
Services (Interim)*

1 Post holder left on 30th January 2022.

2 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 2020/21 and 2021/22. 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 2021/22 were as follows:

78

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 13,750 - - 13,750
Chief Executive & Head of Paid Services May ’20 – Mar ‘21 M Jackson 155,788 - - 155,788
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 Children and Family
Services		 Apr ’20 – Mar ‘21 107,374 - 22,903 130,277
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:

79

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:

----- Start of picture text -----
2021/22 2020/21
Remuneration band
Number of employees Number of employees
Schools Non-Schools Schools Non-Schools
£50,000 - £54,999 17 92 11 37
£55,000 - £59,999 13 24 13 42
£60,000 - £64,999 8 39 10 20
£65,000 - £69,999 18 31 10 32
£70,000 - £74,999 10 30 10 18
£75,000 - £79,999 3 26 3 27
£80,000 - £84,999 - 4 - 7
£85,000 – 89,999 - 5 - 4
£90,000 - £94,999 1 6 - 3
£95,000 - £99,999 - 3 - 4
£100,000 - £104,999 - 3 - -
£105,000 - £109,999 - 1 - 1
£110,000 - £114,999 1 1 - 1
- - - -
£115,000 - £119,999
£120,000 - £124,999 - 3 - 2
Totals 71 268 57 198
----- End of picture text -----

The variation in employee numbers between bands shown in the above table is largely down to a combination of progression from appointment rate to competence rate as well as nationally agreed pay awards that have inflated pay and moved the boundaries against these ranges.

Exit Packages

The numbers of exit packages relating to Council employees during 2021/22, 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
2021/22
2020/21
No.
No.
40
7
4
-
1
-
1
-
-
-
-
-
-
-
46
7		 Number of other
departures
2021/22
2020/21
No.
No.
13
6
3
2
3
-
1
-
-
-
1
-
-
-
21
8		 Total number of
exit packages by
cost band
2021/22
2020/21
No.
No.
53
13
7
2
4
-
2
-
-
-
1
-
-
-
67
15		 Total cost of exit
packages in each
band
2021/22
2020/21
£'000
£'000
364
98
197
61
183
-
136
-
-
-
120
-
-
-
1,000
159

80

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.

xternal 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		 2021/22
£'000
168
36
35
239		 2020/21
£'000
265
42
43
350

81

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:

2020/21
£’000		 2021/22
£’000		 2021/22
£’000
Central
Expenditure
ISB
Total		 Central
Expenditure
ISB
Total
Notes
374,259
Final DSG before academy and high
needs recoupment		 403,690
200,955
Academy and high needs figure
recouped foryear		 1
223,289
173,304
Total DSG after academy and high
needs recoupment for year		 180,401
(2,892)
Plus: Brought forward from previous
year		 -
-
Less: Carry forward agreed in advance		 -
29,575
140,837
170,412
Agreed initial budgeted distribution in
year		 29,264
151,137
180,401
-
(435)
(435)
Inyear adjustments		 2 -
246
246
29,575
140,402
169,977
Final budgeted distribution for year		 29,264
151,383
180,647
29,575
-
29,575
Less: actual central expenditure		 29,264
-
29,264
-
150,406
150,406
Less: actual ISB deployed to schools		 -
166,029
166,029
-
-
-
Plus: LA contribution foryear		 -
-
-
-
(10,004)
(10,004)
In Year Carry forward		 -
(14,646)
(14,646)
-
Carry forward agreed in advance		 -
-
Carried Forward		 -
-
DSG unusable reserve at the end of
the previous year		 3
(10,004)
(10,004)
Addition to DSG unusable reserve at
the end of year		 (14,646)
Total DSG unusable reserve at the
(10,004)
end of theyear		 4 (24,650)
(10,004)
Net DSG position at the end of the
year (Note 34)		 (24,650)

  1. 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 one that opened in year. The academy recoupment in 2021/22 comprised 87 academies open at the start of the year plus 2 that converted in year.

  2. The in-year estimated adjustment for the final early years block funding 2021/22, following the January 2022 census data up-date, due in summer 2022.

  3. This is the brought forward figure from 2020/21.

  4. The total carry forward deficit is £24.650m for the year. Included in the carry forward are surpluses for dedelegated budgets of £0.504m, £0.472m in Early Years Block, £1.517m Schools Block and the High Needs Transformation Programme of £0.740m, with offsetting deficits of £27.876m in High Needs Block.

82

17 Grant Income

The Council credited the following grants and contributions to the Comprehensive Income and Expenditure Statement in 2021/22:

Credited to Taxation and Non Specific Grant Income

Credited to Taxation and Non Specific Grant Income
2021/22 2020/21
£'000 £'000
Capital grants and contributions (Note 11 & see below) 44,432 41,605
Non service relatedgovernmentgrants(Note 11) 59,107 151,656
Total 103,539 193,261

Capital grants and contributions

2021/22 2020/21
£'000 £'000
Government grants applied:
People 5,373 1,955
Growth & Regeneration 26,471 32,805
Resources 1,828 50
Housing Revenue Account 477 481
Developer Contributions 10,282 5,918
Total Government Grants & Contributions applied 44,432 41,209
Government grants unapplied - 396
Total grants credited to the CIES 44,432 41,605

83

Grants Credited to Services

Grants Credited to Services
31-Mar 31-Mar
2022 2021
£'000 £'000
People
Adult Education 1,681 1,582
Better Care Fund - 14,736
COVID-19 - Emergency Response Grants (Adult Social Care) 10,988 9,358
Dedicated Schools Grant 180,647 172,870
Education Services Grant 10 988
Education and Skills Funding Agency Grants 8,217 12,840
Covid 19 - Education and Skills Funding Agency Grants 684 1,743
Independent Living Fund Grant 1,662 1,665
PFI Special Grant 17,103 17,652
Pupil Premium 6,918 7,066
Troubled Families Grant 1,686 1,659
Youth Justice Board Grant 714 759
Other Care Grants (Adults) 3,403 3,533
Other Care Grants (Children) 6,368 4,390
Other 7,025 1,449
Growth & Regeneration
Discretionary Housing Payments 1,045 1,351
Go Ultra Low Grant 109 2,307
Homelessness Reduction & Support Grants 9,573 4,226
Housing Benefit (rent allowances/council tax benefit) subsidy 117,834 127,922
Housing Benefit Administration Subsidy 2,377 2,804
Innovate UK Grant 77 438
Public Health 33,643 33,259
COVID-19 - Public Health Grants 5,288 15,810
Public Heath – Other 2,208 271
SWERCOTS 420 424
Travel & Transport Grants 564 157
Air Quality Grant 657 1,393
Arts Council England - Museums 2,105 2,096
Better Bus Area Fund - 87
Sustainable Travel Access Fund 976 2,535
Winter Funding 6,913 1,640
Covid-19 - Business Support Grants 3,804 18,662
North & South Bristol Enterprise Support Grants 635 -
Other 5,323 5,039
Resources
Covid 19 - Tax Income Guarantee Grant - 1,420
Covid 19 - Test & Trace Support Grant 4,568 752
Non City Council elections - 25
Brexit - 86
Local Crisis and Prevention Fund - 608
Other 1,490 479
Total 446,712 476,079

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:

84

31 March
2022		 31 March
2022		 31 March
2021
£'000 £'000
Capital Grants and Contributions Received in Advance
Government grants 61,378 33,337
Section 106 contributions 41,741 44,441
Total 103,120 77,778
Due < 1 year 71,814 44,447
Due > 1year 31,306 33,331
Total 103,120 77,778
Revenue grants (within creditors)
People 4,693 2,812
Growth & Regeneration 1,943 3,442
Resources 1,155 493
Total 7,791 6,747

85

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.

2021/22
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
Movement in the market value of Investment Properties
Amortisation of Intangible Assets
Capital grants and distributions
Revenue and expenditure funded from capital under statute
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
Changes in Fair Value of Financial Instruments (MiRs)
Insertion of items not debited or credited to the Comprehensive Income and
Expenditure Statement:
Statutory provision for the financing of capital investment
Capital expenditure charged against the General Fund and HRA balances
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
Administrative costs of non-current asset disposals
Use of the Capital Receipts Reserve to finance new capital expenditure
Contribution from the Capital Receipts Reserve to finance the payments to the
Government capital receipts pool
Adjustment Involving the Major Repairs Reserve (MRR):
Excess depreciation transferred to the MRR
HRA depreciation credited to MRR
Use of the MRR to finance new capital expenditure
Adjustments involving the Capital Grants Unapplied Account:
Application of grants to capital financing transferred to the Unapplied Capital
Grants
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
Adjustments involving the Pensions Reserve:
Reversal of items relating to retirement benefits debited or credited to the
Comprehensive Income and Expenditure Statement (see Note 35)
Employer's pensions contributions and direct payments to pensioners payable in
the year
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
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
Other Reserve Movements
Total Adjustment		 General
fund
balance
Housing
Revenue
Account
Capital
Receipts
Major
Repairs
Reserve
Capital
Gains
Unapplied
Total
Movement
Usable
Reserves
£'000
£'000
£'000
£'000
£'000
£'000
(76,750)
(33,567)
-
-
-
(110,317)
82,057
792
-
-
-
82,849
(5,475)
(470)
-
-
-
(5,945)
43,955
477
-
-
-
44,432
(5,483)
-
-
-
-
(5,483)
(20,992)
(9,306)
-
-
-
(30,298)
148
-
-
-
-
148
14,381
-
-
-
-
14,381
2,601
177
-
-
-
2,778
4,762
14,020
(18,781)
-
-
-
(188)
-
188
-
-
-
-
-
16,646
-
-
16,646
-
(2,112)
2,112
-
-
-
-
-
-
-
-
-
-
30,896
(30,896)
-
-
-
-
29,290
-
29,290
-
-
-
-
-
-
-
-
-
-
(475)
(475)
177
-
-
-
-
177
-
(92,969)
(12,169)
-
-
-
(105,138)
44,926
4,896
-
-
-
49,822
38,749
-
-
-
-
38,749
3,280
-
-
-
-
3,280
(1,795)
-
(1,448)
-
-
(3,243)
31,385
(6,367)
(1,283)
(1,606)
(475)
21,654

86

2020/21
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
Movement in the market value of Investment Properties
Amortisation of Intangible Assets
Capital grants and distributions
Revenue and expenditure funded from capital under statute
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
Changes in Fair Value of Financial Instruments (MiRs)
Insertion of items not debited or credited to the Comprehensive Income
and Expenditure Statement:
Statutory provision for the financing of capital investment
Capital expenditure charged against the General Fund and HRA balances
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
Administrative costs of non-current asset disposals
Use of the Capital Receipts Reserve to finance new capital expenditure
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
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
Adjustments involving the Pensions Reserve:
Reversal of items relating to retirement benefits debited or credited to the
Comprehensive Income and Expenditure Statement (see Note 35)
Employer's pensions contributions and direct payments to pensioners payable
in the year
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
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
Other Reserve Movements
Total Adjustment		 General
fund
balance
Housing
Revenue
Account
Capital
Receipts
Major
Repairs
Reserve
Capital
Gains
Unapplied
Total
Movement
Usable
Reserves
£'000
£'000
£'000
£'000
£'000
£'000
(88,430)
(29,993)
(118,423)
22,945
(379)
22,566
(4,137)
(388)
(4,525)
41,123
481
41,604
(18,636)
3,263
(15,373)
(16,029)
(20,774)
(36,803)
1,669
1,669
13,611
13,611
4,185
408
4,592
7,453
33,197
(40,649)
-
(163)
163
-
35,128
35,128
(2,115)
2,115
-
29,332
(29,332)
-
21,642
21,642
(395)
(395)
177
177
-
(74,292)
(9,542)
(83,834)
43,976
4,740
48,716
(88,413)
(88,413)
(6,785)
(6,785)
(8,557)
(8,557)
(172,416)
7,082
20
(7,690)
(395)
(173,399)

87

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 2021/22, 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

88

01 April Transfers Transfers 31 March 01 April Transfers Transfers 31 March
2020 out in 2021 2021 out in 2022
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Total General Fund Strategic
Reserve		 (17,001) - (18,665) (35,666) (35,666) 6,100 (10,508) (40,074)
General Fund Earmarked Reserves
Capital Investment Reserve (25,166) 1,501 (11,969) (35,634) (35,634) 11,656 (13,116) (37,094)
Business Transformation Reserve (3,131) 798 (1,000) (3,333) (3,333) 1,899 (1,414) (2,848)
Risk Management Reserve (16,050) 10,233 (100,176) (105,993) (105,993) 134,247 (82,701) (54,447)
Statutory/Ring-fenced Reserve (31,255) 32,350 (50,288) (49,192) (49,192) 19,481 (27,077) (56,788)
Financing Reserve (9,218) 3,323 (713) (6,608) (6,608) 2,559 (547) (4,596)
Service Specific Reserves (12,570) 3,978 (11,355) (19,947) (19,947) 9,699 (7,415) (17,663)
Total (97,390) 52,184 (175,501) (220,707) (220,707) 179,540 (132,268) (173,435)
School Reserves
Schools – DSG 2,892 (2,892) - - - - - -
Schools - Balances (8,910) 1,729 - (7,180) (7,180) 2,103 - (5,077)
Schools - Other (1,284) 978 (42) (348) (348) - (178) (526)
Total Schools (7,302) (184) (42) (7,529) (7,529) 2,103 (178) (5,604)
Total Dedicated Schools Grant
Reserve
HRA
HRA General Reserve (87,526) 601 (10,865) (97,791) (97,791) - (3,785) (101,576)
Major Repairs Reserve (3,606) 21,642 (29,332) (11,296) (11,296) 58,920 (60,526) (12,902)
HRA Earmarked Reserves - 601 (1,251) (651) (651) - (4) (655)
Total HRA Reserves (91,132) 22,843 (41,448) (109,737) (109,737) 58,920 (64,315) (115,133)
Capital Reserves
Capital Receipts (2,685) 107,570 (107,966) (3,080) (3,080) 20,537 (21,012) (3,555)
Capital Grants Unapplied (78,512) 45,138 (45,117) (78,491) (78,491) 33,757 (35,041) (79,774)
Total Usable Capital Reserves (81,196) 152,708 (153,083) (81,571) (81,571) 54,294 (56,052) (83,329)
TOTAL USABLE RESERVES (294,021) 227,550 (388,739) (455,209) (455,209) 300,957 (263,323) (417,575)

89

20 Property, Plant and Equipment Movements in 2021/22

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 & Buildings Vehicles, Plant, Furniture & Equipment Infrastructure Assets Community Assets Assets Under Construction Surplus Assets Total Property, Plant &
Equipment		 PFI Assets Included in Property, Plant & Equipment
£000s £000s £000s £000s £000s £000s £000s £000s £000s
Cost or Valuation
At 1 April 2021 1,765,900 657,981
89,944		 373,538 7,870 23,662 43,830 2,962,725 26,904
Additions 34,042 14,619
9,362		 21,634 559 48,682 150 129,048 -
Donations - - - - - - - - -
Revaluation Increases / (decreases) recognised in the
Revaluation Reserve 158,521 50,013 - - 114 (1,686) (560) 206,402 1,452
Revaluation Increases / (decreases) recognised in the
Surplus / Deficit on the Provision of Services - (25,139) - - - (32,862) (822) (58,823) (641)
Derecognition - Disposals (8,363) (5,769) - - (3) - (13,011) (27,146) -
Derecognition - Other - - - - - - - - -
Assets reclassified to / from Held for Sale - - - - - - - - -
Assets reclassified to / from Investment Property - - - - - - - - -
Other movements in cost or valuation 10,183 (6,884) (74) (42) 74 (3,257) - - -
At 31 March 2022 1,960,283 684,821
99,232		 395,130 8,614 34,539 29,587 3,212,206 27,715
Accumulated Depreciation and Impairment
At 1 April 2021 (14,378) (16,726)
(38,579)		 (66,831) (416) (4) (124) (137,058) (318)
Depreciation Charge (30,188) (19,250)
(8,698)		 (11,219) - - (247) (69,602) (658)
Depreciation written out to Revaluation Reserve 29,403 - - - - - - 29,403 -
Depreciation written out to the Surplus / Deficit on the
Provision of Services - 17,938 - - - - 245 18,183 641
Derecognition - Disposals 68 148 - - - - - 216 -
Derecognition - Other - - - - - - - - -
Other movements in depreciation and Impairment 1 174 148 - (148) (175) - - -
At 31 March 2022 (15,094) (17,716)
(47,129)		 (78,050) (564) (179) (126) (158,858) (335)
Balance Sheet at 31 March 2022 1,945,189 667,105
52,103		 317,080 8,050 34,360 29,461 3,053,348 27,380
Balance Sheet at 1 April 2021 1,751,522 641,255
51,365		 306,707 7,454 23,658 43,706 2,825,667 26,586

90

Property, Plant and Equipment Comparative movements in 2020/21

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 18,435 263 36,514 104 103,729 -
Revaluation increases/(decreases)
recognised in the Revaluation
Reserve 62,102 52,100 - - - (236) 6,796 120,762 (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 3,614 (21,147) 1,538 - (74) 16,069 - - -
At 31 March 2021 1,765,900 657,981 89,944 373,538 7,870 23,662 43,830 2,962,725 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 1,751,522 641,255 51,365 306,707 7,454 23,658 43,706 2,825,667 26,586
Balance Sheet at 1 April 2020 1,673,144 639,103 46,445 299,146 7,265 11,707 41,957 2,718,767 26,731

91

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 2022 the Council had entered several contracts for the construction or enhancement of Property, Plant and Equipment with outstanding contract commitments of £108.1m.

Significant contractual commitments outstanding at 31 March 2022 were as follows:

----- Start of picture text -----
£m
Bristol Beacon - Cultural refurbishment scheme Willmott Dixon Construction Ltd 23.3
Avonmouth and Severnside Enterprise Area - Flood defences South Gloucestershire Council 21.5
Design, Supply & Installation of New Kitchens and Electrical Rewires Bell Group 11.2
Design, Supply & Installation of New Kitchens and Electrical Rewires Jeff Way Construction Ltd 11.2
Refurbishment - Bishport 5 Blocks Rateavon Ltd 9.2
Refurbishment & Replacement of EWI system to Eccleston & Phoenix SERS Energy Solutions Group Ltd 6.7
House
SEND Expansion Programme: Bristol Education Centre redevelopment Vercity Management Services Limited t/a 6.4
Bristol LEP Limited
Hawkfield Business Park Conversion ISG Construction Ltd 3.4
Refurbishment & Replacement of EWI system to Corbett House Synergise Ltd 2.9
Bedminster Heat Network - Infrastructure CSW Process Ltd 2.7
Transport Cumberland Road Stabilisation works Alun Griffiths (Contractors) Ltd 2.6
Portway Park & Ride Rail Platform Network Rail Infrastructure Limited 2.3
Transport - Floating pontoon walkway Knights Brown Construction Ltd 1.9
Refurbishment - Roegate House Rateavon Ltd 1.4
Bristol Waste (agency agreement) - Hartcliffe site construction Bristol Waste Company Ltd 1.2
Total 108.1
----- End of picture text -----

92

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:

----- Start of picture text -----
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Carried at
historical
cost - 27,189 97,992 395,130 8,614 34,383 - 563,308
01 Oct 2021 1,960,283 596,472 1,240 - - - 29,589 2,587,584
01 Oct 2020 - 29,841 - - - - - 29,841
01 Oct 2019 - 9,161 - - - - - 9,161
01 Oct 2018 - 12,019 - - - 156 - 12,175
01 Dec 2017 - 10,139 - - - - - 10,139
Total cost
valuation 1,960,283 684,821 99,232 395,130 8,614 34,539 29,589 3,212,208
Council Dwellings Other Land and Buildings Vehicles, Plant, etc Infrastructure Community Assets Assets Under Construction Surplus Assets Total Property, Plant and Equipment
----- End of picture text -----

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. It was considered appropriate to increase the properties within Property Plant and Equipment by £126.9m, primarily relating to Council Dwellings (£110.7m).

93

21 Heritage Assets

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

Art
Collection
Ethnography &
Foreign
Archaeology
Antiquarian
books
Other
Total
£'000
£'000
£'000
£'000
£'000
Cost or valuation
01 April 2021 129,888
42,594
7,675
27,249
207,406
Additions 475
-
-
-
475
Revaluations 2,790
(250)
-
4,835
7,375
31 March 2022 133,153
42,344
7,675
32,084
215,256
Cost or valuation
01 April 2021 126,625
42,588
7,675
27,168
204,056
Additions 96
-
-
-
96
Revaluations 3,167
6
-
81
3,254
31 March 2021 129,888
42,594
7,675
27,249
207,406

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:

94

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:

2021/22 2020/21
£'000 £'000
Rental income from Investment Property 12,014 11,161
Direct operatingexpenses arisingfrom Investment Property (318) (592)
Net gain 11,696 10,569

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:

2021/22 2020/21
£'000 £'000
Balance at start of the year 275,903 252,586
Additions – purchases - 256
Disposals (2,112) -
Net gains/losses from fair value adjustments 82,849 22,566
Transfers to/from Property, Plant and Equipment - 495
Balance at end of the year 356,640 275,903

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 income and expenditure line.

Fair Value Hierarchy

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

Other significant
observable inputs (Level2)		 Other significant
observable inputs (Level2)		 Other significant
observable inputs (Level2)
2021/22 2020/21
£'000 £'000
Retail 78,487 67,540
Industrial 209,606 144,779
Office 68,547 63,584
Balance at end of the year 356,640 275,903

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.

95

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 £5.9m charged to revenue in 2021/22 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 relate to system improvements from within the IT Transformation programme (ITTP), the majority of which was spent in 2020/21, with a residual amount in 2021/22.

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

2021/22 2020/21
£'000 £'000
Balance at start of the year
Gross carrying amounts 42,932 33,792
Accumulated amortisation (20,345) (15,820)
Accumulated impairment (2,014) (2,014)
Net carrying amount at start of year 20,573 15,958
Additions:
Purchases 362 9,140
Amortisation for theperiod (5,944) (4,525)
Net carrying amount at the end ofyear 14,991 20,573
Comprising:
Gross carrying amounts 43,294 42,932
Accumulated amortisation (26,289) (20,345)
Accumulated impairment (2,014) (2,014)
Balance at end of the year 14,991 20,573

96

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
2022 2021 2022 2021
£'000 £'000 £'000 £'000
Financial Liabilities at Amortised cost
Borrowing (445,488) (450,488) (9,952) (4,966)
Service Concessions (116,238) (123,910) (9,101) (8,951)
Creditors (93) (94) (266,205) (194,467)
Financial Liabilities at Fair Value through profit
and loss
Financial Derivative - - - (20,702)
Total Financial Liabilities (561,819) (574,492) (285,258) (229,086)
Financial Assets at amortised cost
Investments - - 109,498 105,781
Debtors 24,548 11,332 96,972 92,809
Financial Assets at Fair Value through Other
Comprehensive Income
Investment 350 350 - -
Financial Assets at Fair Value through profit and
loss
Investments 43,938 43,220 108,184 101,476
Total Financial Assets 68,836 54,902 314,654 300,066

Movements

The increase in financial liabilities, circa £44m relates to an increase in the value of general creditors (£72m) during the year primarily due to government grants being received in advance. This was partly offset by the planned repayment of an overdraft (£20m) and service concessions (£8m).

The financial assets increased by circa £29m through a combination of increases in working capital and reserves resulting in additional cash resources to invest in lieu of using these resources.

97

Borrowing

31 March
31 March
2022
2021
Current borrowing £'000
£'000
Deposit loans (repayable at notice - up to 7 days) 285
101
Other short-term borrowing (repayable within 1 year):
- Public Works Loan Board 8,251
3,251
- Banks and other monetary sector 1,137
1,334
- Energy improvement Loans 259
259
- Local bonds and Stocks 21
21
Total 9,952
4,966
31 March
31 March
2022
2021
Non-current borrowing £'000
£'000
Public Works Loan Board 325,439
330,439
Lender Option Borrower Option (Lobo) 70,000
70,000
Market Debt 50,000
50,000
Stocks 49
49
Total 445,488
450,488

98

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 2021/22 Financial Instruments Gains and Losses 2021/22 Financial Instruments Gains and Losses 2021/22 Financial Instruments Gains and Losses 2021/22
Financial Financial
Liabilities 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		 (33,695) - - - (33,695)
Total expense in Surplus or
Deficit on the Provision of (33,695) - - - (33,695)
Services
Interest Income - 4,953 - 78 5,031
Fair Value Movement - - - 148 148
Dividend Income - - - 2,220 2,220
Total income in Surplus or
Surplus / Deficit on the (33,695) 4,953 - 2,446 (26,296)
Provision of Services
Deficit arising on revaluation of
financial assets in Other - - - - -
Comprehensive Income and
Expenditure
Net gain/(loss) for the year (33,695) 4,953 - 2,446 (26,296)
Financial Instruments Gains and Financial Instruments Gains and Losses 2020/21
Financial Financial
Liabilities 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 (28,862) - - - (28,862)
Services
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 (28,862) 5,113 - 5,824 (17,925)
Provision of Services
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)

99

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.

----- Start of picture text -----
Fair value measurements at 31 March Fair value measurements at 31 March
2022 using: 2021 using:
Quoted prices Observable Unobservable Quoted prices Observable Unobservable
in active in active
markets inputs inputs markets inputs inputs
Descriptions
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 108,184 - - 101,476 - -
Bristol Port Company
- - - -
(Non-traded Unquoted 28,000 29,000
Equity Investment)
Bristol Holdings
- - - -
(unquoted equity 5,465 4,992
investment)
Other unquoted private - - 192 - - 128
companies
Pooled property fund - - 10,281 - - 9,100
Fair Value through
Other
Comprehensive
Income
Other unquoted private - - 350 - - 350
companies
Total Non-traded
- -
108,184 44,288 101,476 43,570
securities:
Investment
- - - -
356,640 275,903
properties
Surplus properties - 29,462 - - 43,706 -
Total recurring fair
108,184 386,102 44,288 101,476 319,609 43,570
value measurements
Non-recurring fair
value measurements
Assets held for sale - 806 - - 806 -
Total non-recurring
fair value - 806 - - 806 -
measurements
----- End of picture text -----

100

----- Start of picture text -----
Valuation
techniques and
Inputs
Observable and Key sensitivities
Description of Valuation Unobservable affecting the
asset hierarchy Basis of Valuation inputs valuations provided
Money Market Level 1 Unadjusted quoted prices Latest quoted prices
Funds in active markets for
identical shares
Surplus assets Level 2 All surplus assets have Evidence of title, Not all assets are
been valued by RICS floor area, siting and physically inspected
qualified valuers to Fair site conditions, every year. Latent
Value less costs to sell, type/age and defects, repair and
reflecting highest and current use of the maintenance
best use. property have been backlogs, general
considered together changes in the
with general market market and other
conditions and impairments could
advertised value of have a significant
similar properties impact on the values
currently up for sale. provided.
Investment Level 2 All investment properties All valued on an Changes to market
Properties [(further detailed ] have been valued by the investment income conditions, lease
information in Note 22) Council’s in-house basis, using existing terms, covenant
valuers (all RICS lease terms and strength and
qualified) on an current yields occupancy levels
investment income basis could all affect the
which we are satisfied asset valuations
represents highest and provided.
best use overall.
Bristol Port Level 3 This investment has been Calculations have Changes to market
Company valued by an external been based an conditions (local and
specialist valuation income approach to global), and the
company for financial valuation, by comparable data used
year ending 31 [st] March applying a multiple within the valuations.
2020 and refreshed by derived from the If the growth of
Council officers for this market to a future returns is
financial year on the maintainable profit greater or lesser by
same basis. figure. 0.5% than the 2%
forecast, the fair
value will be circa
£1.7m higher or
lower respectively.
Bristol Holdings Level 3 This investment has been Calculations have Valuations could be
valued at the Council’s been based on their affected by the
share of each company’s unaudited accounts difference between
net assets. as at 31 March 2022. audited and
unaudited accounts.
----- End of picture text -----

101

----- Start of picture text -----
Investments in other Level 3 These investments have Calculations have The value of these
unquoted companies been valued at the been based on their companies is
Council’s share of each latest audited relatively low (£542k)
company. accounts so any change in the
metrics used in the
valuation technique
will not have a
material impact.
Investments in Level 3 These investments have The valuation for Changes to housing
Pooled Property been valued at the Pooled Property market conditions
Fund Council's share within Funds has been could affect the
the pooled fund. based on the latest valuation of the
quarterly financial pooled property
report. 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 £89k higher
or lower respectively.
----- End of picture text -----

102

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
2022
2021
Description Non-traded
securities
Non-traded
securities
£'000
£'000
Opening balance 43,570
42,073
included in the surplus/(deficit) on the Provision of
Services		 112
1,597
included in Other Comprehensive Income and
Expenditure		 -
-
Total gains/(losses) for the period: 112
1,597
Additions 831
100
Disposals (225)
(200)
Closing balance 44,287
43,570

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 (-£1m), Homelessness Property fund (+£675k) and Bristol Holdings (+£473k).

103

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 2022
31 March 2021
Carrying
amount
Fair value
Carrying
amount
Fair value
£'000
£'000
£'000
£'000
Cash & Cash Equivalents -
-
20,702
20,702
Public Works Loan Board (PWLB) 333,690
459,400
333,690
501,500
Lender Option Borrower Option 70,667
98,100
70,865
108,400
Market Debt 50,470
68,100
50,469
74,700
Current Creditors 266,205
266,205
194,467
194,467
Service Concessions 125,339
177,629
132,861
204,061
Other 707
707
524
524
Total Liabilities 847,078
1,070,141
803,578
1,104,354

The Authority has used a transfer value for the fair value of financial liabilities. We have also calculated an exit price fair value of £1.238bn an increase 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 2022) arising from a commitment to pay interest to lenders above current market rates.

Financial Assets 31 March 2022
31 March 2021
Carrying
amount
Fair value
Carrying
amount
Fair value
£'000
£'000
£'000
£'000
Current investments 103,948
103,948
64,983
64,983
Cash and Cash Equivalents 5,550
5,550
40,798
40,798
Non-current investments -
-
-
-
Current Debtors 96,972
96,972
92,809
92,809
Non-current debtors 24,548
24,548
11,332
11,332
Total Financial Assets 231,018
231,018
209,922
209,922

104

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 Fair value measurements
March 2022 using: at 31 March 2021 using:
Quoted Quoted
prices in Observable
Unobservable
prices in		 Observable
Unobservable
active inputs inputs active inputs
inputs
Descriptions markets markets
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
Cash & Cash Equivalent - 20,702
Public Works Loan Board (PWLB) 333,690 333,690
Lender Option Borrower Options 70,667 70,865
Market debt 50,470 50,469
Service Concessions 125,339 132,861
Other 707 524
Total
Financial Assets held at		 580,873 609,111
amortised cost
Current Investments 103,948 64,983
Cash and Cash Equivalents 5,550 40,798
Non-current Investments - -
Non-current Debtors 24,548 11,332
Total 134,046 117,113

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.

105

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 15[th] February 2021 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 2022 that this was likely to crystallise.

106

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
Adjustment
for market
conditions

Estimated
maximum
exposure
to default
Estimated
maximum
exposure to
default
£0
%
%		 £0
**£0 **
A
B
C		 (A*C)
Non-Current Investments: 31-Mar-22
31-Mar-22
31-Mar-22		 31-Mar-22
31-Mar-21
Non-traded securities -
0.00%
0.00%		 -
-
Sub-total - -
-
Current Investments:
Local Authorities 53,537
0.00%
0.00%		 -
-
AA rated counterparties 15,076
0.02%
0.02%		 3
5
A rated counterparties 40,885
0.05%
0.05%		 20
10
Sub-total 109,498 23
15
Trade debtors 96,972 -
-
Non-current debtors 24,548 -
-
Total Financial assets 231,018 23
15

The estimated maximum exposure for credit loss for Treasury investments is £23k and a general allowance of £100k has been set aside for this.

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:

107

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 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
debtor at		 Allowance for
credit losses		 Net debtor
at		 Net
debtor at
at
31-Mar-22 31-Mar-22 31-Mar-22 31-Mar-21
£'000 £'000 £'000 £'000
Local taxpayers 59,488 (37,635) 21,853 15,566
Housing rents 11,935 (8,934) 3,001 3,032
Other - sundry debtors 158,061 (35,047) 123,014 114,038
Total Other Entities and
Individuals		 229,484 (81,616) 147,868 132,636
Central Government bodies 10,970 - 10,970 10,561
Other local authorities 1,509 - 1,509 1,571
NHS bodies 509 - 509 160
Total debtors 242,472 (81,616) 160,856 144,928
Balance sheet debtors 242,472 (81,616) 160,856 144,928
Current debtors not qualifying as a
financial instrument under IFRS
(101,520)		 37,635 (63,885) (52,119)
Current debtors qualifying as a
financial instrument under 140,952 (43,981) 96,971 92,809
IFRS

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
2022
2021
£'000
£'000
Less than three months 35,031
29,971
2,218
1,754
17,837
15,276
50,514
46,848
Three to four months
Four months to one year
More than one year
Total 105,599
93,849

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 Loan 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

108

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:

The maturity analysis of financial assets, excluding sums due from customers, is as follows:
31 March
31 March
2022
2021
£'000
£'000
Less than 1 year 314,654
300,066
Between 1 and 2 years 1,712
1,699
Between 2 and 3 years 1,738
1,724
More than 3years 65,386
51,479
Total 383,490
354,968

The maturity analysis of financial liabilities is as follows:

The maturity analysis of financial liabilities is as follows:
31 March
31 March
2022
2021
£'000
£'000
Less than 1 year 285,258
229,086
1 - 2 Years 18,492
13,853
2 - 5 Years 59,646
44,162
5 - 10 Years 76,191
90,722
10+ Years 407,490
425,754
Total 847,077
803,577

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.

109

Approved
minimum		 Approved
maximum		 Actual 31
March
2022		 % Actual 31
March
2021		 %
limits % limits %
£'000 £'000
Less than 1 year
Between 1 and 2 years		 -
-
30

40		 9,952
-		 2%
0%		 4,966
5,000		 1%
1%
Between 2 and 5 years -
40		 32,000 7% 20,000 4%
Between 5 and 10 years -
50		 22,000 5% 34,000 7%
More Than 10 Years 25 100 391,488 86% 391,488 87%
Total 455,441 100% 455,454 100%

Included within the maturity profile are £70m of LOBOS with maturities averaging 39 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.

110

At 31 March 2022, if interest rates had been 1% higher with all other variables held constant, the financial effect would be:

effect would be:
31-Mar
2022
£'000
Increase in interest receivable on variable rate investments 2,429
Impact on Surplus or Deficit on the Provision of Services 2,429
Share of overall impact debited to the HRA 1,740
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)		 236,700

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 2021/22 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.

111

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
· Use of Major Repairs Reserve
· 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		 2021/22
£'000
886,406
129,299
-
475
362
1,131
5,483
(1,970)
(16,646)
(43,957)
(2,778)
(29,290)
(14,381)
914,134
(14,380)
(1,970)
44,078
27,728		 2020/21
£'000
869,923
107,527
256
95
9,140
1,660
18,636
(1,386)
(38,391)
(41,209)
(4,592)
(21,642)
(13,611)
886,406
(13,611)
(1,386)
31,480
16,483

112

27 Leases

Council as Lessor

Operating Leases

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

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
2022
£'000
14,149
49,012
865,425
928,586		 31 March
2021
£'000
13,821
48,837
851,243
913,901

The minimum lease payments receivable at 31 March 2022 and 2021 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 2022 cumulative payments totalling £161m (£151m in 2020/21) have been made to the PFI contractor. The future estimated payments the Council will make under the contract are as follows:

Year
2022/23
2023/24 to 2026/27
2027/28 to 2031/32
Total		 Payment
for
Services
Repayment
of Liability
Interest
Other
Total
£'000
£'000
£'000
£'000
£'000
3,306
2,339
3,867
(199)
9,313
14,069
11,716
12,453
1,642
39,880
17,087
18,819
6,322
(529)
41,698
34,461
32,874
22,642
914
90,891

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

113

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 2022 cumulative payments totalling £234m (£215m in 2020/21) have been made to the PFI contractor. The future estimated payments the Council will make under this contract are as follows:

Year
2022/23
2023/24 to 2026/27
2027/28 to 2031/32
2032/33 to 2034/35
Total		 Payment
for Services
Repayment
of Liability
Interest
Other
Total
£'000
£'000
£'000
£'000
£'000
5,671
3,951
5,366
4,455
19,443
24,375
17,044
18,353
19,975
79,748
34,671
29,322
14,610
25,621
104,224
18,351
19,364
2,577
11,550
51,842
83,068
69,682
40,906
61,601
255,256

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 2022 payments totalling £35m (£32m at 31 March 2021) have been made to the PFI Contractor. The future estimated payments the Council will have to make under the Contract are as follows:

Year
2022/23
2023/24 to 2026/27
2027/28 to 2031/32
2032/33 to 2036/37
Total		 Payment
for Services
Repayment
of Liability
Interest
Other
Total
£'000
£'000
£'000
£'000
£'000
366
496
1,258
1,438
3,558
1,556
2,041
4,531
6,296
14,424
2,135
4,028
4,120
8,214
18,497
2,346
5,549
1,794
9,117
18,806
6,403
12,114
11,703
25,065
55,285

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

114

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
2021/22
2020/21
£'000
£'000
108,712
114,775
(6,157)
(6,063)
102,555
108,712		 Hengrove Leisure
2021/22
2020/21
£'000
£'000
12,761
13,469
(646)
(708)
12,115
12,761

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 £1.5m of assets to support the provision of waste services, funded from a loan from the Council.

115

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

Year
2022/23
2023/24 to 2026/27
Total		 Payment for
Services
Repayment
of Liability
Interest
Total
£'000
£'000
£'000
£'000
30,782
2,315
265
33,362
108,595
8,354
459
117,408
139,377
10,669
724
150,770

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
2021/22
2020/21
2021/22
2020/21
2021/22
2020/21
2021/22
2020/21
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
108,712
114,775
12,761
13,469
11,388
12,311
132,861
140,555
(6,157)
(6,063)
(646)
(708)
(2,214)
(923)
(9,017)
(7,694)
102,555
108,712
12,115
12,761
9,174
11,388
123,844
132,861

29 Debtors

Debtors
31 March
2022		 31 March
2021
i
Current debtors		 £'000 £'000
Trade receivables 28,981 21,451
Prepayments 7,089 3,948
VAT 11,462 9,632
Other 113,324 109,897
Total 160,856 144,928

Impairments for doubtful debts are detailed in Note 24.

31 March
2022		 31 March
2022		 31 March
2021
ii
Long-term debtors		 £'000 £'000
Mortgages 190 190
Capital loans (Probation/Fire/LEP/Bristol Waste) 24,109 10,865
South Gloucestershire Council 327 354
Former countyCouncil debt 36,181 37,689
Total 60,807 49,098

116

30 Inventories

Inventories
Stock
Work in Progress
Property constructed for sale
Total		 2021/22
£'000
1,861
25,117
-
26,978		 2020/21
£'000
1,841
9,819
756
12,416

31 Cash and Cash Equivalents

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

2021/22 2020/21
£'000 £'000
Cash held by the Council 260 271
Bank current accounts (19,709) (20,702)
Short-term deposits with banks / buildingsocieties 133,184 142,003
Total Cash and Cash Equivalents 113,735 121,572

32 Creditors

Creditors
2021/22 2020/21
Current liabilities £'000 £'000
Trade payables 25,217 12,038
Other payables 179,339 142,329
Receipts in advance 93,169 61,006
Total 297,725 215,373
2021/22 2020/21
Other long-term liabilities £'000 £'000
Service Concession contract liabilities (see Note 28) 116,238 123,910
Retirement benefit obligations (see Note 35) 1,025,888 1,127,918
Deferred liabilities 37,689 39,260
Rent Deposits 93 94
Total 1,179,908 1,291,181

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 2022 the liability in the Council’s Balance Sheet of £37.7m (2021: £39.3m) 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.

117

33 Provisions

Balance at
31 March
2021		 Additional
provisions
made in
2021/22		 Amounts
used in
2021/22
Balance at
March 2022
Due <
1 year
Due > 1
year		 Amounts
used in
2021/22
Balance at
March 2022
Due <
1 year
Due > 1
year		 Amounts
used in
2021/22
Balance at
March 2022
Due <
1 year
Due > 1
year
£'000 £'000 £'000 £'000
£'000
£'000
Business Transformation (109) - 109 -
-
-
Succession Planning - (1,080) - (1,080)
(1,080)
-
Insurance fund (1,608) (796) 629 (1,775)
(1,271)
(504)
NDR Provision for
appeals		 (25,521) (18,143) 18,464 (25,200)
-
(25,200)
Legal (498) - - (498)
(498)
-
Winding up of Bristol
Energy Ltd		 (3,891) - 3,891 -
-
-
Other (411) - 110 (301)
-
(301)
(32,038) (20,019) 23,203 (28,854)
(2,849)
(26,005)
Due < 1 year (5,761) (2,849)
Due > 1year (26,277) (26,005)
(32,038) (28,854)

Details of the provisions are shown in the table below:

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

118

34 Unusable Reserves

Unusable Reserves
2021/22 31 March
2021
£'000
(1,199,657)		 £'000
Revaluation Reserve (987,171)
Capital Adjustment Account (1,579,816) (1,510,865)
Financial Instruments Adjustment Account 6,721 6,898
Deferred Capital Receipt Reserve (12,851) (1,448)
Pensions Reserve 1,032,629 1,141,369
Collection Fund Adjustment Account – Council tax 7,526 4,539
Collection Fund Adjustment Account – NNDR 38,988 80,159
Collection Fund Adjustment Account – Growth /
Renewable Energy Disregard		 2,671 3,237
Accumulated Absences Account 10,108
24,650
(1,669,030)		 13,388
Dedicated Schools Grant Adjustment Account 10,004
(1,239,890)

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.

on the Capital Adjustment Account.
2021/22 2021/22
2020/21		 2020/21
£'000 £'000
£'000		 £'000
Balance at 1 April (987,171) (861,614)
Upward revaluation of assets
(257,767)		 (190,456)
Downward revaluation of assets and impairment
losses not charged to the Surplus/Deficit on the
Provision of Services
14,337
39,555
Surplus or deficit on revaluation of non-current
assets not posted to the Surplus/Deficit on the
Provision of Services		 (243,430) (150,901)
Amount written off to the Capital Adjustment
Account		 30,944 25,344
Balance at 31 March (1,199,657) (987,171)

119

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

involving the Revaluation Reserve.
2021/22 2020/21
£'000 £'000
Balance at 1 April (1,510,865) (1,520,227)
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 69,603 65,697
Revaluation losses on Property, Plant and Equipment 40,640 52,654
Amortisation of Intangible Assets 5,945 4,525
Movement in the fair value of financial Instruments (75) (1,597)
Revenue Expenditure Funded from Capital Under Statute 5,483 18,636
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		 30,298 36,802
(1,358,971) (1,343,510)
Adjusting amounts written out of the Revaluation Reserve (30,944) (25,344)
Net written out amount of the cost of non-current assets
consumed in the year		 (1,389,915) (1,368,854)
Capital financing applied in the year:
Use of the Capital Receipts Reserve to finance new capital
expenditure		 (16,646) (38,391)
Use of the Major Repairs Reserve to finance new capital
expenditure		 (29,290) (21,642)
Capital grants and contributions credited to the Comprehensive
Income and Expenditure Statement that have been applied to
capital financing		 (43,957) (41,209)
Statutory provision for the financing of capital investment
charged against the General Fund and HRA balances		 (14,381) (13,611)
Use of the Capital Receipts Reserve for repayment of Long-
Term Investments financed by borrowing		 (1,970) (1,386)
Long Term Capital Investment repaid 1,970 1,386
Capital expenditure charged against the General Fund and HRA
balances		 (2,778) (4,592)
(1,496,967) (1,488,299)
Movements in the market value of Investments debited or
credited to the Comprehensive Income and Expenditure
Statement		 (82,849) (22,566)
Balance at 31 March (1,579,816) (1,510,865)

120

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 2022 will be charged to the General Fund over the next 38 years.

years.
2021/22 2021/22
2020/21		 2020/21
£'000 £'000
£'000		 £'000
Balance at 1 April 6,898 7,076
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
(177)		 (178)
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) (178)
Balance at 31 March 6,721 6,898

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		 2021/22
£'000
(1,448)
(12,851)
1,448
(12,851)		 2020/21
£'000
-
(1,448)
-
(1,448)

121

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 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		 2021/22
£'000
1,141,369
(164,056)
105,138
(49,822)
1,032,629		 2020/21
£'000
993,905
112,346
83,834
(48,716)
1,141,369

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		 2021/22
£'000
87,935
(38,749)
49,186		 2020/21
£'000
(477)
88,412
87,935

122

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		 2021/22 2021/22
2020/21
£'000
£'000		 2020/21
£'000
£'000
13,388
(6,604)		 6,604
6,784
(13,388)
10,108 13,388
(3,280)
10,108
 13,388

Dedicated Schools Grant Adjustment Account

Regulations effective from 1[st] 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[st] April 2020, 1[st] April 2021 or 1[st] 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[st] April 2020 have been transferred into that account. Prior to 2020/21 this was treated as a useable reserve. 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		 2021/22
£'000
10,004
-
14,646
24,650		 2020/21
£'000
-
2,892
7,112
10,004

123

35 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 2021/22 was 24.99% resulting in a total payment of £10.864m (£10.309m in 2020/21) to the Teachers' Pension Agency. In addition, the Council made payments totalling £2.492m (£2.506m in 2020/21) 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 £1.586m (£1.690m in 2020/21). 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 2021/22 a total payment of £0.402m (£0.35m in 2020/21) was made to the NHS Pension Scheme, following the transfer of public health responsibilities from primary care trusts.

124

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		 Local Government Pension
Scheme		 Teachers' Unfunded
Pensions
2021/22
2020/21
£'000
£'000
-
-
-
-
-
-
1,311
1,455
1,311
1,455
177
4,513
(1,311)
(1,455)
4,081
4,197		 Teachers' Unfunded
Pensions
2021/22
2020/21
£'000
£'000
-
-
-
-
-
-
1,311
1,455
1,311
1,455
177
4,513
(1,311)
(1,455)
4,081
4,197
2021/22 2020/21
£'000 £'000
-
-
-
1,455
1,455
4,513
(1,455)
4,197
84,900 64,432
(4,184) (4,332)
1,251 1,211
21,860 21,068
103,827 82,379
(164,233) 107,833
(103,827) (82,379)
45,741 44,519

The Housing Revenue Account (HRA) Income and Expenditure Account has also been adjusted in 2021/22 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.

125

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:
Local Government Pension
Scheme
2021/22
2020/21
£'000
£'000
(2,925,287)
(2,514,914)
(84,900)
(64,432)
(60,666)
(59,629)
(13,731)
(13,196)
(8,018)
54,877
1,601
(404,302)
22,566
-
72,863
69,098
9,974
7,211
(2,985,598)
(2,925,287)		 Unfunded liabilities:
Local Government
Pension Scheme
2021/22
2020/21
£'000
£'000
(34,356)
(33,688)
-
-
(692)
(776)
-
-
(94)
786
-
(3,408)
237
-
2,705
2,730
-
-
(32,200)
(34,356)		 Unfunded liabilities:
Teachers' Unfunded
Pensions
2021/22
2020/21
£'000
£'000
(64,492)
(62,721)
-
-
(1,311)
(1,455)
-
-
(180)
998
(617)
(5,511)
620
-
4,081
4,197
-
-
(61,899)
(64,492)		 Total Liability
Local Government &
Teachers Pensions
2021/22
2020/21
£'000
£'000
(3,024,135)
(2,611,323)
(84,900)
(64,432)
(62,669)
(61,860)
(13,731)
(13,196)
(8,292)
56,661
984
(413,221)
23,423
-
79,649
76,025
9,974
7,211
(3,079,697)
(3,024,135)		 Total Liability
Local Government &
Teachers Pensions
2021/22
2020/21
£'000
£'000
(3,024,135)
(2,611,323)
(84,900)
(64,432)
(62,669)
(61,860)
(13,731)
(13,196)
(8,292)
56,661
984
(413,221)
23,423
-
79,649
76,025
9,974
7,211
(3,079,697)
(3,024,135)
(2,611,323)
(64,432)
(61,860)
(13,196)
56,661
(413,221)
-
76,025
7,211
(3,024,135)

126

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		 2021/22
£'000
1,896,322
39,337
244,214
(1,211)
(2,879)
57,970
13,196
(71,828)
2,175,121		 2020/21
£'000
1,617,523
39,337
244,214
(1,211)
(2,879)
57,970
13,196
(71,828)
1,896,322

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 £187,439m (2020/21 £283,551m).

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		 2021/22
£'000
(3,017,798)
(61,899)
2,053,915
(963,883)
(61,899)
(1,025,782)		 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)

The total liabilities shown in the Balance Sheet comprise the above (£1,025,782m) together with a small amount in respect of pre-1974 liabilities (£0.105m) totalling (£1,025,887m).

127

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 2020.

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
2021/22
2020/21
23.1
23.3
25.3
25.4
-
-
-
-
24.6
24.8
27.3
27.4
%
%
2.8
2.1
3.4
2.7
4.9
4.2
3.5
2.8		 Teachers’
Unfunded Pensions
2021/22
2020/21
23.1
23.3
25.3
25.4
14.3
14.4
16.1
16.2
-
-
-
-
%
%
2.8
2.1
3.5
2.7
-
-
2.8
2.8

The estimated Macaulay duration of liabilities (at later of 31 March 2020 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 2022.

Impact on the Defined Benefit Obligation in the Scheme (LGPS) 2021/22 2020/21
£'000 £'000
Longevity (increase or decrease by 1 year) 95,116 93,692
Rate of inflation (increase or decrease by 0.1%) 53,125 51,775
Rate of increase in salaries (increase or decrease by 0.1%) 4,325 4,865
Rate for discounting scheme liabilities (increase or decrease by 0.1%) (51,281) (49,860)

128

Impact on the Defined Benefit Obligation in the Scheme (Teachers) 2021/22 2020/21
£'000 £'000
Longevity (increase or decrease by 1 year) 2,396 2,444
Rate of inflation (increase or decrease by 0.1%) 635 657
Rate for discounting scheme liabilities (increase or decrease by 0.1%) (568) (588)

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
Private Debt
Y
Y
Sub-total alternatives
Cash and equivalents
Cash Accounts
Y
Sub-total cash
Total Assets		 31 March
2022
£’000
-
834,765
-
834,765
254,567
153,395
407,962
136,639
136,639
59,239
188,636
179,772
163,665
36,646
14,053
778,650
32,538
32,538
2,053,915		 31 March
2021
£’000
-
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

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, 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.

129

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 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 £39.032m. Expected contributions for the Teacher Pensions Scheme in the year to 31 March 2022 are £4.081m.

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

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.

130

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.

36 Cash Flow Statement – Operating Activities

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

Interest received
Interest paid
Dividends received		 2021/22
£'000
4,901
(33,806)
2,221		 2020/21
£'000
5,842
(33,652)
2,092

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
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		 2021/22
£'000
110,243
5,945
1,317
75,619
(16,628)
(14,562)
62,027
29,293
(86,651)
166,603		 2020/21
£'000
118,351
4,525
2,131
44,001
(34,145)
(2,250)
21,667
25,545
(27,557)
152,268

131

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

Any other items for which the cash effects are investing or financing cash
flows
Proceeds from the sale of Property Plant and Equipment, Investment
Property and Intangible Assets		 2021/22
£'000
(43,957)
(29,332)
(73,289)		 2020/21
£'000
(41,604)
(41,934)
(83,538)

132

37 Cash Flow Statement - Investing Activities

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
Other receipts from investing activities
Net cash flows from investing activities		 2021/22
£'000
(132,850)
(183,000)
(1,710)
15,635
144,000
79,842
(78,083)		 2020/21
£'000
(106,008)
(294,800)
(5,090)
40,291
318,600
67,733
20,726

38 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		 2021/22
£'000
-
(9,017)
(1,570)
3,500
(7,088)		 2020/21
£'000
224
(8,809)
(11,586)
(4,928)
(25,099)

39 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.

133

----- Start of picture text -----
Name Nature of Council relationship Transactions Nature of Balances owed to
with the Council transactions / (from) the
Council as at 31 3
2022
Bristol Holdings 100% subsidiary £112.6k recharges Recharges £178.5k preference
Limited The Council has one Director post from BCC and share interest owed
on the Board. £3.5k recharges to to BCC
BCC
Bristol Waste 100% subsidiary of Bristol Holding £50.5m payments Contract for waste £8.4m loan from
Company Limited by Council to collection and BCC for the
The Council has one Director post company recycling services acquisition of
on the Board. £1.3m recharges Recharges waste vehicles.
from Company to
Council
Goram Homes 100% subsidiary of Bristol Holdings £15.4m loan Development of £15.4m loan
Ltd Limited. building projects
The Council has one Director post
on the Board.
Bristol Heat 100% subsidiary of Bristol Holdings £0.3m loan Operation of heat £0.3m loan
Networks Limited. network energy
Limited The Council has one Director post centres
(formally Energy on the Board.
Service Bristol
Limited)
Bristol Energy & 100% subsidiary of Bristol Holdings None N/A Nil
Technology Limited
Services (Supply) The Council has one Director post
Limited on the Board.
The company is currently dormant.
Bristol is Open 100% owned subsidiary None N/A Nil
Limited The Council has one Director posts
on the Board.
Bristol Local Joint venture with BCC holding £13.9m payments Provision of ICT and Nil
Education 10%, Building Schools for the to the company construction services
Partnership Future Investments (Bristol) Ltd to schools in Bristol.
(LEP) Ltd 10% and IIC Bristol Infrastructure
Limited 80%.
The Council has one director post
on the board.
City Leap Ltd 100% owned subsidiary. None N/A Nil
The Council has one director post
on the board.
The Company is currently dormant.
City Leap Bristol 100% owned subsidiary. None N/A Nil
Ltd The Council has one director post
on the board.
The Company is currently dormant.
Bristol City Leap 100% owned subsidiary. None N/A Nil
Ltd The Council has one director post
on the board.
The Company is currently dormant.
City Leap 100% owned subsidiary. None N/A Nil
Energy The Council has one director post
Partnership on the board.
Limited The Company is currently dormant.
----- End of picture text -----

134

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.

40 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 2021/22 is £10.261m (2020/21 £9.750m). There has been no change to the Council’s assets or liabilities arising from the transfer of functions to WECA.

135

41 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 2022, litigation proceedings had not commenced and no claims have been received.

136

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		 2021/22
Net
£'000
35,786
32,309
12,501
662
34,037
36
627
115,959
(112,501)
(919)
(9,614)
9
(123,025)
(7,066)
(7,066)
(2,602)
(792)
11,193
(288)
2,609
(477)
2,577		 2020/21
Net
£'000
31,450
29,959
9,769
1,117
30,381
37
1,628
104,341
(113,814)
(1,017)
(8,301)
(4)
(123,136)
(18,795)
(18,795)
(12,423)
379
11,210
(359)
2,472
(481)
(17,997)

137

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
2022
Net
£'000
(98,391)
2,577
(6,367)
(3,789)
-
(3,789)
(102,180)
31 March
2022
Net
£'000
(33,567)
(470)
792
(12,169)
2,602
477
(42,335)
177
4,896
-
30,896
35,969
(6,367)		 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
(27,398)
408
4,740
-
29,332
34,480
7,082

138

Notes to the Housing Revenue Account

1 Dwelling numbers as at 31 March 2022

Dwelling numbers as at 31 March 2022
Houses
Bungalows
Flats
Total Dwellings held at 31 March 2022		 31 March
2022
11,222
1,079
14,560
26,861		 31 March
2021
11,285
1,081
14,561
26,927

2 Rent and Rent Arrears

The total value of dwelling rents in 2021/22, less rent attributable to empty properties (voids), is £112.5m (£113.8m in 2020/21). 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
2022
£'000
2,222
9,713
11,935
1,784
7,150
8,934		 31 March
2021
£'000
3,081
10,042
13,123
2,698
7,393
10,091

Vacant Possession

The vacant possession value of dwellings as at 1st April 2022 was £5.264bn. The value of dwellings in the balance sheet (excluding dwellings leased to Registered Social Landlords) was £1.942bn, a difference of £3.322bn. 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 2021/22 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.

139

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		 2021/22
£'000
30,188
708		 2020/21
£'000
28,756
576
30,896
470
31,366
2,671
-
34,037		 29,332
388
29,720
661
-
30,381

Impairment

There was a loss on revaluation of £2.7m charged to the surplus on provision of Services (2020/21: £0.661m).

5 HRA Share of Contributions to/from Pension Reserve

For 2021/22 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 £2.6m (2020/21 £2.5m). 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 £12.2m (2020/21 (£9.5m)). This is excluded from the HRA Balance for the year and replaced with Employers Contributions payable £4.9m (2020/21(£4.7m)) with the net movement on the Pension reserves of £7.3m (2020/21 £4.8m). Further information regarding the accounting for pensions is included in the notes to the consolidated revenue account and balance sheet, see Note 35.

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		 2021/22
£'000
39,241
177
39,418
9,474
177
29,290
477
39,418		 2020/21
£'000
38,637
408
39,045
16,514
408
21,642
481
39,045

140

7 Capital Receipts

Capital receipts received during the year from disposals of land, houses and other property within the HRA was £14m (£35.3m in 2020/21). 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		 2021/22
£'000
67,231
12,616
-
1,404
81,251
(2,112)
9,474
-
88,613		 2020/21
£'000
50,550
8,021
3
27,287
85,861
(2,115)
(16,515)
-
67,231

8 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		 2021/22
£'000
(11,296)
29,290
(30,896)
-
(12,902)		 2020/21
£'000
(3,606)
21,642
(29,332)
-
(11,296)

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 £30.9m for 2021/22 (2020/21 - £29.3m). £29.3m was used to finance appropriate Housing Revenue Account capital expenditure.

9 Balance Sheet Value of Land and Houses, etc.

Dwellings
Land
Other assets		 2021/22
£'000
1,945,189
41,624
18,149
2,004,962		 2020/21
£'000
1,751,522
38,785
28,562
1,818,869

141

10 Asset Split

Operational - dwellings
Operational - other land and buildings
Non-operational
Intangible
Other		 2021/22
£'000
1,945,189
52,782
6,991
1,294
-
2,006,256		 2020/21
£'000
1,751,522
60,848
6,199
1,587
-
1,820,156

142

Collection Fund

Collection Fund Income and Expenditure Account

31 March 2021 31 March 2022
£'000
£'000
£'000		 £'000
£'000
£'000
Business
Rates
Council
Tax
Total
Note		 Business
Rates
Council
Tax
Total
Income
-
266,356
266,356
Council Tax		 -
283,272
283,272
137,951
-
137,951
Non-Domestic Rates		 181,924
-
181,924
(3,254)
-
(3,254)
Transitional Protection Payment		 (3,743)
-
(3,743)
Contributions towards previous years
Collection Fund Deficit:
-
-
-
Central Government		 -
-
-
1,673
-
1,673
Bristol City Council		 84,946
2,549
87,495
Avon & Somerset Police and Crime
-
-
-
Commissioner		 -
330
330
18
-
18
Avon Fire Authority		 904
109
1,013
89
-
89
West of England Combined Authority		 4,518
-
4,518
136,478
266,356
402,834		 268,549
286,260
554,809
Expenditure
Apportionment of Previous Years
Surplus
-
-
-
Central Government		 -
-
-
-
37
37
Bristol City Council		 -
-
-
Avon & Somerset Police and Crime
-
4
4
Commissioner		 -
-
-
-
2
2
Avon Fire Authority		 -
-
-
-
-
-
West of England Combined Authority		 -
-
-
-
43
43		 -
-
-
Precepts, Demands and Shares
197,854
226,055
423,910
Bristol City Council		 197,435
236,198
433,634
Avon & Somerset Police and Crime
-
29,289
29,289
Commissioner		 -
30,862
30,862
2,105
9,635
11,740
Avon Fire Authority		 2,100
9,779
11,880
10,524
-
10,524
West of England Combined Authority		 10,502
-
10,502
210,483
264,979
475,462		 210,038
276,839
486,877
Charges to the Collection Fund
649
1,237
1,885
Write offs of uncollectable amounts		 104
1,280
1,384
6,551
3,723
10,274
Increase/(Decrease) in bad debt
provision		 8,594
11,662
20,256

702
-
702
Cost of Collection Allowance		 698
-
698
4,716
-
4,716
Disregarded amounts		 5,657
-
5,657
-
-
-
Prior year adjustment		 -
-
-
(2,056)
-
(2,056)
Increase/(Decrease) in provision for
appeals		 (341)
-
(341)
10,561
4,960
15,521		 14,712
12,941
27,654
(84,567)
(3,626)
(88,193)
Surplus/(Deficit) for theyear		 43,799
(3,520)
40,279
314
(1,695)
(1,381)
Surplus/ (Deficit) as at 1 April		 (84,253)
(5,321)
(89,574)
(84,253)
(5,321)
(89,574)
Surplus/ (Deficit) as at 31 March		 (40,454)
(8,841)
(49,295)

143

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 127.950 for 2021/22 (128,566 for 2020/21). 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 £2,163.65 for 2021/22 (£2,061.03 for 2020/21) 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 2021/22 council tax

BANDS BANDS BANDS BANDS BANDS BANDS BANDS BANDS BANDS BANDS BANDS BANDS BANDS BANDS BANDS BANDS BANDS BANDS BANDS BANDS BANDS BANDS BANDS BANDS BANDS BANDS
A Entitled
to Disabled
Relief
A
B
C
D
E
F
G
H		 Total
No of Properties
0		 53,191 74,349 39,792 18,833 9,825 4,819 2,861 341 204,011
Exemptions and
disabled relief
(36)
(2,865)
(1,529)
(1,469)
(1,301)
(1,094)
(210)
(51)
10		 (8,545)
Less Discounts
68		 (5,546) (5,596) (2,760) (1,132) (517) (209) (130) (63) (15,883)
Total Equivalent
Dwellings
32
44,781
67,224
35,563
16,400
8,215
4,400
2,680
288		 179,583
Ratio
5/9		 6/9 7/9 1 1 11/9 13/9 15/9 18/9
Band D Equivalents
18		 29,854 52,286 31,612 16,400 10,040 6,355 4,467 577 151,608
Add Changes re:
Additional Properties		 2,045
Additional
Exemptions		 (2,673)
Council Tax Support (21,081)
Rate of Collection
98.5%		 (1,948)
Council Tax Base 127,950

144

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

Council Tax Total Bristol City Police & Crime
Avon Fire
Council Commissioner Authority
£'000 £'000 £'000 £'000
Debtors 38,188 32,552 4,301 1,335
Bad debt allowance (25,053) (21,356) (2,822) (876)
Prepayments and overpayments (3,571) (3,044) (402) (125)
Surplus/ (Deficit) at 31 March (8,841) (7,526) (998) (317)
Business Rates Total Bristol City West of England Avon Fire Central
Council Combined Authority Government
Authority
£'000 £'000 £'000 £'000 £'000
Debtors 28,655 26,936 1,433 287
Bad debt allowance (17,318) (16,279) (866) (173)
Prepayments and overpayments (8,750) (8,225) (438) (88)
Appeals provision (26,809) (25,200) (1,340) (268)
Surplus/ (Deficit) at 31 March (43,125) (41,660) (325) (86) (1,055)

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 2021/22 the non-domestic rating multiplier was 51.2p (51.2p in 2020/21) and the small business nondomestic rating multiplier was 49.9p (49.9p in 2020/21).

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 £173.567m for 2021/22 (£132.808m for 2020/21). The significant change is due to specific COVID-19 reliefs given. The total rateable value at 31 March 2022 was £545.728m (£556.356m at 31 March 2021).

145

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 March 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,

 Tier 3: for the relief of demographic and service pressures associated with growth.

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.

146

CASH
TRANSACTIONS		 CASH
TRANSACTIONS		 REVENUE &
EXPENDITURE
Business Rates
Pool Total
of which the
Council's
share		 Council
Expenditure
Council
Revenue
£'000
£'000		 £'000
£'000
Funds held by BRP at 1 April (55,830)
(14,363)		 -
-
Receipts into the Pool in-year
- Growth sums payable by Council's to
BRP in year		 (25,826)
(5,820)		 3,954
-
Distributions out of the Pool in-year
- Tier 1 no worse off 9,066
2,787		 -
(2,729)
- BRP management fee 35
9		 -
-
- EDF management fee 65
16		 -
-
- Tier 2 EDF funding 3,397
640		 -
(703)
-Tier 3 demographic and service pressures 2,739
501		 -
(646)
Funds held by BRP at 31 March (66,354)
(16,230)
Analysed between:
Uncommitted cash (Tier 2 inc contingency) (4,055)
(2,017)		 n/a
n/a
Committed cash (Tier 3) (62,299)
(14,213)		 n/a
n/a
Expenditure/(Revenue) recognised (66,354)
(16,230)		 3,954
(4,078)

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 £2,017m 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 made a payment of £0.703m to Bristol City Council on behalf of the EDF in 2021/22 (2020/21: £0m.)

The Council itself has recognised revenue income of £4.078m (2020/21 £4.406m) from the BRP and expenditure of £3.954m (2020/21 £4.947m) to the BRP for the year.

147

Group Accounts

Introduction

The Code of Practice on Local Authority Accounting in the United Kingdom 2021/22 (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 and Bristol Waste Company Limited and Goram Homes Limited are considered to be material to the financial statements. Details of the companies considered for consolidation are shown below. Although not material, Bristol Heat Networks Limited as a subsidiary 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, 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:

148

Group Financial Statements

The Group Comprehensive Income and Expenditure Account as at 31 March 2022

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

2020/21 2020/21 2021/22 2021/22
Gross
Exp		 Gross
Income		 Net
Exp		 Gross
Exp
Gross
Income		 Net Exp
£’000 £’000 £’000 £’000
£’000		 £’000
417,307 (212,528) 204,779
People		 454,856
(210,728)		 244,128
240,082 (164,300) 75,782
Resources		 238,121
(148,474)		 89,647
297,632 (115,130) 182,502
Growth & Regeneration		 244,831
(95,557)		 149,274
104,341 (123,136) (18,795)
Housing Revenue Account		 115,959
(123,026)		 (7,067)
212,076 (201,110) 10,966
Dedicated Schools Grant		 228,498
(204,964)		 23,534
9,860 (903) 8,957
Corporate Funding& Expenditure		 6,692
(889)		 5,803
1,281,298 (817,107) 464,191
Cost of services (Note G1)		 1,288,957
(783,638)		 505,319
7,937
Other operating expenditure		 11,780
9,097
Financing and investment income
and expenditure (Note G2)		 (50,705)
(473,173)
Taxation and non-specific grant
income		 (454,781)
8,052
(Surplus)Deficit on provision of
services		 11,613
(150,901)
Deficit on revaluation of Property,
Plant and Equipment assets		 (243,430)
112,632
Remeasurement of the net defined
benefit liability/asset		 (162,172)
-
Surplus/deficit on financial assets
measured at fair value		 -
(38,269)
Other comprehensive (income)
and expenditure		 (405,602)
(30,217)
Total comprehensive (income)
and expenditure		 (393,989)

149

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.

----- Start of picture text -----
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Adjusted Balance at 1 April 2020 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 (14,949) 1,653,805
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) 48,313 36,102
Other Comprehensive Expenditure and Income - - - - - - - - - - - 38,555 38,555 (286) 38,269
Adjustments between group accounts and -
authority accounts - - - (44,154) (44,154)
Total Comprehensive Expenditure and Income (30,208) - - (30,208) 17,997 - 17,997 - - - (12,211) 38,555 26,344 3,873 30,217
Adjustments between accounting basis and funding basis under regulations 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 (134,844) 26,344 3,873 30,217
Transfers to/(from) Earmarked Reserves 19 (123,543) 123,317 226 - (651) 651 - - - - - - - -
Increase/(Decrease) in 2020/21 18,665 123,317 226 142,208 10,264 651 10,915 (20) 7,690 395 161,188 (134,844) 26,344 3,873 30,217
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 1,239,889 1,695,099 (11,077) 1,684,021
Movement in Reserves during 2021/22
Surplus or (deficit) on the provision of services (13,403) - - (13,403) (2,577) - (2,577) - - - (15,980) - (15,980) 56,751 40,770
Other Comprehensive Expenditure and Income - - - - - - - - - - - 407,486 407,486 (1,884) 405,602
Adjustments between group accounts and authority accounts - - - - - - - - - - - - - (52,382) (52,383)
Total Comprehensive Expenditure and Income (13,403) - - (13,403) (2,577) - (2,577) - - - (15,980) 407,486 391,506 2,485 393,989
Adjustments between accounting basis and funding basis under regulations 18 (31,385) - - (31,385) 6,367 - 6,367 1,283 1,606 475 (21,654) 21,654 - - -
Net Increase/(Decrease) before Transfers to Earmarked Reserves (44,788) - - (44,788) 3,789 - 3,789 1,283 1,606 475 (37,634) 429,140 391,506 2,485 393,989
Transfers to/(from) Earmarked Reserves 19 49,196 (47,272) (1,924) - (4) 4 - - - - - - - - -
Increase/(Decrease) in 2021/22 4,408 (47,272) (1,924) (44,788) 3,785 4 3,789 1,283 1,606 475 (37,634) 429,140 391,506 2,485 393,989
Balance at 31 March 2022 Carried Forward 40,074 173,435 5,604 219,113 101,576 655 102,231 79,775 12,902 3,555 417,575 1,669,030 2,086,605 (8,592) 2,078,010
Note
General Fund Balance Earmarked Reserves School Reserves Sub Total - General Fund Housing Revenue Account Housing Revenue Account Earmarked R Sub Total - Housing Revenue Account Capital Receipts Major Repairs Reserve Capital Grants Unapplied Total Usable Reserves Unusable Reserves Total Council Reserves Council Share of Subsidiaries Total Group Reserves
----- End of picture text -----

150

Group Consolidated Balance Sheet as at 31 March 2022

Consolidated Balance Sheet as at 31 March 2022
31-Mar-21
Note		 31-Mar-22
£'000 £'000
2,827,555
Property, Plant & Equipment		 3,055,966
207,406
Heritage Assets		 215,256
20,573
Intangible Assets		 14,991
275,903
Investment Property		 356,640
38,678
Long Term Investments
G10		 48,848
38,666
Long Term Debtors		 34,627
3,408,781
Long Term Assets		 3,726,328
64,983
Short Term Investments
G10		 103,948
12,431
Inventories		 26,998
148,071
Short Term Debtors
G3		 171,569
148,308
Cash and Cash Equivalents		 142,542
806
Assets held for sale		 806
374,599
Current assets		 445,863
(20,702)
Cash and Cash Equivalents		 (19,709)
(4,966)
Short Term Borrowing
G10		 (9,952)
(227,860)
Short Term Creditors
G4		 (308,917)
(5,760)
Provisions		 (2,849)
(44,448)
Capital grants received in advance		 (71,814)
(303,736)
Current liabilities		 (413,241)
(450,488)
Long Term Borrowing
G10		 (445,488)
(26,277)
Provisions		 (26,005)
(1,285,527)
Other Long Term Liabilities		 (1,178,141)
(33,331)
Capital Grants Receipts in Advance		 (31,306)
(1,795,623)
Long-term liabilities		 (1,680,940)
1,684,021
Net assets		 2,078,010
(451,769)
Usable Reserves		 (422,437)
(1,232,252)
Unusable Reserves
G5		 (1,655,573)
(1,684,021)
Total reserves		 (2,078,010)

151

Group Cash Flow Statement for the year ended 31 March 2022

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.

----- Start of picture text -----
2020/21 2021/22
£'000 Note £'000
(8,057) Net surplus on the provision of services (11,613)
Adjustment to net surplus on the provision of services for non-cash G6
143,977 165,347
movements
Adjust for items included in the net surplus or deficit on the G6
(83,538) (73,289)
provision of services that are investing and financing activities
52,382 Net cash flows from Operating Activities 80,445
20,396 Investing Activities G7 (78,132)
(25,099) Financing Activities G8 (7,088)
47,679 Net increase (decrease) in Cash and Cash Equivalents (4,774)
79,927 Cash and Cash Equivalents at the beginning of the reporting period 127,606
127,606 Cash and Cash Equivalents at the end of the reporting period 122,832
----- End of picture text -----

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:

152

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

----- Start of picture text -----
Bristol Holding Ltd Direct Subsidiary Consolidated
Bristol Waste Company Ltd Indirect Subsidiary Consolidated
BE2020 Limited (formally Bristol Energy Indirect Subsidiary In liquidation therefore
Limited) no requirement to
produce accounts. Not
consolidated.
Bristol Energy and Technology Services Indirect Subsidiary Not Material – Dormant
(Supply) Ltd 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
----- End of picture text -----

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 2022 the Council has invested £37.153m in Bristol Holding Limited. This was made up of £36.550m ordinary shares and £603m 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.

153

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.

In September 2021, the Council approved Goram Homes joint venture plans for 268 new homes at Romney House, Lockleaze. The site was transferred during 2021/22 to Goram Homes joint venture in return for £12.9m of repayable loan notes. 147 homes (55%) will be affordable and managed by Bristol City Council.

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 39).

Events after the Balance Sheet Date

The Statement of Accounts was authorised for issue by the Director of Finance on 26 July 2022. Events taking place after this date are not reflected in the financial statements or notes. Where events taking place before this date provided information about conditions existing at 26 July 2022, the figures in the financial statements and notes have been adjusted in all material respects to reflect the impact of this information. There are no non-adjusting events after the Balance Sheet date.

Group financial position

The closing net deficit balance of the group is £40.3m 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 £2.6m and gross expenditure of £3.9m 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.

154

G2 Financing and Investment Income and Expenditure

Interest payable and similar charges
Loss Allowance (Financial Guarantee Contracts)
Changes in the Fair Values 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
rrent Debtors
Current debtors
Trade Receivables
Prepayments
VAT
Other
Total*		 31 March
2022
£'000
27,402
-
325
23,171
(7,058)
(11,696)
(82,849)
(50,705)
31 March
2022
£'000
34,443
12,340
11,462
113,324
171,569		 31 March
2021
£'000
36,671
(5,379)
(2,301)
22,523
(9,282)
(10,569)
(22,566)
9,097
31 March
2021
£'000
24,836
4,677
9,632
108,926
148,071

G3 Current Debtors

G4 Creditors

Current liabilities
Trade Payables
Other Payables
Receipts In Advance
Total		 31 March
2022
£'000
21,106
183,694
104,117
308,917		 31 March
2021
£'000
10,690
147,659
69,511
227,860

G5 Unusable Reserves

Revaluation Reserve
Capital Adjustment Account
Financial Instruments Adjustment Account
Deferred Capital Receipt Reserve
Pensions Reserve
Collection Fund Adjustment Account
Accumulated Absences Account
Dedicated Schools Grant Adjustment Account		 31 March
2022
£'000
(1,199,657)
(1,571,526)
6,721
(12,851)
1,037,796
49,186
10,108
24,650
(1,655,573)		 31 March
2021
£'000
(987,171)
(1,505,872)
6,898
(1,448)
1,144,014
87,935
13,388
10,004
(1,232,252)

155

G6 Cash Flow Statement

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

The cash flows for operating activities include the following significant items:
Interest received
Interest paid
Dividends received		 2021/22
£'000
4,901
(33,870)
2,221		 2020/21
£'000
634
(34,003)
1,954

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
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		 2021/22
£'000
110,243
5,945
1,317
74,700
(16,245)
(14,567)
61,469
29,293
(86,808)
165,347		 2020/21
£'000
120,197
4,525
2,131
12,827
(12.774)
(2,455)
21,109
25,545
(27,128)
143,977

The surplus or deficit on the provision of services has been adjusted for the following items that are investing and financing activities:


nvesting and financing activities:
Any other items for which the cash effects are investing or financing cash
flows
Proceeds from the sale of Property Plant and Equipment, Investment
Property and Intangible Assets		 2021/22
£'000
(43,957)
(29,332)
(73,289)		 2020/21
£'000
(41,934)
(41,604)
(83,538)

156

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
Other receipts from investing activities
Net cash flows from investing activities		 2021/22
£'000
(132,899)
(183,000)
(1,710)
15,635
144,000
79,842
(78,132)		 2020/21
£'000
(107,018)
(294,800)
(4,410)
40,291
318,600
67,733
20,396

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
Net cash flows from financing activities		 2021/22
£'000
-
(9,017)
(1,570)
3,500
(7,088)		 2020/21
£'000
224
(8,809)
(11,586)
(4,928)
(25,099)

157

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.

2021/22 Salary, Fees
and
Allowances		 Compensation
for Loss of
Office
Pension
Contribution		 Total
Post Title Post Term Post Holder Notes £ £ £ £
Bristol Waste Company
Managing Director Apr’ 21 – Mar’ 22 126,586 - 10,815 137,401
Finance Director Apr’ 21 – Mar’ 22 114,827 - 13,563 128,390
Goram Homes
Managing Director Apr’ 21 – Mar’ 22 114,587 - 10,428 125,015
Finance Director Apr’ 21 – Mar’ 22 56,231 - 5,623 61,854
Bristol Holding Company
Executive Chair (CEO) Apr’ 21 – Oct’ 21 43,334 - 9,063 52,397
Group Finance Director & Executive Lead Apr’ 21 – Mar’ 22 130,900 - - 130,900
Bristol Heat Networks
Consulting Officer Apr’ 21 – Mar’ 22 J Bungey 121,296 - - 121,296

Note 1 - 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.

158

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
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
Bristol Holding Company
Executive Chair (CEO) Apr’ 20 – Mar’ 21 88,365 18,848 107,213

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

159

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
31 March 31 March 31 March 31 March
2022 2021 2022 2021
£'000 £'000 £'000 £'000
Financial Liabilities at Amortised
cost
Borrowing (445,488) (450,488) (9,952) (4,966)
Service Concessions (107,884) (114,670) (6,786) (6,803)
Creditors (6,680) (2,738) (279,712) (209,684)
Financial Liabilities at Fair Value
through profit and loss
Financial Derivative - - (20,702)
Total Financial Liabilities (560,052) (567,896) (296,450) (242,155)

Financial Assets at amortised cost
Investments - - 118,596 111,777
Debtors 8,394 800 107,685 96,008
Financial Assets at Fair Value
through Other Comprehensive
Income
Investment 350 350 - -
Financial Assets at Fair Value
through profit and loss
Investments 38,473 38,228 108,184 101,476
Total Financial Assets 47,217 39,378 334,465 309,261

Movements

The net increase of financial assets and liabilities (circa £13m) was through a combination of increases in working capital and reserves resulting in additional cash resources to invest in lieu of using these resources.

160

Borrowing

31 March
31 March
2022
2021
Current borrowing £'000
£'000
Deposit loans (repayable at notice - up to 7 days) 285
102
8,251
3,251
1,137
1,334
259
259
21
21
Other short-term borrowing (repayable within 1 year):
- Public Works Loan Board
- Banks and other monetary sector
- Energy Improvement Loans
- Local Bonds and Stocks
Total 9,952
4,966
31 March
31 March
2022
2021
Non-current borrowing £'000
£'000
Public Works Loan Board 325,439
330,439
70,000
70,000
50,000
50,000
49
49
Lender Option Borrower Option (Lobo)
Market Debt
Stocks
Total 445,488
450,488

161

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 2021/22 Financial Instruments Gains and Losses 2021/22 Financial Instruments Gains and Losses 2021/22
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 (33,695) - - - (33,695)
Total expense in Surplus or
Deficit on the Provision of
Services (33,695) - - - (33,695)
Interest Income 4,595 78 4,673
Fair Value Movement (325) (325)
Dividend Income 2,220 2,220
Total income in Surplus or
Deficit on the Provision of
Services (33,695) 4,595 - 1,973 (27,127)
Deficit arising on revaluation
of financial assets in Other
Comprehensive Income and
Expenditure - - - - -
Net gain/(loss) for the year (33,695) 4,595 - 1,973 (27,127)

162

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)

163

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 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 2022 using: March 2021 using:
Quoted Observable Unobservable Quoted 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 108,184 - - 101,476 - -
Bristol Port Company (Non-
traded Unquoted Equity
Investment) - - 28,000 - - 29,000
Other Unquoted private
companies - - 192 - - 128
Pooled property fund - - 10,281 - - 9,100
Fair Value through Other
Comprehensive Income
Other unquoted private
companies - - 350 - - 350
Total Non-traded securities: 108,184 - 38,822 101,476 - 38,578
Investment properties - 356,640 - - 275,903 -
Surplus properties - 29,462 - - 43,706 -
Total recurring fair value
measurements 108,184 386,102 38,822 101,476 319,609 38,578
Non-recurring fair value
measurements
Assets held for sale - 806 - 806 -
Total non-recurring fair value
measurements - 806 - - 806 -

164

----- Start of picture text -----
Valuation
techniques and
Inputs Observable
and
Description of Valuation Unobservable Key sensitivities affecting the
asset hierarchy Basis of Valuation inputs valuations provided
Money Market Level 1 Unadjusted quoted Latest quoted
Funds prices in active markets prices
for identical shares
Surplus assets Level 2 All surplus assets have Evidence of Not all assets are physically
been valued by RICS title, floor area, inspected every year. Latent
qualified valuers to Fair siting and site defects, repair and maintenance
Value less costs to sell, conditions, backlogs, general changes in the
reflecting highest and type/age and market and other impairments
best use. current use of could have a significant impact on
the property the values provided.
have been taken
into account
together with
general market
conditions and
advertised value
of similar
properties
currently up for
sale.
Investment Level 2 All investment All valued on an Changes to market conditions,
Properties [ (further ] properties have been investment lease terms, covenant strength and
detailed information in note 22) valued by the Group’s income basis, occupancy levels could all affect
in-house valuers (all using existing the asset valuations provided.
RICS qualified) on an lease terms and
investment income current yields
basis which we are
satisfied represents
highest and best use
overall.
Bristol Port Level 3 This investment has Calculations Changes to market conditions
Company been valued by an have been based (local and global), and the
external specialist an income comparable data used within the
valuation company for approach to valuations. If the growth of
financial year ending valuation, by future returns is greater or lesser
31 [st] March 2020 and applying a by 0.5% than the 2% forecast, the
refreshed by Council multiple derived fair value will be circa £1.7m
officers for this from the market higher or lower respectively.
financial year on the to a
same basis. maintainable
profit figure.
----- End of picture text -----

165

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 (£542k) 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 £89k
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.

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

31 March
31 March
2022
2021
Description Non-traded
securities
Non-traded
securities
£000
£000
Opening balance 38,578
36,450

(361)
2,228
-
-
(361)
2,228
831
100
(225)
(200)
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 38,822
38,578

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 (-£1m) and Homelessness Property fund (+£675k).

166

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 2022 31 March 2021
Carrying
amount
Fair value		 Carrying
amount
Fair value
£000
£000		 £000
£000
Cash & Cash Equivalents -
-		 20,702
20,702
333,690
501.500
70,865
108,400
50,469
74,700
212,328
212,328
121,473
192,673
524
524
Public Works Loan Board (PWLB) 333,690
459,400
Lender Option Borrower Option 70,667
98,100
Market Debt 50,470
68,100
Current Creditors 286,299
286,299
Service Concessions 114,670
166,960
Other 707
707
Total Liabilities 856,503
1,079,566		 810,051
1,110,827

The Group has used a transfer value for the fair value of financial liabilities. We have also calculated an exit price fair value of £1.238bn 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 2022) arising from a commitment to pay interest to lenders above current market rates.

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Financial Assets 31 March 2022 31 March 2021
Carrying
amount
Fair value		 Carrying
amount
Fair value
£000
£000		 £000
£000
Current investments 103,948
103,948		 64,983
64,983
46,794
46,794
96,008
96,008
800
800
Cash and Cash Equivalents 14,648
14,648
Current Debtors 107,685
107,685
Non-current debtors 8,394
8,394
Total Financial Assets 234,675
234,675		 208,585
208,585

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.

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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 2022 using: March 2021 using:

Descriptions
Quoted
prices in
active
markets
Observable
inputs
Level 1
Level 2
£000
£000		 Unobservable
inputs
Quoted
prices in
active
markets
Observable
inputs
Unobservabl
e inputs
Level 3
Level 1
Level 2
Level 3
£000
£000
£000
£000
Recurring fair value
measurements using:
Financial Liabilities held
at Amortised Cost
Cash & Cash Equivalent
-		 20,702
333,690
70,865
50,469
123,621
524

Public Works Loan Board
(PWLB)
333,690
Lender Option Borrower
Options
70,667
Market debt
50,470
Service Concessions
116,985
Other
707
Total
572,519		 579,169
64,983
46,794
-
800
Financial Assets held at
amortised cost
Current Investments
103,948
Cash and Cash Equivalents
14,648
Non-current Investments
-
Non-current Debtors
8,394
Total
126,990		 112,577

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.

169

G11 Nature and Extent of Risks Arising from Financial Instruments

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

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 15 February 2021 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:

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 2022 that this was likely to crystallise.

170

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-22
31-Mar-22
31-Mar-22		 31-Mar-22
31-Mar-21
Current Investments:
Local Authorities 53,537
0.00%
0.00%		 -
-
3
3
30
18
AA rated counterparties 15,076
0.02%
0.02%
A rated counterparties 49,983
0.05%
0.05%
Sub-total 118,596 33
21
Trade debtors 107,685 -
-
-
-
33
21
Non-current debtors 8,394
Total Financial assets 234,675

The estimated maximum exposure for credit loss for Treasury investments is £33k and a general allowance has been set aside for this.

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:

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.

171

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.

Debtor analysis Gross
debtor at		 Allowance for
credit losses		 Net debtor
at		 Net
debtor at
at
31-Mar-22 31-Mar-22 31-Mar-22 31-Mar-21
£'000 £'000 £'000 £'000
Local taxpayers 59,488 (37,635) 21,853 15,566
Housing rents 11,935 (8,934) 3,001 3,032
Other - sundry debtors 168,774 (35,047) 133,727 117,237
Total Other Entities and
Individuals		 240,197 (81,616) 158,581 135,835
Central Government bodies 10,970 - 10,970 10,561
Other local authorities 1,509 - 1,509 1,571
NHS bodies 509 - 509 160
Total debtors 253,185 (81,616) 171,569 148,127
Balance sheet debtors 253,185 (81,616) 171,569 148,127
Current debtors not qualifying as a
financial instrument under IFRS
(101,520)		 37,635 (63,885) (52,119)
Current debtors qualifying as a
financial instrument under 151,665 (43,981) 107,684 96,008
IFRS

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
2022
2021
£'000
£'000
Less than three months 35,342
30,047
2,240
1,759
17,837
15,276
50,514
46,848
Three to four months
Four months to one year
More than oneyear
Total 105,932
93,930

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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
2022
2021
£'000
£'000
Less than 1 year 334,465
288,559
314
339
301
324
46,602
38,715
Between 1 and 2 years
Between 2 and 3 years
More than 3years
Total 381,682
327,937

The maturity analysis of financial liabilities is as follows:

31 March
2022
31 March
2021
£'000
£'000
Less than 1 year 296,450
219,338
1 - 2 years 14,364
11,786
2 - 5 years 57,659
42,179
5 - 10 years 80,539
88,177
10+years 407,490
425,754
Total 856,502
787,234

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:

173

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 2022
%
£'000		 Actual 31
March
2021
%
£'000
Less than 1 year
-
30		 9,952
2%		 4,966
1%
5,000
1%
20,000
4%
34,000
7%
391,488
87%
455,454
100%
Between 1 and 2 years
-
40		 -
-%
Between 2 and 5 years
-
40		 32,000
7%
Between 5 and 10 years
-
50		 22,000
5%
More Than 10 Years
25
100		 391,488
86%
Total 455,441
100%

Included within the maturity profile are £70m of LOBOS with maturities averaging 39 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 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.

174

At 31 March 2022, if interest rates had been 1% higher with all other variables held constant, the financial effect would be:

31 March
2022
£'000
Increase in interest receivable on variable rate investments 2,429
Impact on Surplus or Deficit on the Provision of Services 2,429
Share of overall impact debited to the HRA 1,740
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)		 236,700

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

Foreign exchange risk

During 2021/22 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.

175