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2021-03-31-accounts

Trustees' Annual Report for the period

Period start date Period end date 1[st] April 2020 31[st] March 2021 To

From

Section A Reference and administration details

Charity name Ayscoughfee Hall and Gardens Other names charity is known by Registered charity number (if any) 515905 Charity's principal address Ayscoughfee Hall Museum Churchgate Spalding, Lincolnshire. Postcode PE11 2RA

Ayscoughfee Hall and Gardens

Names of the charity trustees who manage the charity

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15		 Trustee name Office (if any) Dates acted if not for whole
**year **		 Name of person (or body) entitled
to appoint trustee (ifany)
Mr B Alcock Councillor The electorate of the South
Holland district
MrJAstill Councillor The electorate of the South
Holland district
Mr A Beal Councillor The electorate of the South
Holland district
Mr J E Avery Councillor The electorate of the South
Holland district
Mr F Biggadike Councillor The electorate of the South
Holland district
Mr H Bingham Councillor The electorate of the South
Holland district
Mr M D Booth BEM Councillor The electorate of the South
Holland district
Mr C J T H Brewis Councillor The electorate of the South
Holland district
Ms T A Carter Councillor The electorate of the South
Holland district
Mr ACasson Councillor The electorate of the South
Holland district
Mr PE Coupland Councillor The electorate of the South
Holland district
Mr A Cronin Councillor The electorate of the South
Holland district
Mr H Drury Councillor The electorate of the South
Holland district
Mr R Gambba-
Jones		 Councillor The electorate of the South
Holland district
Mr R Gibson Councillor The electorate of the South
Holland district

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37		 Mr RGrocock Councillor The electorate of the South
Holland district
Mr M Hazan Councillor The electorate of the South
Holland district
Ms J L King Councillor The electorate of the South
Holland district
Ms C JLawton Councillor The electorate of the South
Holland district
Mr J D McLean Councillor The electorate of the South
Holland district
MrsA M Newton Councillor The electorate of the South
Holland district
Mr N Pepper Councillor The electorate of the South
Holland district
The Lord Porter of
Spalding CBE		 Councillor The electorate of the South
Holland district
Mr P Redgate Councillor The electorate of the South
Holland district
Ms J L Reynolds Councillor The electorate of the South
Holland district
MrGRudkin Councillor The electorate of the South
Holland district
Ms G Scalese Councillor The electorate of the South
Holland district
Mr M D Seymour Councillor The electorate of the South
Holland district
Mrs S Slade Councillor The electorate of the South
Holland district
Mrs E J Sneath Councillor The electorate of the South
Holland district
Mr G J Taylor Councillor The electorate of the South
Holland district
Mr A C Tennant Councillor The electorate of the South
Holland district
Mr J Tyrell Councillor The electorate of the South
Holland district
MrCWalsh Councillor The electorate of the South
Holland district
Mr D Wilkinson Councillor The electorate of the South
Holland district
Mr A R Woolf Councillor The electorate of the South
Holland district
Mr C N Worth Councillor The electorate of the South
Holland district

Names of the trustees for the charity, if any, (for example, any custodian trustees)

Name Dates acted if not for whole year

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Names and addresses of advisers (Optional information)

Type of adviser Name Address

Name of chief executive or names of senior staff members (Optional information)

Chief Executive – Anna Graves (until Oct 2020)

Director – Robert Walker

South Holland Place Manager – Emily Spicer

Communities Manager – Emily Holmes

Section B Structure, governance and management

Description of the charity’s trusts

Type of governing document

How the charity is constituted

Trust

Trustee selection methods

Elected

Additional governance issues (Optional information)

You may choose to include additional information, where relevant, about:

Section C Objectives and activities

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The objects of the Charity are the establishment and maintenance of a Recreation Ground and Museum. Summary of the objects of the charity set out in its governing document Provision of a Museum and public gardens. Summary of the main activities undertaken for the public benefit in relation to these objects (include within this section the statutory declaration that trustees have had regard to the guidance issued by the Charity Commission on public benefit)

Additional details of objectives and activities (Optional information)

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You may choose to include further statements, where relevant, about:

Section D Achievements and performance

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Section D Achievements and erformance p

The year 2020-2021 was challenging for Ayscoughfee Hall Museum & Summary of the main Gardens due to the Covid 19 pandemic. All museums in England closed achievements of the charity in March 2020, which allowed vital maintenance works to be carried out, during the year and ‘behind the scenes’ collections and admin work. Ayscoughfee Gardens remained open throughout the pandemic, and was very popular with visitors throughout the whole period, providing access to open space and nature to people, which anecdotally was very important to our local community.

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Section E Financial review

The Charity does not have any reserves.

Brief statement of the charity’s policy on reserves

Details of any funds materially Not applicable in deficit

Further financial review details (Optional information)

You may choose to include additional information, where relevant about:

Section F Other optional information

Section G Declaration

The trustees declare that they have approved the trustees’ report above.

Signed on behalf of the charity’s trustees

Signature(s) Julia Elizabeth Knight Full name(s) Position (eg Secretary, Chair, Manager etc) Date 9/5/2022

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CHARITY TRUST - AYSCOUGHFEE MUSEUM AND GARDENS

INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR ENDED 31 MARCH 2021

Sum of Amount Column Labels
Row Labels 2019/20 2020/21
Employees Direct £226,790 £177,794
Employees Indirect £312 £75
Income -£58,739 -£48,785
MOVERESERVE -£2,823
Premises £55,744 £23,015
Supplies & Services £108,957 £30,485
Support Services £63,873 £61,835
Tax & Non Spec Grant -£51,125 -£6,500
Transfer Payments £200
Transport £578 £21
Grand Total **£343,567 ** £238,141

AUDITED FINANCIAL STATEMENTS For the Year Ended 31 March 2021

C o n t e n t s

FINANCIAL STATEMENTS

Page
Narrative Report 3 – 20
Statement of Responsibilities 21
CORE FINANCIAL STATEMENTS
Comprehensive Income and Expenditure Statement 22
Movement in Reserves Statement 23 – 24
Balance Sheet 25
Cash Flow Statement 26
Notes to the Accounts 27 – 88
SUPPLEMENTARY FINANCIAL STATEMENTS
Housing Revenue Account Income and Expenditure Statement 89
Movement on the Housing Revenue Account Statement 90
Notes to the Housing Revenue Account Statement 91– 93
Collection Fund Statement 94
Notes to the Collection Fund Statement 95 – 96
Group Accounts 97 – 105
Glossary of Terms 106 – 111
Annual Governance Statement 112 – 120

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NARRATIVE REPORT 2020/21

This report seeks to provide a summary and a straightforward explanation of the often complicated local government finance arrangements. It seeks to summarise the key events during the year, their associated financial impact and hopefully make the Financial Statements easier to understand. The Narrative Report, together with the Annual Governance Statement and the auditor’s report, are outside the scope of the formal Accounts, but all of the documents constitute the Council’s Financial Report for 2020/21.

The Narrative Report and the detailed accounts aim to provide information to members of the public; electors and residents of South Holland; council members; partners; stakeholders and other interested parties so that they can:

The 2020/21 Budget and the Medium Term Financial Plan, approved by Council on 26 February 2020, presented a balanced position after a wide ranging review of activities and proactively seeking reductions in costs and more efficient ways of working to ensure this position continues. Within the capital programme, funding has been allocated to support growth in the district, specifically for commercial investments, more affordable housing, investment in new technology and improvements to private sector housing.

To assist readers in understanding the financial position of South Holland, the Narrative Report is structured to provide additional information in the following sections:

The 2020/21 accounts were produced within the statutory deadlines set out in the Accounts and Audit Regulations 2015. The Council’s approach to finance will continue to evolve, aiding the self-service nature of financial/service management in all operations. This working model also supports current, and future, changes in the Council as a whole as it strives to increase income, reduce costs, manage demand, transform working practices, introduce innovation and maintain performance.

1. Our District

South Holland district is situated in the south eastern corner of Lincolnshire. The district is located in flat fenlands reclaimed from the sea. The Council works closely with 5 Internal Drainage boards and the Environment Agency to maintain this usable land and prevent inundation.

The district has five towns: Crowland, Holbeach, Long Sutton, Spalding and Sutton Bridge, and various small rural communities, with a low population density of 125 persons per km[2] compared to an average of 305 in the East Midlands and 427 for England.

The latest population estimate for South Holland is 93,980 which is an increase of 5,580 (6.31%) since the 2011 census. South Holland experienced an annual rate of increase in population of 0.7%, this is higher than the national average of 0.6%.

Working age population is estimated to be 54,900 (58.4%). Residents aged 65 and over make up approximately 22,700 (24.2%) of the population. It is predicted the population will increase from 93,980 to 97,709 (3.97%) by 2024, which is a higher rate of growth than generally predicted for England and Wales (3.50%).

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The number of households in the district is approximately 40,700 with the Electoral Wards of Spalding, the largest town, having an estimated 12,100 dwellings.

All statistics are based on the Office for National Statistics 2018 mid-year estimates, the most recent available at time of publication.

The South Holland economy is largely based upon agriculture, horticulture and food processing, and their associated distribution and packaging services. Generally levels of employment are high at 80.6% of people in working age 16-64 years (May 2018 - source ONS Annual Population Survey) compared to 75.7% for Lincolnshire as a whole.

South Holland’s resident population is 50.8% female and 49.2% male. The average age of the South Holland district population is 45 years. The predominant age band in South Holland is ‘Age 16 to 64’ which represents 58.4% of the total district population.

3. South Holland District Council

The Council, together with its partner organisations and external contractors, delivers a wide range of services to our residents, businesses and visitors. These are detailed in the table below categorised by the Council’s Directorates:

Commercialisation Economic development. Local plan and planning policy, Housing strategy,
delivery of special projects (assets and infrastructure), collection of all
revenues, benefit services, corporate finance including investment income,
government grants and other funding, and use of reserves.
Place All council assets and property, building control, planning services,
licensing, community services (including leisure, events, CCTV),
environmental services (including refuse collection, recycling, green waste
collection and street cleaning), Public Protection, housing services such as
disabled facility grants, homelessness and housing advice, houses in
multiple occupation. Also included is the Council’s housing landlord service.
Strategy &
Governance		 Corporate improvement and performance, Communications and marketing,
corporate management, members, elections, human resources, ICT
services.

South Holland is a district comprising of 22 parishes, most parishes have their own parish council, or parish meeting. The Council is composed of 37 Councillors, as at 31 March 2021 the political make-up of the Council was as follows:

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South Holland District Council is a forward-thinking, entrepreneurial and innovative authority, which continues to strive for excellence and deliver great value for money for our residents, whilst making the most of the huge opportunities for economic growth in our district.

The Council has adopted the Leader and Cabinet model as its political management structure arising from the Local Government and Public Involvement in Health Act 2007. The Leader of the Council has responsibility for the appointment of Members of the Cabinet, the allocation of Portfolios and the delegation of Executive Functions.

All councillors meet together as the Council, here councillors decide the Council’s overall policies and set the budget and council tax each year. The Council holds to account the Executive and Committees. The Cabinet is made up of the Leader, Deputy Leader and Portfolio Holders, each Portfolio Holder has specific responsibilities over an area of the Council’s activities.

Cabinet Members are held to account by a system of scrutiny, which is also set out in the Constitution. Scrutiny of Executive decisions for 2020/21, including the setting of a balanced budget for 2020/21 has been undertaken by the following committees:

Joint meetings of the committees were held throughout the year.

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The District Council as the Billing Authority collects the council tax for the County Council, the Lincolnshire Police Authority, Parish Councils and Internal Drainage Boards.

4. Council Priorities, Corporate Plan and Performance

Our ambition is to continue to increase the prosperity and wellbeing of our residents and businesses, whilst striving to protect and enhance the district’s environment and its unique and historic character.

The Council has a corporate plan covering 2019-23, each year an annual delivery plan is drawn up to cover the actions for the next year. The business plan shows what the Council will do to meet the needs and aspirations of residents. The Plan was refreshed in 2019 and extends to 2023, the Medium Term Financial Plan for 2019 to 2023 is closely aligned to the Council objectives, aims and priorities within the Corporate Plan.

The Corporate Plan also sets out how we work with partners and the community to ensure that South Holland continues to be a place of choice for people to live, work, visit and play. It is based on information about the area and identifies how we will achieve our long term vision, what our key priorities are and how we will deliver the services our residents want.

The ambition embodied in the plan is to continue to increase the prosperity and wellbeing of our residents and businesses, whilst striving to protect and enhance the environment and the unique and historic character of the district.

The Corporate Plan sets out the Council’s priorities which are:

“To develop safer, stronger, healthier and more independent communities while protecting the most vulnerable”

“To have pride in South Holland by supporting the district and residents to develop and thrive” “To provide the right services, at the right time and in the right way” “To encourage the local economy to be vibrant with continued growth”

Delivery of the plan is monitored through a performance framework and annually the delivery of the plan is refreshed to ensure it is relevant to the current political and economic climate. Internally there is a monthly performance board which holds to account all performance indicators, team projects and audit recommendations to ensure delivery of the corporate plan and performance framework. Quarterly performance is reported to our Member scrutiny panel and subsequently to Cabinet as part of the constitutional governance. Financial performance reports are prepared monthly for review by the Executive

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Management Team and the Finance Board, this supports effective management of budgets and informs financial strategy in the Medium Term Financial Strategy.

How We Performed in 2020/21

In 2020/21 we delivered the following activities towards the 2019 – 2023 business plan actions.

In 2020/21 we paid We collected £19.747m of £12.244m in Housing Business Rates in 2020/21, from Benefits to 3,316 cases. 2,880 businesses, achieving a collection rate in year of 92.46%. We collected £51.934m of Council Tax in 2020/21, from 42,163 The Council’s Investment homes, achieving a Property Assets have a collection rate in year of fair value of £1.6m and 96.91%. have generated income of £0.164m in 2020/21 We paid out £25.918m in Covid19 Government grants to businesses in In 2020/21 we successfully collected 2020/21. Plus a further 99.95% weekly refuse and recycling £0.996m in discretionary collections from over 42,000 households grants to business and in South Holland. the self-employed. We determined 91% of major planning applications within the agreed time frames (13 weeks or agreed extension)

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5. Our People

The Council is headed by a shared Corporate Management Team (CMT). The team is shared with Breckland District Council along with other senior managers. The two Councils continue to exercise independent democratically-accountable local government in their respective areas, each having their own governance arrangements. The Corporate Management Team consists of a Chief Executive and three Executive Directors. Each Executive Director has overall responsibility for a directorate. The services included in each directorate are detailed on in Section 3.

The make-up of the Executive Management Team is as set out below:

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Chief Executive
Head of Paid Service
Exec Director
Exec Director
Strategy & Governance Exec Director
Growth & Commercialisation
Monitoring Officer Place
S151 Officer
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In addition there are five shared executive managers who are part of the Executive Management Team. There is also a dedicated team of shared managers and service managers to support the delivery of services for both councils.

In October 2020 a strategic review of the shared management structure between South Holland and Breckland Councils was commissioned. Both councils have successfully developed and operated a shared management model for over 10 years which has been replicated across the Local Government sector, however during the Covid-19 pandemic there was a ‘temporary uncoupling’ of shared managers to enable each council to focus on their own ‘places’. As a result of this successful place based working and the evolving needs to provide service to our residents to meet the challenges of the Covid-19 pandemic, Full Council approved in February 2021 that the existing shared management arrangements with Breckland would end with effect from May 2021. Staff have been ‘landed’ in their new roles at either South Holland or Breckland Councils, there were no redundancies. Arrangements were also in place to ensure the statutory roles of Chief Executive, S151 Officer and Monitoring Officer were in place. Some sharing of other services is continuing (such as legal and procurement) in the same manner as prior to May 2021.

The Council employs 227.4 full time equivalent staff as at 31 March 2021. This includes 197 full time staff and 48 part time staff. This figure includes six apprentices.

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From 1 April 2019 the Council, in partnership with East Lindsey District Council, renewed its arrangement with Public Sector Partnership Services Limited (PSPS) to provide back office and business support services. The shared services delivered through PSPS include:

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6. Financial Performance

The Management Accounts below show the Council’s actual financial performance for the year compared to the budget. Further information can be found in the Expenditure and Funding Analysis on page 43.

General Fund

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2020/21 2020/21 2020/21
Budget Actual Variance
£'000 £'000 £'000
Commercialisation Directorate 2,097 2,435 338
Place Directorate - Investment Properties (187) (155) 31
Place Directorate 6,076 6,228 152
Strategy & Governance Directorate 3,587 3,694 107
Statutory recharge to the HRA for support services (1,962) (1,966) (4)
Cost of Services 9,612 10,236 624
Internal Drainage Boards and Parish Precepts 3,457 3,457 0
Investment Income (383) (246) 137
Decrease in impairment allowance 86 60 (26)
Transfers to Earmarked Reserves 773 773 (0)
Efficiencies Requirement (993) (62) 931
Total Cost of Services 12,552 14,218 1,666
Funding
Government Grants (2,754) (4,508) (1,754)
Council Tax (6,305) (6,318) (13)
Retained Business Rates (3,493) (3,517) (24)
Total Financing (12,552) (14,343) (1,791)
Funding Surplus Transferred to Council Tax
(125) (125)
Reserve
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The full year outturn delivered under budget spend of £0.125m as a result of redirecting significant budgeted resource to Covid compliance and community grant distribution activities which have been supported by grant from central government. Income losses arising from Covid compliance activity have also been compensated from government grant. The budget surplus above has been transferred to Council reserves.

Revenue expenditure and income and the services provided

The following charts show in broad terms where the money came from, how it was spent and the services provided.

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Where the money came from

Council Tax is the income received from taxpayers through the Council Tax levied by the Council for South Holland, the Parishes and the Internal Drainage Boards.

Another source of income was interest earned on the Council’s cash deposits. This interest is applied towards the revenue budgets.

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How the money was spent

Rent Allowances and Rebates include only costs relating to the actual Housing Benefits provided, they do not include any staffing or other related costs. These benefits are funded from Government grants as can be seen from the “where the money came from” graph.

Running expenses and employees expenditure are included as part of the Directorate expenditure items.

Running expenses include costs relating to:

Employee’s expenditure includes costs relating to:

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Housing Revenue Account

The Housing Revenue Account is a record of revenue expenditure and income relating to the Council’s housing stock. It is a statutory account, ringfenced from the rest of the General Fund, so that rents cannot be subsidised from council tax, or vice versa.

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2020/21 2020/21
2020/21
Budget Actual Variance
£'000 £'000 £'000
Rent Income - Dwellings (15,049) (15,066) (17)
Charges for Services and Facilities (1,176) (1,203) (27)
Contributions to Expenditure (27) (5) 22
Total Income (16,252) (16,274) (22)
Repairs and Maintenance 3,008 2,461 (547)
Supervision and Management 2,963 2,875 (88)
Rents, rates, taxes and other charges 78 61 (17)
Depreciation 3,235 3,816 581
Debt management expenses (included in
- - -
support service recharge)
Statutory recharge to the HRA for support
services 1,962 1,966 4
Total Expenditure 11,246 11,177 (67)
Contribution from Operations (5,006) (5,095) (89)
Investment Income (161) (79) 82
Interest Payable on £67.456m 2,348 2,347 (1)
Increase/(decrease) in impairment allowance 271 18 (253)
- - -
Capital expenditure charged in year
Transfer to Major Repairs Reserve and other
-
adjustments (210) (210)
Net (Surplus)/Deficit (2,548) (3,019) (471)
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The full year outturn delivered combined savings and additional income of £0.471m relating to service provision in 2020/21.

Transparency

The Government’s transparency agenda encourages local authorities to make public data openly available. Details of transparency items such as the Council’s spend on items over £500, contracts and pay, and benefits for senior officers can be found on our website:

https://www.sholland.gov.uk/article/5272/Transparency

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Capital Financial Performance

The capital outturn for 2020/21 is:

General Fund 2020/21 General Fund 2020/21 Housing Revenue Account
2020/21		 Housing Revenue Account
2020/21
Department Revised
Budget		 Actual Revised
Budget		 Actual
£'000 £'000 £'000 £'000
Commercialisation 7,420 6,004 - -
Strategy and
Governance		 308 77 - -
Place 1,013 1,552 6,371 4,912
Grand Total 8,741 7,633 6,371 4,912

This capital expenditure for 2020/21 was funded from the following areas:

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Housing
General
Revenue
Fund
Account
(£’000)
(£’000)
Capital Receipts - 1,676
Capital Grants and Contributions 5,261 190
Internal Borrowing 901 -
Revenue Resources 1,471 -
Major Repairs Reserve - 3,046
Total 7,633 4,912
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The 2020/21 capital budget planned to be spent on programmes in the year has not been fully utilized as these programmers are still in progress and therefore, the budgets are required for commitments to complete the programmes outlined in the Council’s Capital Programme 2021/22. An analysis of non-current assets and funding of the capital expenditure is shown in notes 13-17 and 35. Currently South Holland does not borrow externally to finance its capital programme , however the available capital funding is reducing year-byyear and borrowing may be undertaken in future if the business case for a project supports it.

Based on the current budgeted projections, South Holland will be borrowing from internal balances by the end of the medium term financial plan, so available capital for future projects is limited unless it is relevant to use revenue funding, additional capital receipts are generated or the business case supports borrowing. The Capital Programme and its access to financing will be rigorously reviewed as a result of the Coronavirus Pandemic and its impact on the Council’s Medium Term Financial Strategy.

Collection Fund financial performance

The balance on the Council Tax Collection Fund at 31 March 2021 showed a £0.144m surplus. This will be shared between the District, Lincolnshire County Council and Lincolnshire Police and Crime Commissioner in proportion with each authority’s relative precept. This surplus has resulted from a higher than budgeted tax base, SHDC’s share is £0.017m.

The balance on the NNDR Collection Fund at 31 March 2021 showed a £10.179m deficit. This will be shared between the District, Lincolnshire County Council and the Government in proportion with each party’s relative proportionate share. This deficit has resulted from Covid-19 business rates reliefs provided in year after the budget had been set, however Government have provided grants to offset the lost income from the reliefs leaving a smaller ‘real’ deficit to be funded by the Council. Notes 12 and 32 provides further detail on the impact of the pandemic on these accounts.

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Reserves and balances (GF and HRA)

The net increase in reserves and balances for 2020/21 was £3.675m. This includes an increase of £11.153m for unusable reserves and an decrease of £7.478m in usable reserves. Increases and (decreases) in reserves balances include:

Reserves and Balances Increase/
(Decrease)
2020/21 £’000
Pensions reserve 9,220
Revaluation reserve (3,577)
Deferred Capital Receipts 3
Capital Adjustment Account 177
Other Unusable Reserves 4,114
Total Unusable Reserves 9,937
General Fund (3,337)
HRA (3,019)
Capital Receipts (159)
Major Repairs (770)
Capitalgrants unapplied (193)
Total Usable Reserves (7,478)
Total 2,459

Further information on reserves can be found in the Movement in Reserves Statement and Note 24 to the Financial Statements.

Pension fund

The accounts and notes with relation to the pension fund have been prepared in accordance with International Accounting Standard (IAS) 19. The Pension Fund liability shown in the Balance Sheet as at 31 March 2021 stands at £43.953m compared with £34.733m the previous year, this represents the liability to the Lincolnshire Pension Fund. This amount is matched by a pension reserve also shown in the Balance Sheet and therefore has no impact on the Council’s overall financial position at 31 March 2021. The IAS 19 Balance Sheet position for the Council shows an increased obligation and the net liability to the Council under IAS 19 pension deficit is higher in monetary terms at 31 March 2021. The actuary uses a set of demographic assumptions that are consistent with those used for the Lincolnshire Pension Fund. These are highlighted in note 36. Following the results of the triennial review in 2019, the Council’s budget includes both a pension contribution percentage and also a lump sum payment each year which is forecast to bring the pension scheme into a fully funded position over a 20-year term.

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Cash flows

The table below shows the level of investments held by the Council which are used to fund day to day cash flow requirements, achieve a return on investments to help support the low levels of council tax, support the reserves expenditure and to fund capital expenditure. Short term investments maturing in 2020/21 and long term investments mature beyond this or are open-ended.

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2020/21 2019/20 Change
£’000 £’000 £’000
Long Term Investments 3,963 3,664 299
Short Term Investments 34,524 26,118 8,406
Cash and Cash Equivalents 10,528 12,040 (1,512)
Total 49,015 41,822 7,193
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Capital spend will reduce the cash held, however the Council does not currently have a need to borrow over the medium term. The Council’s overall Capital Financing Requirement (CFR) which details the Council’s underlying need to borrow can be found at Note 33.

There were no significant provisions, contingencies or write offs during the year. Full details on provisions and contingencies can be found at Note 22. However appeals from Business Rates (NNDR) continue to be a risk to the Council.

Current economic climate, outlook and risk

The current economic climate, unprecedented circumstance from events such as the Pandemic and Brexit plus the continuing reduction and un-certainty in Central Government funding continues to add pressures to the Council’s budgets. Future changes relating to the percentage of retained Business Rates is now planned by Government to be implemented for 2022/23 alongside the Fair Funding review. This is a fundamental review by Government on how to calculate the ‘needs’ of each authority in order to determine the amount of funding each local authority requires through grant funding. This continues to add further uncertainty for our budget setting in the medium term as funding levels past 2021/21 are still not known, neither is the percentage share of retained NNDR under the new scheme and neither is sufficient detail available on the Fair Funding review to calculate estimated funding shares.

The Council remains in a strong financial position over the medium term, with robust plans for transformation, capital spend and delivery of services as well as investment in our communities. This means the Council is well placed to deal with any changes in funding levels resulting from the Fair Funding review and 75% Rates Retention with a measured and planned approach. Our Medium Term Financial Plan (MTFP) provides information on the Councils budget, transformation programme and reserves and can be found on our website https://democracy.sholland.gov.uk/documents/s28891/Budget%20Medium%20Term%20Plan%20and%20C apital%20Strategy.pdf

The current level of reserves held by the Council is considered adequate to withstand current pressures and to invest in transformation projects, but it would not be financially sustainable to rely on these reserves to continue to fund the reduction in Central Government funding.

The impact of Brexit on the Council’s corporate objectives and finances continues to be monitored, particularly in relation to inflation levels (which impact our major contracts) and the impact on businesses and licensing.

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Covid-19 Pandemic

The Covid-19 pandemic has had a considerable impact on the Council, our businesses and our residents. The lockdowns and tier systems announced throughout the year has meant that many of our businesses have been forced to close at different times, or have worked with many restrictions in place, significantly impacting the local economy and our residents. The Council has played a critical role in helping to lead the local response to Covid-19 along with our partners to ensure our residents are supported and protected. The Council has adapted quickly, putting considerable additional resource into ensuring rough sleepers are safe, providing temporary accommodation for those in need, administering business rates relief and grants to businesses and supporting the most vulnerable and in need within our community. Our staff have quickly adapted to working from home whilst our offices are closed, finding new ways of working and communicating and some have been redeployed to support our priority areas of work.

The Council suffered losses in income from areas such as car parking, licensing and investment income. Additional costs have been incurred in providing support for rough sleepers, ensuring compliance with Covid tier requirements and administering financial support to our communities and businesses. The financial effects of the pandemic have been significant for the Council, however we have received £1.340m of general Covid funding from Government, alongside income loss compensation of £0.407m. In the longer term we will need to reset our Medium Term Financial Plan and our budget in recognition of the national impact of the pandemic on our place, businesses and residents and reflect these changes in our strategic objectives for the future.

Key Risks

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Risk Likelihood Impact Mitigating Action
Cost pressures or changes to High High Continued financial monitoring in year.
services as a result of the Allocation of Covid-19 grants to areas
Covid-19 pandemic lead to with the greatest needs.
financial pressures to the
Council
Reduced public sector High High Keep up to date with developments and
funding from Central make prudent budget assumptions.
Government (e.g. New
Homes Bonus)
Business rates retention reset High High Monitor developments & set aside
leaves Council exposed to appropriate reserves and provisions to
economic fluctuations and help with potential initial pressures and
rating appeals fluctuations
Increased maintenance costs High High Review and maintain Asset
of ageing physical assets Management Plan. Adopting a pro-
active rather than reactive maintenance
programme
Growth plans may require High High Continue to closely monitor and
borrowing at some point in the prioritise the Council's Capital Financing
future Requirement.
Additional duties arising from High High Embed structure changes in service and
the Homeless Reduction Act maximise use of Government funding
and closely monitor impact.
Low income levels from fees High High Review and revise proposals for fees
and charges and charges and annual increases as
appropriate.
Return to lower interest rates High Medium Market advice and forecasting.
Mitigation by diversification
Court Income collectability High Low Court income projections are in varying
favourably against budget. The budget
has not been increased due to concerns
over collectability of this income. A year-
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----- Start of picture text -----
Risk Likelihood Impact Mitigating Action
end review will be undertaken to inform
future year’s budgets.
Universal Credit effect on Medium Medium The implementation of the Universal
service demand and credit may impact on the General Fund
recoverability of Housing in terms of running costs for the Benefits
Benefit Overpayments service and additional demand on other
council services and on the HRA in
terms of increased arrears. This will be
closely monitored.
Pension fund deficit Medium Medium Close links with LCC pension fund
Increased contributions following
triennial review
Additional bad debts as a Medium Medium The Council has pro-active debt
result of economic management and pre-pay fee policies in
circumstances line with Cabinet Decisions
Inflation rises by more than Medium Medium Budget assumptions kept up to date with
budgeted projections most recent projections.
Brexit negotiations and trade Medium Low Reserve to manage potential fall to
deals impact on the levels of NNDR safety net levels
NNDR income and Housing
Benefits demand.
Increased risk that liability Medium Low Prepare to go to the market again if
insurance premiums will premiums exceed market trends.
increase
Public Sector Partnership Low Medium Service Level Agreements activity levels
Services may be unable to and service priorities, reviewed
deliver an effective service regularly. Performance monitored
within the agreed reduced against the PSPS Transformation
contract price Programme
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The Performance, Risk and Audit Board reviews updates on corporate and operational risks on a quarterly basis and takes any remedial actions as necessary (for example, escalation to the Executive Management Team or Governance and Audit committee). Quarterly updates on the corporate risk register are provided to both the Executive Management Team and the Governance and Audit Committee. The Governance and Audit Committee is responsible for monitoring the arrangements in place for identification, monitoring and management of strategic risk.

The Council is always looking for new opportunities, such as sharing services with other Councils, service improvements and cost reductions through digitalisation of services, etc. All opportunities will be examined on their own merits and detailed business cases completed if the opportunity is considered worthy of implementation.

7. The Statement of Accounts

The Statements for the Council have been prepared on the going concern accounting basis, i.e. on the assumption that the functions of the authority will continue in operational existence for the foreseeable future. This assessment has been possible due to the sound financial position of the Council, notably the delivery of a balanced outturn position for 2020/21, the establishment of a balanced budget for 2021/22 with an embedded transformation programme aimed at delivering ongoing savings. Additionally, the Council has sufficient funds and reserves to meet its immediate financial commitments and has robust governance arrangements in place to monitor and control the Council’s financial position. More information can be found in Note 42 on page 88.

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The Statement of Accounts sets out the Council’s income and expenditure for the year, and its financial position at 31 March 2021. It comprises core and supplementary statements, together with disclosure notes. The format and content of the financial statements is prescribed by the CIPFA Code of Practice on Local Authority Accounting in the United Kingdom 2020/21, which in turn is underpinned by International Financial Reporting Standards.

A Glossary of key terms can be found at the end of this publication.

Supplementary Financial Statements

Group Accounts

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Annual Governance Statement – sets out the Council’s approach to corporate governance and how it manages its governance arrangements in accordance with the Code of Governance.

8. Further Information

Further information on the Statement of Accounts is available from Public Sector Partnership Services Ltd (formerly Compass Point Business Services), who provide all financial services for the Council. This is available as follows:

The accounts are available on our website at www.sholland.gov.uk

Christine Marshall, Deputy Chief Executive Corporate Development and Section 151 Officer 22 March 2022

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STATEMENT OF RESPONSIBILITIES

The Council’s Responsibilities

The Council is required to:

The Chief Financial Officer’s Responsibilities

The Chief Financial Officer is responsible for the preparation of the Council’s Financial Statements 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 the Financial Statements, the Chief Financial Officer has:

Certification by the Chief Financial Officer

I hereby certify that the audited Financial Statements give a ‘true and fair’ view of the financial position of the Council and Group at the reporting date and of its expenditure and income for the year ended 31 March 2021.

Approval of the Financial Statements

The Governance and Audit Committee approved the audited Financial Statements on 17 March 2022.

Signed on behalf of South Holland District Council:

Christine Marshall

Christine Marshall Deputy Chief Executive Corporate Development

Cllr T Carter

Cllr Tracey Carter Chair of meeting approving the accounts Dated: 22 March 2022

Dated: 22 March 2022

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COMPREHENSIVE INCOME AND EXPENDITURE STATEMENT

The Comprehensive Income and Expenditure Statement shows the accounting cost in the year of providing services in accordance with generally accepted accounting practices, rather than the amount to be funded from taxation (or rents). The Council raises taxation and rents to cover expenditure in accordance with statutory requirements; this may be different from the accounting cost. The taxation position is shown in both the Expenditure and Funding Analysis and the Movement in Reserves Statement.

The Council recognises its share (37%) of expenses incurred and income it earns from the activity of Public Sector Partnership Services Ltd (formerly Compass Point Business Services (East Coast) Ltd) in the Comprehensive Income and Expenditure Statement – see note 40 Joint Operation for full details.

----- Start of picture text -----
2019/20 2020/21
Gross Gross Net Gross Gross Net
Expenditure Income Expenditure Expenditure Income Expenditure
£’000 £’000 £’000 £’000 £’000 £’000
18,175 (15,488) 2,687 Growth and Commercialisation Directorate 23,718 (19,982) 3,736
13,628 (23,127) (9,499) Place Directorate 19,464 (21,350) (1,886)
5,531 (1,160) 4,371 Strategy and Governance Directorate 5,107 (644) 4,463
37,334 (39,775) (2,441) Cost of Services 48,289 (41,976) 6,313
5,225 (2,228) 2,997 Other operating expenditure (Note 10) 6,340 (2,326) 4,014
5,031 (2,607) 2,424 Financing and investment income and expenditure (Note 11) 4,547 (1,769) 2,778
6,081 (20,117) (14,036) Taxation and non-specific grant income and expenditure (Note 12) 6,162 (20,793) (14,631)
53,671 (64,727) (11,056) (Surplus) or Deficit on the Provision of Services 65,338 (66,864) (1,526)
(7,636) Surplus on revaluation of property, plant and equipment assets (3,577)
(9,539) Remeasurements of the net defined benefit liability 7,562
(17,175) Other Comprehensive Income and Expenditure 3,985
(28,231) Total Comprehensive Income and Expenditure 2,459
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The notes to the accounts on pages 27 - 88 form an integral part of the Financial Statements.

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MOVEMENT IN RESERVES STATEMENT

The Movement in Reserves Statement shows the movement from the start of the year to the end on the different reserves held by the Council, analysed into ‘usable reserves’ (i.e. those that can be applied to fund expenditure or reduce local taxation) and other ‘unusable reserves’. The Statement shows how the movements in year of the Council’s reserves are broken down between gains and losses incurred in accordance with generally accepted accounting practices and the statutory adjustments required to return to the amounts chargeable to council tax (or rents) for the year. The Net Increase/Decrease line shows the statutory General Fund Balance and Housing Revenue Account Balance movements in the year following those adjustments.

The Council recognises its share (37%) of the movement in reserves from the activity of Public Sector Partnership Services Ltd (formerly Compass Point Business Services (East Coast) Ltd) in the Movement in Reserves Statement – see note 40 Joint Operation for full details.

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2020/21
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Balance at 31 March 2020 2,443 8,013 19,809 200 3,586 3,061 2,991 40,103 99,171 139,274
Movement in Reserves during 2020/21
Total Comprehensive Income and - - - - -
(3,489) 5,015 1,526 (3,985) (2,459)
Expenditure
Adjustments between accounting basis
and funding basis under regulations 6,826 - (1,996) - 770 159 193 5,952 (5,952) -
(Note 8)
Increase/(Decrease) in 2020/21 3,337 - 3,019 - 770 159 193 7,478 (9,937) (2,459)
Transfer to/(from) Earmarked Reserves (3,402) 3,402 - - - - - - - -
Balance at 31 March 2021 carried 2,378 11,415 22,828 200 4,356 3,220 3,184 47,581 89,234 136,815
forward
HRA Major
Balance Earmarked Reserves Housing Revenue Account Earmarked Reserves Repairs Reserve Capital Receipts Reserve Unapplied Reserves Unusable Reserves Reserves
General Fund General Fund Capital Grants Total Usable Total Authority
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----- Start of picture text -----
2019/20
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Balance at 31 March 2019 2,353 8,702 16,575 200 4,684 4,959 2,707 40,180 70,863 111,043
Movement in Reserves during
2019/20
Total Comprehensive Income and - - - - -
(3,786) 14,842 11,056 17,175 28,231
Expenditure
Adjustments between accounting basis
and funding basis under regulations 3,187 (11,608) - (1,098) (1,898) 284 (11,133) 11,133 -
(Note 8)
Increase/(Decrease) in 2019/20 (599) - 3,234 - (1,098) (1,898) 284 (77) 28,308 28,231
Transfer to/(from) Earmarked Reserves 689 (689) - - - - - - - -
Balance at 31 March 2020 carried 2,443 8,013 19,809 200 3,586 3,061 2,991 40,103 99,171 139,274
forward
HRA Major
Balance Earmarked Reserves Housing Revenue Account Earmarked Reserves Repairs Reserve Capital Receipts Reserve Unapplied Reserves Unusable Reserves Reserves
General Fund General Fund Capital Grants Total Usable Total Authority
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The notes to the accounts on pages 27 - 88 form an integral part of the Financial Statements

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BALANCE SHEET

The Balance Sheet shows the value as at the Balance Sheet date of the assets and liabilities recognised by the Council. The net assets of the Council (assets less liabilities) are matched by the reserves held by the Council. Reserves are reported in two categories. The first category of reserves are usable reserves, i.e. those reserves that the Council may use to provide services, subject to the need to maintain a prudent level of reserves and any statutory limitations on their use (for example the Capital Receipts Reserve that may only be used to fund capital expenditure or repay debt). The second category of reserves is those that the Council is not able to use to provide services. This category of reserves includes reserves that hold unrealised gains and losses (for example the Revaluation Reserve), where amounts would only become available to provide services if the assets are sold; and reserves that hold timing differences shown in the Movement in Reserves Statement line ‘Adjustments between accounting basis and funding basis under regulations’.

The Council recognises its share (37%) of its rights to the assets and obligations for the liabilities from the activity of Public Sector Partnership Services Ltd (formerly Compass Point Business Services (East Coast) Ltd) in the Balance Sheet – see note 40 Joint Operation for full details.

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31 March 31 March
2020 2021
£’000 Note £’000
199,140 Property, Plant and Equipment 13 201,712
105 Heritage Assets 14 105
1,021 Investment Property 15 1,573
701 Intangible Assets 16 708
3,664 Long Term Investments 17 3,963
3,535 Long Term Debtors 3,966
208,166 Long Term Assets 212,027
26,118 Short Term Investments 34,524
989 Assets Held for Sale 20 1,391
4,255 Short Term Debtors 18 8,710
12,078 Cash and Cash Equivalents 19 10,528
43,440 Current Assets 55,153
(38) Cash and Cash Equivalents 19 -
(26) Short Term Borrowing (26)
(8,595) Short Term Creditors 21 (16,960)
(841) Provisions 22 (638)
(9,500) Current Liabilities (17,624)
(67,456) Long Term Borrowing (67,456)
(34,733) Other Long Term Liabilities – Pension Liability 36 (43,953)
(643) Grants Receipts in Advance – Capital 32 (1,332)
(102,832) Long Term Liabilities (112,741)
139,274 Net Assets 136,815
40,103 Usable Reserves 47,581
99,171 Unusable Reserves 24 89,234
139,274 Total Reserves 136,815
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The notes to the accounts on pages 27 - 88 form an integral part of the Financial Statements.

CASH FLOW STATEMENT

The Cash Flow Statement shows the changes in cash and cash equivalents of the Council during the reporting period. The statement shows how the Council generates and uses cash and cash equivalents by classifying cash flows as operating, investing and financing activities. The amount of net cash flows arising from operating activities is a key indicator of the extent to which the operations of the Council are funded by way of taxation and grant income or from the recipients of services provided by the Council. Investing activities represent the extent to which cash outflows have been made for resources which are intended to contribute to the Council’s future service delivery. Cash flows arising from financing activities are useful in predicting claims on future cash flows by providers of capital to the Council.

The Council recognises its share (37%) of cash flows from the activity of Public Sector Partnership Services Ltd (formerly Compass Point Business Services (East Coast) Ltd) in the Cash Flow Statement – see note 40 Joint Operation for full details.

----- Start of picture text -----
2019/20 2019/20 2020/21 2020/21
£’000 £’000 £’000 £’000
11,056 Net surplus on the provision of services 1,526
Adjustments to net surplus or deficit on the
provision of services for non-cash movements
893 (Note 25) 12,731
Adjustments for items included in the net
surplus or deficit on the provision of services
that are investing and financing activities
(5,435) (4,542) (Note 25) (7,980) 4,751
6,514 Net cash flows from Operating Activities 6,277
1,458 Investing Activities (Note 26) (6,223)
(1,231) Financing Activities (Note 27) (1,564)
6,741 Net increase in cash and cash equivalents (1,510)
Cash and cash equivalents at the beginning of
5,299 the reporting period 12,040
- Other Cash Movements (2)
Cash and cash equivalents at the end of
12,040 the reporting period (Note 19) 10,528
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The notes to the accounts on pages 27 - 88 form an integral part of the Financial Statements.

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NOTES TO THE ACCOUNTS

NOTE 1 – ACCOUNTING POLICIES

1. General Principles

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

The accounting convention adopted in the Financial Statements is principally historical cost, modified by the revaluation of certain categories of non-current assets and financial instruments.

2. Accruals of Income and Expenditure

Activity is accounted for in the year that it takes place, not simply when cash payments are made or received. In particular:

3. 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 highly liquid investments that mature in no more than three months or less from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Cash Flow Statement, 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.

4. Prior Period Adjustments, Changes in Accounting Policies and Estimates and Errors

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

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

5. 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:

The Council is not required to raise council tax to fund depreciation, revaluation and impairment losses or amortisation. However, it is required to make an annual contribution from revenue towards the reduction in its overall borrowing requirement equal to an amount calculated on a prudent basis determined by the Council in accordance with statutory guidance. Depreciation, revaluation and impairment losses and amortisation are therefore replaced by the 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.

6. Council Tax and Non-Domestic Rates

Billing authorities act as agents, collecting council tax and non-domestic rates (NDR) on behalf of the major preceptors (including government for NDR) and, as principals, collecting council tax and NDR for themselves. Billing authorities are required by statute to maintain a separate fund (i.e. the Collection Fund) for the collection and distribution of amounts due in respect of council tax and NDR. Under the legislative framework for the Collection Fund, billing authorities, major preceptors and central government share proportionately the risks and rewards that the amount of council tax and NDR collected could be less or more than predicted.

Accounting for Council Tax and NDR

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.

7. Employee Benefits

Benefits Payable during Employment

Short term employee benefits are those due to be settled wholly within 12 months of the year end. They include such benefits as wages and salaries, paid annual leave and paid sick leave, bonuses and nonmonetary benefits for current employees and are recognised as an expense for services in the year in which employees render service to the Council. An accrual is made for the cost of holiday entitlements, or any form of leave e.g. time off in lieu, earned by employees but not taken before the year end which employees can carry forward into the next financial year. The accrual is made at the wage and salary rates applicable in the following accounting year, being the period in which the employee takes the benefit. The accrual is charged to Surplus or Deficit on the Provision of Services, but then reversed out through the Movement in Reserves Statement so that holiday entitlements are charged to revenue in the financial year in which the holiday absence occurs.

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Termination Benefits

Termination benefits are amounts payable as a result of a decision by the Council to terminate an officer’s employment before the normal retirement date or an officer’s decision to accept voluntary redundancy in exchange for those benefits and are charged on an accruals basis to the appropriate service segment or, where applicable, to a corporate service segment at the earlier of when the Council can no longer withdraw the offer of those benefits or when the Council recognises costs for a restructuring.

Where termination benefits involve the enhancement of pensions, statutory provisions require the General Fund Balance and Housing Revenue Balance to be charged with the amount payable by the Council to the pension fund or pensioner in the year, not the amount calculated according to the relevant accounting standards. In the Movement in Reserves Statement, appropriations are required to and from the Pensions Reserve to remove the notional debits and credits for pension enhancement termination 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.

Post-Employment Benefits

Employees of the Council are members of the Local Government Pension Scheme, administered by Lincolnshire County Council. The scheme provides defined benefits to members (retirement lump sums and pensions), earned as employees worked for the Council.

The Local Government Pension Scheme

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

The liabilities of the Lincolnshire County Council 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 discounted to their value at current prices, using a discount rate of 2.0% (2.3% in 2019/20), based on the indicative rate of return on high quality corporate bonds.

The assets of the Lincolnshire County Council pension fund attributable to the Council are included in the Balance Sheet at their fair value:

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

Service Cost comprising:

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Remeasurements comprising:

In relation to retirement benefits, statutory provisions require the General Fund Balance and Housing Revenue Account 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 transfers to and from the Pensions Reserve to remove the notional debits and credits for retirement benefits and replace them with debits for the cash paid to the pension fund and pensioners and any such amounts payable but unpaid at the year end. The negative balance that arises on the Pensions Reserve thereby measures the beneficial impact to the General Fund and Housing Revenue Account of being required to account for retirement benefits on the basis of cash flows rather than as benefits are earned by employees.

Discretionary Benefits

The Council also has restricted powers to make discretionary awards of retirement benefits in the event of early retirements. Any liabilities estimated to arise as a result of an award to any member of staff are accrued in the year of the decision to make the award and accounted for using the same policies as are applied to the Local Government Pension Scheme.

8. Events after the Reporting Period

Events after the Balance Sheet date are those events, both favourable and unfavourable, that occur between the end of the reporting period and the date when the Financial Statements are authorised for issue. Two types of events can be identified:

Events taking place after the date of authorisation for issue are not reflected in the Financial Statements.

9. Financial Instruments

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. 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 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 the long term borrowings that the Council has, this means that the amount presented in the Balance Sheet is the outstanding principal repayable plus accrued interest; and interest charged to the Comprehensive Income and Expenditure Statement is the amount payable for the year according to the loan agreement.

30

The Council has provided a guarantee in relation to the liabilities of Public Sector Partnership Services, based on 37% of any outstanding liabilities, in the event that the Company should cease trading. Details can be found in the Joint Operations note (note 40).

Financial Assets

Financial Assets are classified based on a classification and measurement approach that reflects the business model for holding the financial assets and their cash flow characteristics. There are three main classes of financial assets measured at:

The Council’s business model is to hold investments to collect contractual cash flows. Financial assets are therefore classified as amortised cost, except for those whose 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 authority 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 (CIES) 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 authority, this means that the amount presented in the Balance Sheet is the outstanding principal receivable (plus accrued interest) and interest credited to the CIES is the amount receivable for the year in the loan agreement.

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.

Expected Credit Loss Model

The authority recognises expected credit losses on all of its financial assets held at amortised cost, or where relevant 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 authority.

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 on the basis of 12-month expected losses.

The Council has issued four loans to its subsidiary, Welland Homes Limited, and has assessed lifetime expected losses for these loans on a collective basis. The Council relies on past due information and calculates losses based on lifetime credit losses for all loans more than 30 days past due.

Financial Assets Measured at Fair Value through Profit of Loss

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

For Financial Assets measured at Fair Value through Profit and Loss, monthly dividend/distribution income receivable is credited to the Financial and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement.

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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.

Financial Assets Measured at Fair Value through Other Comprehensive Income

Financial assets that are measured at FVOCI are recognised on the Balance Sheet when the authority becomes a party to the contractual provisions of a financial instrument and are initially measured and carried at fair value. A gain or loss on a financial asset measured at fair value through other comprehensive income shall be recognised in other comprehensive expenditure and taken to the financial instruments revaluation reserve, except for impairment gains or losses until the financial asset is derecognised or reclassified.

Where financial assets are measured at FVPL or FVOCI, the fair value measurements are based on the following techniques:

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

10. 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 in the form of 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.

Monies advanced as grants and contributions for which conditions have not been satisfied are carried in the Balance Sheet as creditors. When conditions are satisfied, the grant or contribution is credited to the relevant service line (attributable revenue grants and contributions) or Taxation and Non-specific Grant Income and Expenditure (non-ringfenced revenue grants and all capital grants) in the Comprehensive Income and Expenditure Statement.

Where capital grants are credited to the Comprehensive Income and Expenditure Statement, they are reversed out of the General Fund Balance and Housing Revenue Account 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.

11. Heritage Assets

The extent of the Council’s holdings of heritage assets is limited. Heritage assets are held to help increase the knowledge, understanding and appreciation of the Council’s history and local area. Heritage assets are recognised and measured, including the treatment of revaluation gains and losses, in accordance with the Council’s accounting policies on property, plant and equipment. However, some of the measurement rules

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are relaxed in relation to heritage assets as detailed below. The Council’s heritage assets fall into two categories; Civic Regalia and Works of Art, and Archaeological Sites, Smallholdings and other Land and Sites of Special Interest and are accounted for as follows:

Civic Regalia and Works of Art:

Archaeological Sites, Smallholdings and other Land and Sites of Special Interest:

Heritage assets not recognised on the Council’s Balance Sheet:

The carrying amounts of heritage assets are reviewed where there is evidence of impairment for heritage assets, e.g. where an item has suffered physical deterioration or breakage or where doubts arise as to its authenticity. Any impairment is recognised and measured in accordance with the Council’s general policies on impairment – see item 19 in this summary of significant accounting policies. Depreciation is not charged as the assets are deemed to be held in perpetuity. Should any heritage assets be disposed of, the proceeds are accounted for in accordance with the Council’s general provisions relating to the disposal of property, plant and equipment.

12. 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 e.g. software licences, is capitalised when it is expected that future economic benefits or service potential will flow from the intangible asset to the Council.

Intangible assets are measured initially at cost and are 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. Amortisation is calculated on the following basis:

Where expenditure on intangible assets qualifies as capital expenditure for statutory purposes, the amortisation charge is not permitted to have an impact on the General Fund Balance or Housing Revenue Account Balance. It is therefore reversed out of the General Fund Balance and Housing Revenue Account Balance in the Movement in Reserves Statement and posted to the Capital Adjustment Account.

13. Interest in Companies and Other Entities

The Council has material interests in companies and other entities that have the nature of subsidiaries, associates and joint ventures and require it to prepare group accounts. In the Council’s own single entity accounts, the interests in companies and other entities are recorded as financial assets at cost.

14. Joint Operations

Joint operations are arrangements where the parties that have joint control of the arrangement have rights to the assets and obligations for the liabilities relating to the arrangement.

South Holland has joint control with East Lindsey District Council over Public Sector Partnership Services Ltd (formerly Compass Point Business Services (East Coast) Ltd), a company established in 2010 to provide ‘back office’ services to both Councils.

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The Council recognises on its Balance Sheet an appropriate share of its rights to the assets and obligations for the liabilities and debits and credits the Comprehensive Income and Expenditure Statement with its share of expenses incurred and income it earns from the activity of the Company.

15. Investment Property

Investment properties are those that are used solely to earn rentals and/or for capital appreciation. The definition is not met 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, being the price that would be received to sell such an asset in an orderly transaction between market participants at the measurement date. As a non-financial asset, investment properties are measured at highest and best use. 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. Assets are transferred into or out of the Investment Property class only when there is evidence of a change of use.

Rentals received in relation to investment properties are 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 any sale proceeds greater than £10,000) the Capital Receipts Reserve.

16. 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.

The Council has no finance lease commitments as at 31 March 2021.

The Council as Lessee - 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 (e.g. there is a rent free period at the commencement of the lease).

The Council as Lessor - 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 relevant 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 (e.g. 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.

17. Material Items of Income or Expense

When items of income and expense are material, their nature and amount is disclosed separately, either on the face of the Comprehensive Income and Expenditure Statement or in the notes to the accounts, depending on how significant the items are to an understanding of the Council’s financial performance.

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18. Overheads and Support Services

Following revisions to the Accounting Code, the cost of overheads and support services are not charged to service segments, within the Financial Statements, in accordance with the Council’s arrangements for accountability and financial performance. However, they are apportioned to comply with the requirements of various government returns.

19. 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. Expenditure that maintains but does not add to an assets potential to deliver future economic benefits or service potential (i.e. repairs and maintenance) is charged as an expense when it is incurred.

Measurement

Assets are initially measured at cost, comprising;

The Council does not capitalise borrowing costs incurred whilst assets are under construction.

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 authority). 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 authority.

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

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

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

Assets included in the Balance Sheet at current value are revalued sufficiently regularly to ensure that their carrying amount is not materially different from their current 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 Surplus or Deficit on the Provision of Services where they arise from the reversal of a loss previously charged to a service.

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Where decreases in value are identified, they are accounted for by:

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 any 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 by:

Where an impairment loss is reversed subsequently, the reversal is credited to the relevant service line(s) in the Comprehensive Income and Expenditure Statement, up to the amount of the original loss, adjusted for depreciation that would have been charged if the loss had not been recognised.

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 useful life (i.e. freehold land and certain Community Assets) and assets that are not yet available for use (i.e. assets under construction).

Depreciation is calculated on the following bases:

Where an item of Property, Plant and Equipment asset has major components whose cost is significant in relation to the total cost of the item, the components are depreciated separately. Materiality levels have been assessed and a materiality level of £0.5m for major components has been applied. Council dwellings are separated into their principal components, which 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

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Other Operating Expenditure line in the Comprehensive Income and Expenditure Statement. Gains in fair value are recognised only up to the amount of any previous 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 noncurrent assets and valued at the lower of their carrying amount before they were classified as held for sale; adjusted for depreciation 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.

Assets that are to be abandoned or scrapped are not reclassified as assets held for sale.

When an asset is disposed of or 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 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 in excess of £10,000 are categorised as capital receipts. A proportion of receipts relating to housing disposals is payable to the Government. The balance of receipts remains within the Capital Receipts Reserve, and can then only be used for new capital investment or set aside to reduce the Council’s underlying need to borrow. Receipts are appropriated to the Reserve from the General Fund Balance and Housing Revenue Account Balance in the Movement in Reserves Statement.

The written off value of disposals is not a charge against council tax or housing rents, as the cost of noncurrent assets is fully provided for under separate arrangements for capital financing. Amounts are appropriated to the Capital Adjustment Account from the General Fund Balance and Housing Revenue Account Balance in the Movement in Reserves Statement.

20. 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 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:

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

When measuring the fair value of a non-financial asset, the authority takes into account 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:

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21. Provisions

Provisions are made where an event has taken place that gives the Council 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.

Provisions are charged as an expense to the appropriate service line in the Comprehensive Income and Expenditure Statement when the Council has an obligation, and are measured at the best estimate at the Balance Sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.

When payments are eventually made, they are charged to the provision carried in the Balance Sheet. 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.

Where some or all of the payment required to settle a provision is expected to be recovered from another party, this is only recognised as income for the relevant service if it is virtually certain that reimbursement will be received if the Council settles the obligation.

22. 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 disclosed in a note to the accounts.

23. 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 disclosed in a note to the accounts where it is probable that there will be an inflow of economic benefits or service potential.

24. Reserves

The Council sets aside specific amounts as reserves for future policy purposes or to cover contingences. Reserves are created by transferring amounts out of the General Fund Balance. 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 transferred back into the General Fund Balance so that there is no net charge against council tax for the expenditure.

Certain reserves are kept to manage the accounting processes for non-current assets, financial instruments, local taxation, retirement and employee benefits and do not represent usable resources for the Council – these reserves are explained in the relevant policies.

25. 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

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Reserves Statement from the General Fund Balance to the Capital Adjustment Account then reverses out the amounts charged so that there is no impact on the level of council tax.

26. VAT

VAT payable is included as an expense only to the extent that it is not recoverable from Her Majesty’s Revenue and Customs. VAT receivable is excluded from income.

NOTE 2 – ACCOUNTING STANDARDS ISSUED, NOT ADOPTED

The Code of Practice on Local Authority Accounting in the United Kingdom 2021/22 (the Code) has introduced several changes in accounting standards which will be required from 1 April 2021.

The Code requires the disclosure of information relating to the impact of an accounting change that will be required by a new accounting standard, but one which has not yet been implemented.

It is not anticipated that the above amendments will have a material impact on the information provided in the financial statements, i.e. there is unlikely to be a change to the reported information in the reported net cost of services or the Surplus or Deficit on the Provision of Services.

NOTE 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.

There was a high level of uncertainty about the longer-term impact of the Coronavirus pandemic at the time the accounts were prepared, and this has presented challenges in preparing the financial statements. Further information about volatility in financial and other markets at 31 March 2021 that became available up until the date the accounts were authorised for issue has been taken into account.

The critical judgements made in the Financial Statements are:

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NOTE 4 – ASSUMPTIONS MADE ABOUT THE FUTURE AND OTHER MAJOR SOURCES OF ESTIMATION UNCERTAINTY

The Financial Statements contain estimated figures that are based on assumptions made by the Council about the future or that are otherwise uncertain. Estimates are made taking into account historical experience, current trends and other relevant factors, including the effects of the Coronavirus pandemic. This is an unprecedented situation however, and because balances cannot be determined with certainty, actual results could be materially different from the assumptions and estimates.

The items in the Council’s Balance Sheet at 31 March 2021 for which there is a significant risk of material adjustment in the forthcoming financial year are as follows:

Pensions Liability

The estimation of the net liability (£43.953m at 31 March 2021) to pay pensions depends on a number of 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 assets. A firm of consulting actuaries is engaged to provide expert advice about the assumptions to be applied.

During 2020/21, the actuaries advised that the net pension liability had increased by £9.220m. This is made up of:

Debt Impairment

At 31 March 2021, the Council had a balance of sundry debtor and housing benefit overpayments of £1.674m. The Council’s normal approach to review significant items suggested that an impairment allowance for doubtful debts of 58.36% (£0.977m) was appropriate. However, in the current economic climate it is not certain that the allowance will be sufficient.

If collection rates were to deteriorate, increasing the impairment for doubtful debts to 65% of the total debt would require an additional £0.111m to be set aside as an allowance.

The change in the impairment allowance for bad debts is presented within Financing and Investment Income and Expenditure in the Comprehensive Income and Expenditure Statement.

Business Rates

Since the introduction of the Business Rates Retention Scheme effective from 1 April 2013, local authorities need to account for any reduction in Business Rates income and repayment to ratepayers, in respect of successful appeals against business rates for current and earlier years. A provision has been made in the accounts based on the best estimate of the amount that the Council might need to repay as a result of successful appeals up to 31 March 2021.

For appeals already lodged, this estimate has been calculated using the latest Valuation Office Agency list of outstanding appeals with an assessment being made of the likely impact of those appeals, taking into account past national decisions together with any specific / local implications. This assessment has been undertaken by an external provider, and reviewed by officers to reflect local circumstances. The Council’s share of the provision as at 31 March 2021 is £0.638m (40% of £1.595m), but it is possible that this will need to increase in the future, partially due to the restrictions put in place by the government during the pandemic. The restrictions have had an adverse impact on many businesses, resulting in some reducing operations and

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some closing down, but at the time the accounts were finalised it was not possible to predict the impact of this on the Council’s overall business rates income.

If the appeals provision increased by 10% the Council’s share would increase to £0.701m.

Fair Value Measurements

When the fair values of financial assets and financial liabilities cannot be measured based on quoted prices in active markets (i.e. Level 1 inputs), their fair value is measured using valuation techniques (e.g. quoted prices for similar assets or liabilities in active markets or the discounted cash flow (DCF) model). Where possible, the inputs to these valuation techniques are based on observable data, but where this is not possible judgement is required in establishing fair values. These judgements typically include considerations such as uncertainty and risk. However, changes in the assumptions used could affect the fair value of the authority’s assets and liabilities.

Where Level 1 inputs are not available, the authority employs relevant experts to identify the most appropriate valuation techniques to determine fair value (for example for investment properties, the external valuer). Information about the valuation techniques and inputs used in determining the fair value of the authority’s assets and liabilities is disclosed in notes 13 and 15.

The outbreak of COVID-19, declared by the World Health Organisation as a ‘Global Pandemic’ on 11 March 2020, has and continues to impact many aspects of daily life and the global economy – with some real estate markets having experienced lower levels of transactional activity and liquidity. Travel, movement and operational restrictions have been implemented by many countries. In some cases ‘lockdowns’ have been applied to varying degrees and to reflect further waves of COVID-19; although these may imply a new stage of the crisis, they are not unprecedented in the same way as the initial impact.

The pandemic and the measures taken to tackle COVID-19 continue to affect economies and real estate markets. Nevertheless, as at the valuation date property markets are mostly functioning again, with transaction volumes and other evidence at levels where an adequate quantum of market evidence exists upon which to base opinions of value.

Accordingly, the valuations are not reported as being subject to ‘material valuation uncertainty’ as defined by VPS 3 and VPGA 10 of the RICS Valuation – Global Standards, except as identified below.

In respect of retail and specific trading related assets/sectors such as car parks, as at the valuation date the valuers continue to be faced with an unprecedented set of circumstances caused by COVID-19 and an absence of relevant and sufficient market on which to base their judgements.

The valuations are therefore reported on the basis of ‘material valuation uncertainty’ as per VPS 3 and VPGA 10 of the RICS Red Book Global. Consequently in respect of these valuations, less certainty – and a higher degree of caution – should be attached to the valuations than would normally be the case.

The meaning of this clause is explained by the Royal Institute of Chartered Surveyors as:

‘Where a material uncertainty clause is being used, its purpose is to ensure that any client relying upon that specific valuation report understands that it has been prepared under extraordinary circumstances. The term is not meant to suggest that the valuation cannot be relied upon; rather, it is used in order to be clear and transparent with all parties, in a professional manner that – in the current extraordinary circumstances – less certainty can be attached to the valuation than would otherwise be the case. Indeed, with regard to the process itself, professional valuers will almost certainly have undertaken far more due diligence than normal, in order to arrive at their estimate of value.’

Asset Lives

Asset lives are determined by the valuers and if asset lives were reduced by one year the impact on the depreciation charged to the CIES would be immaterial.

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NOTE 5 – EVENTS AFTER THE BALANCE SHEET DATE

The audited Financial Statements were authorised for issue by the Deputy Chief Executive – Corporate Development on 22 March 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 31 March 2021, the figures in the financial statements and notes have been adjusted in all material respects to reflect the impact of this information.

From 1 April 2021, Boston Borough Council back office services transferred into the joint merged services organisation arrangements delivered through Public Sector Partnership Services Ltd. This does not impact on the Council’s share of the Company’s assets, liabilities, income and expenditure presented in the Financial Statements as at 31 March 2021.

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NOTE 6 – EXPENDITURE AND FUNDING ANALYSIS

The Expenditure and Funding Analysis shows how annual expenditure is used and funded from resources (government grants, rents, council tax and business rates) by local Councils in comparison with those resources consumed or earned by Councils in accordance with generally accepted accounting practices. It 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.

----- Start of picture text -----
2019/20 2020/21
Net Net Expenditure Net Net Expenditure
Expenditure Adjustments in the Expenditure Adjustments in the
Chargeable to between the Comprehensive Chargeable to between the Comprehensive
the General Funding and Income and the General Funding and Income and
Fund and Accounting Expenditure Fund and Accounting Expenditure
HRA Balance Basis Statement HRA Balance Basis Statement
£’000 £’000 £’000 £’000 £’000 £’000
2,502 185 2,687 Growth and Commercialisation Directorate 3,521 215 3,736
92 (9,591) (9,499) Place Directorate (767) (1,119) (1,886)
4,427 (56) 4,371 Strategy and Governance Directorate 4,233 230 4,463
7,021 (9,462) (2,441) Net Cost of Services 6,987 (674) 6,313
(9,656) 1,041 (8,615) Other Income and Expenditure (13,343) 5,504 (7,839)
(2,635) (8,421) (11,056) (Surplus) or Deficit (6,356) 4,830 (1,526)
General General
Fund HRA Fund HRA
Balance Balance Total Balance Balance Total
£’000 £’000 £’000 £’000 £’000 £’000
2,353 16,575 18,928 Opening Balance at 1 April 2,443 19,809 22,252
Surplus or (Deficit) in Year (after transfers to/from
90 3,234 3,324 (65) 3,019 2,954
earmarked reserves)
2,443 19,809 22,252 Closing Balance at 31 March 2,378 22,828 25,206
----- End of picture text -----

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NOTE 6A – NOTE TO THE EXPENDITURE AND FUNDING ANALYSIS

2020/21
Adjustments from General Fund to
arrive at the Comprehensive Income
and Expenditure Amounts		 Adjustments
for Capital
Purposes
£’000		 Net Change
for the
Pensions
Adjustments
£’000		 Other
Differences
£’000		 Total
Adjustments
£’000
Growth and Commercialisation
Directorate
Place Directorate
Strategy and Governance Directorate
Net Cost of Services
Other Income and Expenditure from the
Funding Analysis		 (6)
(1,562)
68		 221
394
(18)		 -
49
180		 215
(1,119)
230
(1,500) 597 229 (674)
557 1,061 3,886 5,504
Difference between General Fund
(Surplus)/Deficit and Comprehensive
Income and Expenditure Statement
(Surplus)/Deficit		 (943) 1,658 4,115 4,830
2019/20
Adjustments from General Fund to
arrive at the Comprehensive Income
and Expenditure Amounts		 Adjustments
for Capital
Purposes
£’000		 Net Change
for the
Pensions
Adjustments
£’000		 Other
Differences
£’000		 Total
Adjustments
£’000
Growth and Commercialisation
Directorate
Place Directorate
Strategy and Governance Directorate
Net Cost of Services
Other Income and Expenditure from the
Funding Analysis		 (203)
(10,344)
(72)		 388
750
48		 -
2
(32)		 185
(9,592)
(56)
(10,619) 1,186 (30) (9,463)
(1,728) 1,438 1,331 1,041
Difference between General Fund
(Surplus)/Deficit and Comprehensive
Income and Expenditure Statement
(Surplus)/Deficit		 (12,347) 2,624 1,301 (8,422)

Adjustments for Capital Purposes

This column adds in depreciation and impairment, revaluation gains and losses and transfer to the Major Repairs Reserve for future capital investment in the service lines, and for:

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Net Change for the Pensions Adjustments

Net change for the removal of pension contributions and the addition of IAS19 Employee Benefits pension related expenditure and income are reflected as follows:

Other Differences

Other differences between amounts debited or credited to the Comprehensive Income and Expenditure Statement and amounts payable or receivable to be recognised under statute are as follows:

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NOTE 7 – EXPENDITURE AND INCOME ANALYSED BY NATURE

The authority’s expenditure and income is analysed as follows:

----- Start of picture text -----
Remove
amounts
SHDC paid Add PSPS Total
Income and to/received subjective Income and
2020/21 Expenditure from PSPS analysis Expenditure
£’000 £’000 £’000 £’000
Expenditure
-
Employee benefits expenses 12,734 3,119 15,853
Other service expenses 32,819 (3,575) 436 29,680
Depreciation, amortisation, impairment 4,916 - 15 4,931
- -
Interest payments 2,347 2,347
- -
Precepts and levies 3,457 3,457
Increase/(Decrease) in Impairment Allowance
(General Fund) 78 - - 78
Payments to Housing Capital Receipts Pool 431 - - 431
- -
Business Rates tariff and levy 6,162 6,162
- -
Loss on disposal of non-current assets 2,452 2,452
Share of PSPS Taxation - - 4 4
Pensions interest cost 2,115 - 324 2,439
Total Expenditure 67,511 (3,575) 3,898 67,834
Income
Income from council tax and non-domestic rates (12,076) - - (12,076)
- -
Government grants and contributions (28,459) (28,459)
- -
Other grants and contributions (1,253) (1,253)
Fees, charges and other service income (21,974) 241 (20) (21,753)
Interest and investment income (325) - (1) (326)
- -
Change in fair value of equity investments (23) (23)
- - - -
Changes in fair value of investment property
Gain on revaluation of non-current assets (1,538) - - (1,538)
- -
Gain on disposal of non-current assets (2,326) (2,326)
Pensions interest income (1,345) - (261) (1,606)
Total Income (69,319) 241 (282) (69,360)
(Surplus) or Deficit on the Provision of
Services (1,808) (3,334) 3,616 (1,526)
----- End of picture text -----

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----- Start of picture text -----
Remove
amounts
SHDC paid Add PSPS Total
Income and to/received subjective Income and
2019/20 Expenditure from PSPS analysis Expenditure
£’000 £’000 £’000 £’000
Expenditure
-
Employee benefits expenses 12,547 3,116 15,663
Other service expenses 30,892 (3,601) 440 27,731
Depreciation, amortisation, impairment 4,307 - 11 4,318
- -
Interest payments 2,348 2,348
- -
Precepts and levies 3,294 3,294
Increase/(Decrease) in Impairment Allowance
- -
(General Fund) (17) (17)
Payments to Housing Capital Receipts Pool 431 - - 431
- -
Business Rates tariff and levy 6,080 6,080
- -
Loss on disposal of non-current assets 1,500 1,500
Pensions interest cost 2,274 - 408 2,682
Total Expenditure 63,656 (3,601) 3,975 64,030
Income
Income from council tax and non-domestic rates (15,704) - - (15,704)
- -
Government grants and contributions (21,179) (21,179)
- -
Other grants and contributions (950) (950)
Fees, charges and other service income (22,732) 289 (62) (22,505)
Interest and investment income (517) - (3) (520)
Decrease in impairment allowance for bad debts
(HRA) 81 - - 81
- -
Change in fair value of equity investments (171) (171)
- -
Changes in fair value of investment property (225) (225)
Gain on revaluation of non-current assets (10,026) (10,026)
- -
Gain on disposal of non-current assets (2,227) (2,227)
Pensions interest income (1,345) - (315) (1,660)
Total Income (74,995) 289 (380) (75,086)
(Surplus) or Deficit on the Provision of
Services (11,339) (3,312) 3,595 (11,056)
----- End of picture text -----

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NOTE 8 – 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 arrive at the resources that are specified by statutory provisions as being available to the Council to meet future capital and revenue expenditure. The following sets out a description of the reserves that the adjustments are made against.

General Fund Balance

The General Fund is the statutory fund into which all the receipts of the Council are required to be paid and out of which all liabilities of the Council are to be met, except to the extent that statutory rules might provide otherwise. These rules can also specify the financial year in which liabilities and payments should impact on the General Fund Balance, which is not necessarily in accordance with proper accounting practice. The General Fund Balance therefore summarises the resources that the Council is statutorily empowered to spend on its services or on capital investment at the end of the financial year. However, as a Housing authority, the balance is not available to be applied to funding HRA services.

Housing Revenue Account Balance

The Housing Revenue Account Balance reflects the statutory obligation to maintain a revenue account for local authority council housing provision in accordance with Part VI of the Local Government and Housing Act 1989. It contains the balance of income and expenditure as defined by the 1989 Act that is available to fund future expenditure in connection with the Council’s landlord function.

Major Repairs Reserve

The Council is required to maintain the Major Repairs Reserve, which controls an element of the capital resources limited to being used on capital expenditure on HRA assets or the financing of historical capital expenditure by the HRA. The balance shows the capital resources that have yet to be applied at year end.

Capital Receipts Reserve

The Capital Receipts Reserve holds the proceeds from the disposal of land or other assets, which are restricted by statute from being used other than to fund new capital expenditure or to be set aside to finance historical capital expenditure. The balance on the reserve shows the resources that have yet to be applied for these purposes at the year end.

Capital Grants Unapplied

The Capital Grants Unapplied Account holds the grants and contributions received towards capital projects for which the Council has met the conditions that would otherwise require repayment of the monies but which have yet to be applied to meet expenditure. The balance is restricted by grant terms as to the capital expenditure against which it can be applied and/or the financial year in which this can take place.

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----- Start of picture text -----
2020/21
£’000 £’000 £’000 £’000 £’000
Adjustments to Revenue Resources
Amounts by which income and expenditure included in the Comprehensive Income
and Expenditure Statement are different from revenue for the year calculated in
accordance with statutory requirements:
 Pension costs 1,324 334 - - -
 Council Tax and Non-Domestic Rates 3,908 - - - -
 Holiday pay 180 48 - - -
 Movements in the market value of Investment Properties - - - - -
 Movements in fair value of financial assets designated to fair value other
- - - -
comprehensive income (23)
 - - -
Capital grants and contributions applied to capital financing (5,333) (190)
 Capital grants and contributions not applied to capital financing (193) - - - 193
 Reversal of entries included in the Surplus or Deficit on the Provision of
- - -
Services in relation to capital expenditure 7,481 3,891
Total Adjustments to Revenue Resources 7,344 4,083 - - 193
Adjustments between Revenue and Capital Resources
Transfer of non-current asset sale proceeds from revenue to the Capital Receipts
Reserve 541 (2,340) 2,340 - -
Administrative costs of non-current asset disposals - 77 (77) - -
Payments to the government housing receipts pool 431 - (431) - -
- - -
Posting of HRA resources from revenue to the Major Repairs Reserve (3,816) 3,816
- - - -
Capital expenditure financed from revenue balances (1,490)
-
Total Adjustments between Revenue and Capital Resources (518) (6,079) 1,832 3,816
Adjustments to Capital Resources
- - - -
Use of Capital Receipts Reserve to finance capital expenditure (1,676)
- - - -
Use of Major Repairs Reserve to finance capital expenditure (3,046)
- - - - -
Use of capital grants to finance capital expenditure
Cash payments in relation to deferred capital receipts - - 3 - -
- - -
Total Adjustments to Capital Resources (1,673) (3,046)
Total Adjustments 6,826 (1,996) 159 770 193
Fund Major
General Balance Housing Revenue Account Capital Receipts Reserve Repairs Reserve Capital Grants
Unapplied
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----- Start of picture text -----
2019/20
£’000 £’000 £’000 £’000 £’000
Adjustments to Revenue Resources
Amounts by which income and expenditure included in the Comprehensive Income
and Expenditure Statement are different from revenue for the year calculated in
accordance with statutory requirements:
 Pension costs 2,137 488 - - -
 Council Tax and Non-Domestic Rates 1,501 - - - -
 - - -
Holiday pay (25) (5)
 Movements in the market value of Investment Properties (225) - - - -
 Movements in fair value of financial assets designated to fair value other
- - - -
comprehensive income (171)
 - -
Capital grants and contributions applied to capital financing (2,130) (910) (39)
 Capital grants and contributions not applied to capital financing (323) - - - 323
 Reversal of entries included in the Surplus or Deficit on the Provision of
- - -
Services in relation to capital expenditure 2,907 (5,770)
Total Adjustments to Revenue Resources 3,671 (6,197) - - 284
Adjustments between Revenue and Capital Resources
Transfer of non-current asset sale proceeds from revenue to the Capital Receipts
Reserve (38) (2,188) 2,225 - -
Administrative costs of non-current asset disposals - 36 (36) - -
Payments to the government housing receipts pool 431 - (431) - -
- - -
Posting of HRA resources from revenue to the Major Repairs Reserve (3,259) 3,259
- - - -
Capital expenditure financed from revenue balances (877)
Total Adjustments between Revenue and Capital Resources -
(484) (5,411) 1,758 3,259
Adjustments to Capital Resources
- - - -
Use of Capital Receipts Reserve to finance capital expenditure (3,658)
- - - -
Use of Major Repairs Reserve to finance capital expenditure (4,357)
- - - - -
Use of capital grants to finance capital expenditure
Cash payments in relation to deferred capital receipts - - 2 - -
- - -
Total Adjustments to Capital Resources (3,656) (4,357)
Total Adjustments 3,187 (11,608) (1,898) (1,098) 284
General Fund Balance Housing Revenue Account Capital Receipts Reserve Major Repairs Reserve Capital Grants Unapplied
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NOTE 9 – MOVEMENTS IN EARMARKED RESERVES

This note sets out the amounts set aside from the General Fund and HRA balances in earmarked reserves to provide financing for future expenditure plans and the amounts posted back from earmarked reserves to meet General Fund and HRA expenditure in 2020/21.

----- Start of picture text -----
Balance Balance Balance
Transfers Transfers In Transfers Transfers In
1 April 31 March 31 March
Out 2019/20 2019/20 Out 2020/21 2020/21
2019 2020 2021
£'000 £'000 £'000 £'000 £'000 £'000 £'000
General Fund
Council Tax Reserve 2,348 (1,571) 1,284 2,061 (614) 362 1,809
Replacement and Refurbishment
Reserve 173 (77) - 96 (60) 136 172
Investment and Growth Reserve 5,489 (1,373) 1,148 5,264 (1,970) 1,195 4,489
Transformation Reserve 299 (158) - 141 (70) - 71
Earmarked Grants Reserve 393 (116) 174 451 (180) 4,603 4,874
Total General Fund 8,702 (3,295) 2,606 8,013 (2,894) 6,296 11,415
Housing Revenue Account
Insurance Reserve 200 - - 200 - - 200
Total Housing Revenue Account 200 - - 200 - - 200
Total Earmarked Reserves 8,902 (3,295) 2,606 8,213 (2,894) 6,296 11,615
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The Earmarked Reserves have had an exceptional contribution during 2020/21 in respect of £4.006m Tax Income Guarantee funds from MHCLG to support the distribution of Business Rates collected on behalf of other authorities.

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NOTE 10 – OTHER OPERATING EXPENDITURE

----- Start of picture text -----
2019/20 2020/21
£’000 £’000
846 Parish Council Precepts 897
2,447 Internal Drainage Board Levies 2,560
431 Payments to the Government Housing Capital Receipts Pool 431
(727) (Gains)/Losses on the disposal of non-current assets 126
2,997 Total 4,014
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NOTE 11 – FINANCING AND INVESTMENT INCOME AND EXPENDITURE

----- Start of picture text -----
2019/20 2020/21
£’000 £’000
2,348 Interest payable and similar charges 2,347
1,023 Net interest on the net defined benefit liability for pensions 833
(521) Interest receivable and similar income (326)
64 Movement in the impairment allowance for bad debts 78
(319) Income and expenditure in relation to investment properties and (135)
changes in their fair value
(171) Movements in fair value of financial assets designated to fair value (23)
other comprehensive income
- Share of PSPS Taxation 4
2,424 Total 2,778
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Following the introduction of IFRS9 Financial Instruments, the Council is required to value its equity stake in South Holland Local Housing Community Interest Company and Welland Homes Limited at fair value.

NOTE 12 – TAXATION AND NON SPECIFIC GRANT INCOME AND EXPENDITURE

----- Start of picture text -----
2019/20 2020/21
£’000 £’000
(6,014) Council Tax income (6,246)
(3,609) Retained Business Rates income and expenditure 332
(1,266) Section 31 Grant (1,252)
- Section 31 Grant – Extended Reliefs (4,005)
-
Council Tax Income Compensation (13)
(271) Revenue Support Grant (275)
(1,170) Non-ringfenced government grants (1,235)
(1,706) Capital grants and contributions (190)
-
Covid-19 Support Grant (1,340)
- Covid-19 Sales, Fees and Charges Income Compensation (407)
(14,036) Total (14,631)
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Additional Business Rates reliefs were provided in year to businesses to provide financial assistance in response to the Covid-19 pandemic, resulting in reduced income due from ratepayers, and therefore lost income to the Council in the current financial year. However, Central Government have provided compensation to the Council to offset this lost income, in the form of Section 31 Grant for extended reliefs.

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NOTE 13 – PROPERTY, PLANT AND EQUIPMENT - Movements on Balances

----- Start of picture text -----
2020/21
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Movements on balances
Cost or Valuation
At 1 April 2020 169,365 23,039 5,886 2,444 962 1,446 1,774 204,916
Additions 3,543 462 270 - - - 1,293 5,568
Revaluation increases/ (decreases) recognised in the Revaluation
Reserve 2,338 (1,120) - - - 20 - 1,238
Revaluation increases/ (decreases) recognised in the Surplus/Deficit on
the Provision of Services 205 (244) - - - - - (39)
- -
Derecognition – disposals (1,073) (2) (120) (525) (63) (1,783)
- - - - - -
Assets reclassified (to)/from Held for Sale (552) (552)
Other movements in Cost or Valuation 1,756 - - - - - (2,871) (1,115)
At 31 March 2021 176,134 21,583 6,036 2,444 962 941 133 208,233
Accumulated Depreciation and Impairment
- - - -
At 1 April 2020 (3,733) (1,897) (146) (5,776)
Depreciation charge (3,493) (428) (682) (156) (7) (4,766)
Depreciation written out to the Revaluation Reserve 1,936 403 - - - - - 2,339
Depreciation written out to the Surplus/Deficit on the Provision of 1,551 25 - - - - - 1,576
Services
Derecognition – disposals 6 - 93 - - 7 - 106
At 31 March 2021 - - (4,322) (2,053) (146) - - (6,521)
Net Book Value
At 31 March 2020 169,365 23,039 2,153 547 816 1,446 1,774 199,140
At 31 March 2021 176,134 21,583 1,714 391 816 941 133 201,712
Council Assets Assets
Dwellings Buildings Furniture & Equipment Community Plant and Equipment
Other Land and Vehicles, Plant, Infrastructure Surplus Assets Assets Under Construction Total Property,
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----- Start of picture text -----
2019/20
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Movements on balances
Cost or Valuation
At 1 April 2019 150,171 22,960 5,308 2,261 962 823 309 182,794
Additions 6,639 304 578 195 - 707 1,494 9,917
Revaluation increases/ (decreases) recognised in the Revaluation
Reserve 5,871 366 - - - (188) - 6,049
Revaluation increases/ (decreases) recognised in the Surplus/Deficit on
the Provision of Services 8,693 (305) - - - (182) - 8,206
- - - -
Derecognition – disposals (1,020) (12) (29) (1,061)
- - - - - -
Assets reclassified (to)/from Held for Sale (989) (989)
Other movements in cost or valuation - (286) - - - 286 - -
At 31 March 2020 169,365 23,039 5,886 2,444 962 1,446 1,774 204,916
Accumulated Depreciation and Impairment
- - - -
At 1 April 2019 (3,112) (1,729) (146) (4,987)
- - -
Depreciation charge (3,028) (399) (621) (180) (4,228)
Depreciation written out to the Revaluation Reserve 1,215 374 - - - - - 1,589
Depreciation written out to the Surplus/Deficit on the Provision of 1,794 25 - - - - - 1,819
Services
Derecognition – disposals 19 - - 12 - - - 31
At 31 March 2020 - - (3,733) (1,897) (146) - - (5,776)
Net Book Value
At 31 March 2020 169,365 23,039 2,153 547 816 1,446 1,774 199,140
At 31 March 2019 150,171 22,960 2,196 532 816 823 309 177,807
Council Assets Assets
Dwellings Buildings Furniture & Equipment Community Plant and Equipment
Other Land and Vehicles, Plant, Infrastructure Surplus Assets Assets Under Construction Total Property,
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Depreciation

The following useful lives and depreciation rates have been used in the calculation of depreciation:

Capital Commitments

At 31 March 2021, the Council has entered into contracts for the enhancement of Property, Plant and Equipment in 2020/21 and future years budgeted at a cost of £3.1m. Similar commitments at 31 March 2020 were £4.2m, mainly relating to works to dwellings. The major commitments are:

 Central Heating Replacements £0.6m  New Build Council Houses and Shared Ownership £1.1m  IT & Equipment Upgrade and Replacement £0.1m  Vehicles, plant and machinery £1.3m

Effects of Changes in Estimates

No material changes were made to the Council’s accounting estimates for Property, Plant and Equipment 2020/21.

Revaluations

The Council carries out a programme that ensures that all Property, Plant and Equipment required to be measured at current value is regularly revalued. A full revaluation of all Council housing stock and other land and buildings is undertaken every 5 years, although a desktop review of all assets is carried out in each of the intervening years. All valuations are carried out externally. Valuations of land and buildings are carried out in accordance with the methodologies and bases for estimation set out in the professional standards of the Royal Institution of Chartered Surveyors.

In addition due regard has been taken of amendments introduced in the CLG document “Stock Valuation for Resource Accounting – Guidance for Valuers 2010”. The basis of valuation is Current Value (EUV) for nonhousing property and Existing Use Value for Social Housing (EUV – SH) for Council dwellings. Surplus property is valued at Fair Value, estimated at highest and best use from a market participant’s perspective.

Revaluations during 2020/21 were undertaken by Darren Fabris BSc (Hons) MRICS, RICS Registered Valuer (Kier) and Guy S C Harbord MA MRICS, IRRV (Hons), RICS Registered Valuer (Wilks Head and Eve).

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----- Start of picture text -----
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Carried at
historical cost - - 6,036 2,444 962 - 133 9,575
Valued at fair
value as at:
31 March 2021 176,134 21,583 - - - 941 - 198,658
Total Cost or
Valuation 176,134 21,583 6,036 2,444 962 941 133 208,233
Total
Council Assets Assets
Dwellings Buildings Furniture & Equipment Community
Infrastructure Assets Under Construction
Other Land and Vehicles, Plant, Surplus Assets
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Fair Value Hierarchy – Surplus Assets

Details of the authority’s surplus assets and information about the fair value hierarchy as at 31 March 2021 is as follows:

----- Start of picture text -----
Fair Value Fair Value
Level 2 Level 2
2019/20 2020/21
£’000 £’000
1,446 Surplus Land 941
1,446 Balance at end of the year 941
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Valuation Techniques Used to Determine Level 2 Fair Values for Surplus Assets

Significant Observable Inputs – Level 2

The fair value of surplus assets have been measured using either the income or comparative approach methods.

For land only assets the Valuers have compared sale prices of comparable land in applicable uses and similar locations before making adjustments for differences in key attributes such as land size.

For some assets the Valuers have relied upon data ascertained from current evidence of passing rents on comparable properties including new lettings and rent reviews. Evidence of yields has been taken from the sale of comparable investments having regard to the type of property, covenant strength and lease terms. Factors of relevance in the leases include the lease term, rent review frequency, any break clauses and obligations for repair, maintenance and buildings insurance.

Valuation inputs for rental and yield which are directly applicable i.e. an almost identical property let to a similar covenant on the same repairing and insuring terms for a similar term to the valuation subject are said to be at Level 2 in the fair value hierarchy as they are directly comparable with limited adjustment.

Highest and best use of Surplus Assets

In estimating the fair value of the Council’s surplus assets, the highest and best use of the properties is deemed to be their current use for some assets and alternative use for others.

Valuation Process for Surplus Assets

The fair value of the Council’s surplus assets is measured at each reporting date. All valuations are carried out externally, in accordance with the methodologies and bases for estimation set out in the professional

56

standards of the Royal Institution of Chartered Surveyors. The Council’s valuation experts work closely with finance officers regarding all valuation matters.

NOTE 14 – HERITAGE ASSETS

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

----- Start of picture text -----
2019/20 2020/21 2020/21 2020/21
£’000 £’000 £’000 £’000
Cost or valuation
107 1 April 62 43 105
(2) Revaluations - - -
105 31 March 62 43 105
Total
Interest
Works of Art
Archaeological Sites of Special
Civic Regalia and
Sites, Smallholdings and other Land and
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The Council’s heritage assets fall into two categories; Civic Regalia and Works of Art, and Archaeological Sites, Smallholdings and other Land and Sites of Special Interest. All the assets have been in the Council's ownership for a number of years and are held for their intrinsic worth as opposed to financial gain. As such they are unlikely to be sold. There were no additions or disposals in the current financial year.

Heritage assets recognised on the Council’s Balance Sheet:

Civic Regalia and Works of Art:

Archaeological Sites, Smallholdings and other Land and Sites of Special Interest:

Heritage assets not recognised on the Council’s Balance Sheet:

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NOTE 15 – INVESTMENT PROPERTY

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:

----- Start of picture text -----
2019/20 2020/21
£’000 £’000
(95) Rental Income from investment property (145)
1 Direct operating expenses arising from investment property 10
-
(225) Net (gains)/losses from fair value adjustments
(319) Net (gain)/loss (135)
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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 repairs, maintenance or enhancement.

The following table summarises the movement in the fair value of investment properties over the year.

----- Start of picture text -----
2019/20 2020/21
£’000 £’000
796 Balance at start of the year 1,021
- Reclassification to Investment Property 552
225 Net gains/(losses) from fair value adjustments -
1,021 Balance at end of the year 1,573
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Fair Value Hierarchy

Details of the authority’s investment properties and information about the fair value hierarchy as at 31 March 2021 is as follows:

----- Start of picture text -----
Fair Value
Fair Value
Level 2
Level 2
2019/20 2020/21
£’000 £’000
1,021 Commercial Industrial Units 1,573
1,021 Balance at end of the year 1,573
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Valuation Techniques Used to Determine Level 2 for Investment Properties

Significant Observable Inputs – Level 2

The fair value of investment properties has been measured using two main approaches - the income method and the comparable method.

For land only assets the Valuers have compared sale prices of comparable land in applicable uses and similar locations before making adjustments for differences in key attributes such as land size.

For land and building assets the Valuers have relied upon data ascertained from current evidence of passing rents on comparable properties including new lettings and rent reviews. Evidence of yields has been taken from the sale of comparable investments having regard to the type of property, covenant strength and lease terms. Factors of relevance in the leases include the lease term, rent review frequency, any break clauses and obligations for repair, maintenance and buildings insurance.

Valuation inputs for rental and yield which are directly applicable i.e. an almost identical property let to a similar covenant on the same repairing and insuring terms for a similar term to the valuation subject are said to be ‘observable inputs’ as they are directly comparable with limited adjustment and are said to be a Level 2 in the fair value hierarchy.

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Highest and best use of Investment Properties

In estimating the fair value of the Council’s investment properties, the highest and best use of the properties is deemed to be their current use.

Valuation Process for Investment Properties

The fair value of the Council’s investment properties is measured at each reporting date. All valuations are carried out externally, in accordance with the methodologies and bases for estimation set out in the professional standards of the Royal Institution of Chartered Surveyors. The Council’s valuation experts work closely with finance officers regarding all valuation matters.

NOTE 16 – INTANGIBLE ASSETS

The Council accounts for its software as intangible assets. Intangible assets include purchased licenses.

All software is given a finite useful life, based on assessments of the period that the software is expected to be of use to the Council. The carrying amount of intangible assets is amortised on a straight-line basis, over 1 to 10 years. The amortisation of £164,000 was charged to an overhead account and then absorbed across service headings in the Cost of Services. It is not possible to quantify exactly how much of the amortisation is attributable to each service heading.

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

----- Start of picture text -----
2019/20 2020/21
£’000 £’000
Balance at start of year:
1,502 - Gross carrying amounts 2,004
(1,213) - Accumulated amortisation (1,303)
289 Net carrying amount at start of year 701
Additions:
502 - Purchases 171
(90) Amortisation for the period (164)
- -
Derecognition
701 Net carrying amount at end of year 708
Comprising:
2,004 - Gross carrying amounts 2,175
(1,303) - Accumulated amortisation (1,467)
701 708
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NOTE 17 – FINANCIAL INSTRUMENTS

The following categories of financial instrument are carried in the Balance Sheet:

----- Start of picture text -----
Financial Assets Non-Current Current
Long-term Long-term Short-term Short-term Total
Investments Debtors Investments Debtors
31 31 31 31 31 31 31 31 31 31
March March March March March March March March March March
2020 2021 2020 2021 2020 2021 2020 2021 2020 2021
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Fair Value through other
comprehensive income –
Designated equity
instruments 3,664 3,963 - - - - - - 3,664 3,963
Amortised cost
Investments - - - - 26,118 34,524 - - 26,118 34,524
- - - - - -
Cash & cash equivalents 12,040 10,528 12,040 10,528
Mortgages and car loans - - 165 113 - - 52 38 217 151
Loans to Welland Homes - - 3,227 3,710 - - - - 3,227 3,710
Trade debtors - - 143 143 - - 1,975 1,560 2,118 1,703
Total financial assets 3,664 3,963 3,535 3,966 38,158 45,052 2,027 1,598 47,384 54,579
----- End of picture text -----

----- Start of picture text -----
Financial Liabilities Non-Current Current
Long-term Long-term Short-term Short-term Total
Borrowings Creditors Borrowings Creditors
31 31 31 31 31 31 31 31 31 31
March March March March March March March March March March
2020 2021 2020 2021 2020 2021 2020 2021 2020 2021
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Amortised cost
- - - -
External borrowing (67,456) (67,456) (26) (26) (67,482) (67,482)
Trade creditors - - - - - - (4,334) (2,746) (4,334) (2,746)
Total financial liabilities (67,456) (67,456) - - (26) (26) (4,334) (2,746) (71,816) (2,746)
----- End of picture text -----

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Income, expense, gains and losses

2019/20
Surplus or
Deficit on the
Provision of
Services
£’000		 2020/21
Surplus or
Deficit on the
Provision of
Services
£’000
Net gains/losses on:

Financial assets measured at fair value other comprehensive
income
Interest Revenue
Financial assets measured at amortised cost		 (171)
(517)		 (23)
(326)
Interest expense
Fee Expense
Brokers fees		 2,348
2		 2,347
3

Fair Value of Financial Assets

The Council has a shareholding interest in the UK Municipal Bonds Agency (MBA). The fair value has been written down to zero as the balance sheet of the MBA shows negative equity. The company has been created with a view to providing funds to the public sector, and issued its first bond during 2019/20. The profit from this will show in the MBA’s 2020/21 accounts. The authority did not intend to dispose of the shares at the Balance Sheet date.

The authority is the sole shareholder of Welland Homes Limited, which is the Council’s wholly owned Housing Development Company. The fair value of the equity balance brought forward was £2.601m and a further equity investment was made during the year of £276k. This equity is categorised as Level 3 inputs due to there being no active market for the shares. The Company accounts reported capital and reserves balances of £2.889m as at 31 March 2021. This is presented in the Financial Assets table above, as fair value through other comprehensive income – designated equity instruments. The authority did not intend to dispose of the shares at the Balance Sheet date.

The authority is also the sole shareholder of South Holland Local Community Housing Interest Company. The fair value of the equity balance brought forward was £1.063m and this equity is categorised as Level 3 inputs due to there being no active market for the shares. The Company accounts reported capital and reserves balances of £1.074m as at 31 March 2021. This is presented in the Financial Assets table above, as fair value through other comprehensive income – designated equity instruments. The authority did not intend to dispose of the shares at the Balance Sheet date.

Transfers between Levels of the Fair Value Hierarchy

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

Changes in the Valuation Technique

There has been no change in the valuation technique used during the year for the financial instruments.

Fair Values of Assets and Liabilities that are not measured at Fair Value (but which fair value disclosures are required)

Except for the financial assets carried at fair value, all other financial liabilities and financial assets represented by amortised cost 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:

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The fair values calculated are as follows:

LIABILITIES 31 March 2020 31 March 2020 31 March 2021 31 March 2021
Carrying
Amount
£’000		 Fair Value
£’000		 Carrying
Amount
£’000		 Fair Value
£’000
Borrowing (67,482) (85,849) (67,482) (93,676)

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

The fair value of Public Works Loan Board (PWLB) loans of £93.676m measures the economic effect of the terms agreed with the PWLB compared with estimates of the terms that would be offered for market transactions undertaken at the Balance Sheet date. The difference between the carrying amount and the fair value measures the additional interest that the authority will pay over the remaining terms of the loans under the agreements with the PWLB, against what would be paid if the loans were at prevailing market rates.

However, the Council has a continuing ability to borrow at concessionary rates from the PWLB rather than from the markets, termed the PWLB Certainty Interest rates. A supplementary measure of the fair value as a result of its PWLB commitments for fixed rate loans is to compare the terms of these loans with the new borrowing rates available from the PWLB. If a value is calculated on this basis, the carrying amount of £67.482m would be valued at £93.676m. But, if the Council were to seek to avoid the projected loss by repaying the loans to the PWLB, the PWLB would raise a penalty charge for early redemption in addition to charging a premium for the additional interest that will not now be paid. The exit price for the PWLB loans including the penalty charge would be £119.056m.

ASSETS 31 March 2020 31 March 2020 31 March 2021 31 March 2021
Carrying
amount
£’000		 Carrying Fair Value
£’000
Fair Value
amount
£’000 £’000
Short Term investments
Welland Homes
Castle Sports		 26,118
3,227
143		 26,118
3,227
143		 34,524
3,710
143		 34,524
3,710
143

The loans to Welland Homes were made at the market rate at the time of issue. As at 31 March 2021 there had been no material changes to the market rates so the fair value of the loans are deemed to be unchanged.

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NOTE 18 – DEBTORS

----- Start of picture text -----
31 March 31 March 31 March 31 March
2020 2021 2021 2021
Net Gross Impairment Net
£’000 £’000 £’000 £’000
842 Trade debtors 336 (123) 213
753 Council Tax & NDR debtors 6,935 (1,286) 5,649
-
1,106 Related parties 1,151 1,151
236 Prepayments 284 - 284
103 Costs 314 (194) 120
1,215 Other entities and individuals 2,545 (1,252) 1,293
4,255 Total 11,565 (2,855) 8,710
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NOTE 19 – CASH AND CASH EQUIVALENTS

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

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31 March 31 March
2020 2021
£’000 £’000
396 Bank current accounts 1,571
11,682 Deposits with Banks on Instant Access 8,957
Cash and Cash Equivalents categorised as
12,078 Current Assets 10,528
(38) Bank current accounts -
Cash and Cash Equivalents categorised as
(38) Current Liabilities -
12,040 Total Cash and Cash Equivalents 10,528
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NOTE 20 – ASSETS HELD FOR SALE

Assets held for sale represent Council Houses to be sold under the Governments Right to Buy (RTB) Scheme. Fair Value is deemed to be the discounted RTB price paid by tenants to acquire the dwelling. This represents level 1 under the fair value hierarchy.

The balance outstanding at 31 March 2021 has significantly increased from the prior year due to more RTB applications being at the accepted stage by tenants who are eligible to purchase them.

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2019/20 2020/21
£’000 £’000
432 Balance outstanding at start of year 989
Assets newly classified as held for sale:
989 - Property, Plant and Equipment 1,184
Assets declassified as held for sale:
-
- Property, Plant and Equipment (70)
(432) Assets sold (712)
989 Balance outstanding at year end 1,391
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NOTE 21 – CREDITORS

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2019/20 2020/21
£’000 £’000
(1,182) Trade payables (1,963)
(1,511) Council Tax & NDR payables (5,094)
(3,541) Other payables (1,816)
(2,361) Receipts in Advance (8,087)
(8,595) Total (16,960)
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NOTE 22 – PROVISIONS

----- Start of picture text -----
Business
Rate Appeals
£’000
Balance at 1 April 2020 (841)
Additional provisions made in 2020/21 (145)
Amounts used in 2020/21 309
Unused amounts reversed in 2020/21 39
Balance at 31 March 2021 (638)
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The provision represents South Holland’s share (40% of £1.595m) of the total provision for appeals against the rateable values set by the Valuation Office Agency (VOA) not settled as at 31 March 2021. The total provision has been recognised in the Collection Fund Statement (page 94).

NOTE 23 – USABLE RESERVES

Movements in the Council’s usable reserves are detailed in the Movement in Reserves Statement.

NOTE 24 – UNUSABLE RESERVES

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31 March 31 March
2020 2021
£’000 £’000
29,370 Revaluation Reserve 31,952
102,926 Capital Adjustment Account 103,743
(34,733) Pensions Reserve (43,953)
47 Deferred Capital Receipts Reserve 44
(146) Collection Fund Adjustment Account (4,054)
(9) Accumulated Absences Account (237)
1,716 Financial Instruments Revaluation Reserve 1,739
99,171 Total Unusable Reserves 89,234
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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.

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----- Start of picture text -----
2019/20 2019/20 2020/21 2020/21
£’000 £’000 £’000 £’000
22,386 Balance at 1 April 29,370
8,386 Upward revaluation of assets 5,184
Downward revaluation of assets and impairment
losses not charged to the Surplus/Deficit on the
(749) Provision of Services (1,607)
Surplus or deficit on revaluation of non-current
assets not posted to the Surplus or Deficit on the
7,636 Provision of Services 3,577
Difference between fair value depreciation and
(472) historical cost depreciation (732)
(180) Accumulated gains on assets sold or scrapped (262)
Amount written off to the Capital Adjustment
(652) Account (995)
29,370 Balance at 31 March 31,952
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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 pension funds 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.

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2019/20 2020/21
£’000 £’000
(41,647) Balance at 1 April (34,733)
9,539 Remeasurements of the net defined benefit liability (7,562)
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
(4,751) Expenditure Statement (4,019)
Employer’s pensions contributions and direct payments
2,126 to pensioners payable in the year 2,361
(34,733) Balance at 31 March (43,953)
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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 additions to those assets under statutory provisions. The Account is debited with the cost of acquisition, construction or subsequent costs as depreciation, impairment losses and amortisations are charged to the Comprehensive Income and Expenditure Statement (with reconciling postings from the Revaluation Reserve to convert current and 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 subsequent costs. The Account contains accumulated gains and losses on Investment Properties. It 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.

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Note 8 provides details of the source of all the transactions posted to the Account, apart from those involving the Revaluation Reserve.

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2019/20 2019/20 2020/21 2020/21
£’000 £’000 £’000 £’000
87,213 Balance at 1 April 102,926
Reversal of items relating to capital
expenditure debited or credited to the
Comprehensive Income and Expenditure
Statement:
Charges for depreciation and impairment of non-
(4,228) current assets (4,767)
Reversal of Revaluation losses on Property, Plant
10,040 and Equipment 1,538
(90) Amortisation of intangible assets (164)
Revenue expenditure funded from capital under
(1,397) statute (6,129)
Amounts of non-current assets written off on
disposal or sale as part of the gain/loss on
disposal to the Comprehensive Income and
(1,461) Expenditure Statement (2,390)
2,864 (11,912)
Adjusting amounts written out of the Revaluation
180 Reserve 262
Net written out amount of the cost of non-current
472 assets consumed in the year 732
Capital financing applied in the year:
Use of the Capital Receipts Reserve to finance
3,658 new capital expenditure 1,676
Use of the Major Repairs Reserve to finance new
4,357 capital expenditure 3,046
Capital grants and contributions credited to the
Comprehensive Income and Expenditure
Statement that have been applied to capital
3,079 financing 535
Application of grants to capital financing from the
Capital Grants Unapplied Account 4,988
Capital expenditure charged against the General
877 Fund and HRA balances 1,490
11,971 11,735
Movements in the market value of Investment
Properties debited or credited to the
Comprehensive Income and Expenditure
225 Statement -
102,926 Balance at 31 March 103,743
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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 Council 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.

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2019/20 2020/21
£’000 £’000
49 Balance at 1 April 47
(2) Transfer to the Capital Receipts Reserve upon receipt of (3)
cash
- Other Movements -
47 Balance at 31 March 44
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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 tax payers and business rate payers compared with the statutory arrangements for paying across amounts to the General Fund from the Collection Fund.

----- Start of picture text -----
2019/20 2020/21
£’000 £’000
1,356 Balance at 1 April (146)
Amount by which council tax and non-domestic rates
income credited to the Comprehensive Income and
Expenditure Statement is different from council tax and
non-domestic rates income calculated for the year in
(1,502) accordance with statutory requirements (3,908)
(146) Balance at 31 March (4,054)
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Accumulated Absences Account

The Accumulated Absences Account absorbs the differences that would otherwise arise on the General Fund Balance and Housing Revenue Account Balance from accruing for compensated absences earned but not taken in the year, e.g. annual leave entitlement carried forward at 31 March. Statutory arrangements require that the impact on the General Fund Balance and Housing Revenue Account Balance is neutralised by transfers to or from the Account.

----- Start of picture text -----
2019/20 2019/20 2020/21 2020/21
£’000 £’000 £’000 £’000
(39) Balance at 1 April (9)
Settlement or cancellation of accrual made at the
39 end of the preceding year 9
9 Amounts accrued at the end of the current year (237)
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
48 with statutory requirements (228)
9 Balance at 31 March (237)
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Financial Instruments Revaluation Reserve

The Financial Instruments Revaluation Reserve holds the gains and losses on the fair value of financial instruments.

----- Start of picture text -----
2019/20 2020/21
£’000 £’000
1,545 Balance at 1 April 1,716
250 Welland Homes equity 12
South Holland Local Housing Community Interest Company
(29) 11
equity
-
(50) Investment in Municipal Bonds Agency (MBA)
1,716 Balance at 31 March 1,739
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NOTE 25 – CASH FLOW STATEMENT – OPERATING ACTIVITIES

The cash flows for operating activities include the following items:

2019/20 2020/21
£’000 £’000
511
(2,295)		 Interest received
Interest paid		 414
(2,347)

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

----- Start of picture text -----
2019/20 2020/21
£’000 £’000
4,228 Depreciation 4,766
452 Impairment and downward valuations 236
(10,492) Impairment and revaluation losses/(gains) on HRA non dwellings (1,774)
90 Amortisation of intangible assets 164
(118) (Increase)/decrease in interest debtors 88
4,115 Increase in creditors 4,695
(452) (Increase)/decrease in debtors 748
2,625 Movement in pension liability 1,658
(672) Contribution to/(from) provisions (203)
Adjustment for movements in fair value of investments classified as Fair
(221) Value through Other Comprehensive Income (23)
Carrying amount of non-current assets and non-current assets held for
1,461 sale, sold or derecognised 2,390
225 Movement in Investment Property Values -
Other non-cash items charged to the net surplus or deficit on the
(348) provision of services (14)
893 12,731
Adjustment for items included in the net surplus or deficit on the provision
of services that are investing or financing activities
(3,248) Capital Grants credited to surplus or deficit on the provision of services (5,716)
Proceeds from the sale of property, plant and equipment, investment
(2,187) property and intangible assets (2,264)
(5,435) (7,980)
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NOTE 26 – CASH FLOW STATEMENT – INVESTING ACTIVITIES

----- Start of picture text -----
2019/20 2020/21
£’000 £’000
Purchase of property, plant and equipment, investment property and
(10,213) intangible assets (5,708)
(39,768) Purchase of short term and long term investments (247,869)
(620) Other payments for investing activities (494)
Proceeds from the sale of property, plant and equipment, investment
2,189 property and intangible assets 2,267
46,500 Proceeds from sale of short term investments 239,100
3,370 Other receipts from investing activities 6,481
1,458 Net cash flows from investing activities (6,223)
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NOTE 27 – CASH FLOW STATEMENT – FINANCING ACTIVITIES

2019/20 2020/21
£’000 £’000
(1,231) Other payments for financing activities
Net cash flows from financing activities		 (1,564)
(1,231) (1,564)

NOTE 28 - RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES

----- Start of picture text -----
2020/21 Financing Non-Cash 2020/21
1 April Cashflows Changes 31 March
£’000 £’000 £’000 £’000
Debtors (150) (5,053) (5,203) (10,256)
Creditors (1,081) 4,720 3,639 8,359
Total Liabilities from Financing
(1,231) (333) (1,564) (1,897)
Activities
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NOTE 29 – MEMBERS’ ALLOWANCES

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

----- Start of picture text -----
2020/21 2019/20
£’000 £’000
Basic Allowance 233 232
Special Responsibility 163 156
Expenses 4 12
Total 400 400
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NOTE 30 – OFFICERS’ REMUNERATION

The remuneration paid to the Council’s senior employees is as follows:

----- Start of picture text -----
Salary, Expenses Pension Redundancy Total
Fees and Allowances Contribution Payments
Allowances
£ £ £ £ £
Chief 2020/21 - - - - -
Executive 2019/20 - - - - -
 Chief
2020/21 - - - - -
Finance
Officer 2019/20 - - - - -
Monitoring 2020/21 - - - - -
Officer 2019/20 - - - - -
Executive 2020/21 84,147 283 14,277 - 98,707
Manager/
Interim
2019/20 78,293 221 12,477 90,991
Director
 Place
2020/21 75,436 101 13,040 - 88,576
Manager/
Interim
2019/20 - - - - -
Director
Executive 2020/21 - - - - -
Manager
(until 07/10/19) 2019/20 37,469 645 5,769 - 43,883
----- End of picture text -----*

** These role undertook additional duties to support the response to the Covid-19 pandemic in the year for which an additional remuneration was paid during the period for which additional duties were undertaken.

In October 2020 a strategic review of the shared management structure between South Holland and Breckland Councils was commissioned. Both councils have successfully developed and operated a shared management model for over 10 years which has been replicated across the Local Government sector, however during the covid-19 pandemic there was a ‘temporary uncoupling’ of shared managers to enable each council to focus on their own ‘places’. As a result of this successful place based working and the evolving needs to provide service to our residents to meet the challenges of the Covid-19 pandemic, Full Council approved in February 2021 that the existing shared management arrangements with Breckland would end with effect from May 2021. Staff have been ‘landed’ in their new roles at either South Holland or Breckland Councils, there were no redundancies. Some sharing of other services is continuing (such as legal and procurement) in the same manner as prior to May 2021.

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The Council’s other employees receiving more than £50,000 remuneration for the year (excluding employer’s pension contributions) were paid the following amounts:

Remuneration Band 2020/21
Number of
Employees		 2019/20
Number of
Employees
£50,000– £54,999 5 4
£55,000– £59,999 1 3
£60,000– £64,999 4 1

The Council terminated the contracts of 11 employees in 2020/21 incurring liabilities of £17,119 (£1,630 in 2019/20). The number of exit packages with total cost per band and total cost of the compulsory and other redundancies are set out in the table below.

Exit package cost
band (including
special payments)		 Number of
compulsory
redundancies		 Number of
compulsory
redundancies		 Number of other
departures
agreed		 Number of other
departures
agreed		 Total number of
exit packages by
cost band		 Total number of
exit packages by
cost band		 Total cost of exit
packages in each
band		 Total cost of exit
packages in each
band
2020/21 2019/20 2020/21 2019/20 2020/21 2019/20 2020/21 2019/20
£0-£20,000
£20,001-£40,000		 10
-		 -
-		 1
-		 1
-		 11
-		 1
-		 17,119
-		 1,630
-
Total cost included
in bandings and in
CIES (£)		 17,119 1,630

NOTE 31 – EXTERNAL AUDIT COSTS

The Council has incurred the following costs in relation to the audit of the Financial Statements.

----- Start of picture text -----
2020/21 2019/20
£’000 £’000
Statutory Audit Services
Fees payable to Ernst & Young with regard to external audit services carried
out for the year by the appointed auditor for the year 34 34
Audit fee for 2019/20 20 -
Fees payable to KPMG LLP with regard to certification of grants and claims 14 17
68 51
Other Audit Services
Share of fees payable to KPMG LLP with regard to external audit services
carried out for the year on behalf of Public Sector Partnership Services Ltd
(formerly Compass Point Business Services) 3 3
3 3
Total 71 54
----- End of picture text -----

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NOTE 32 – GRANT INCOME

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

----- Start of picture text -----
2020/21 2019/20
£’000 £’000
Credited to Taxation and Non Specific Grant Income and
Expenditure
Covid-19 Related Grants and Contributions
-
Local Authority Covid Support Grant (1,340)
-
Sales, Fees and Charge Income Compensation (407)
Local Tax Income Guarantee (856) -
-
Business Rates Relief Grant – Expanded Retail and Nursery Relief (3,429)
Other Grants and Contributions
Revenue Support Grant (275) (271)
S31 Grant – Business Rates (985) (1,266)
New Homes Bonus Scheme Grant (1,067) (1,002)
Other non-specific grants (168) (168)
Grants in relation to capital expenditure (190) (1,706)
Total Credited to Taxation and Non Specific Grant Income and
Expenditure (8,717) (4,413)
Credited to Services
Covid-19 Related Grants and Contributions
Test and Trace (265) -
-
Retail, Hospitality and Leisure Grants (991)
-
Hardship Funding (461)
-
Other Covid-19 related grants (15)
Other Grants and Contributions
Housing Benefit Subsidy (12,244) (13,444)
Council Tax and Housing Benefit Administration (263) (273)
Discretionary Housing Payments (150) (104)
Disabled Facilities Grant (694) (691)
Electoral Commission (8) (13)
Homelessness Grants (185) (38)
Grants for Growth (740) (452)
-
Housing Infrastructure Funding (3,863)
Other grants (1,146) (2,701)
Total Credited to Services (20,995) (17,716)
Total Grants (29,712) (22,129)
Sources of Grants:
Central Government (28,459) (21,179)
Other Local Authorities (962) (852)
Other Bodies (291) (98)
Total (29,712) (22,129)
----- End of picture text -----

During the year the Council was responsible for the administration of various grants and relief to business and individuals on behalf of Central Government. For some grant schemes the Council was acting as agent, effectively passing the money on from Central Government, had no control over the amount allocated to recipients. The transactions for such schemes do not appear in the Comprehensive Income and Expenditure Statement (CIES). For other grant schemes the Council did have control over the distribution of funding. For these schemes the Council was acting as principal and the related transactions for these schemes do appear in the CEIS. Following the closure of grant schemes where the Council has acted as Agent, any unused funding awarded is returned to Central Government following a reconciliation process. Similarly, if the Council

72

has paid out more than it received the Council will be compensated by Government. The below table provides an overall summary of the schemes and the role of the Council in their administration.

----- Start of picture text -----
Grant Scheme 2020/21 Grant 2020/21 Grant Paid Balance
Awarded Out
£’000 £’000 £’000
Small Business Grants, (19,815) 17,475 2,340
Retail, Leisure and
Hospitality Discretionary
Grants
Test and Trace Main (214) 70 144
Support Scheme
Local Restrictions (1,377) 746 631
Support Grant (Closed)
Addendum November
Lockdown
Local Restrictions (601) 369 232
Support Grant (Closed)
Tier 3 and Tier 3
Local Restrictions (27) 27 -
Support Grant (open)
Local Restrictions (2,744) 390 2,354
Support Grant
Additional Restrictions
Grant
Local Restrictions (77) 43 34
Support Grant
(Christmas Support Wet
Led Pubs)
Local Restrictions (4,131) 2,257 1,874
Support Grant (Closed)
January Lockdown
Local Restrictions (4,231) 2,235 1,996
Support Grant (Closed)
Addendum post
05/01/21
----- End of picture text -----

The Council has received grants and contributions that have yet to be recognised as income as they have conditions attached to them that will require the monies to be returned to the giver if the conditions are not met. The balances at the year end are as follows:

Grants Received in Advance - Capital

----- Start of picture text -----
2020/21 2019/20
£’000 £’000
Long Term Liabilities
MHCLG – Gypsy and Travellers (196) (196)
Private Developers – S106 Funding (1,136) (447)
Total (1,332) (643)
----- End of picture text -----

NOTE 33 – 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.

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Central Government

UK 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, provides the majority of its funding in the form of grants and prescribes the terms of many of the transactions that the Council has with other parties (e.g. housing benefits).

Details of material transactions with Central Government are shown below. 2019/20 comparators shown in brackets.

• Funding from Government Note 32 £28.459m (£21.179m)
• Non-Domestic Rates Share Payable Collection Fund £12.248m
(£12.019m)
• Debtors £5.213m
(£1.077m)
• Creditors £12.512m (£0.844m)

Members

Members of the Council have direct control over the Council’s financial and operating policies. The total of members’ allowances paid in 2020/21 is shown in note 30. During 2020/21 a number of members had links to local Parish Councils, held positions on Internal Drainage Boards and other Local Community associations. Two members are Directors of Public Sector Partnership Services Ltd (formerly Compass Point Business Services (East Coast) Ltd), a joint venture with East Lindsey District Council). During 2020/21 four members were Directors of South Holland Local Housing Community Interest Company, and five members were Directors of Welland Homes Ltd.

Payments to Companies during the year (other than to those companies mentioned above) for which members are directors, amounted to £25,884 (£30,600 in 2019/20).

Details of specific transactions where members declared their interests are recorded in the Register of Members’ Interest, open to public inspection at the Council Offices during office hours. The Council is compliant with the Localism Act 2012.

Other Public Bodies

Joint management arrangements exist between South Holland District Council and Breckland District Council. The costs of this arrangement are shared between the two Councils. During the year, the Council paid Breckland £1.105m (£1.322m in 2019/20) for shared Breckland employee and other costs and received £206k (£285k in 2019/20) from Breckland for payment of shared South Holland employees and other costs. There was an outstanding balance of £279k due by South Holland and Breckland owed South Holland a balance of £71k at the end of March 2021.

Transactions with the Lincolnshire Pension Fund are detailed in note 36, Defined Benefits Pension Scheme.

Precepts paid to other authorities from Council Tax collected and other authorities retained share of National Non-Domestic Rates are detailed in the Collection Fund note.

The precept value paid to parish and town councils is included in Other Operating Expenditure in Note 10 and was £897,000 in 2020/21 (£846,000 in 2019/20)

Entities Controlled or Significantly Influenced by the Council

Public Sector Partnership Services Ltd (formerly Compass Point Business Services)

Joint merged service organisation arrangements for the shared provision of a number of back office services with East Lindsey District Council were implemented with effect from 1 August 2010, delivered through Public Sector Partnership Services Ltd (PSPS, formerly Compass Point Business Service (East Coast) Ltd (CPBS)). The Council’s share of the Company’s assets, liabilities, income and expenditure are shown in note 40. There are no significant balances outstanding between the Council and the Company at 31 March 2021. One officer was a director of PSPS Ltd during the year.

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During 2020/21 payments totalling £3.5m were paid to PSPS (£3.4m 2019/20).

Further information about the accounts of PSPS is available from the Company Secretary, New Bailey, 4 Stanley Street, Manchester M3 5JL.

South Holland Homes and Welland Homes Ltd

The Council has two wholly owned subsidiary companies, South Holland Local Housing Community Interest Company and Welland Homes Ltd. Information and transactions for the year are set out in the group accounts. One officer was a director of South Holland Homes during 2020/21 and another officer was company secretary. A different officer was company secretary for Welland Homes Ltd.

NOTE 34 – CAPITAL EXPENDITURE AND CAPITAL FINANCING

The total amount of capital expenditure incurred in the year is shown in the table below 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). This is a measure of the capital expenditure incurred historically by the Council that has yet to be financed. The CFR is analysed in the second part of this note.

----- Start of picture text -----
2020/21 2019/20
£’000 £’000
Opening Capital Financing Requirement 74,992 73,892
Capital Investment
Property, Plant and Equipment 5,567 9,917
Intangible Assets 89 362
Revenue Expenditure Funded from Capital under Statute 6,129 1,397
Long Term Investments – Welland Homes 276 768
Long Term Debtor – Welland Homes 484 347
Long Term Debtor – Castle Sports Leisure - 143
Sources of finance
Capital receipts (1,676) (3,658)
Government grants and other contributions (5,451) (2,926)
Major Repairs Reserve (3,046) (4,358)
Sums set aside from revenue:
Direct revenue contributions (1,471) (877)
Other adjustments to the CFR - (15)
Closing Capital Financing Requirement 75,893 74,992
Explanation of movements in year
Increase/(Decrease) in underlying need to borrow
(unsupported by government financial assistance) 901 1,100
Increase/(decrease) in Capital Financing Requirement 901 1,100
----- End of picture text -----

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NOTE 35 – LEASES

Council as Lessee

Operating Leases

The Council has acquired some of its vehicle fleet by entering into operating leases, which typically have a 5 year life. It also has entered into some property leases.

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

----- Start of picture text -----
31 March 31 March
2021 2020
£’000 £’000
Not later than 1 year 10 20
Later than 1 year and not later than 5 years 1 10
11 30
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The expenditure charged to the Comprehensive Income and Expenditure Statement during the year in relation to these leases was:

2020/21 2019/20
£’000 £’000
Minimum lease payments 19 35
19 35

Council as Lessor

Operating Leases

The Council leases out a number of items of land and property under operating leases.

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

----- Start of picture text -----
31 March 31 March
2021 2020
£’000 £’000
Not later than 1 year 222 220
Later than 1 year and not later than 5 years 197 168
Later than 5 years 196 195
615 583
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The minimum lease payments receivable do not include rents that are contingent on events taking place after the lease was entered into, such as adjustments following rent reviews. In 2020/21 no contingent rents were receivable by the Council (2019/20 nil).

NOTE 36 – DEFINED BENEFIT PENSION SCHEMES

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, there is a commitment to make the payments and to disclose them at the time that employees earn their future entitlement.

The Council participates in the Local Government Pension Scheme, administered by Lincolnshire County Council. This is a funded defined benefit scheme, meaning that the employer and employees pay

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contributions into a fund, calculated at a level intended to balance the pensions liabilities with investment assets.

The Lincolnshire pension scheme is operated under the regulatory framework for the Local Government Pension Scheme and the governance of the scheme is the responsibility of the pensions committee of Lincolnshire County Council. Policy is determined in accordance with the Pensions Fund Regulations.

The principal risks of the scheme are the longevity assumptions, statutory changes to the scheme, structural changes to the scheme, changes to inflation, bond yields and the performance of the equity investments held by the scheme. These are mitigated to a certain extent by the statutory requirements to charge to the General Fund and Housing Revenue Account the amounts required by statute as described in the accounting policies note.

The financial information contained in this note includes the position for South Holland District Council together with a share for Public Sector Partnership Services Ltd (formerly Compass Point Business Services Ltd) to comply with the accounting requirements for Joint Operations.

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Transactions Relating to Post-employment Benefits

We recognise 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 we are required to make against council tax and housing rents is based on the cash payable in the year, so the real cost of post-employment/retirement benefits is reversed out of the General Fund and Housing Revenue Account via the Movement in Reserves Statement. The following transactions have been made in the Comprehensive Income and Expenditure Statement and the General Fund Balance and Housing Revenue Account Balance via the Movement in Reserves Statement during the year.

----- Start of picture text -----
Local Government
Pension Scheme
2020/21 2019/20
£’000 £’000
Comprehensive Income and Expenditure Statement
Cost of Services:
Service cost comprising
Current service cost 3,164 3,562
Administration Costs 51 0
Past Service costs (including curtailments) 13 166
Financing and Investment Income and Expenditure
791 1,023
Net interest expense
Total Post-employment Benefits charged to the Surplus or
Deficit on the Provision of Services 4,019 4,751
Other Post-employment Benefits charged to the
Comprehensive Income and Expenditure Statement
Remeasurement of net defined benefit liability comprising:
Return on plan assets (excluding the amount included in the
net interest expense) (13,789) 8,303
Actuarial (gains) and losses arising on changes in
demographic assumptions (1,103) (3,783)
Actuarial (gains) and losses arising on changes in financial
assumptions 23,639 (8,561)
Other experience (1,185) (5,498)
Total Remeasurements recognised in Other
Comprehensive Income and Expenditure 7,562 (9,539)
Total Post-employment Benefit charged to the
Comprehensive Income and Expenditure Statement 11,581 (4,788)
Movement in Reserves Statement
Reversal of net charges made to the Surplus or Deficit for the
Provision of Services for post-employment benefits in
accordance with the Code (1,658) (2,625)
Actual amount charged against the General Fund Balance
for pensions in the year:
Employers’ contributions payable to scheme 2,274 2,035
Contributions in respect of unfunded benefits 87 91
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Pensions Assets and Liabilities Recognised in the Balance Sheet

The amount included in the Balance Sheet arising from the authority’s obligation in respect of its defined benefit plans is as follows:

----- Start of picture text -----
Local Government
Pension Scheme
2020/21 2019/20
£’000 £’000
Present Value of the defined obligation (120,008) (96,343)
Fair Value of plan assets 76,055 61,610
Net Liability arising from defined benefit obligation (43,953) (34,733)
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Reconciliation of the Movements in the Fair Value of Scheme (Plan) Assets

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Local Government
Pension Scheme
2020/21 2019/20
£’000 £’000
Opening fair value scheme assets 61,610 68,765
Interest Income 1,255 1,660
Remeasurement gain/(loss)
The return on plan assets, excluding the amount
included in the net interest expense 13,789 (8,303)
Contributions from employer 2,274 2,035
Contributions from employees into the scheme 526 505
Contributions in respect of unfunded benefits 87 91
Administration Cost (51) 0
Benefits paid (3,435) (3,143)
Closing fair value of scheme assets 76,055 61,610
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Reconciliation of Present Value of Scheme Liabilities (Defined Benefit Obligation)

----- Start of picture text -----
Local Government
Pension Scheme
2020/21 2019/20
£’000 £’000
Opening Balance at 1 April 96,343 110,412
Current Service Cost 3,164 3,562
Past Service Cost 13 166
Interest Cost 2,046 2,682
Contributions from scheme participants 526 505
Remeasurements (gains) and losses:
Actuarial (gains) and losses arising on changes in
demographic assumptions (1,103) (3,783)
Actuarial (gains) and losses arising from changes in
financial assumptions 23,639 (8,561)
Other experience (1,185) (5,498)
Benefits paid (3,435) (3,142)
Closing Balance at 31 March 120,008 96,343
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Local Government Pension Scheme assets comprised:

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2020/21 2019/20
Quoted % of Quoted % of
prices in Total prices in Total
active assets active assets
markets markets
£’000 £’000
Cash and Cash Equivalents 3,422 5% 924 2%
Equity Instruments
UK 12,321 16% 9,734 16%
Overseas 31,259 41% 23,658 38%
Debt Securities
Corporate Bonds - UK 7,529 10% 7,085 12%
- - - -
Corporate Bonds - Overseas
Fixed Interest Government - UK 837 1% 801 1%
Fixed Interest Government -
Overseas - - - -
Index Linked Government - UK 1,293 2% 1,232 2%
Index Linked Government -
Overseas - - - -
Property 5,324 7% 5,237 9%
Private equity 228 - - -
Others
- - - -
Hedge Fund
Infrastructure 456 1% 62
Bonds - - 2,403 4%
Commodities 380 - 185 -
Credit Diversified Income 2,510 3% - -
Other Diversified Alternatives 1,217 2% 863 1%
Private Debt - - - -
- - - -
Forward Currency Contracts
Total 66,776 88% 52,184 85%
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2020/21 2019/20
Unquoted % of Unquoted % of
prices in Total prices in Total
active assets active assets
markets markets
£’000 £’000
- - - -
Cash and Cash Equivalents
Equity Instruments
UK - - - -
Overseas - - - -
Debt Securities
- - - -
Corporate Bonds - UK
- - - -
Corporate Bonds - Overseas
Fixed Interest Government - UK - - - -
Fixed Interest Government -
Overseas - - - -
Index Linked Government - UK - - - -
Index Linked Government –
Overseas - - - -
Property 228 - 62 -
Private equity 4,259 5% 3,943 6%
Others
Hedge Fund 2,282 3% 2,156 4%
Infrastructure 1,977 3% 1,848 3%
Bonds - - - -
Commodities - - 123 -
Credit Diversified Income - - - -
Other Diversified Alternatives (152) - 308 1%
Private Debt 761 1% 739 1%
Forward Currency Contracts (76) - 246 -
Total 9,279 12% 9,425 15%
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Basis for estimating Assets and Liabilities

Liabilities have been assessed on an actuarial basis using the projected unit credit method, an estimate of the pensions that will be payable in future years dependent on assumptions about mortality rates, salary levels, etc.

The Local Government Pension Scheme has been assessed by Barnett Waddingham, an independent firm of actuaries; estimates for the Lincolnshire Pension Fund are based on the latest full valuation of the scheme as at 31 March 2019, transferred from Hymans Robertson.

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The significant assumptions, for the Council, used by the actuary have been:

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Local Government
Pension Scheme
2020/21 2019/20
Mortality assumptions:
Longevity at 65 for current pensioners (years):
- Men 21.1 21.4
- Women 23.6 23.7
Longevity at 65 for future pensioners (years):
- Men 22.0 22.4
- Women 25.0 25.2
Rate of increase in salaries 3.1% 2.2%
Rate of increase in pensions 2.8% 1.9%
Rate for discounting scheme liabilities 2.0% 2.3%
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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 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.

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Impact on the Defined Benefit
Obligation in the Scheme
Present Value of Projected Service
Obligation Cost
£’000 £’000
0.1% decrease in Discount Rate 102,101 3,682
0.1% increase in the Salary Increase Rate 100,432 3,587
0.1% increase in the Pension Increase Rate 101,867 3,681
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Impact on the Council’s Cash Flows

The contributions paid by the Council are set by the Fund Actuary at each triennial actuarial valuation, the most recent being 31 March 2019. The employer’s contributions rate, over the period to 31 March 2023 will be 17.4%, a 0.7% increase from the level set at the previous triennial valuation.

Employer contributions payable to the scheme in 2021/22 are estimated to be £2.147m.

NOTE 37 – CONTINGENT LIABILITIES

At 31 March 2021 the Council identified no material contingent liabilities.

NOTE 38 – CONTINGENT ASSETS

At 31 March 2021 the Council has identified the following material contingent assets:

Decent Homes Loans

The Council has, for a number of years, been giving property owners loans to enable them to improve their homes to meet a decent standard. These loans have been registered with Land Registry and will only become repayable, together with interest and a proportion of the increased property value, once the dwelling is sold or otherwise disposed of. The disposal and therefore repayment could be many years in the future. Loans outstanding as at 31 March 2021 are £514,000 (£471,000 at 31 March 2020).

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NOTE 39 – NATURE AND EXTENT OF RISKS ARISING FROM FINANCIAL INSTRUMENTS

Key risks

The Council’s activities expose it to a variety of financial risks. The key risks are:

Overall procedures for managing risk

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. 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.

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 the Fitch, Moody’s and Standard & Poor’s Credit Ratings Services. The Annual Investment Strategy also considers maximum amounts and time limits with a financial institution located in each category.

The credit criteria in respect of financial assets held by the Council are detailed below.

This Council uses the creditworthiness service provided by Link Group. This service uses a sophisticated modelling approach with credit ratings from all three rating agencies - Fitch, Moody’s and Standard and Poor’s, forming the core element. However, it does not rely solely on the current credit ratings of counterparties but also uses the following as overlays:

The full Investment Strategy for 2020/21 was approved by Council on 26 February 2020 and is available on the Council’s website.

Customers for goods and services are assessed, taking into account their financial position, past experience and other factors, with individual credit limits being set in accordance with internal ratings in accordance with parameters set by the Council.

The Council’s maximum exposure to credit risk in relation to its investments in banks and building societies of £29.5m 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 Council’s deposits, but there was no evidence at 31 March 2021 that this was likely to crystallise.

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The following analysis summarises the Council’s maximum exposure to credit risk on other financial assets, based on experience of default, adjusted to reflect current market conditions:

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Historical Estimated
experience maximum
adjusted for exposure to Estimated
market default and maximum
Historical conditions at uncollectability exposure at
Amount at 31 experience of 31 March at 31 March 31 March
March 2021 default 2021 2021 2020
£’000 % % £’000 £’000
A B C (A x C)
Debtors 1,598 3.09% 3.09% 49 63
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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 and bonds.

The Council does not generally allow credit for its customers, such that £217,435 of the £0.659m trade debtor balance is past its due date for payment. The past due but not impaired amount can be analysed by age as follows:

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31 March 31 March
2021 2020
£’000 £’000
Less than three months 450 796
Three to six months 8 6
Six months to one year 57 96
More than one year 144 49
TOTAL 659 947
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During the reporting period the Council held no collateral as security.

Liquidity Risk

The Council manages its liquidity position through the risk management procedures above (the setting and approval of prudential indicators and the approval of the Treasury and Investment Strategy reports), as well as through a comprehensive cash flow management system, as required by the CIPFA Code of Practice. This seeks to ensure that cash is available when needed.

The Council has ready access to borrowings from the money markets to cover any day to day cash flow need, and the PWLB and money 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. There is therefore no significant risk that it will be unable to raise finance to meet its commitments under financial instruments.

The maturity analysis of financial liabilities (borrowing) is as follows:

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31 March 31 March
2021 2020
£’000 £’000
Less than one year 26 26
More than ten years 67,456 67,456
67,482 67,482
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Most trade and other payables are due to be paid in less than one year. The exceptions to this relate to car loans to staff and a loan to Castle Leisure which are due to be paid within five years.

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Refinancing and maturity risk

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

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

Market Risk

Interest Rate 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, depending on how variable and fixed interest rates move across differing financial instrument periods. For instance, a rise in 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 Other Comprehensive Income and Expenditure Statement.

The Council has a number of strategies for managing interest rate risk. The annual Treasury Management Strategy draws together the Council’s prudential and treasury indicators and its 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 treasury team monitors 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 rate borrowing would be postponed.

If all interest rates had been 1% higher (with all other variables held constant) the financial effect would be:

£’000
Increase in interest receivable on variable rate investments 172
Impact on Surplus or Deficit on the Provision of Services
Share of overall impact credited to the HRA		 172
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The approximate impact of a 1% fall in interest rates would be as above but with the movements being reversed.

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Price Risk - The Council does not generally invest in equity share or marketable bonds. However, it does have shareholdings in Public Sector Partnership Services Ltd (formerly Compass Point Business Services (East Coast) Ltd), a joint venture with East Lindsey District Council.

It also holds an equity stake in the UK Municipal Bonds Agency and is the sole shareholder of Welland Homes Limited and South Holland Local Community Housing Interest Company. This equity is valued at fair value through other comprehensive income each year and full details are shown in Note 17 – Financial Instrument.

Foreign Exchange Risk - The Council has no financial assets or liabilities denominated in foreign currencies. It therefore has no exposure to loss arising from movements in exchange rates.

NOTE 40 – JOINT OPERATION

South Holland has joint control with East Lindsey District Council over Public Sector Partnership Services Limited (formerly Compass Point Business Services (East Coast) Ltd), a company established in 2010 to provide ‘back office’ services to both Councils. South Holland owns 37%, of the company, and East Lindsey 63%, but voting rights are split 50:50.

This arrangement is classified as a joint operation. The Council recognises on its Balance Sheet an appropriate share of its rights to the assets and obligations for the liabilities and debits and credits the Comprehensive Income and Expenditure Statement with its share of expenses incurred and income it earns from the activity of the Company.

Public Sector Partnership Services’ attributable proportion included in the Council’s Balance Sheet as at 31 March 2021:

----- Start of picture text -----
31 March 31 March
2020 2021
£’000 £’000
5 Property, Plant and Equipment 3
145 Intangible Assets 211
150 Long Term Assets 214
34 Short Term Debtors 64
490 Cash and Cash Equivalents 471
524 Current Assets 535
-
(38) Cash and Cash Equivalents
(120) Short Term Creditors (224)
(158) Current Liabilities (224)
(2,920) Other Long Term Liabilities (5,759)
(2,404) Net Liabilities (5,234)
Usable Reserves
366 General Fund 300
Unusable Reserves
159 Capital Adjustment Account 235
(2,920) Pension Reserve (5,759)
(9) Accumulated Absences Adjustment Account (10)
(2,770) (5,534)
(2,404) Total Reserves (5,234)
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Public Sector Partnership Services’ attributable proportion included in the Council’s Comprehensive Income and Expenditure Account for the year:

----- Start of picture text -----
31 March 31 March
2020 2021
£’000 £’000
3,116 Gross Pay, National Insurance and Pensions 3,119
(39) Premises Related Expenses (8)
59 Transport Related Expenses 21
420 Supplies and Services 423
11 Depreciation and Amortisation 15
3,567 Gross Operating Expenditure 3,570
(62) Other Income (20)
3,505 Cost of Services 3,550
93 Net interest on the net defined benefit liability 63
(3) Interest receivable and similar income (1)
- Tax liability 4
3,595 (Surplus)/Deficit on the Provision of Services 3,616
(1,143) Remeasurements of the net defined benefit liability 2,548
2,452 Total Comprehensive Income and Expenditure 6,164
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NOTE 41 – TRUST FUNDS

The Council is custodian trustee for:

IVO Day Care Centre

The Council holds and invests £10,000 on behalf of the trust. This is not held on the Council’s Balance Sheet.

Weston St Mary’s Village Hall

The Council is a custodian trustee for the village hall. It has no liability for debts and is not responsible for the management of the trust property.

Ayscoughfee Hall and Gardens (registered charity 515905)

The Council, as trustee, holds the deeds on behalf of the people of Spalding.

Sir Halley Stewart Playing Field (registered charity 1084450)

Day to day running costs for Ayscoughfee Hall and Gardens and the Sir Halley Stewart Playing Field are included in the Council’s Comprehensive Income and Expenditure Statement. Values placed on these assets, by an external RICS qualified valuer are shown below. They are not included in the Council’s Balance Sheet.

Ayscoughfee Hall and Gardens £1,367,000 last revalued as at 31 March 2021. Sir Halley Stewart Playing Field £144,300 last revalued as at 31 March 2021.

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2020/21 2019/20
Trust Fund Revenue Account Expenditure Income Net Expenditure Income Net
£’000 £’000 £’000 £’000 £’000 £’000
Ayscoughfee Hall and Gardens 293 (55) 238 456 (113) 343
Sir Halley Stewart Playing Field 41 (1) 40 35 (7) 28
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NOTE 42 – GOING CONCERN

The CIPFA Code confirms that local authority accounts must be prepared on a going concern basis. The coronavirus restrictions across the UK, have created significant issues for many businesses and residents and as a result from April 2020, Council income was affected detrimentally as payers sought to defer payments. The government has provided some support for lost income and for the additional costs borne by authorities because of the crisis and the Council has received just over £2.472 million in this regard to date.

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Covid-19 Grant Support funding Year £'000
Local Authority Support Grant
Tranche 1 2019/20 59
Tranches 2 to 4 2020/21 1,340
Tranche 5 2021/22 477
Sales, Fees and Charges
Compensation 2020/21 407
New Burdens Grant 189
Total 2,472
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Our most recent year end balances, as reported in these statements are as follows.

Date General Fund Earmarked reserves 31 March 2021 £2.4m £11.4m

We have carried out an assessment of the impact of Covid-19 on our future finances and we are satisfied that there is no material uncertainty relating to the Council’s going concern. Through our assessment we have identified that we expect reductions in our major income sources in 2021/22 as follows:

Additional costs relating to Covid-19 have been identified for 2021/22 as £1.3m.

Allowing for the expected income grant from government and allowances within reserves already set aside to cover these type of events, we would expect our 2021/22 outturn to show a revised deficit of £0.5m, before application of government grants and taking into account a cautious recovery from the impact of Covid-19 on income streams and a likely reduction in the availability of support grants. This would be funded from a combination of government grants and reserves which would then protect the General Fund balance to remain at £2.078m at 31 March 2022.

The Council has undertaken cash flow modelling through to March 2023 which demonstrates the Council’s ability to work within its Capital Financing Requirement and Cash management framework, with a positive cash position throughout the period.

The Council thereby concludes that it is appropriate to prepare the financial statements on a going concern basis, and that the Council will be a going concern to March 2023, 12 months from the date of authorisation of these Financial Statements, based on its cash flow forecasting and the resultant liquidity position of the Council, taking account of the cash and short term investment balances of £48.4 million at 31 December 2021. This demonstrates that the Council has sufficient liquidity over the same period, and no requirement to borrow.

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SUPPLEMENTARY FINANCIAL STATEMENTS

HOUSING REVENUE ACCOUNT (HRA) INCOME AND EXPENDITURE STATEMENT

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2019/20 2020/21
£’000 £’000
Expenditure
2,849 Repairs and maintenance 2,461
4,009 Supervision and management 4,291
56 Rents, rates, taxes and other charges 61
3,259 Depreciation of non-current assets (Note 6) 3,816
82 Debt management expenses 82
10,255 Total Expenditure 10,711
Income
(14,696) Dwelling rents (15,066)
(1,243) Charges for services & facilities (1,203)
(23) Contribution towards expenditure (5)
(10,477) Revaluation of non current assets (1,775)
(26,439) Total Income (18,049)
Net income of HRA Services as included in the whole authority
(16,184) Comprehensive Income and Expenditure Statement (7,338)
469 HRA share of Corporate and Democratic Core 469
(15,715) Net income for HRA Services (6,869)
HRA Share of the operating income and expenditure included in
the whole authority Comprehensive Income and Expenditure
Statement
(689) (Gain)/loss on sale of HRA non-current assets (414)
2,347 Interest payable and similar charges 2,347
81 Movement in the allowance for bad debts 18
(161) Interest and investment income (79)
205 Net interest on the net defined benefit liability 172
(910) Capital grants and contributions (190)
(14,842) Surplus for the year on HRA services (5,015)
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The accompanying notes form an integral part of the Financial Statements.

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MOVEMENT ON THE HRA STATEMENT

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2019/20 2020/21
£’000 £’000
16,575 Balance on the HRA at the end of the previous reporting period 19,809
14,842 Surplus for the year on the HRA Income and Expenditure Statement 5,015
Adjustments between accounting basis and funding basis under
(11,608) statute (1,996)
19,809 Balance on the HRA at the end of the current reporting period 22,828
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Adjustments between accounting basis and funding basis under statute

----- Start of picture text -----
2019/20 2020/21
£’000 £’000
(689) (Gain)/loss on sale of HRA non-current assets (414)
(5) Employee Benefits 48
488 HRA Share of contributions to or from the Pension’s Reserve 334
(3,259) Transfers to the Major Repairs Reserve (3,816)
(910) Application of Capital Grants to Capital Adjustment Account (190)
Differences relating to changes in property values
3,259 Funding of depreciation from Capital Adjustment Account 3,816
(10,492) Reversal of Revaluation losses on HRA Property (1,774)
Net additional amount required by statute to be debited or
(11,608) (credited) to the HRA Balance for the year (1,996)
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The accompanying notes form an integral part of the Financial Statements.

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NOTES TO THE HOUSING REVENUE ACCOUNT

NOTE 1 – PURPOSE OF HRA STATEMENT

The HRA Income and Expenditure Statement shows the economic cost in the year of providing housing services in accordance with generally accepted accounting practices, rather than the amount to be funded from rents and government grants. The Council charges rents to cover expenditure in accordance with the legislative framework; this may be different from the accounting cost. The increase or decrease in the year, on the basis on which rents are raised, is shown in the Movement on the Housing Revenue Account Statement.

NOTE 2 – HOUSING STOCK

The Council was responsible for managing 3,793 dwellings at 31 March 2021 (3,779 at 31 March 2020). The stock is analysed below by number of bedrooms. The Council has an equity share in 28 shared ownership properties, with the Council’s equity share being equivalent to 17 dwellings.

----- Start of picture text -----
Analysis of Housing Stock at 31 March 1 Bed 2 Bed 3 Bed 3+ Bed Total
2021
HRA Housing Stock
Houses 8 346 1,473 13 1,840
Bungalow 671 991 - - 1,662
Flats 110 153 - - 263
Shared Ownership - 16 12 - 28
Total 789 1,506 1,485 13 3,793
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NOTE 3 – RENT ARREARS

Rent arrears at 31 March 2021 amounted to £742,000 (£770,000 in 2019/20) and are analysed as follows:

----- Start of picture text -----
31 March 31 March
2021 2020
£’000 £’000
Rent Arrears Due From
Residential - Current Tenants 436 493
- Former Tenants 292 258
Non Residential - Garages 14 19
Total 742 770
These arrears include all charges due from tenants: rents, service
charges and other charges.
Allowance for bad debts (398) (383)
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NOTE 4 – ASSET VALUES

The Balance Sheet value of assets within the Council’s HRA is shown below:

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31 March 31 March
2021 2020
£’000 £’000
Property, Plant and Equipment
Council Dwellings 176,134 169,365
Other Land and Buildings 283 431
Infrastructure – Housing Sewerage 362 507
Vehicles, Plant and Equipment 324 406
Surplus Assets 468 291
Community Assets 46 46
177,617 171,046
Non-operational assets
Assets Under Construction 131 1,774
Intangible Non-Current Assets 288 309
Assets Held For Sale 1,391 989
Total 179,427 174,118
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NOTE 5 – VACANT POSSESSION

The vacant possession value is the Council’s estimate of the total sum that it would receive if all the dwellings were sold on the open market. The Balance Sheet value is calculated on the basis of rents receivable on existing tenancies. These are less than would be obtainable on the open market, and the Balance Sheet value is therefore lower than the vacant possession valuation. The difference between the two values therefore shows the economic cost of providing housing at less than market value. The vacant possession value of dwellings within the HRA is shown below:

2020/21 2019/20
£’000 £’000
Vacant possession value 419,367 407,508

NOTE 6 – DEPRECIATION

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2020/21 2019/20
£’000 £’000
Depreciation
Council dwellings 3,497 3,028
Other Land and Buildings - 5
Infrastructure - Housing Sewerage 145 164
Vehicles, Plant & Equipment 94 36
3,736 3,233
Amortisation
Intangible Assets 80 26
Total 3,816 3,259
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92

NOTE 7 – CAPITAL EXPENDITURE AND FINANCING

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2020/21 2019/20
£’000 £’000
Expenditure
Improvements and enhancements to Council Dwellings 2,969 3,603
New Build – Council Dwellings 1,258 2,283
Improvements to wastewater treatments - 195
Purchase of Units 607 2,246
Vehicles, Plant & Equipment 19 303
Information systems 59 257
Total Expenditure 4,912 8,887
Financing
Capital receipts 1,676 3,620
Major Repairs Reserve 3,046 4,357
Grants and Contributions 190 910
Total Financing 4,912 8,887
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NOTE 8 – CAPITAL RECEIPTS FROM DISPOSAL OF ASSETS

2020/21 2019/20
£’000 £’000
Sale of Council Houses under the Right to Buy Scheme 1,024 1,318
Shared Ownership Sales Proceeds 1,259 195
Total from Disposals 2,283 1,513

NOTE 9 – MAJOR REPAIRS RESERVE

The Major Repairs Reserve is maintained to meet HRA Capital Investment. Movements on the reserve were:

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2020/21 2019/20
£’000 £’000
Balance at 1 April 3,586 4,684
Transfers from the HRA
Depreciation 3,816 3,259
-
Funding set-aside for Capital Investment
Financing of Capital Investment (3,046) (4,357)
Balance at 31 March 4,356 3,586
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93

COLLECTION FUND STATEMENT

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2019/20 2020/21
Non- Non-
Council Domestic Council Domestic
Tax Rates Total Tax Rates Total
£’000 £’000 £’000 £’000 £’000 £’000
Income
(49,572) (49,572) Council Tax receivable (Note 2) (51,934) (51,934)
(26,757) (26,757) Non-Domestic Rates receivable (Note 3) (19,747) (19,747)
Contributions towards previous year's Collection Fund deficit
(22) (22) Central Government (520) (520)
- - - South Holland District Council - (430) (430)
- - - -
Lincolnshire County Council (113) (113)
(49,572) (26,779) (76,351) Total Income (51,934) (20,810) (72,744)
Expenditure
Precepts, demands and shares
12,019 12,019 Central Government 12,248 12,248
5,946 9,615 15,561 South Holland District Council 6,241 9,799 16,040
36,098 2,404 38,502 Lincolnshire County Council 38,110 2,450 40,560
6,742 6,742 Police and Crime Commissioner for Lincolnshire 7,162 7,162
2,274 2,274 Transitional Protection Payments 2,882 2,882
Impairment of debts/appeals
232 110 342 Increase in allowance for impairment 392 2,320 2,712
427 427 Increase/(decrease) in provision for appeals (Note 4) 266 266
105 105 Cost of Collection Allowance 104 104
343 343 Renewable Energy 356 356
Contributions towards previous year's Collection Fund surplus
100 1,276 1,376 South Holland District Council 64 - 64
- - Central Government - -
594 858 1,452 Lincolnshire County Council 390 - 390
105 105 Police and Crime Commissioner for Lincolnshire 66 66
49,817 29,431 79,248 Total Expenditure 52,425 30,425 82,850
245 2,652 2,897 (Surplus)/Deficit arising during year 491 9,615 10,106
(880) (2,088) (2,968) Deficit/(surplus) at beginning of year (635) 564 (71)
(635) 564 (71) Deficit/(surplus) at end of year (Note 5) (144) 10,179 10,035
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94

NOTES TO THE COLLECTION FUND STATEMENT

NOTE 1 – PURPOSE OF COLLECTION FUND STATEMENT

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 the distribution to local authorities and the Government of council tax and non-domestic rates.

NOTE 2 – COUNCIL TAX RECEIVABLE

Council Tax income derives from charges raised according to the value of residential properties that have been classified into eight Valuation Bands (A to H). Individual charges are calculated by estimating the amount of income required to be taken from the Collection Fund by Lincolnshire County Council, Police and Crime Commissioner for Lincolnshire and South Holland District Council, together with the relevant Parish requirement.

This is then divided by the council tax base, i.e. the number of properties in each valuation band, converted to an equivalent number of band D dwellings and adjusted for discounts and exemptions.

The council tax base was calculated as follows:

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Band No. of No. of Ratio Band D
properties chargeable equivalent
on dwellings dwellings
Valuation
List
A (with Disabled Relief) 34 5/9 19
A 15,761 11,729 6/9 7,819
B 8,978 7,633 7/9 5,937
C 10,054 8,983 8/9 7,985
D 4,231 4,275 9/9 4,275
E 1,864 1,744 11/9 2,131
F 377 352 13/9 508
G 106 97 15/9 161
H 13 9 18/9 18
Band D Equivalents 28,853
Allowance for non-collection (1.25%) (361)
District Tax Base 28,492
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The basic amount of council tax for a band D property including an average parish charge, £1,808.01 (2019/20 £1,746.66), is then multiplied by the ratio specified for the particular band to give an individual amount due.

NOTE 3 – NON-DOMESTIC RATES RECEIVABLE

Under the arrangements for non-domestic rates, the Council collects rates for its area based on local rateable values (determined by the Valuation Office Agency, an executive agency of HM Revenue and Customs) multiplied by the multiplier (determined by the Government). For 2020/21 there are two multipliers, the nondomestic rating multiplier of 51.2p and the small business non-domestic rating multiplier of 49.9p.

The Council’s total Non-Domestic Rates Rateable Value at 31 March 2021 was £61.124m (31 March 2020 £60.125m).

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NOTE 4 – NON-DOMESTIC RATES PROVISION FOR APPEALS

The Collection Fund provides for a provision for appeals against the Rateable Value set by the Valuation Office Agency (VOA) not settled at 31 March 2021.

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Business Rate Appeals
£’000 £’000
Balance at 1 April 2020 (2,102)
Amounts used in 2020/21 773
Additional provisions made in 2020/21 (362)
Unused amounts reversed in 2020/21 96
(266)
Balance at 31 March 2021 (1,595)
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NOTE 5 – COLLECTION FUND DEFICIT/ (SURPLUS)

As at 31 March 2021, the net deficit on the Collection Fund is £10.035.m (Net surplus £0.071m at 31 March 2020).

The Council Tax surplus is apportioned to the relevant precepting bodies based on the following year’s Council Tax requirement. The Business Rates deficit relating to 2020/21 is apportioned to South Holland (40%), Central Government (50%) and Lincolnshire County Council (10%).

The balance on the Collection Fund is allocated as follows:

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2019/20 2020/21
Council Non- Council Non-
Tax Domestic Tax Domestic
Rates Rates
£’000 £’000 £’000 £’000
270 Central Government 5,089
(76) 230 South Holland District Council (17) 4,072
(471) 64 Lincolnshire County Council (106) 1,018
(88) Police and Crime Commissioner for Lincolnshire (21)
(635) 564 (Surplus)/deficit (144) 10,179
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96

GROUP ACCOUNTS

The Council is not required to produce a Group Expenditure and Funding Analysis.

GROUP COMPREHENSIVE INCOME AND EXPENDITURE STATEMENT

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2019/20 2020/21
Gross Gross Net Gross Gross Net
Expenditure Income Expenditure Expenditure Income Expenditure
£’000 £’000 £’000 £’000 £’000 £’000
18,175 (15,469) 2,706 Growth and Commercialisation Directorate 23,718 (21,729) 1,989
13,602 (23,117) (9,515) Place Directorate 19,464 (21,340) (1,876)
5,531 (1,160) 4,371 Strategy and Governance Directorate 5,107 (644) 4,463
37,308 (39,746) (2,438) Cost of Services 48,289 (43,713) 4,576
5,225 (2,228) 2,997 Other operating expenditure 6,340 (2,326) 4,014
5,086 (2,744) 2,342 Financing and investment income and expenditure 4,717 (1,952) 2,765
Taxation and non-specific grant income and
6,081 (20,117) (14,036) expenditure 6,162 (19,046) (12,884)
53,700 (64,835) (11,135) (Surplus)/Deficit on the Provision of Services 65,508 (67,037) (1,529)
39 - 39 Tax expenses of subsidiaries 3 - 3
53,739 (64,835) (11,096) Group Deficit on the Provision of Services 65,511 (67,037) (1,526)
Surplus on revaluation of property, plant and equipment
(7,636) assets (3,577)
(9,539) Remeasurements of the net defined benefit liability 7,562
(17,175) Other Comprehensive Income and Expenditure 3,985
(28,271) 2,459
Total Comprehensive Income and Expenditure
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The accompanying notes form an integral part of the Financial Statements.

97

GROUP MOVEMENT IN RESERVES STATEMENT

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2020/21
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Balance at 31 March 2020 2,443 8,013 19,809 200 3,586 3,061 2,991 40,103 98,358 138,461 813 139,274
Movement in Reserves
during 2020/21
Total Comprehensive
Income and Expenditure (3,489) - 5,015 - - - - 1,526 (3,985) (2,459) 23 (2,436)
Adjustments between group
accounts and authority
accounts - - - - - - - - (14) (14) (10) (24)
Net (Increases)/Decreases
before transfers (3,489) - 5,015 - - - - 1,526 (3,999) (2,473) 13 (2,460)
Adjustments between
accounting basis & funding
basis under regulations 6,826 - (1,996) - 770 159 193 5,952 (5,952) - - -
Increase/(Decrease) in
Year 3,337 - 3,019 - 770 159 193 7,478 (9,951) (2,473) 13 (2,460)
Transfer to/from Earmarked
Reserves (3,402) 3,402 - - - - - - - - - -
Balance at 31 March 2021
carried forward 2,378 11,415 22,828 200 4,356 3,220 3,184 47,581 88,407 135,988 826 136,814
Balance Earmarked Reserves Housing Revenue Account Reserve Reserve Reserve Unapplied Reserves Unusable Reserves Reserves
General Fund General Fund HRA Earmarked Major Repairs Capital Receipts Capital Grants Total usable Total Authority Authority's Share of Reserves of Subsidiaries Total Reserves
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A description of the nature and purpose of each of the usable reserves can be found in Note 9 on page 51. Unusable reserves can be found in Note 24 on pages 64-68.

The accompanying notes form an integral part of the Financial Statements.

98

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2019/20
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Balance at 31 March 2019 808 8,702 16,575 200 4,684 4,959 2,707 38,635 71,690 110,325 719 111,044
Movement in Reserves
during 2019/20
Adjustment to opening
balance rounding (1) (1)
Total Comprehensive Income
and Expenditure (3,786) - 14,842 - - - - 11,056 17,175 28,231 261 28,492
Adjustments between group
accounts and authority
accounts 1,545 - - - - - - 1,545 (1,640) (95) (166) (261)
Net (Increases)/Decreases
before transfers (2,241) - 14,842 - - - - 12,601 15,535 28,136 95 28,231
Adjustments between
accounting basis & funding
basis under regulations 3,187 - (11,608) - (1,098) (1,898) 284 (11,133) 11,133 - - -
Increase/(Decrease) in Year (946) - 3,234 - (1,098) (1,898) 284 1,468 26,668 28,136 95 28,231
Transfer to/from Earmarked
Reserves 689 (689) - - - - - - - - - -
Balance at 31 March 2020
carried forward 2,443 8,013 19,809 200 3,586 3,061 2,991 40,103 98,358 138,461 813 139,274
Balance Earmarked Reserves Housing Revenue Account Reserve Reserve Reserve Unapplied Reserves Unusable Reserves Reserves
General Fund General Fund HRA Earmarked Major Repairs Capital Receipts Capital Grants Total usable Total Authority Authority's Share of Reserves of Subsidiaries Total Reserves
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99

GROUP BALANCE SHEET

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31 March 31 March
2020 2021
£’000 £’000
199,140 Property, Plant and Equipment 201,712
105 Heritage Assets 105
7,696 Investment Property 9,005
701 Intangible Assets 708
308 Long Term Debtors 256
207,950 Long Term Assets 211,786
26,118 Short Term Investments 34,524
989 Assets Held for Sale 1,391
4,254 Short Term Debtors 8,701
12,808 Cash and Cash Equivalents 11,265
44,169 Current Assets 55,881
-
(38) Cash and Cash Equivalents
(26) Short Term Borrowing (26)
(8,643) Short Term Creditors (16,980)
(841) Provisions (638)
(9,548) Current Liabilities (17,644)
(67,456) Long Term Borrowing (67,456)
(35,000) Other Long Term Liabilities (44,220)
(198) Long Term Provisions (201)
(643) Grants Receipts in Advance – Capital (1,332)
(103,297) Long Term Liabilities (113,209)
139,274 Net Assets 136,814
40,916 Usable Reserves 48,407
98,358 Unusable Reserves 88,407
139,274 Total Reserves 136,814
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The accompanying notes form an integral part of the Financial Statements.

100

GROUP CASH FLOW STATEMENT

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2019/20 2019/20 2020/21 2020/21
£’000 £’000 £’000 £’000
11,135 Net surplus on the provision of services 1,529
Adjustments to net surplus or deficit on the
909 provision of services for non-cash movements 12,912
Adjustments for items included in the net
surplus or deficit on the provision of services
(5,548) (4,639) that are investing and financing activities (8,000) 4,912
6,496 Net cash flows from Operating Activities 6,441
1,281 Investing Activities (6,691)
(885) Financing Activities (1,252)
Net increase/(decrease) in cash and cash
6,892 equivalents (1,502)
Cash and cash equivalents at the beginning of
5,878 the reporting period 12,770
- Other movements (3)
Cash and cash equivalents at the end of
12,770 the reporting period 11,265
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The accompanying notes form an integral part of the Financial Statements.

The Council is the sole owner of two subsidiary companies: South Holland Local Housing Community Interest Company ("South Holland Homes"), and Welland Homes Ltd ("Welland Homes"), holding 100% of the issued share capital in each. It therefore has control over both of these entities and is required to prepare group accounts, which reflect the financial position, financial performance and cash flows of the group.

Explanatory Notes to the Group Accounts

Where figures in the group accounts differ materially from the Council’s accounts, the relevant explanatory notes have been prepared on a consolidated basis. The notes below give information on the areas that have materially changed on consolidation of the group entities into the Council’s accounts. Accounting Policies

The financial statements of South Holland Homes and Welland Homes have been prepared in accordance with the Financial Reporting Standard 102 Section 1A - "The Financial Reporting Standard applicable in the UK and Republic of Ireland". There are no significant differences in the accounting policies of the subsidiary companies and the Council that would cause a material adjustment in the consolidation of the Group Accounts. Any statutory adjustments between accounting and funding basis included in the Council’s accounting policies do not apply to the subsidiary company.

Notes within the group accounts have not been provided except where there are material differences to those provided in the notes above.

101

GROUP INVESTMENT PROPERTY

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

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2019/20 2020/21
£’000 £’000
(372) Rental Income from investment property (493)
87 Direct operating expenses arising from investment property 212
(430) Net (gains)/losses from fair value adjustments (13)
(715) Net (gain)/loss (294)
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There are no restrictions on the Group’s ability to realise the value inherent in its investment property or on the Group’s right to the remittance of income and the proceeds of disposal.

The following table summarises the movement in the fair value of investment properties over the year.

----- Start of picture text -----
2019/20 2020/21
£’000 £’000
6,321 Balance at start of the year 7,696
945 Additions resulting from acquisitions 744
- Transfers to/from Property, Plant and Equipment 552
430 Net gains/(losses) from fair value adjustments 13
7,696 Balance at end of the year 9,005
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Fair Value Hierarchy

Details of the Group’s investment properties and information about the fair value hierarchy as at 31 March 2021 is as follows:

----- Start of picture text -----
Fair Value Fair Value
Level 2 Level 2
2019/20 2020/21
£’000 £’000
1,021 Commercial Industrial Units 1,573
6,675 Residential Investment Property 7,432
7,696 Balance at end of the year 9,005
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Valuation Techniques Used to Determine Level 2 for Investment Properties

Significant Observable Inputs – Level 2

The fair value of investment properties has been measured using two main approaches - the income method and the comparable method.

For land only assets the Valuers have compared sale prices of comparable land in applicable uses and similar locations before making adjustments for differences in key attributes such as land size.

For land and building assets the Valuers have relied upon data ascertained from current evidence of passing rents on comparable properties including new lettings and rent reviews. Evidence of yields has been taken from the sale of comparable investments having regard to the type of property, covenant strength and lease terms. Factors of relevance in the leases include the lease term, rent review frequency, any break clauses and obligations for repair, maintenance and buildings insurance.

Valuation inputs for rental and yield which are directly applicable i.e. an almost identical property let to a similar covenant on the same repairing and insuring terms for a similar term to the valuation subject are said to be ‘observable inputs’ as they are directly comparable with limited adjustment and are said to be a Level 2 in the fair value hierarchy.

102

Highest and best use of Investment Properties

In estimating the fair value of the Group’s investment properties, the highest and best use of the properties is deemed to be their current use.

Valuation Process for Investment Properties

The fair value of the Group’s surplus assets is measured at each reporting date. All valuations are carried out externally, in accordance with the methodologies and bases for estimation set out in the professional standards of the Royal Institution of Chartered Surveyors. The Group’s valuation experts work closely with finance officers regarding all valuation matters.

GROUP CASH AND CASH EQUIVALENTS

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

----- Start of picture text -----
31 March 31 March
2020 2021
£’000 £’000
1,125 Bank current accounts 2,308
11,682 Deposits with Banks on Instant Access 8,957
Cash and Cash Equivalents categorised as
12,807 Current Assets 11,265
(38) Bank current accounts -
Cash and Cash Equivalents categorised as
(38) Current Liabilities -
12,770 Total Cash and Cash Equivalents 11,265
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ADDITIONAL INFORMATION

The notes that follow relating to each entity are produced to assist the reader’s understanding of the relationship between the Council and the entity.

Contingent Liabilities

There are no contingent liabilities for 2020/21 relating to the interests in the companies and joint venture or in the entities themselves that are not disclosed elsewhere in the Accounts.

South Holland Local Housing Community Interest Company – South Holland Homes

South Holland Homes was established by the Council in 2008/09 for the purpose of accessing social housing grant from the Homes and Communities Agency. This was in order to provide affordable and social housing for the benefit of the local community. In 2009/10, 6 new properties were constructed. These are tenanted and managed by the Council.

The Business Plan for South Holland Homes is currently in the process of being refreshed.

In 2020/21 the Council collected rent of £25,613 on behalf of the Company and charged management, support fees and other expenses of £9,795. There was an outstanding balance of £9,196 due to the Council at 31 March 2021 (£3,696 31 March 2020).

Retained Surplus/Deficit

In 2020/21 the company made a profit after tax of £10,819 (2019/20 £11,845). This is included in the Group Comprehensive Income and Expenditure Statement.

103

Assets and Liabilities

At 31 March 2021, South Holland Homes held fixed assets valued at £836,400 and current assets totalling £561,423. Liabilities consisted of short term creditors of £15,945 and long term creditors of £267,000 and a provision for a deferred tax liability of £40,668.

Commitments under capital contracts

At 31 March 2021 the company had no commitments under capital contracts (31 March 2020 nil).

Inter-organisation Balances

Group accounting regulations require that inter-organisation balances be removed. The following balances were removed in 2020/21:

Inter-organisation transactions

Group accounting regulations require that inter-organisation transactions be removed. The following transactions were removed in 2020/21:

Further information about the accounts of South Holland Homes is available from the Company Secretary, M Stinson, Council Offices, Priory Road, Spalding, Lincolnshire, PE11 2XE.

Welland Homes Ltd

During 2015/16 the Council established a wholly owned subsidiary company, Welland Homes Ltd, in order to meet a number of social and economic objectives including increasing housing supply in the area to address existing demand and meet the needs of a growing population. In 2016/17, 4 new build residential properties were purchased.

During 2017/18, Welland Homes purchased a further 11 new build residential properties. All 15 properties are rented to private tenants at market value. Welland Homes also purchased a piece of land for future residential development. The Council committed to providing financial support to Welland Homes in the form of a £1,393,261 loan facility, to be used to construct residential property. £187,676 of the loan facility was drawn down in 2017/18.

During 2018/19 work started on the building of a further 10 properties for rental to private tenants at market value, using the land purchased in 2017/18. £883,948 of the £1,393,261 loan facility was drawn down during the year to finance this project. A further 5 properties were purchased for rental to private tenants at market value. The Council committed to providing financial support in the form of a £719,983 loan facility, of which £466,771 was drawn down during the year

During 2019/20 the 10 properties started in 2018/19 were completed, and a further £255,384 of the £1,393,261 loan facility was drawn down. A further 5 properties were purchased for rental to private tenants at market value. The Council committed to providing financial support in the form of a £564,086 loan facility, of which £555,548 was drawn down during the year.

During 2020/21, Welland Homes Purchased a further 4 properties were purchased for rental to private tenants at market value. The Council committed to providing financial support in the form of a £500,136 loan facility, of which £461,791 was drawn down during the year. In respect of loans, there was a balance of £3,710,031 outstanding to the Council as at 31 March 2021 (£3,226,517 at 31 March 2020).

104

The Council charged £113,134 interest to Welland Homes during the year, A further £14,420 of expenses was recharged and capitalised. The Council also recharged expenses incurred on behalf of Welland Homes of £19,004 in the year.

Retained Surplus/Deficit

In 2020/21 the company made a profit after tax of £12,216 (2019/20 £248,705). This is included in the group Comprehensive Income and Expenditure Statement. The majority of the fall in profits year on year was due to the gains on property revaluations (£10,486 2020/21, £166,122 2019/20) and charitable donations made on behalf of Welland Homes of £111,000.

Assets and Liabilities

At 31 March 2021, Welland Homes held fixed assets valued at £6,596,400 and current assets totalling £192,841. Liabilities consisted of short term creditors of £30,444, long term creditors of £3,710,031 and a provision for a deferred tax liability of £159,734.

Commitments under capital contracts

At 31 March 2021 the company had no commitments under capital contracts. (31 March 2020 nil).

Inter-organisation balances

Group accounting regulations require that inter-organisation balances be removed. The following balances were removed in 2020/21:

Creditors: Amounts falling due within one year – £17,304 (2019/20 £2,880) Long term creditors – £3,710,031 (2019/20 £3,226,517)

Inter-organisation transactions

Group accounting regulations require that inter-organisation transactions be removed. The following transactions were removed in 2020/21:

Management and support fees and other expenses £19,004 (2019/20 £18,983) Loan Interest £113,134 (2019/20 £101,758)

Further information about the accounts of Welland Homes is available from the Company Secretary, V Cherry, Council Offices, Priory Road, Spalding, Lincolnshire, PE11 2XE.

105

GLOSSARY OF TERMS

Accounting Period

This is the period of time covered by the accounts, normally twelve months commencing on 1 April. The end of the accounting period is the Balance Sheet date.

Accruals Basis

The accruals principle is that income is recorded when it is earned rather than when it is received and expenses are recorded when goods and services are received rather than when the payment is made.

Actuarial Gains and Losses

Actuaries assess financial and non-financial information by the Council to project levels of future pension fund requirements. Changes in actuarial deficits or surpluses can arise leading to a loss or gain because:

Appointed Auditors

Public Sector Audit Appointments Limited (PSAA) appoints external auditors to every local authority from one of the major firms of registered auditors. For South Holland this is Ernst and Young.

Balance Sheet

This is a statement of the recorded assets, liabilities and other balances held at the end of the accounting period.

Balances

The balances of the Council represent the accumulated surplus of income over expenditure on any of the funds.

Capital Adjustment Account

The Account accumulates (on the debit side) the write-down of the historical cost of fixed assets as they are consumed by depreciation and impairments or written off on disposal. It accumulates (on the credit side) the resources that have been set aside to finance capital expenditure. The same process applies to capital expenditure that is only capital by statutory definition (e.g. Disabled Facilities Grants). The balance on this account thus represents timing differences between the amount of the historical cost of fixed assets that has been consumed and the amount that has been financed in accordance with statutory requirements.

Capital Expenditure

This is expenditure on the acquisition of a non-current asset (fixed asset), or expenditure, which adds to, and not merely maintains, the value of an existing non-current asset.

Capital Receipts

Income received from the sale of land or other capital assets, a proportion of which may be used to finance new capital expenditure, subject to the provisions contained within the Local Government Act 2003.

Carrying Amount

The Balance Sheet value recorded of either an asset or a liability.

Cash Flow Statement

The Cash Flow Statement shows the changes in cash and cash equivalents of the Council during the financial year.

Chartered Institute of Public Finance and Accountancy (CIPFA)

CIPFA is the leading professional accountancy body for public services

Collection Fund

A fund administered by the Council showing the transactions of the billing authority (South Holland) in relation to the collection from taxpayers and the distribution to local authorities and the Government of council tax and non-domestic rates.

106

Community Assets

These are non-current assets that the Council intends to hold in perpetuity which have no determinable finite useful life and, in addition, may have restrictions on their disposal. Examples of community assets are parks and historical buildings.

Contingent Liabilities or Assets

These are amounts potentially due to or from individuals or organisations which may arise in the future but which at this time cannot be determined accurately and for which, provision has not been made in the Council’s accounts.

Council Tax

This is one of the main sources of local taxation to local authorities. Council tax is levied on households within its area by the billing authority (South Holland) and the proceeds are paid into its Collection Fund for distribution to precepting authorities and for use by its own General Fund.

Council Tax Requirement

This is the estimated revenue expenditure on General Fund services that is required to be financed from council tax after deducting income from fees and charges, certain specific grants and any funding from reserves,

Creditors

Amounts owed by the Council for work done, goods received or services rendered, for which payment has not been made at the Balance Sheet date.

Current Service Cost

Current Service Cost is the increase in the present value of a defined benefit pension scheme’s liabilities expected to arise from employee service in the current period, i.e. the ultimate pension benefits “earned” by employees in the current year’s employment.

Curtailment

Curtailments will allow the cost of the early payment of pension benefits if any employee has been made redundant in the previous financial year

Debtors

These are sums of money due to the Council that have not been received at the Balance Sheet date.

Deferred Capital Receipts

These represent capital income still to be received after disposals have taken place.

Defined Benefit Scheme

Pension schemes in which the benefits received by the participants are independent of the contributions paid and are not directly related to the investments of the scheme. The scheme may be funded or unfunded.

Ministry of Housing, Communities and Local Government (MHCLG)

The CLG is a key Department within Central Government with the overriding responsibility for determining the allocation of general resources to local authorities.

Depreciation

This is the measure of the wearing out, consumption, or other reduction in the useful economic life of a fixed (non-current) asset.

Earmarked Reserves

The Council holds a number of reserves earmarked to be used to meet specific, known or predicted future expenditure.

Events after the Balance Sheet Date

Events after the Balance Sheet date are those events, favourable or unfavourable, that occur between the Balance Sheet date and the date when the Accounts are authorised for issue.

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Exceptional Items

Material items deriving from events or transactions that fall within the ordinary activities of the Council but which need to be disclosed separately by virtue of their size and/or incidence, to give fair presentation of the accounts.

External Audit

The independent examination of the Council’s activities and accounts to ensure that the accounts have been prepared in accordance with legislative requirements and proper practices and to ensure the Council has made proper arrangements to secure value for money in its use of resources.

Expenditure

This is amounts paid by the Council for goods and services rendered of either a capital or revenue nature. This does not necessarily involve a cash payment since expenditure is deemed to have been incurred once the goods or services have been received even if they have not been paid for.

Fair Value

The fair value of an asset is the price at which it could be exchanged in an arm’s length transaction less, where applicable, any grants receivable towards the purchase or use of the asset.

Finance Lease

A finance lease is a lease that transfers substantially all of the risks and rewards of ownership of a fixed asset to the lessee.

Financial Instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another. The term ‘financial instrument’ covers both financial assets and financial liabilities and includes Investments, trade receivables and trade payables.

General Fund

This is the main revenue fund of the Council and includes the net cost of all services financed by local taxpayers and Government Grants.

Heritage Assets

A tangible asset with historical, artistic, scientific, technological, geophysical or environmental qualities that is held and maintained principally for its contribution to knowledge and culture.

Housing Revenue Account

Local authorities are required to maintain a separate account – the Housing Revenue Account – which sets out the expenditure and income arising from the provision of Council housing. Other services are charged to the General Fund.

Impairment

A reduction in the value of a fixed asset to below its carrying amount on the Balance Sheet. Examples of factors which may cause such a reduction in value include general price decreases, a significant decline in a fixed asset’s market value and evidence of obsolescence or physical damage to the asset.

Income

These are amounts due to the Council for goods supplied or services rendered of either a capital or a revenue nature. This does not necessarily involve a cash payment. Income is deemed to have been earned once the goods or the services have been supplied even if the payment hasn’t been received (in which case the recipient is a debtor to the Council).

Infrastructure Assets

Fixed assets belonging to the Council that cannot be transferred or sold, on which expenditure is only recoverable by the continued use of the asset created. Examples are highways, footpaths and bridges.

Intangible Assets

These are assets that do not have physical substance but are identifiable and controlled by the Council. Examples include Software Licenses.

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Internal Borrowing

The use of internal cash balances to pay for the unfinanced element of capital expenditure rather than taking on additional external borrowing.

International Financial Reporting Standards

These are defined Accounting Standards that must be applied by all reporting entities to all Financial Statements in order to provide a true and fair view of the entity’s financial position, and a standardised method of comparison with Financial Statements of other entities.

Joint Operation

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.

Liabilities

These are amounts due to individuals or organisations which will have to be paid at some time in the future. Current Liabilities are usually payable within one year of the Balance Sheet date.

Materiality

The concept that the Accounts should include all amounts which, if omitted or mis-stated, could be expected to lead to a distortion of the Financial Statements and ultimately mislead a user of the accounts.

National Non-Domestic Rates (Business Rates)

This is one of the main sources of local taxation to local authorities. NDR is the levy on business property, based on a national rate in the pound applied to the rateable value of the property.

Net Book Value (NBV)

The amount at which fixed assets are included in the Balance Sheet, i.e. their historical costs or current value less the cumulative amounts provided for depreciation.

Net Debt

Net debt is the Council’s borrowings less cash and liquid resources.

Net Realisable Value (NRV)

NRV is the open mark value of the asset in its existing use (or open market value in the case of non-operational assets) less the expenses to be incurred in realising the asset.

Non-Current Assets (Fixed Assets)

Assets that yield benefits to the Council and the services it provides for a period of more than one year. Examples include land, buildings and vehicles.

Non-Operational Assets

Fixed assets held by the Council but not directly occupied, used or consumed in the delivery of services. Examples are investment properties, assets under construction or assets surplus to requirements pending sale or redevelopment.

Operational Assets

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

Operational Boundary

This reflects the maximum anticipated level of external debt consistent with budgets and forecast cash flows.

Operating Lease

This is a type of lease usually for computer equipment or office furniture and equipment where the balance of risks and rewards of holding assets remains with the lessor. The assets remain the property of the lessor and the lease costs are revenue expenditure to the Council.

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Precept

The amount levied by various authorities that is collected by the Council on their behalf. The precepting authorities in South Holland are Lincolnshire County Council and the Police and Crime Commissioner for Lincolnshire.

Prior Year Adjustment

These are material adjustments which are applicable to an earlier accounting period arising from changes in accounting policies or from the correction of fundamental errors. This does not include normal recurring corrections or adjustments of accounting estimates made in prior years.

Provision

An amount put aside in the accounts for future liabilities or losses which are certain or very likely to occur but the amounts or dates of when they will arise are uncertain .

Public Works Loan Board (PWLB)

A Central Government Agency which provides loans, for one year and above, to Councils at interest rates only slightly higher than those at which the government can borrow itself.

Related Parties

Related parties are Central Government, other Local Councils, precepting and levying bodies, subsidiary and associated companies. Related parties are deemed to include the Council’s elected members, the Chief Executive and its Directors. For individuals identified as related parties, the following are also presumed to be related parties:

Remuneration

All sums paid to or receivable by an employee and sums due by way of expense allowances (as far as those sums are chargeable to UK income tax) and the money value of any other benefits received. Pension contributions payable by the employer are excluded.

Reserves

The accumulation of surpluses, deficits and appropriations arising from previous financial years. Reserves can either be usable; that is, available to meet the Council’s future expenditure plans and unusable; that is, those maintained purely for accounting purposes.

Revaluation Reserve

The Reserve records the accumulated gains on the fixed assets held by the Council arising from increases in value as a result of inflation or other factors (to the extent that these gains have not been consumed by subsequent downward movements in value).

Revenue Expenditure

Expenditure incurred on the day-to-day running of the Council. This mainly includes employee costs, general running expenses and capital financing costs.

Revenue Expenditure Funded From Capital under Statute (REFCUS)

Expenditure incurred in year that may be capitalised under statutory provision but that does not result in the creation of a non-current asset that has been charged as expenditure to the Comprehensive Income and Expenditure Statement.

Revenue Support Grant

A grant paid by Central Government towards the cost of providing General Fund services.

Service Potential

Future benefits that an asset is expected to bring to the Council.

Treasury Management

This is the process by which the Council controls its cash flow and its borrowing and lending activities.

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Treasury Management Strategy

A strategy prepared with regard to legislative and CIPFA requirements setting out the framework for treasury management activity for the Council.

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For the Year Ended 31 March 2021

ANNUAL GOVERNANCE STATEMENT

Scope of responsibilities

South Holland District Council is responsible for ensuring that its business is conducted in accordance with the law and proper standards, that public money is safeguarded, properly accounted for, used economically, efficiently and effectively. The Council also has a duty under the Local Government Act 1999 to make arrangements to secure continuous improvement in the way in which its functions are exercised, having regard to a combination of economy, efficiency and effectiveness.

In discharging this overall responsibility, South Holland District Council is also responsible for ensuring that there is a sound system of governance which facilitates the effective exercise of its functions, guarantees that the financial and operational management of the authority is effective and includes arrangements for the management of risk.

South Holland District Council has approved and adopted a Code of Corporate Governance, which is consistent with the principles of the CIPFA/SOLACE Framework Delivering Good Governance in Local Government. A copy of the Code is available on our website at: https://www.sholland.gov.uk/article/5700/Standards-and-Code-of-Conduct

This statement explains how South Holland District Council has complied with the code and also meets the requirements of the Accounts and Audit Regulations 2015 in relation to consideration of the findings of a review of the system of internal control and approval and publication of an annual governance statement.

The purpose of the Governance Framework

The Governance Framework comprises the systems and processes, culture and values, by which the Council is directed and controlled and the activities through which it accounts to, engages with and leads its communities. It enables the Council to monitor the achievement of its strategic objectives and to consider whether those objectives have led to the delivery of appropriate services and value for money.

The system of internal control is a significant part of that framework and is designed to manage risk to a reasonable level. The system of internal control is based on an ongoing process designed to identify and prioritise the risks to the achievement of the Council’s policies, aims and objectives, to evaluate the likelihood and potential impact of those risks being realised, and to manage them efficiently, effectively and economically. It cannot eliminate all risk and can only provide reasonable and not absolute assurance of effectiveness.

The Governance Framework has been in place at South Holland District Council for the year ended 31 March 2021 and up to the date of approval of the Financial Statements.

The Governance Framework

Vision and Priorities – the Council’s ambition is to continue to increase the prosperity and wellbeing of residents and businesses, whilst striving to protect and enhance the district’s environment and its unique and historic character. Council priorities are:

Quality of Services - The Council has an established Performance Management Strategy which sets out how it monitors both performance and the delivery of objectives and risks. The framework for managing performance has been completely reviewed in light of changes to the business planning and shared management arrangements, with new performance measures also being developed to reflect the change in central government policy to move away from national targets to those that better identify with local requirements’.

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Operational Governance - The Council has produced an operational governance document whose purpose is to ensure the senior officers effectively manage the business of the Council, this document is reviewed regularly (last reviewed January 2020). It covers the shared management officer led groups/boards which report to the Executive Management Team (EMT) and then through to Corporate Management Team (CMT) as required. Each group/board is supported with agreed terms of reference and the minutes and actions are reviewed by EMT. EMT manages the business of the Council and CMT escalation of corporate level issues risks and decisions. The groups/boards cover a wide range of areas, such as; Finance, Performance Risk and Audit, Joint Safeguarding, statutory officers group and Transformation to name a few. There are a number of other groups covering cross cutting themes and specific services which also report to the Corporate Management Team. These governance arrangements are being reviewed in 2021/22 to reflect the new structure which took effect on 1 May 2021.

South Holland District Council also participates in the Lincolnshire Counter-Fraud Partnership and regular updates are circulated within applicable departments and partner organisations to ensure controls are amended as necessary.

Constitution and Responsibilities - A comprehensive document setting out the Council’s constitution exists which sets out the clearly defined structure for the Council’s organisational and decision-making arrangements based upon a Cabinet/Executive model. It sets out how the Council operates, what matters are reserved for decision by the whole Council, the responsibilities of the Cabinet and the matters reserved for collective and individual decisions, and the powers delegated to panels, committees and community councils. In essence the different roles can be summarised as follows:

The constitution also includes sections on standing orders, financial regulations and conduct of meetings. The constitution as a whole is reviewed periodically with interim updates as and when appropriate. A complete review of the constitution was carried out in 2015/16 to ensure that it remains relevant and effective. Formal adoption of the revised constitution was made at Full Council in January 2016 and there is a standing item at Full Council for any minor updates to be made.

Regulations to allow virtual meeting were introduced in early April 2020, following which all Council Meetings were held virtually via Zoom, these regulations ended on 6th May 2021 after which all meetings must continue on a face-to-face basis.

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During this period, a number of temporary amendments were made to the Council’s Constitution as well as additional temporary delegations to allow the Council to continue with its day-to-day business in a Covid compliant environment.

Effective leadership - The Constitution sets out roles and responsibilities for the Council and its standing committees, as well as the Leader, Cabinet and Portfolio Holders. All working groups have clear terms of reference for their work in supporting policy development and progress monitoring. Roles and responsibilities of Councillors are defined in both generic and specific job descriptions that have been tested through consultation and based on a recommended national model with some additional local interpretation. A clear Officer/Member delegation framework exists to provide clarity on the powers entrusted in those appointed to make decisions on behalf of the Council.

The Council has adopted a standard form of committee report which seeks to ensure that all matters coming to Councillors for decision have first received consideration in respect of all appropriate and necessary, legal, financial and professional matters, as well as risk. This has been expanded to include coverage of technical matters such as carbon footprint. The Council updates and publishes Key Decision and Exempt Decision Plans. These record all key and exempt decisions the Executive expects to make in the next twelve months.

Policies, Procedures, Laws and Regulations - The statutory officers of South Holland District Council are the Head of the Paid Service, the Monitoring Officer and the Section 151 Officer. They are responsible for staff and ensuring the Council acts within the law and in accordance with established policies and procedures. The Section 151 Officer is specifically responsible for the proper discharge of financial arrangements and must advise the Council where any proposal might be unlawful or where expenditure is likely to exceed resources, and to ensure that the authority’s financial management arrangements conform to the governance requirements as set out in the Chartered Institute of Public Finance and Accountancy statement on the Role of the Chief Financial Officer (2010).

Compliance with established policies, procedures, statements, laws and regulations is ensured by the requirements of the constitution to give the Chief Executive, the Monitoring Officer and the Chief Finance Officer (Executive Director – Strategy & Resources) the opportunity to comment on every report submitted to a decision making body. The Monitoring Officer has a legal duty to ensure the lawfulness and fairness of decision making.

The Council understands its legal powers and limitations, and seeks to ensure that it acts lawfully at all times. The Monitoring Officer is responsible for advising the Council if any proposal, decision or omission is likely to give rise to unlawfulness or maladministration.

The statutory officers are also members of the authority’s Corporate and Executive Management Teams. Service Managers are responsible for ensuring that legislation and policy relating to service delivery and health and safety are implemented in practice.

Working relationships - The Constitution of the Council sets out a number of delegated authorities for Officers, including the conditions of such delegations. Other delegations may also be granted separately from the constitution and these are recorded in a log maintained by the Monitoring Officer.

All staff have conditions of employment and job descriptions that set out their roles and responsibilities. There is also a competency framework. The framework defines the competencies required of each post in the Council so that individuals can be assessed against them to identify suitability for the posts, areas of strength and areas for further development. Competencies can be used to measure how well we do things and are essential to the performance management process. The competencies provide consistent standards across the organisation, which align to the corporate Core Values and help to identify the types of behaviour the Council wishes to promote, develop and engender.

Codes of Conduct - The Council’s constitution contains codes of conduct applying to members as well as a protocol for councillor/officer relationships. These have enabled the authority to develop an inclusive culture over the years, whereby members and officers work together to deliver the Council’s vision and quality services to its residents. The codes include reference to the need to declare any interests which may conflict with the individual’s role at the Council and such registers for councillors and officers are maintained by the Council. The Members’ Code of Conduct was reviewed during 2016/17

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Complaints - The Council has in place a Whistle-blowing Policy as well as a compliments and complaints procedure that ensure that any referrals are fully investigated, properly resolved and learning applied to service delivery. Systems and procedures have been enhanced to ensure that complaints/service requests are a cornerstone of the management approach of the Council.

Partnership working - The Financial Regulations of the Council set out the principles of effective management of resources when working in partnership, including the setting of clear objectives and management of financial and delivery risks.

The South Holland District Council shared management arrangement with Breckland District Council has been in place for many years and is well established. Despite the commitment to sharing a management team the two Councils continue to exercise independent democratically accountable local government in their respective areas, each having its own governance arrangements. A Memorandum of Understanding is in place, and sets out the governance arrangements for shared management and joint working. (See note on shared management at the end of this document).

Group Companies - Public Sector Partnership Services Ltd, (PSPS), formerly Compass Point Business Services (East Coast) Ltd. (CPBS) was set up by South Holland and East Lindsey District Councils in August 2010 to deliver human resources, customer services, ICT, revenues and benefits, and financial services to the two authorities. South Holland District Council owns a 37% stake in the company with the remaining share being owned by East Lindsey District Council. Each authority has equal voting rights.

The PSPS Board of Directors includes Councillors and Chief Officers of both authorities. The company has regularly reported its progress on performance of services to the Monitoring Officer, with quarterly shareholder performance being subject to Scrutiny.

An annual business plan is approved by Council. The ongoing governance arrangements are set out in the Service Level Agreement (SLA), and a management Agreement is in place that sets out the partnership arrangements, principles and parameters.

The Council is the sole shareholder of South Holland Local Housing Community Interest Company. The board of directors are responsible for preparing the Director’s report, financial statements and governance arrangements for the company.

Welland Homes Limited was set up during 2015/16 and became fully operational in 2016/17 with the Council as the sole shareholder. The Board of Directors is responsible for preparing the Director’s report, Financial Statements and governance arrangements for the company. Officers of the Council work within this framework to deliver services to the company and Welland Homes operates within the governance arrangements of the Council when delivering services to the authority.

Transparency

The Council strives to be publicly accountable and to present its work with openness and transparency. As such, the authority routinely publishes data on its website in accordance with the requirements of the Local Government Transparency Code 2015. In addition, Committee reports, minutes and decision records are all available on the website. The Council also applies the principle that everything is publically available unless there is a substantial reason for not doing so.

Functions and roles

Financial management

The Executive Director – Strategy & Resources is designated the responsible officer for the administration of the financial affairs of the Council under S151 of the Local Government Act 1972. This includes ensuring the lawfulness and financial prudence of decision making; providing advice, particularly on financial impropriety, publicity and budget issues, giving financial information; and acting as the Council Money Laundering Reporting Officer. The Section 151 Officer is specifically responsible for the proper discharge of financial arrangements and must advise the Council where any proposal might be unlawful or where expenditure is likely to exceed resources, and to ensure that financial management arrangements conform to the governance requirements as set out in the Chartered Institute of Public Finance and Accountancy statement on the Role of the Chief Financial Officer.

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The Council operates a strong financial management framework to ensure the lawful and best economic use of the Council’s assets. Financial regulations are supported by effective financial procedures underpinned by the work of internal and external audit. Financial regulations and contract procedure rules are periodically reviewed to ensure they remain effective in supporting sound internal control.

Risk Management

The Council’s risk management arrangements are embedded in its Corporate Risk Management Strategy and risk registers. South Holland District Council has developed its performance system to maintain a register of the key strategic risks it considers it faces along with the actions planned or taken to mitigate these risks, which have been monitored by Performance, Risk and Audit Board and the Governance and Audit Committee on a regular basis. Risk logs are also being used to manage the risks for key projects and partnerships, along with other project management techniques, and all key decisions are required to be assessed for risks. All committee reports contain a mandatory risk section to ensure that members can consider the risks and opportunities of any recommendations or options, so that the consideration of risk forms an integral part of all decision making.

Data Protection

Following the implementation of the General Data Protection Regulation (GDPR) 2016/679 and Data Protection Act 2018 our policies, practices and procedures have been updated and continue to be updated to reflect changes and guidance as it is issued. Data Protection continues to be a priority and is being overseen by the Executive Manager for Governance, the Information Governance Officer and a corporate governance group; the Statutory Information Group. Progress is reported to the Executive Management Team on a monthly basis and the Council received ‘Reasonable Assurance’ for a GDPR audit in January 2019.

Councillor and officer development

The Council has a Councillor Development Working Group and provides opportunities to all members to undertake appropriate Development, both on first election and on an on-going basis. In addition, certain regulatory committees require member training before undertaking that role. The Council is working towards reaccreditation for the Member Development Charter.

Staff performance is managed using a performance development framework. The Performance Development Review (PDR) process improves communications and ensures employees have clear objectives and an understanding of how they contribute to corporate priorities and goals. All Council employees have a minimum of one annual Performance Development Review which is followed up and monitored by the reviewer and reviewee throughout the year. PDR’s include a process for identifying training and development needs, setting objectives, providing a mechanism for feedback, in addition to aligning to the corporate core values and competence frameworks required by staff.

There is a strong working relationship between Councillors and staff, and the Council aims to ensure that they have the skills, resources and support needed to perform effectively in their roles. The Council has an embedded induction process and a continuous development ethos.

Senior officers are also expected to keep abreast of developments in their profession at all times and attend suitable training to maintain their professional competency.

Community engagement

The Council is committed to listening to and involving the community and consistently demonstrates that it does, therefore both the Medium Term Financial Plan and the Corporate Plan went out for public consultation prior to adoption. Our consultation processes provide useful feedback on services, public perceptions and quality of life; we provide guidance on good practice and we profile respondents to better understand equalities implications. The Housing Service employs a tenant engagement officer to work closely with our tenants, some of whom are also our most vulnerable, and understand their specific needs. Our community engagement strategy provides a robust strategic framework for addressing the most significant barriers to engagement in South Holland, and a programme of action for improving information provision, consultation and empowerment. This is complemented by our web strategy and online capability.

Review of effectiveness

South Holland District Council has responsibility for conducting, at least annually, a review of the effectiveness of its governance framework including the system of internal control. The review of effectiveness is informed by the work of the executive managers within the authority who have responsibility for the development and

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maintenance of the governance environment, the Internal Audit Consortium Manager’s annual report, and also by comments made by the external auditors and other review agencies and inspectorates. The review of effectiveness covers all group activities undertaken by the Council with other partners.

The Council approves and keeps under regular review all the strategic policies which it reserves for its own consideration, including:

The Leader

The Cabinet is appointed by the Leader and carries out the executive functions of the Council as required by legislation and the Council’s constitution and accordingly:

The Executive consists of the Leader and Executive Members (Portfolio Holders), who together are the Cabinet and most day to day ‘executive’ decisions fall to the Executive under the law.

The Overview and Scrutiny Commission may undertake any work relating to the four key principles of scrutiny as follows:

The Governance and Audit Committee

Executive and Corporate Management. CMT review corporate responsibility, direction and delivery of corporate plan, direction and delivery of resources, horizon scanning and key controls. EMT receives regular reports from a variety of governance boards which have been set up to manage corporate performance and risk. These boards cover performance and risk, employee relations, safeguarding, health and safety, emergency planning, and finance, as well as the statutory officers group. There are a number of other groups covering cross cutting themes and specific services.

Managers have carried out self-assessments of the processes and controls they have in place to allow them to achieve their service objectives. These are reviewed by Finance to provide assurance that effective controls were in place.

External Auditors review the Council’s arrangements for:

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External audit is provided by Ernst & Young LLP (EY). Following the annual audit EY issues an Audit Results Report to the Governance and Audit Committee covering the opinion on the financial statements, value for money and the Whole of Government Accounts submission. The Council takes appropriate action where improvements need to be made.

Internal Audit

The S151 Officer has provided the Internal Audit service through a contract with Eastern Internal Audit Services Ltd which monitors the effectiveness of the control environment and reports specific recommendations to the senior management and the Governance and Audit Committee. The Head of Internal Audit provides an independent opinion on the framework of governance, risk management and control, which is incorporated in the Annual Report and Opinion. The Head of Internal Audit also places reliance on the outcomes of the work undertaken by East Lindsey District Council in relation to the services provided by Public Sector Partnership Service Ltd.

The internal audit conclusions are scored as either Substantial, Reasonable, Limited or No assurance by internal audit.

From the work undertaken by Internal Audit during the year, the Head of Internal Audit provides an opinion on the effectiveness of South Holland District Council’s arrangements for governance, risk management and control; for the 2020/21 financial year the opinion concluded is of reasonable assurance.

During 2020/21 a total of nine assurance reviews have been completed, eight of these reports concluded in a positive assurance grading. One review, Accounts Payable, received a limited assurance grading. For three areas; Corporate Governance, Revenues and Benefits and Accountancy Services a Substantial assurance grading was given.

During 2020/21 a total of three reports have been issued to management for consideration but remain in draft at time of writing this report. They are for Asset Management, Coronavirus Response and Recovery, and Accounts Payable.

In none of the areas reviewed as part of the revised 2020/21 Internal Audit Plan did the findings indicate that the Covid-19 pandemic had severely impacted the Council’s ability to deliver core services to its residents however the Council’s budgeting challenges as a direct result of the pandemic have been highlighted and an internal audit review of budget sustainability is scheduled for 2021/22 to provide assurance over this risk.

We have been advised on the implications of the result of the review of the effectiveness of the governance framework by Cabinet and Governance and Audit Committee, and that the arrangements continue to be regarded as fit for purpose in accordance with the Governance Framework. The areas already addressed and those to be specifically addressed with new actions planned are outlined below.

Significant Governance Issues

All issues raised are subject to action plans to improve the control environment.

The following items have been identified, from the internal audit Annual Opinion, for inclusion in the Annual Governance Statement:

A limited assurance opinion and eight recommendations were raised for Asset Management in 2017/18. One urgent recommendation remains outstanding. The urgent recommendation relates to completing a programmed review of all leases. A subsequent review of this area has been completed in 2020/21 and a reasonable assurance grading given, indicating a positive direction of travel in this area.

One important recommendation remains outstanding from the 2018/19 Financial Services report which was given a limited assurance grading. This recommendation relates to ensuring accounts receivable reconciliation processes are defined within the financial system.

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In 2019/20, the private sector housing report was given a No Assurance grading. A total of 28 recommendations; 16 urgent, six important and six needs attention recommendations were raised of which one remains outstanding. The urgent outstanding recommendation relates to caravan site inspections.

Significant findings raised in 2020/21 which should be reported in the AGS until resolved, these are detailed as follows:

Covid-19

Facing the significant leadership challenge presented to us, the Council transformed into a virtual network and a Gold command group was set up to include one Director and a number of the key senior management team. The Gold group is South Holland facing only and does not share with Breckland District Council. The group initially met daily, adapting and responding quickly to ensure critical services were maintained and a number of sub-cells were set up to focus on key areas: Critical services, Communications, Finance, Resources, Communities, Business/Economy and Recovery,

Key members of the management team attended Lincolnshire groups such as SCG, TCG, Outbreak boards, Engagement boards and resilience and recovery groups. The Chief Executive left the Council in October 2020 and since that time the Executive Directors have encompassed this work within their own remits, alongside support from the recruitment of a temporary part time Head of Paid Service. The Gold group and sub cells work at both a Lincolnshire level and at a local level. The Gold group and sub cells work at both a Lincolnshire level and at a local level. This structure continues into 2020/21 with the regularity of meetings adapted as required depending on the issues faced at the time. By the end of the financial year both a Gold meeting and an EMT meeting was held weekly.

Additional resources have been required to support Covid related work such as; staff to support the assessment and payment of grants to businesses through the various government schemes, staff to help support our residents through welfare calls, supporting the vulnerable to receive food and medicines whilst unable to leave their homes, domestic abuse support and support to food banks. Many South Holland staff were redeployed into these roles to help support the new work. These additional resources will continue into 2021/22 to provide continued work on our response to the Covid-19 pandemic.

In order to facilitate decision making whilst Committee meetings were cancelled a major incident was declared and the following part of the constitution is in place until a Council meeting takes place to clarify delegations: Under Part 3 Section F2 paragraph 6 of the Council's Constitution the Chief Executive has power, after consultation with the Leader, to declare an incident to be a major incident under the Peacetime Emergency Plans and thereafter to take any necessary immediate action in respect of the incident, including expenditure of money subject to obtaining the agreement of the Leader and to calling a meeting of Cabinet as quickly as possible and so far as practicable thereafter acting in consultation with Cabinet.

In terms of Executive arrangements, decisions that would normally go to Cabinet, are being made by the Leader or appropriate Portfolio holder.

Whilst some services were temporarily stopped, due to lockdown requirements, the majority of Council services were delivered throughout the year without impact to our residents (such as waste collection, planning, etc). We reviewed the internal audit requirements for the year and removed non-essential audits, instead focusing internal audit on key control areas as well as the response to the pandemic and changes to ways of working. This both protected our staff to ensure they could manage workloads and also ensured sufficient work was done to produce an internal audit opinion for the year.

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Shared Management

In October 2020 a strategic review of the shared management structure between South Holland and Breckland Councils was commissioned. Both councils have successfully developed and operated a shared management model for over 10 years which has been replicated across the Local Government sector, however during the Covid-19 pandemic there was a ‘temporary uncoupling’ of shared managers to enable each council to focus on their own ‘places’.

As a result of this successful place based working and the evolving needs to provide service to our residents to meet the challenges of the Covid-19 pandemic, Full Council approved in February 2021 that the existing shared management arrangements with Breckland would end with effect from May 2021. Staff have been ‘landed’ in their new roles at either South Holland or Breckland Councils, there were no redundancies. Some sharing of other services is continuing (such as legal and procurement) in the same manner as prior to May 2021.

As a result of these changes, the internal governance arrangements are being reviewed in 2021/22 to reflect the new structure which took effect on 1 May 2021.

Certification

We are satisfied that appropriate arrangements are in place to address improvements identified in our review of effectiveness. Progress on these improvements and mitigation of risks will be monitored by the Executive Management Team and Governance and Audit Committee through the year and be considered in our next annual review.

Lord Porter of Spalding

Robert Barlow Lord Porter of Spalding Robert Barlow Lord Porter of Spalding Chief Executive Leader of the Council Date: 22 March 2022 Date: 22 March 2022

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