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2024-03-31-accounts

Trustees’ Annual Report for the period

From 1[st] April 2023 To 31[st] March 2024

Charity name: Ayscoughfee Hall and Gardens

Charity registration number: 515905

Objectives and Activities

SORP reference
Summary of the purposes of
the charity as set out in its
governing document		 Para 1.17 The establishment and maintenance of a
Museum and Recreation Ground
Summary of the main
activities in relation to those
purposes for the public
benefit, in particular, the
activities, projects or
services identified in the
accounts.		 Para 1.17 and
1.19		 Provision of a Museum and public
gardens
Statement confirming
whether the trustees have
had regard to the guidance
issued by the Charity
Commission on public
benefit		 Para 1.18

Additional information (optional)

You may choose to include further statements where relevant about:

SORP reference
Para 1.38
Policy on grant making
Para 1.38
Policy on social investment
including program related
investment
Para 1.38
Contribution made by
volunteers
Other

Achievements and Performance

SORP reference
Summary of the main
achievements of the charity,
identifying the difference the
charity’s work has made to
the circumstances of its
beneficiaries and any wider
benefits to society as a
whole.		 Para 1.20 Ayscoughfee Hall Museum reopened to pre-
Covid pandemic levels in January 2024, seeing
visitor numbers and associated donations
increasing.
Weddings continued to be a popular service
provided, with 5 being held.
Ayscoughfee Gardens remained open every
day of the year (except Christmas Day), with a
major refurbishment of the tennis courts
taking place.
Various events took place, including theatrical
performances, outdoor cinema screenings,
community events and group visits.
Additional information (optional)
You may choose to include further statements		 Additional information (optional)
You may choose to include further statements		 where relevant about:
Achievements against
objectives set		 Para 1.41
Performance of fundraising
activities against objectives
set		 Para 1.41
Investment performance
against objectives		 Para 1.41
Other

Financial Review

Review of the charity’s Para 1.21 financial position at the end of the period Statement explaining the Para 1.22 policy for holding reserves stating why they are held Amount of reserves held Para 1.22 Reasons for holding zero Para 1.22 reserves Details of fund materially in Para 1.24 deficit Explanation of any Para 1.23 uncertainties about the charity continuing as a going concern

Additional information (optional) You may choose to include further statements where relevant about:

The charity’s principal
sources of funds (including
any fundraising)		 Para 1.47
Investment policy and
objectives including any
social investment policy
adopted		 Para 1.46
A description of the principal
risks facing the charity		 Para 1.46
Other

Structure, Governance and Management

Description of charity’s
trusts:
Type of governing document
(trust deed, royal charter)		 Para 1.25 Trust deed
How is the charity
constituted?
(e.g unincorporated
association, CIO)		 Para 1.25 Councillors act on behalf of the Trustee,
South Holland District Council
Trustee selection methods
including details of any
constitutional provisions e.g.
election to post or name of
any person or body entitled
to appoint one or more
trustees		 Para 1.25 Elected

Additional information (optional)

You may choose to include further statements where relevant about:

Policies and procedures adopted for the induction Para 1.51 and training of trustees The charity’s organisational structure and any wider Para 1.51 network with which the charity works Relationship with any related Para 1.51 parties Other

Reference and Administrative details

Charity name Ayscoughfee Hall and Gardens
Other name the charity uses Ayscoughfee Hall Museum and Gardens
Registered charity number 515905
Charity’s principal address Churchgate
Spalding
Lincolnshire
PE11 2RA

Names of the charity trustees who manage the charity

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20		 Trustee name Office (if any) Dates acted if not for whole
**year **		 Name of person (or body) entitled
to appoint trustee (ifany)

– Corporate trustees names of the directors at the date the report was approved

Director name

Name of trustees holding title to property belonging to the charity

Trustee name Dates acted if not for whole year

Funds held as custodian trustees on behalf of others

Description of the assets held in this capacity

Name and objects of the charity on whose behalf the assets are held and how this falls within the custodian charity’s objects Details of arrangements for safe custody and segregation of such assets from the charity’s own assets

Additional information (optional)

Names and addresses of advisers (Optional information)

Type of Name Address
adviser

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

Exemptions from disclosure

Reason for non-disclosure of key personnel details

Other optional information

Declarations

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

Signed on behalf of the charity’s trustees

Signature(s) Full name(s) Position (eg Secretary, Chair, etc) Date

Subjective Analysis

Employees Direct Employees Direct Employees Direct Employees Direct Employees Direct Employees Direct

Employees Direct Employees Direct Employees Direct

Income Income Income Income Income Income

Premises Premises Premises Premises Premises Premises Premises

Support Services

Supplies & Services Supplies & Services Supplies & Services

Supplies & Services Supplies & Services Supplies & Services Supplies & Services Supplies & Services Supplies & Services Supplies & Services Supplies & Services Supplies & Services Supplies & Services Supplies & Services Supplies & Services Supplies & Services Supplies & Services

Support Services Support Services

Employees Direct Employees Direct Employees Direct Employees Direct Employees Direct Employees Direct Employees Direct

Employees Indirect

Income Income Income

MOVERESERVE MOVERESERVE MOVERESERVE MOVERESERVE MOVERESERVE

Premises Premises Premises Premises

Supplies & Services Supplies & Services Supplies & Services Supplies & Services Supplies & Services Supplies & Services Supplies & Services Supplies & Services Supplies & Services Supplies & Services Supplies & Services

Support Services Support Services

Tax & Non Spec Grant Tax & Non Spec Grant

Transport

Employees Direct Employees Direct

Income Income Income

MOVERESERVE

Premises Premises Premises Premises

Supplies & Services Supplies & Services Supplies & Services Supplies & Services Supplies & Services Supplies & Services Supplies & Services

Support Services

Transport

CHARITY TRUST - AYSCOUGHFEE MUSEUM AND GARDENS

INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR ENDED 31 MARCH 2024

MainAccount

4035 - Ayscoughfee Museum

Employees Direct

10000 - Gross Pay 10020 - Overtime 10050 - Employer's NI Contributions 10060 - Employer's Retirement Benefit Cost 10080 - Retirement Benefits - IAS19 Adjustment 15035 - Recharge of Salaries - General Fund Employees Direct total

Employees Indirect

10260 - Other Employee Expenses 10261 - Other Employee Expenses (Non-Payroll)

Employees Indirect total

Income

90120 - Other Revenue Grants Reimbursements and Contributions (Non-Government) 90125 - Other Revenue Grants Reimbursements and Contributions (Other Local Authorities) 91590 - Fees and Charges General 91710 - Other Income 95035 - Recharge of Salaries - General Fund 95045 - Recharge of Salaries - Other Income total

Premises

20010 - Buildings Maintenance - Responsive 21010 - Electricity 24010 - Water and Sewerage Charges 25010 - Fixtures and fittings 26010 - Operational Buildings Apportionment 28045 - Buildings Maintenance Recharge - GF to GF 29010 - Premises Insurance Premises total

Transport

33015 - Public Transport (Non-Payroll) Transport total

Supplies & Services

40010 - Furniture and Equipment 40030 - Materials and Consumables 40320 - External Printing and Design Costs

40330 - Stationery 41015 - Professional and Contractors Fees 41100 - Performers and Entertainers Fees 41110 - Public Courses and Workshops 42015 - Postages 42020 - Telephones 42060 - Computer Hardware Purchase 42080 - Computer Software Licence Costs 44120 - Subscriptions to Organisations and Other Bodies 45010 - Purchase of Goods for Resale 45030 - License Fees 45040 - Advertising - Events 45090 - Insurance 45100 - Other Miscellaneous Expenses

Supplies & Services total

Support Services

75010 - Recharges to/from Support Services 75015 - PSPS Recharges to Services

Support Services total

4035 - Ayscoughfee Museum total

4190 - Ayscoughfee Gardens

Employees Direct

10000 - Gross Pay 10020 - Overtime 10050 - Employer's NI Contributions 10060 - Employer's Retirement Benefit Cost 10080 - Retirement Benefits - IAS19 Adjustment 10090 - Agency Staff 15035 - Recharge of Salaries - General Fund

Employees Direct total

Employees Indirect

10261 - Other Employee Expenses (Non-Payroll)

Employees Indirect total

Income

90125 - Other Revenue Grants Reimbursements and Contributions (Other Local Authorities) 91710 - Other Income 95035 - Recharge of Salaries - General Fund

Income total

MOVERESERVE

87025 - REFCUS 87050 - Capital Expenditure Charged in Year 87070 - Application of Capital Grants to CAA 87075 - Transfer to Capital Grant Unapplied 87125 - Transfers from Earmarked Reserves

MOVERESERVE total

Premises

20010 - Buildings Maintenance - Responsive 21010 - Electricity 24010 - Water and Sewerage Charges 28010 - Grounds Maintenance Contract (External)

Premises total

Supplies & Services

40010 - Furniture and Equipment 40030 - Materials and Consumables 40210 - Clothing Uniforms and Laundry 41015 - Professional and Contractors Fees 42020 - Telephones 42060 - Computer Hardware Purchase 44120 - Subscriptions to Organisations and Other Bodies 45030 - License Fees 45040 - Advertising - Events 45090 - Insurance 45100 - Other Miscellaneous Expenses

Supplies & Services total

Support Services

75010 - Recharges to/from Support Services 75015 - PSPS Recharges to Services Support Services total

Tax & Non Spec Grant

64020 - Grants and Contributions to Outside Bodies - No Service Received 83095 - Capital Grants and Contributions (Non-Government)

Tax & Non Spec Grant total

Transport

30010 - Fuel and Oil

Transport total

4190 - Ayscoughfee Gardens total

4215 - Ayscoughfee Leisure Employees Direct

10090 - Agency Staff 15035 - Recharge of Salaries - General Fund Employees Direct total

Income

90150 - Costs Recharged to Outside Bodies 91710 - Other Income 92040 - Rents Income total

MOVERESERVE

87120 - Transfers to Earmarked Reserves

MOVERESERVE total

Premises

20010 - Buildings Maintenance - Responsive 21010 - Electricity 21020 - Gas 24010 - Water and Sewerage Charges

Premises total

Supplies & Services

40010 - Furniture and Equipment 40030 - Materials and Consumables 40210 - Clothing Uniforms and Laundry 41015 - Professional and Contractors Fees 42020 - Telephones 45090 - Insurance 45100 - Other Miscellaneous Expenses Supplies & Services total

Support Services

75015 - PSPS Recharges to Services

Support Services total

Transport

30010 - Fuel and Oil

Transport total

4215 - Ayscoughfee Leisure total

Summary

4035 - Ayscoughfee Museum total 4190 - Ayscoughfee Gardens total 4215 - Ayscoughfee Leisure total

Grand Total Ayscoughfee

2023/24

83,916 4,263 5,701 18,265 0 9,900 122,045

171 1,248 1,419 0 0 -1,250 -3,254 -21,300 0 -25,804

0 32,308 1,600 46 833 93,000 1,234 129,022

4 4

2,431 369 462

45,000 9,900 54,900 300,547

39,063 2,092 3,168 9,737 0 4,425 22,900 81,384

24 24

0 0 0 0

0 0 0 0 0 0

0 314 1,791 13,350 15,454

4,960 6,615 370 24,153 150 780 0 0 0 825 1,578 39,433

10,500 8,400 18,900

123,533 -101,443 22,090

42 42 177,326

4,425 1,900 6,325

-14,669 0 -6,000 -20,669

6,495 6,495

2,287 15,923 1,089 1,791 21,089

750 4,460 0 0 0 0 0

5,210

1,500 1,500

0 0 19,950

300,547 177,326 19,950 497,824

UNAUDITED FINANCIAL STATEMENTS For the Year Ended 31 March 2024

South Holland District Council Unaudited Financial Statements 2023/24

C o n t e n t s

FINANCIAL STATEMENTS

Page
Narrative Report 3 - 17
Statement of Responsibilities 18
CORE FINANCIAL STATEMENTS
Comprehensive Income and Expenditure Statement 19
Movement in Reserves Statement 20 – 21
Balance Sheet 22
Cash Flow Statement 23
Notes to the Accounts 24 – 86
SUPPLEMENTARY FINANCIAL STATEMENTS
Housing Revenue Account Income and Expenditure Statement 87
Movement on the Housing Revenue Account Statement 88
Notes to the Housing Revenue Account Statement 89– 91
Collection Fund Statement 92
Notes to the Collection Fund Statement 93 – 95
Group Accounts 95 – 103
Glossary of Terms 104 – 109
Annual Governance Statement 110 – 121

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South Holland District Council Unaudited Financial Statements 2023/24

NARRATIVE REPORT 2023/24

This report seeks to provide a summary and a straightforward explanation of, often complicated, local government finance arrangements. It aims to summarise the key events during the year, their associated financial impact and 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 the documents constitute the Council’s Financial Report for 2023/24.

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

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

The Statement of Accounts were unfortunately not produced within the statutory deadlines set out in the Accounts and Audit Regulations 2015 due to significant resourcing issues and delays.

The Council’s approach to finance will continue to evolve, developing the self-service nature of financial/service management in all operations whilst seeking to advance business partnering skills for services and particularly those undertaking service review or transformation programmes. This working model also supports current, and future, changes in the Council as it strives to increase income, reduce costs, manage demand, transform working practices, introduce innovation, and maintain performance.

The Narrative Report aims to give a clear picture of the Statement of Accounts and shows how Council Tax and other sources of income are used to provide the full range of Council Services. The Financial Statements are required to be prepared in line with International Financial Reporting Standards (IFRS) meaning that the Council’s Accounts are prepared on a similar basis to those produced in other sectors of the economy.

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South Holland District Council Unaudited Financial Statements 2023/24

1. The Statement of Accounts

The accounts are available on the Council’s website at www.sholland.gov.uk

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 is based in part on the sound financial position of the Council in particular:

The Statement of Accounts sets out the Council’s income and expenditure for the year, and its financial position at 31 March 2024. 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 2023/24, which in turn is underpinned by International Financial Reporting Standards.

The main financial statements are:

The Supplementary Financial Statements are:

The Council has produced Group Accounts for 2023/24, consisting of a Comprehensive Income and Expenditure Statement, Movement in Reserves Statement, Balance Sheet and Cash Flow Statement, consolidating the transactions relating to the council’s subsidiary companies Welland Homes and South Holland Homes together with its share of Public Sector Partnership Services Limited (PSPSL), which is accounted for as an associate.

The 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.

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

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South Holland District Council Unaudited Financial Statements 2023/24

Financial Management

The Council remains committed to delivering the quality frontline services which its residents want, and which will deliver the Council’s corporate priorities. Effective financial management at both corporate and service levels is a key to achieving this particularly in a period when the Councils’ resources are reducing and likely to continue to do so.

The Council’s approach to these challenges is set out in the 2024/25 Budget and the Medium-Term Financial Plan, approved by Council on 29 February 2024. These presented a balanced position after a wide-ranging review of activities and proactively sought reductions in costs and more efficient ways of working to ensure the Councils position remained stable. 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.

The council achieves effective financial management through:

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 the Council’s website:

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

2. Our District

Surrounded by wide open countryside, the district of South Holland encompasses the flat fenlands of South East Lincolnshire, characterised by big skies and fertile land that was reclaimed from the sea over many centuries. Once renowned for its tulip industry, it is now recognised nationally as the hub of the UK agriculture, food manufacturing and logistics sectors. South Holland is a welcoming place of thriving local communities offering great schools, a quality of life well above the national average and broad ranges of high quality family and starter homes. It is a district with a unique history and an exciting future.

Our traditional market towns and villages retain the historic character that is unique to Lincolnshire. Our proud heritage, stretching back to Roman times, is displayed for all to see, from historic windmills to our modernday flower industry, with the fens and drains in between. The main towns and population centres of Spalding, Crowland, Holbeach, Donington, Long Sutton and Sutton Bridge all feature strong community identities and activities, matched by thriving business and industry. The population is expanding healthily there are now 92,500 residents in the area with estimates that the population will reach 105,400 by 2041.

The continued success of major industries such as agriculture, horticulture, food processing, packaging and distribution, together with related commercial support services, is testament to the skills base, education and support for entrepreneurs. This success is reflected in an increasing demand for high quality housing, commercial developments and business support facilities.

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South Holland District Council Unaudited Financial Statements 2023/24

South Holland District Council is at the forefront of innovative schemes to develop high quality affordable homes for purchase, shared ownership and rent.

3. South Holland District Council

Organisational Structure

The Council, together with its partner organisations and external contractors, delivers a wide range of services to our residents, businesses and visitors.

The Council is organised into four directorates;

Political structure

South Holland has 18 electoral wards, and the Council consists of 37 councillors. The political makeup of the Council at the end of the year was:

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 its residents, whilst making the most of the huge opportunities for economic growth in the 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 Cabinet Functions.

All Councillors meet as the Council, here councillors decide the Council’s overall policies and set the budget and council tax each year. 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 Cabinet decisions for 2023/24, including the setting of a balanced budget for 2024/25, has been

6

South Holland District Council Unaudited Financial Statements 2023/24

undertaken by the two scrutiny committees in a joint meeting of the Policy Development Panel and Performance Management Panel.

Staffing

The South and East Lincolnshire Councils Partnership (Boston Borough Council, East Lindsey District Council and South Holland District Council) launched on 1 October 2021. This created the senior management structure for the three authorities. This has led to each of the Councils saving money on their previous arrangements and has created opportunity for greater cross working and to drive out further efficiencies going forward such as such as shared resources and expertise, exploring the opportunity for joint procurements, knowledge sharing and creating a greater voice for south and east Lincolnshire on the national stage.

Significant savings and efficiencies have already been secured by each Partnership Council. The Corporate Management Team structure is available to view on the Partnership’s website – www.selcp.co.uk/managementteam.

4. Council Priorities, Corporate Strategy and Performance

During 2023/24 the Council replaced its Corporate Strategy with a Sub-regional Strategy for the South & East Lincolnshire Councils Partnership area, setting out the Partnership priorities, as well as those priorities specific to South Holland district.

The Strategy has the following strategic priorities:

There is also a corporate priority focused on being ‘Efficient and Effective’ as well as local priorities.

How South Holland District Council performed in 2023/24

The Council proactively monitors delivery of its services through a number of Key Performance Indicators (KPIs) which are linked to priorities within the Sub-Regional Strategy.

The indicators, which are included in the Partnership’s Performance Management Framework are available to view at www.selcp.co.uk; alongside the Partnership’s Annual Delivery Plan, which sets out the key projects to be delivered for the benefit of the people of South Holland district.

The KPIs are monitored by the Council’s Insights and Transformation Team and reported to Management Team on a quarterly basis and to the Council’s Cabinet and Scrutiny Committee on a quarterly basis.

In 2023/24, the Council monitored a total of 64 KPIs. Out of these 64 KPIs there were 20 KPI’s meeting or exceeding their target, 4 slightly below target, 6 under-performing and 1 where data was unable to be provided. The remaining 33 are data only and do not have associated targets.

In 2023/24 the Council delivered the following actions from the Annual Delivery Plan (this is just a snapshot):

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South Holland District Council Unaudited Financial Statements 2023/24

5. Financial Performance

Council Tax

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. The diagram shows how it was distributed.

Where the Money Came From

South Holland receives income from many sources, as shown in the chart below. Income is received from council tax (received from taxpayers levied by the Council for South Holland), from the Parishes, from Business Rates and Government grants.

The majority of the income comes from Housing Benefit Subsidy grant (which is paid out to claimants) and other non-specific Government grants.

Council Tax receipts (excluding town and parish precepts) totalled £6.13m (9% of the income), and Business Rates receipts totalled £6.80m.

£19.41m of the income was received from grant funding, and a further £0.92m was received for New Homes Bonus grant.

A total of £29.61m was received from fees, charges, rents, and other service income (45% of total income). Income from investments and interest totalled £2.41m (4% of income).

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South Holland District Council Unaudited Financial Statements 2023/24

How the money was spent

The pie chart shows how the money was spent by Assistant Director area, as per the Comprehensive Income and Expenditure Statement on page 19.

Rent Allowances and Rebates is included with Finance and 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” pie chart.

Running expenses and employee expenditure are included as part of the Assistant Director expenditure items.

Running expenses include costs relating to:

Employees expenditure includes costs relating to:

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South Holland District Council Unaudited Financial Statements 2023/24

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 (Note 6).

General Fund

There was a service overspend of £0.115m due to staffing agency cost pressures within Neighbourhood services and the underachievement of income within Regulatory services. Overall, the full year outturn delivered an underspend of £0.116m mainly due to increased interest income on investments because of favourable market rates. The table below shows the outturn position reported to Cabinet:

Revised Outturn Variance
Budget 2023/24 (underspend)/
Assistant Director Area 2023/24 overspend
£'000 £'000 £'000
Corporate 2,475 2,399 (76)
Finance 3,551 3,775 224
Housing (114) (134) (20)
General Fund Assets 407 496 89
Governance 992 1,009 17
Leisure & Culture 1,273 1,332 59
Neighbourhoods 4,716 4,820 104
Planning& Strategic Infrastructure 302 177 (125)
Regulatory 832 917 85
Strategic Growth & Development 384 362 (22)
Strategic Project 152 128 (24)
Wellbeing& CommunityLeadership 1,411 1,215 (196)
Sub Total – Assistant Directors – Net
Costs		 16,381 16,496 115
Recharges to HRA (3,069) (3,083) (14)
Internal Drainage Boards and Parish
Precepts		 3,996 3,999 3
Investment Income (1,184) (1,514) (330)
Minimum Revenue Provision 177 309 132
Impairment Allowance – Bad debt
provision		 - 7 7
Capital Expenditure Charged in Year 808 758 (50)
Transfers to/(from)Earmarked Reserves (810) (825) (15)
Efficiencies Requirement (192) - 192
Other Income and Expenditure (274) (349) (75)
General Fund Budget net costs 16,107 16,147 40
Council Tax (7,242) (7,255) (13)
Business Rates (6,942) (6,804) 138
Government Grants (1,923) (2,204) (281)
Total Funding (16,107) (16,263) (156)
Total Budget -(Surplus)/Deficit - (116) (116)

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South Holland District Council Unaudited Financial Statements 2023/24

Capital Financial Performance

The capital outturn for 2023/24 reported to Cabinet by scheme is as follows:

General Fund 2023/24 Capital Programme and Outturn General Fund 2023/24 Capital Programme and Outturn General Fund 2023/24 Capital Programme and Outturn
Revised Variance
Budget Outturn (underspend)/
2023/24 2023/24 overspend
Service Area £'000 £'000 £'000
ICT 270 270 -
FootwayLighting 98 98 -
Car Park Resurfacing 12 - (12)
Capital Acquisitions re Growth and
Commercialisation		 1,329 1,304 (25)
Rough Sleeping Accommodation Programme
(RSAP)		 4 - (4)
Neighbourhoods 629 592 (37)
Disabled Facilities Grants – Private Sector
Housing		 751 647 (104)
Decent Homes Unfit and Disrepair – Housing 75 - (75)
Welland Homes 2,866 1,578 (1,288)
Disabled Facilities Grants – Private Sector
Housing – Discretionary Better Care Additional
Payments		 126 126 -
Council Offices PrioryRoad – Boiler 32 - (32)
South Holland Centre – Boiler 65 108 43
SpaldingGatewayPublic Realm Project 283 - (283)
Assets and Property– Castle Sports 78 35 (43)
Assets and Property – Moulton Park & New
SheepMarket		 172 104 (68)
West Marsh Road Depot Projects 36 40 4
Next Steps Accommodation Programme(NSAP) 12 12 -
ChangingPlaces 65 75 10
Ayscoughfee Tennis Court 116 124 8
Local AuthorityHousingFund 738 581 (157)
Car Park Machines 63 55 (8)
Markets - Van 22 20 (2)
Insurance Claim - 23 23
Total Non UKSPF & LUF Projects 7,780 5,792 (2,050)
UKSPF & LUF
UKSPF 216 37 (179)
UKSPF - Rural 378 378 -
Total UKSPF 594 415 (179)
LUF - South Holland Health and WellbeingHub 799 799 -
Total LUF 799 799 -
Grand Total General Fund Capital
Programme		 9,235 7,006 (2,229)

11

South Holland District Council Unaudited Financial Statements 2023/24

The revised 2023/24 capital budget is £9.235m derived from the combination of the approved budget of £7.780m non-UKSPF and LUF projects, UKSPF projects at £0.594m and LUF projects at £0.799m. The overall outturn expenditure is £7.006m.

General Fund 2023/24 Capital Programme and Outturn General Fund 2023/24 Capital Programme and Outturn General Fund 2023/24 Capital Programme and Outturn
Revised Variance
Budget Outturn (underspend)/
2023/24 2023/24 overspend
Service Area £'000 £'000 £'000
Borrowing - - -
Grants & Contributions (4,403) (3,825) 578
Capital Reserves (857) (751) 106
Direct Revenue Financing (3,975) (2,430) 1,545
Total (9,235) (7,006) 2,229

Housing Revenue Account

HRA 2023/24 Outturn

HRA 2023/24 Outturn HRA 2023/24 Outturn
Revised Variance
Budget Outturn (underspend)/
Service Area 2023/24 2023/24 overspend
£'000 £'000 £'000
Rent Income – Dwellings (17,001) (16,830) 171
Charges for Services and Facilities (1,217) (1,266) (49)
Contributions to Expenditure (399) (413) (14)
Total Income (18,617) (18,509) 108
Repairs and Maintenance 3,629 4,354 725
Supervision and Management 3,677 3,353 (324)
Rents,rates,taxes,and other charges 81 79 (2)
Depreciation 4,251 5,514 1,263
Movement in Allowance for bad debts 271 36 (235)
Statutory recharge to the HRA for support
services		 3,021 3,020 (1)
Total Expenditure 14,930 16,357 1,426
Contribution from Operations (3,687) (2,152) 1,534
Investment Income (677) (896) (219)
Interest Payable 2,348 2,348 -
Net(Surplus)/Deficit (2,016) (701) 1,315

12

South Holland District Council Unaudited Financial Statements 2023/24

Housing Revenue Account (HRA) Capital Programme

HRA 2023/24 Capital Programme and Outturn HRA 2023/24 Capital Programme and Outturn HRA 2023/24 Capital Programme and Outturn
Revised Variance
Budget Outturn (underspend)/
2023/24 2023/24 overspend
Service Area £'000 £'000 £'000
Central Heating 945 923 (22)
Kitchen/Bathroom 1,495 1314 (181)
Renewable Energy 1061 1102 41
Smoke Alarms 210 332 122
Electrical Upgrades 96 202 106
Roofs and Gutters 888 885 (3)
Doors and Windows 468 446 (22)
Flat Entrance Doors Sheltered Schemes 482 486 4
Chimneys 196 159 (37)
Paths and Drives 36 72 36
BoundaryWalls 90 50 (40)
Fees 219 215 (4)
10 Baulkins Drove Insurance Claim 29 29 -
15 Lansdowne Court – Insurance Claim 20 20 -
75 Wygate Road Insurance Claim 102 102 -
6 & 8 Farrow Avenue Insurance Claim 242 242 -
Sewerage Treatment Plant 273 273 -
The Square 370 370 -
Car Parks - - -
CommunityCentre Refurbishment 18 18 -
Booking System for Community Centres
and Guest Rooms		 15 15 -
ICT Strategy/ Infrastructure 268 146 (122)
Replacement Laptops 78 28 (50)
Major Adaptions 600 447 (153)
Sheltered Alarm Upgrade 94 94 -
HousingRepairs Vehicles - - -
Wignals Gate S106 965 866 (99)
Albion Street Crowland 9 1 (8)
Northons Lane Holbeach 406 406 -
Jubilee WayGosberton 1,298 1,298 -
Pheasant Street Holbeach 789 789 -
Primus Close Moulton Chapel 5 5 -
Biehler Avenue Weston 2,111 2,111 -
Cobgate Whaplode 907 907 -
Coalbeach Lane Surfleet 1,450 1,450 -
LAHF Frogmore Lane Holbeach 6 6 -
LAHF TulipFields Holbeach 738 738 -
Scheme Subject to detailed approval - - -
Total 16,979 16,547 (432)

13

South Holland District Council Unaudited Financial Statements 2023/24

HRA 2023/24 Capital Funding and Outturn HRA 2023/24 Capital Funding and Outturn HRA 2023/24 Capital Funding and Outturn
Revised Variance
Budget Outturn (underspend)/
2023/24 2023/24 overspend
Service Area £'000 £'000 £'000
Capital Receipts (1,238) (1,176) 62
Major Repairs Reserve (2,075) (6,298) (4,223)
Reserve Financing (12,298) (7,940) 4,358
Direct Revenue Financing (272) (272) -
Grants and Contributions (1,096) (861) 235
Total (16,979) (16,547) 432

Collection Fund financial performance

The balance on the Council Tax Collection Fund at 31 March 2024 showed a £0.498m 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 £0.59m.

The balance on the NNDR Collection Fund at 31 March 2024 showed a £1.747m surplus. This will be shared between the District, Lincolnshire County Council, and the Government in proportion with each party’s relative proportionate share. SHDC’s share is £0.699m.

Reserves and balances

The net decrease in specific and general reserves and balances for 2023/24 was £0.166m. The table below shows the balances at 31 March 2024 by reserve:

Specific and General Reserves Balance Specific and General Reserves Balance Specific and General Reserves Balance Specific and General Reserves Balance

Balances at
Contributions
Use of		 Balances at
Reserve 1 April 2023 into Reserves Reserves 31 March 2024
£'000 £'000 £'000 £'000
General Fund
Council Tax 656 667 (128) 1,195
Replacement and Refurbishment - 108 (108) -
Repayment Reserve - 66 - 66
Investment and Growth 3,703 459 (1,308) 2,854
Transformation 129 116 (38) 207
Specific Reserves Total 4,488 1,416 (1,582) 4,322
General Fund 2,078 - - 2,078
Total 6,566 1,416 (1,582) 6,400

14

South Holland District Council Unaudited Financial Statements 2023/24

At 31 March 2024, the Council also held reserve balances that are ringfenced and committed to future spend:

Ringfenced Reserves Balance Ringfenced Reserves Balance
Reserve
Balances at
1 April 2023
£’000
Contributions into
Reserves
£’000		 Use of
Reserves
£’000		 Balances at
31 March
2024
£’000
Capital Receipts 3,835 2,716 (1,288) 5,263
1-4-1 Right to Buy Receipts 2,900 511 (1,176) 2,235
Earmarked Grants 683 225 (497) 411
S106 Reserve 238 383 - 621
Planning Reserve - 394 - 394
Spalding Special 103 35 - 138
Climate Change 36 - - 36
Total 7,795 4,264 (2,961) 9,098

Please note the following reserve movements that have taken place in 2023/24:

HRA Reserves Balance HRA Reserves Balance
Balances at Contributions Use of Balances at
Reserve 1 April 2023 into Reserves Reserves 31 March 2024
£'000 £'000 £'000 £'000
Housing Revenue Account
(HRA)
HRA General Reserve 22,513 701 (7,819) 15,395
Major Repairs Reserve 5,163 5,514 (6,298) 4,379
Insurance Reserve 200 - - 200
Total 27,876 6,215 (14,117) 19,974

15

South Holland District Council Unaudited Financial Statements 2023/24

The HRA contribution into reserves is the HRA surplus for the year, and the Major Repairs Reserve contribution into reserves is the Depreciation charge for the year. The use of reserves is financing the HRA Capital Programme. There are no other movements in reserves.

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. South Holland’s Pension Fund liability included in the Balance Sheet as at 31 March 2024 stands at £4.044m compared with £1.525m 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 2024. 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 2024. 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 2022, 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.

Cash flows

Investments held by the Council are used to fund day to day cash flow requirements, and achieving a return on investments helps to support the low levels of council tax, support the reserves expenditure and to fund capital expenditure. Short term investments maturing in 2024/25 and long term investments mature beyond this or are open-ended.

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 34.

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 creation of the 2024/25 budget has been challenging. It has been set within a background of unprecedented inflationary pressures with Internal Drainage Board precepts again significantly increasing and continued changes in resident, customer and business needs. Despite these issues the Council’s financial position means that it is well placed and able to take a considered approach to mitigating these exceptional challenges. The Government has provided a one-year settlement which has taken some uncertainty away regarding certain grants, however, the uncertainty remains significant and into the mediumterm. South Holland District Council remains sovereign in terms of its constitution and budget, as do the Councils we partner with, and our SHDC priorities are to ensure that the Council remains financially resilient, able to deliver services it has to by law, and to provide support to the district’s most vulnerable residents. Secondly, to continue the process of redressing the imbalances still being felt from the pandemic by appropriately focussing on the provision of financial support to underpin economic recovery for the district and seeking to invest in our places. Work to develop new opportunities, efficiencies and income streams to support the Council’s revenue budget has continued. The Council had made representations regarding the Internal Drainage Board pressures and some initial one-off funding has been awarded. An internal Innovation, Transformation and Efficiency Board has been established to give oversight, support and steer to new opportunities and this board will oversee the efficiency targets for the Council.

The Council remains in a strong financial position over the medium term, with significant plans for transformation, capital spend and reviewing the potential for more efficient delivery of services as well as investment in its communities. The Council needs to deal with any changes in funding levels resulting from any Fair Funding review or changes to Business Rates Retention with a measured and planned approach.

16

South Holland District Council Unaudited Financial Statements 2023/24

The Medium Term Financial Plan (MTFP) provides information on the Councils budget, transformation programme and reserves and can be found on the Council’s website: - Agenda item Annual Budget Report 2023/24, Medium Term Financial Strategy, Capital Programme and Capital Strategy, Treasury Management Policy/Strategy and Annual Delivery Plan - South Holland District Council (sholland.gov.uk)

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.

Key Risks

The internal 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 Senior Leadership Team or Audit and Governance 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.

Future Opportunities

The Council is always looking for new opportunities, such as through the South and East Lincolnshire Council Partnership, 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.

The 2023/24 Annual Delivery Plan sets out the projects to be brought forward by the Partnership Councils during this municipal year.

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:

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

17

South Holland District Council Unaudited Financial Statements 2023/24

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 unaudited Financial Statements give a ‘true and fair’ view of the financial position of the Council at the reporting date and of its expenditure and income for the year ended 31 March 2024.

Christine Marshall

Deputy Chief Executive Corporate Development & S151 Officer

Dated: 18 July 2024

18

South Holland District Council Unaudited Financial Statements 2023/24

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.

2022/23 2023/24
Gross Gross Net Gross Gross Net
Expenditure Income Expenditure Expenditure Income Expenditure
£’000 £’000 £’000 £’000 £’000 £’000
2,029
(857)		 1,172
General Fund Assets		 1,790 (847) 943
16,256
(13,079)		 3,177
Finance		 15,508 (12,984) 2,524
7,938

(6,972)		 966
Economic Growth		 -
-		 -
1,146

(28)		 1,118
Governance		 1,216 (105) 1,111
4,470
(3,046)		 1,424
Wellbeing and Community Leadership		 5,152 (3,584) 1,568
2,121
(756)		 1,365

Leisure and Culture		 2,363 (833) 1,530
2,443

(292)		 2,151
Corporate		 2,124
(408)		 1,716
5,757

(800)		 4,957

Neighbourhoods		 6,149
(936)		 5,213
1,364
(1,504)		 (140)
Planning and Strategic Infrastructure		 3,368 (3,524) (156)
1,384
(844)		 540

Regulatory		 1,460 (696) 764
1,694

(1,028)		 666

Strategic Growth and Development		 2,056
(1,776)		 280
14,204

(18,187)		 (3,983)
Housing		 50,810
(18,506)		 32,304
60,806 (47,393) 13,413 Cost of Services 91,996 (44,199) 47,797
6,322 (2,768) 3,554 Other operating expenditure (Note 10) 7,352 (3,333) 4,019
5,219 (3,354) 1,865
Financing and investment income and expenditure (Note 11)		 6,286 (6,290) (4)
6,291
(21,209)		 (14,918)
Taxation and non-specific grant income and expenditure (Note 12)		 6,483
(26,764)
(20,281)
78,638 (74,724) 3,914 (Surplus) or Deficit on the Provision of Services 112,117 (80,586) 31,531
(8,290) Surplus on revaluation of property, plant and equipment assets (93,323)

77
(Surplus) or Deficit from investments in equity instruments
designated at fair value through other comprehensive income
621
(28,719) Remeasurements of the net defined benefit liability 3,250
(36,932) Other Comprehensive Income and Expenditure (89,452)
(33,018) Total Comprehensive Income and Expenditure (57,921)

The notes to the accounts on pages 24 - 86 form an integral part of the Financial Statements.

19

South Holland District Council Unaudited Financial Statements 2023/24

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.

2023/24 General Fund
Balance		 General Fund
Earmarked
Reserves		 Housing
Revenue
Account		 HRA
Earmarked
Reserves		 Major
Repairs
Reserve		 Capital
Receipts
Reserve		 Capital Grants
Unapplied		 Total Usable
Reserves		 Unusable
Reserves		 Total Authority
Reserves
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Balance at 31 March 2023
Movement in Reserves during 2023/24
Total Comprehensive Income and
Expenditure
Adjustments between accounting basis
and funding basis under regulations
(Note 8)
Increase/(Decrease) in 2023/24
Transfer to/(from) Earmarked Reserves
Transfer to/from Other Reserves
Balance at 31 March 2024 carried
forward		 2,078
2,270
(1,793)		 5,548
-
-		 22,513
(33,801)
26,683		 200
-
-		 5,163
-
(784)		 6,735
-
763		 3,040
-
2,153		 45,277
(31,531)
27,022		 165,333
89,452
(27,022)		 210,610
57,921
-
477
(477)
-		 -
477
-		 (7,118)
-
-		 -
-
-		 (784)
-
-		 763
-
-		 2,153
-
-		 (4,509)
-
-		 62,430
-
-		 57,921
-
-
2,078 6,025 15,395 200 4,379 7,498 5,193 40,768 227,763 268,531

20

South Holland District Council Unaudited Financial Statements 2023/24

2022/23 General Fund
Balance		 General Fund
Earmarked
Reserves		 Housing
Revenue
Account		 HRA
Earmarked
Reserves		 Major
Repairs
Reserve		 Capital
Receipts
Reserve		 Capital Grants
Unapplied		 Total Usable
Reserves		 Unusable
Reserves		 Total Authority
Reserves
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Balance at 31 March 2022
Movement in Reserves during 2022/23
Total Comprehensive Income and
Expenditure
Adjustments between accounting basis
and funding basis under regulations
(Note 8)
Increase/(Decrease) in 2022/23
Transfer to/(from) Earmarked Reserves
Transfer to/from Other Reserves
Balance at 31 March 2023 carried
forward		 2,078
(3,632)
(688)		 9,537
-
-		 24,464
(282)
(1,669)		 200
-
-		 3,944
-
1,219		 4,335
-
2,351		 4,152
-
(781)		 48,710
(3,914)
432		 128,882
36,932
(432)		 177,592
33,018
-
(4,320)
3,989
331		 -
(3,989)
-		 (1,951)
-		 -
-
-		 1,219
-
-		 2,351
-
49		 (781)
-
(331)		 (3,482)
-
49		 36,500
-
(49)		 33,018
-
-
2,078 5,548 22,513 200 5,163 6,735 3,040 45,277 165,333 210,610

The notes to the accounts on pages 24 - 86 form an integral part of the Financial Statements

21

South Holland District Council Unaudited Financial Statements 2023/24

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’.

31 March 31 March
2023 2024
£’000 Note £’000
231,920 Property, Plant and Equipment 13 300,234
113
Heritage Assets		 14 98
2,468
Investment Property		 15 2,255
279
5,362
4,986		 Intangible Assets
Long Term Investments
Long Term Debtors
Long Term Assets
Short Term Investments
Assets Held for Sale
Short Term Debtors
Cash and Cash Equivalents
Current Assets
Cash and Cash Equivalents
Short Term Borrowing
Short Term Creditors
Provisions
Current Liabilities
Long Term Borrowing
Other Long Term Liabilities – Pension Liability
Other Long Term Liabilities – S106 and Rent Deposits
Grants Receipts in Advance – Capital
Long Term Liabilities		 16
17
17
20
18
19
19
21
22
36
32		 101
5,308
5,949
245,128
32,046
2,449
6,618
6,459		 313,945
25,849
935
8,080
2,762
47,572
-
(26)
(8,959)
(219)		 37,626
-
(26)
(7,808)
(138)
(9,204)
(67,456)
(1,525)
(3,709)
(196)		 (7,972)
(67,456)
(4,044)
(3,152)
(416)
(72,886) (75,068)
210,610 Net Assets 268,531
(45,277) Usable Reserves* (40,768)

(165,333)		 Unusable Reserves 24
(227,763)
(210,610) Total Reserves (268,531)

The notes to the accounts on pages 24 - 86 form an integral part of the Financial Statements.

22

South Holland District Council Unaudited Financial Statements 2023/24

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.

2022/23 2022/23 2023/24 2023/24
£’000 £’000 £’000 £’000
3,831
(11,325)		 (3,914)
(7,494)		 Net surplus/(deficit) on the provision of
services
Adjustments to net surplus or deficit on the
provision of services for non-cash movements
(Note 25)
Adjustments for items included in the net
surplus or deficit on the provision of services
that are investing and financing activities (Note
25)
Net cash flows from Operating Activities
Investing Activities (Note 26)
Financing Activities (Note 27)
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of
the reporting period
Other Cash Movements
Cash and cash equivalents at the end of
the reporting period (Note 19)		 46,499
(8,770)		 (31,531)
37,729
(11,408)
4,551
1,538		 6,198
(7,597)
(2,296)
(5,319)
11,786
(8)		 (3,695)
6,459
(2)
6,459 2,762

The notes to the accounts on pages 24 - 86 form an integral part of the Financial Statements.

23

South Holland District Council Unaudited Financial Statements 2023/24

NOTES TO THE ACCOUNTS

NOTE 1 – ACCOUNTING POLICIES

1. General Principles

The Financial Statements summarise the Council’s transactions for the 2023/24 financial year and its position at the year end of 31 March 2024. 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 2023/24, 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.

24

South Holland District Council Unaudited Financial Statements 2023/24

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.

25

South Holland District Council Unaudited Financial Statements 2023/24

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 4.8% (2.6% in 2021/22), 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:

26

South Holland District Council Unaudited Financial Statements 2023/24

the period – taking into account any changes in the net defined benefit liability during the period as a result of contribution and benefit payments.

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

27

South Holland District Council Unaudited Financial Statements 2023/24

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.

The Council has provided a guarantee in relation to the liabilities of Public Sector Partnership Services, based on 28% of any outstanding liabilities, in the event the Company should cease trading.

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 five 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.

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South Holland District Council Unaudited Financial Statements 2023/24

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.

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

29

South Holland District Council Unaudited Financial Statements 2023/24

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 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.

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South Holland District Council Unaudited Financial Statements 2023/24

13. Interest in Companies and Other Entities

The Council has material interests in companies and other entities that have the nature of subsidiaries and associates 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. The Group Accounts included with the financial statements incorporate South Holland Homes, Welland Homes and Public Sector Partnership Services Ltd.

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.

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 2024.

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).

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South Holland District Council Unaudited Financial Statements 2023/24

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.

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 accrual’s 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:

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South Holland District Council Unaudited Financial Statements 2023/24

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.

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:

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South Holland District Council Unaudited Financial Statements 2023/24

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 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.

Infrastructure Assets

Infrastructure assets include sewage treatment works and street furniture.

Recognition

Expenditure on the acquisition or replacement of components of these assets is capitalised on an accrual basis, provided that it is probable that the future economic benefits associated with the item will flow to the authority and the cost of the item can be measured reliably.

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South Holland District Council Unaudited Financial Statements 2023/24

Measurement

Infrastructure assets are generally measured at depreciated historical cost. However, this is a modified form of historical cost – opening balances for infrastructure assets were originally recorded in balance sheets at amounts of capital undischarged for sums borrowed as at 1 April 1994, which was deemed at that time to be historical cost.

Where impairment losses are identified, they are accounted for by the carrying amount of the asset being written down to the recoverable amount.

Depreciation

Annual depreciation is provided on these assets over their useful lives on a straight-line basis, as follows:

Disposals and derecognition

When an infrastructure asset is disposed of, the carrying amount of the component in the Balance Sheet is written off to the ‘Other operating expenditure’ line in the Comprehensive Income and Expenditure Statement as part of the gain or loss on disposal. Receipts from disposals (if any) are credited to the same line in the Comprehensive Income and Expenditure Statement, also as part of the gain or loss on disposal (i.e., netted off against the carrying value of the asset at the time of disposal).

The written-off amounts of disposals are not a charge against council tax, as the cost of non-current assets is fully provided for under separate arrangements for capital financing. Amounts are transferred to the capital adjustment account from the General Fund 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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South Holland District Council Unaudited Financial Statements 2023/24

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

36

South Holland District Council Unaudited Financial Statements 2023/24

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 2023/24 (the Code) has introduced several changes in accounting standards which will be required from 1 April 2024.

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 material change to the reported information in the 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 at Note 1 the Council has had to make certain judgements about complex transactions or those involving uncertainty about future events. The critical judgements made in the statement of accounts are:

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South Holland District Council Unaudited Financial Statements 2023/24

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 have been made taking into account historical experience, current trends and other relevant factors. The assumptions and other sources of estimation uncertainty disclosed below relate to the estimates that require the council’s most difficult, subjective or complex judgements. As a number of variables and assumptions affecting the possible future resolution of the uncertainties increases, those judgements become more subjective and complex. As a result, balances cannot be determined with certainty and actual results could be materially different from the assumptions and estimates.

The items in the Council’s Balance Sheet at 31 March 2024 for which there is a significant risk of material adjustment in the forthcoming financial year are as follows:

Pensions Assets and Liability

The estimation of the net defined benefit liability at 31 March 2024 was £4.044m (£1.525m liability at 31 March 2023) 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 2023/24, the actuaries advised that South Holland’s net pension liability had decreased by £2.519m. This is made up of:

Debt Impairment

At 31 March 2024, the Council had a balance of sundry debtor and housing benefit overpayments of £3.082m. The Council’s normal approach to review significant items suggested that an impairment allowance for doubtful debts of 24% (£0.746m) 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 50% of the total debt would require an additional £0.795m 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 2024.

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 2024 is £0.138m (40% of £0.344m).

If the appeals provision increased by 10% the Council’s share would increase to £0.152m.

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South Holland District Council Unaudited Financial Statements 2023/24

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.

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.

NOTE 5 – EVENTS AFTER THE BALANCE SHEET DATE

Events taking place after 31 March 2024 are not reflected in the Financial Statements or notes. Where events taking place before this date provided information about conditions existing at 31 March 2024, the figures in the financial statements and notes have been adjusted in all material respects to reflect the impact of this information.

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South Holland District Council Unaudited Financial Statements 2023/24

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.

2022/23
2023/24		 2022/23
2023/24		 2022/23
2023/24		 2022/23
2023/24		 2022/23
2023/24		 2022/23
2023/24		 2022/23
2023/24
Net
Expenditure
Chargeable to
the General
Fund and
HRA Balance
Adjustments
between the
Funding and
Accounting
Basis
Net Expenditure
in the
Comprehensive
Income and
Expenditure
Statement
Net
Expenditure
Chargeable to
the General
Fund and
HRA Balance
Adjustments
between the
Funding and
Accounting
Basis
Net Expenditure
in the
Comprehensive
Income and
Expenditure
Statement
£’000
£’000
£’000
£’000
£’000
£’000
1,389
(217)		 1,172
General Fund Assets		 2,504
(1,561)		 943
2,818

359
3,177
Finance		 3,038

(514)		 2,524
(250) 1,216
966
Economic Growth		 -
-		 -

1,087
31
1,118
Governance		 1,129
(18)		 1,111
1,076
348
1,424
Wellbeing and Community Leadership		 1,681

(113)		 1,568
1,096
269
1,365

Leisure and Culture		 1,446

84
1,530
2,361
(210)		 2,151
Corporate		 1,704
12
1,716
4,353

604
4,957

Neighbourhoods		 4,965
248
5,213
(204) 64
(140)
Planning and Strategic Infrastructure		 (111) (45) (156)

458
82

540

Regulatory
820

(56)
764
672
(6)		 666

Strategic Growth and Development		 648
(368)		 280
(2,530)
(1,453)
(3,983)
Housing		 5,272
27,032
32,304
12,326 1,087 13,413 Net Cost of Services 23,096
24,701
47,797
(6,055) (3,444) (9,499) Other Income and Expenditure (16,455) 189
(16,266)
6,271 (2,357) 3,914 (Surplus) or Deficit 6,641 24,890
31,531

40

South Holland District Council Unaudited Financial Statements 2023/24

General
Fund
Balance		 HRA
Balance		 Total General
Fund
Balance		 HRA
Balance		 Total
£’000 £’000 £’000 £’000 £’000 £’000
2,078 24,463 26,541 Opening Balance at 1 April 2,078 22,513 24,591
- (1,950) (1,950) Surplus or (Deficit) in Year (after transfers to/from
earmarked reserves)		 - (7,118) (7,118)
2,078 22,513 24,591 Closing Balance at 31 March 2,078 15,395 17,473

41

South Holland District Council Unaudited Financial Statements 2023/24

NOTE 6A – NOTE TO THE EXPENDITURE AND FUNDING ANALYSIS

2023/24
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
General Fund Assets
Finance
Economic Growth
Governance
Wellbeing and Community Leadership
Leisure and Culture
Corporate
Neighbourhoods
Planning and Strategic Infrastructure
Regulatory
Strategic Growth and Development
Housing
Net Cost of Services
Other Income and Expenditure from the
Funding Analysis
Difference between General Fund
(Surplus)/Deficit and Comprehensive
Income and Expenditure Statement
(Surplus)/Deficit		 (1,527)
(352)
-
-
(48)
105
(30)
432
-
3
(324)
27,182		 (34)
(162)

-
(18)
(65)

(21)
43

(184)

(45)

(59)
(44)

(155)		 -
-
-
-
-
-

(1)
-
-
-
-
5
(1,561)
(514)
-
(18)
(113)
84
12
248
(45)
(56)
(368)

27,032
25,441
(96)
(744)
13		 4
272
24,701
189
25,345
(731)		 276
24,890
2022/23
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
General Fund Assets
Finance
Economic Growth
Governance
Wellbeing and Community Leadership
Leisure and Culture
Corporate
Neighbourhoods
Planning and Strategic Infrastructure
Regulatory
Strategic Growth and Development
Housing
Net Cost of Services
Other Income and Expenditure from the
Funding Analysis
Difference between General Fund
(Surplus)/Deficit and Comprehensive
Income and Expenditure Statement
(Surplus)/Deficit		 (278)
-
1,182
5
274
244
(67)
358
-
3
6
(1,784)		 61
359

34

26

74

25
59

246
64

79

(12)

355
-

-

-

-

-

-

(202)

-

-

-
-

(24)		 (217)
359
1,216
31
348
269
(210)
604
64
82
(6)
(1,453)
(57)
(556)		 1,370
700		 (226)
(3,588)		 1,087
(3,444)
(613) 2,070 (3,814) (2,357)

42

South Holland District Council Unaudited Financial Statements 2023/24

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:

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:

43

South Holland District Council Unaudited Financial Statements 2023/24

NOTE 7 – EXPENDITURE AND INCOME ANALYSED BY NATURE

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

2022/23 2023/24
£’000 £’000

16,067
26,909
10,903
5,995
2,347
3,847
136
218
1
6,291
2,474
953
2,497


























Expenditure
Employee benefits expenses
Other service expenses
Benefits expenditure
Depreciation, amortisation, impairment
Interest payments
Precepts and levies
Increase in impairment allowance
Changes in fair value of investment property
Payments to Housing Capital Receipts Pool
Business Rates tariff and levy
Loss on disposal of non-current assets
Loss on revaluation of non-current assets
Pensions interest cost
Total Expenditure

Income
Income from council tax and non-domestic rates
Government grants and contributions
Other grants and contributions
Fees, charges and other service income
Benefits income
Decrease in impairment allowance
Interest and investment income
Change in fair value of equity investments
Changes in fair value of investment property
Gain on revaluation of non-current assets
Gain on disposal of non-current assets
Pensions interest income
Total Income

(Surplus) or Deficit on the Provision of
Services		 14,666
22,093
10,893
6,695
2,348
4,298
107
493
3
6,483
3,051
37,667
3,320
78,638

(16,332)
(13,385)
(1,994)
(26,142)
(10,930)
(42)
(1,263)
-
(71)
-
(2,768)
(1,797)		 112,117
(17,598)
(7,217)
(6,277)
(29,608)
(10,504)
(51)
(2,411)
-
(280)
-
(3,333)
(3,307)
(74,724) (80,586)
3,914 31,531

44

South Holland District Council Unaudited Financial Statements 2023/24

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.

45

South Holland District Council Unaudited Financial Statements 2023/24

2023/24 General
Fund
Balance		 Housing
Revenue
Account		 Capital
Receipts
Reserve		 Major
Repairs
Reserve		 Capital
Grants
Unapplied
£’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
•
Council Tax and Non-Domestic Rates
•
Holiday pay
•
Movements in the market value of Investment Properties
•
Capital grants and contributions applied to capital financing
•
Capital grants and contributions not applied to capital financing
•
Reversal of entries included in the Surplus or Deficit on the Provision of Services in
relation to capital expenditure
Total Adjustments to Revenue Resources
Adjustments between Revenue and Capital Resources
Transfer of non-current asset sale proceeds from revenue to the Capital Receipts Reserve
Administrative costs of non-current asset disposals
Payments to the government housing receipts pool
Posting of HRA resources from revenue to the Major Repairs Reserve
Minimum Revenue Provision
Other income that cannot be credited to the CIES
Capital expenditure financed from revenue balances
Total Adjustments between Revenue and Capital Resources
Adjustments to Capital Resources
Use of Capital Receipts Reserve to finance capital expenditure
Use of Major Repairs Reserve to finance capital expenditure
Use of capital grants to finance capital expenditure
Cash payments in relation to deferred capital receipts
Total Adjustments to Capital Resources
Total Adjustments		 (558)
272
(1)
213
(2,481)
(1,315)
4,708
838
(1,632)
64
3
-
(309)
-
(757)
(2,631)
-
-
-
-
-
(1,793)		 (173)
-
5
-
(861)
-
43,984
42,955
(1,685)
28
-
(5,514)
-
-
(8,213)
(15,384)
-
-
(888)
-
(888)
26,683		 -
-
-
-
-
-
-
-
3,317
(92)
(3)
-
-
-
-
3,222
(2,461)
-
-
2
(2,459)
763		 -
-
-
-
-
-
-
-
-
-
-
5,514
-
-
-
5,514
-
(6,298)
-
-
(6,298)
(784)		 -
-
-
-
(50)
1,315
-
1,265
-
-
-
-
-
-
-
-
-
-
888
-
888
2,153

46

South Holland District Council Unaudited Financial Statements 2023/24

2022/23 General
Fund
Balance		 Housing
Revenue
Account		 Capital
Receipts
Reserve		 Major
Repairs
Reserve		 Capital
Grants
Unapplied
£’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
•
Council Tax and Non-Domestic Rates
•
Holiday pay
•
Movements in the market value of Investment Properties
•
Movements in fair value of financial assets designated to fair value other comprehensive
income
•
Capital grants and contributions applied to capital financing
•
Capital grants and contributions not applied to capital financing
•
Reversal of entries included in the Surplus or Deficit on the Provision of Services in
relation to capital expenditure
Total Adjustments to Revenue Resources
Adjustments between Revenue and Capital Resources
Transfer of non-current asset sale proceeds from revenue to the Capital Receipts Reserve
Administrative costs of non-current asset disposals
Payments to the government housing receipts pool
Posting of HRA resources from revenue to the Major Repairs Reserve
Minimum Revenue Provision
Other income that cannot be credited to the CIES
Capital expenditure financed from revenue balances
Total Adjustments between Revenue and Capital Resources
Adjustments to Capital Resources
Use of Capital Receipts Reserve to finance capital expenditure
Use of Major Repairs Reserve to finance capital expenditure
Use of capital grants to finance capital expenditure
Cash payments in relation to deferred capital receipts
Total Adjustments to Capital Resources
Total Adjustments		 1,538
(3,588)
(203)
148
-
(7,914)
(822)
11,574
733
(150)
-
1
-
(137)
(47)
(1,088)
(1,421)
-
-
-
-
-
(688)		 532
-
(24)
-
-
(13)
-
7,684
8,179
(2,618)
41
-
(5,017)
-
-
(2,254)
(9,848)
-
-
-
-
-
(1,669)		 -
-
-
-
-
-
-
-
-
2,618
(41)
(1)
-
-
-
-
2,576
(227)
-
-
2
(225)
2,351		 -
-
-
-
-
-
-
-
-
-
-
-
5,018
-
-
-
5,018
-
(3,799)
-
-
(3,799)
1,219		 -
-
-
-
-
(1,603)
822
-
(781)
-
-
-
-
-
-
-
-
-
-
-
-
-
(781)

47

South Holland District Council Unaudited Financial Statements 2023/24

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 2023/24.

Balance
31 March
2022		 Transfers
Out 2022/23		 Transfers
In 2022/23		 Balance
31 March
2023		 Transfers
Out 2023/24		 Transfers
In 2023/24		 Balance
31 March
2024
£'000 £'000 £'000 £'000 £'000 £'000 £'000
General Fund
Council Tax Reserve
Replacement and Refurbishment Reserve
Investment and Growth Reserve
Transformation Reserve
Repayment Reserve
Climate Change
S106 Reserve
Planning Reserve
Spalding Special Expenses
Earmarked Grants Reserve		 1,585
77
4,136
97
-
-
-
-
-
3,642		 (969)
(176)
(1,607)
-
-
-
(1,992)
-
-
(2,942)		 40
99
1,174
32
-
37
2,229
-
-
86		 656
-
3,703
129
-
37
237
-
-
786		 (128)
(108)
(1,308)
(38)
-
-
-
-
-
(497)		 666
108
459
116
66
-
383
394
138
225		 1,194
-
2,854
207
66
37
620
394
138
514
Total General Fund 9,537 (7,686) 3,697 5,548 (2,079) 2,556 6,025
Housing Revenue Account
Insurance Reserve		 200 - - 200 - - 200
Total Housing Revenue Account 200 - - 200 - - 200
Total Earmarked Reserves 9,737 (7,686) 3,697 5,748 (2,079) 2,556 6,225

48

South Holland District Council Unaudited Financial Statements 2023/24

NOTE 10 – OTHER OPERATING EXPENDITURE

2022/23 2023/24
£’000 £’000
1,014
2,833
1
(294)		 Parish Council Precepts 1,131
3,167
3
(282)

Internal Drainage Board Levies

Payments to the Government Housing Capital Receipts Pool

(Gains)/Losses on the disposal of non-current assets
3,554 Total 4,018

NOTE 11 – FINANCING AND INVESTMENT INCOME AND EXPENDITURE

2022/23 2023/24
£’000 £’000
2,347 Interest payable and similar charges 2,348
700
Net interest on the net defined benefit liability for pensions		 13
(1,263)
Interest receivable and similar income		 (2,411)

94		 Movement in the impairment allowance for bad debts
56
(14)
Income and expenditure in relation to investment properties
and changes in their fair value		 (10)
1,865 Total (4)

NOTE 12 – TAXATION AND NON SPECIFIC GRANT INCOME AND EXPENDITURE

2022/23 2023/24
£’000 £’000
(6,852) Council Tax income (7,255)

(3,189)		 Retained Business Rates income and expenditure
(3,860)

(1,987)
Section 31 Grant
(2,067)

(650)		 Section 31 Grant – Extended Reliefs
(877)

(286)		 Revenue Support Grant
(424)

(1,677)
Non-ringfenced government grants
(1,508)

(230)
Capital grants and contributions
(4,290)

(47)
AssetExchange
-
(14,918) Total (20,281)

49

South Holland District Council Unaudited Financial Statements 2023/24

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

2023/24 Council
Dwellings		 Other Land and
Buildings		 Vehicles, Plant,
Furniture &
Equipment		 Community
Assets		 Surplus Assets Assets Under
Construction		 Total Property,
Plant and
Equipment
£’000 £’000 £’000 £’000 £’000 £’000 £’000
Movements on balances

Cost or Valuation
At 1 April 2023
Additions
Revaluation increases/ (decreases) recognised in the Revaluation
Reserve
Revaluation increases/ (decreases) recognised in the Surplus/Deficit on
the Provision of Services
Derecognition – disposals
Assets reclassified (to)/from Held for Sale
Other movements in Cost or Valuation
At 31 March 2024
Accumulated Depreciation and Impairment
At 1 April 2023
Depreciation charge
Depreciation written out to the Revaluation Reserve
Depreciation written out to the Surplus/Deficit on the Provision of
Services
Derecognition – disposals
At 31 March 2024
Net Book Value
At 31 March 2023
At 31 March 2024		 201,841
13,576
85,891
(38,109)
(979)
(437)
2,263		 23,103
2,230
3,573
(209)
-
-
-		 7,882
1,127
-
-
(619)
-
-		 1,184
12
-
-
-
-
-		 1,779
-
(753)
(230)
(32)
-
-		 269
3,262
-
-
-
-
(2,263)		 236,058
20,207
88,711
(38,548)
(1,630)
(437)
-
264,046
-
(5,142)
4,284
825
33		 28,697
-
(395)
344
51
-		 8,390
(4,204)
(862)
-
-
620		 1,196
(146)
-
-
-
-		 764
-
(6)
-
6
-		 1,268
(5)
-
-
-
-		 304,361
(4,355)
(6,405)
4,628
882
653
-
201,841
264,046		 -
23,103
28,697		 (4,446)
3,678
3,944		 (146)
1,038
1,050		 -
1,779
764		 (5)
264
1,263		 (4,597)
231,703
299,764

50

South Holland District Council Unaudited Financial Statements 2023/24

2022/23 Council
Dwellings		 Other Land and
Buildings		 Vehicles, Plant,
Furniture &
Equipment		 Community
Assets		 Surplus Assets Assets Under
Construction		 Total Property,
Plant and
Equipment
£’000 £’000 £’000 £’000 £’000 £’000 £’000
Movements on balances
Cost or Valuation
At 1 April 2022
Additions
Revaluation increases/ (decreases) recognised in the Revaluation
Reserve
Revaluation increases/ (decreases) recognised in the Surplus/Deficit on
the Provision of Services
Derecognition – disposals
Assets reclassified (to)/from Held for Sale
Other movements in Cost or Valuation
At 31 March 2023
Accumulated Depreciation and Impairment
At 1 April 2022
Depreciation charge
Depreciation written out to the Revaluation Reserve
Depreciation written out to the Surplus/Deficit on the Provision of
Services
Derecognition – disposals
At 31 March 2023
Net Book Value
At 31 March 2022
At 31 March 2023		 193,816
6,352
4,145
(1,801)
(732)
-
61		 21,953
381
320
(490)
(234)
-
1,173		 7,690
1,579
(990)
-
(359)
-
(38)		 1,121
63
-
-
-
-
-		 1,162
504
130
(17)
-
-
-		 1,054
737
-
-
-
-
(1,522)		 226,796
9,616
3,604
(2,308)
(1,325)
-
(326)
201,841
-
(4,668)
3,328
1,324
16		 23,103
-
(357)
325
31
1		 7,882
(4,871)
(703)
1,027
-
343		 1,184
(146)
-
-
-
-		 1,779
-
-
-
-
-		 269
-
(5)
-
-
-		 236,058
(5,017)
(5,733)
4,680
1,355
360
- - (4,204) (146) - (5) (4,355)
193,816
201,841		 21,953
23,103		 2,819
3,678		 975
1,038		 1,162
1,779		 1,054
264		 221,779
231,703

51

South Holland District Council Unaudited Financial Statements 2023/24

Depreciation

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

Capital Commitments

At 31 March 2024, the Council has entered into contracts for the enhancement of Property, Plant and Equipment in 2023/24 and future years budgeted at a cost of £9.3m. Similar commitments at 31 March 2023 were £6.8m, mainly relating to works to dwellings. The major commitments are:

• Central Heating Replacements £4.2m
• General Works £2.7m
• Roofing and Fixtures £1.4m
• Disabled Adaptations HRA £1.0m

Effects of Changes in Estimates

No material changes were made to the Council’s accounting estimates for Property, Plant and Equipment in 2023/24.

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. 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 Global Standards, incorporating the ISVC International Valuation Standards.

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 2023/24 were undertaken by Ed Cox MRICS, the South East Lincolnshire Partnership’s qualified valuer and Mark Aldis BSc (Hons), MRICS, RICS Registered Valuer (Wilks Head and Eve).

52

South Holland District Council Unaudited Financial Statements 2023/24

Council
Dwellings		 Other Land and
Buildings		 Vehicles, Plant,
Furniture &
Equipment		 Infrastructure
Assets		 Community
Assets		 Surplus Assets Assets Under
Construction		 Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Carried at
historical cost
Valued at fair
value as at:
31 March 2024
Total Cost or
Valuation		 -
264,046
264,046		 -
28,697		 8,390
-		 2,894
-		 1,196
-		 -
764		 1,268
**- **		 13,748
293,507
28,697 8,390 2,894 1,196 764 1,268 307,255

Fair Value Hierarchy – Surplus Assets

Details of the authority’s surplus assets and information about the fair value hierarchy as at 31 March 2024 is as follows:

Fair Value Fair Value
Level 2 Level 2
2022/23 2023/24
£’000 £’000
1,779 Surplus Land 764
1,779 Balance at end of the year 764

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

53

South Holland District Council Unaudited Financial Statements 2023/24

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

Infrastructure Assets

Movement on balances

In accordance with the temporary relief offered by the Update to the Code on infrastructure assets, this note does not include disclosure of gross cost and accumulated depreciation for infrastructure assets because historical reporting practices and resultant information deficits mean that this would not faithfully represent the asset position to the users of the financial statements.

The authority has chosen not to disclose this information as the previously reported practices and resultant information deficits mean that gross cost and accumulated depreciation are not measured accurately and would not provide the basis for the users of the financial statements to take economic or other decisions relating to infrastructure assets.

2023/24 2022/23
£’000 £’000
Net book value (modified historical cost) at 1 April 217 244
Additions 381 70
Depreciation (128) (97)
Net book value at 31 March 470 217
2023/24
2022/23
Infrastructure assets 470
299,764
217
230,483
Other PPE assets
Total PPE assets 300,234 231,920

The authority has determined in accordance with Regulation 30M of the Local Authorities (Capital Finance and Accounting) (England) (Amendment) Regulations 2022 that the carrying amounts to be derecognised for infrastructure assets when there is replacement expenditure is nil.

NOTE 14 – HERITAGE ASSETS

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

Civic Regalia and
Works of Art		 Archaeological
Sites, Smallholdings
and other Land and
Sites of Special
Interest
Total		 Archaeological
Sites, Smallholdings
and other Land and
Sites of Special
Interest
Total
2021/22
£’000		 2022/23
£’000		 2022/23
£’000		 2022/23
£’000
Cost or valuation
108 1 April 62 51 113
5
Revaluations		 - (15) (15)
113 31 March 62 36 98

54

South Holland District Council Unaudited Financial Statements 2023/24

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:

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:

2022/23 2023/24
£’000 £’000
(181) Rental Income from investment property (241)

20
Direct operating expenses arising from investment property
18
147
Net (gains)/losses from fair value adjustments		 213
(14) Net (gain)/loss (10)

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.

2022/23 2023/24
£’000 £’000
2,146 Balance at start of the year 2,468
469
Additions and Enhancements		 -
(147) Net gains/(losses) from fair value adjustments (213)
2,468 Balance at end of the year 2,255

55

South Holland District Council Unaudited Financial Statements 2023/24

Fair Value Hierarchy

Details of the authority’s investment properties and information about the fair value hierarchy as at 31 March 2024 is as follows:

Fair Value
Level 2
2022/23		 Fair Value
Level 2
2022/23		 Fair Value
Level 2
2023/24
£’000 £’000
2,468 Commercial Industrial Units 2,255
2,468 Balance at end of the year 2,255

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.

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 £163,000 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.

56

South Holland District Council Unaudited Financial Statements 2023/24

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

2022/23 2023/24
£’000 £’000
Balance at start of year:
1,283
- Gross carrying amounts		 1,302
(858)
-Accumulated amortisation		 (1,023)
425 Net carrying amount at start of year 279

Additions:
19 - Purchases -
(165) Amortisation for the period (163)
-
Derecognition		 (15)
279 Net carrying amount at end of year 101

Comprising:
1,302 - Gross carrying amounts 1,287
(1,023)
-Accumulated amortisation		 (1,186)
279 101

57

South Holland District Council Unaudited Financial Statements 2023/24

NOTE 17 – FINANCIAL INSTRUMENTS

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

Financial Assets Non-Current Non-Current Non-Current Non-Current Current Current Current Current
Long-term
Investments		 Long-term
Debtors		 Short-term
Investments		 Short-term
Debtors		 Total
31
March
2023
£’000		 31
March
2024
£’000		 31
March
2023
£’000		 31
March
2024
£’000		 31
March
2023
£’000		 31
March
2024
£’000		 31
March
2023
£’000		 31
March
2024
£’000		 31
March
2023
£’000		 31
March
2024
£’000
Fair Value through other
comprehensive income –
Designated equity
instruments
Amortised cost
Investments
Cash & cash equivalents
Mortgages and car loans
Loans to Welland Homes
Trade debtors
Total financial assets		 5,362
-
-
-
-
-		 5,308
-
-
-
-
-		 -
-
-
109
4,783
94		 -
-
-
86
5,795
68		 -
32,046
6,458
-
-
-		 -
25,849
2,762
-
-
-		 -
-
-
37
-
2,944		 -
-
-
32
-
3,833		 5,362
32,046
6,458
146
4,783
3,038		 5,308
25,849
2,762
118
5,795
3,901
5,362 5,308 4,986 5,949 38,504 28,611 2,981 3,865 51,833 43,733
Financial Liabilities Non-Current Non-Current Non-Current Non-Current Current Current Current Current
Long-term
Borrowings		 Long-term
Creditors		 Short-term
Borrowings		 Short-term
Creditors		 Total

31
March
2023
£’000
31
March
2024
£’000		 31
March
2023
£’000		 31
March
2024
£’000
31
March
2023
£’000
31
March
2024
£’000		 31
March
2023
£’000		 31
March
2024
£’000		 31
March
2023
£’000		 31
March
2024
£’000
Amortised cost
External borrowing
Trade creditors
Total financial liabilities		 (67,456)
-		 (67,456)
-		 -
-		 -
-		 (26)
-		 (26)
-		 -
(3,238)		 -
(4,884)		 (67,482)
(3,238)		 (67,482)
(4,884)
(67,456) (67,456) - - (26) - (3,238) (4,884) (70,720) (72,366)

58

South Holland District Council Unaudited Financial Statements 2023/24

Income, expense, gains and losses

2022/23
Surplus or
Deficit on the
Provision of
Services
£’000		 2023/24
Surplus or
Deficit on the
Provision of
Services
£’000
Net gains/losses on:
Interest Revenue
Financial assets measured at amortised cost
Interest expense
Fee Expense
Brokers fees		 (1,264)
2,347
8		 (2,411)
2,348
7

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 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 £4.199m. During 2023/24 an additional equity investment of £567k was made. 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 £4.071m as at 31 March 2024. 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 £1.163m 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 £1.237m as at 31 March 2024. 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:

59

South Holland District Council Unaudited Financial Statements 2023/24

alternative valuation;

The fair values calculated are as follows:

LIABILITIES 31 March 2023 31 March 2023 31 March 2024 31 March 2024
Carrying
Amount
£’000		 Fair Value
£’000		 Carrying
Amount
£’000		 Fair Value
£’000
Borrowing (67,482) (54,364) (67,482) (48,690)

For long term borrowing, the fair value is lower than the carrying amount because the authority’s portfolio of loans includes fixed rate loans where the interest rate payable is lower than the prevailing rates at the Balance Sheet date. This shows a notional future gain (based on economic conditions at 31 March 2024) arising from a commitment to pay interest to lenders below current market rates.

The fair value of Public Works Loan Board (PWLB) loans of £48.690m 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 reduced level of 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 £54.364m. If the Council were to prematurely repay the loans to the PWLB a discount would be receivable based on rates as at 31 March 2024. The exit price for the PWLB loans including the discount would be £57.960m.

ASSETS 31 March 2023 31 March 2023 31 March 2024 31 March 2024
Carrying
amount
£’000		 Fair Value
£’000		 Carrying
amount
£’000		 Fair Value
£’000
Short Term investments
Loans to Subsidiaries
Castle Sports		 32,046
4,784
94		 32,046
3,762
94		 25,849
5,795
68		 25,849
4,420
68

The loans to subsidiaries are loans to Welland Homes Limited, which is the Council’s wholly owned Housing Company. The Council has made loans totalling £5.795m with a fair value of £4.420m. These loans are categorised under Level 1 inputs and the fair value has been calculated using the comparable PWLB new loan rates for a similar duration with a margin added for credit risk equivalent to the margin at the time when the loan was issued.

60

South Holland District Council Unaudited Financial Statements 2023/24

NOTE 18 – DEBTORS

31 March 31 March 31 March 31 March
2023 2024 2024 2024
Net Gross Impairment Net
£’000 £’000
£’000		 £’000
144 Trade debtors 257 (150) 107
1,413 Council Tax & NDR debtors 3,514 (667) 2,847
2,117 Related parties 1,593 - 1,593
523
Prepayments		 868 - 868
154
Costs		 474 (295) 179
2,267 Other entities and individuals 3,574 (1,088) 2,486
6,618 Total 10,280 (2,200) 8,080

NOTE 18A – DEBTORS FOR LOCAL TAXATION

The past due but not impaired amount for local taxation (council tax and non-domestic rates) can be analysed by age as follows:

31 March
2023
£’000		 31 March
2024
£’000
597 Less than one year 740
1,347
More than one year		 1,375
1,944 Total 2,115

NOTE 19 – CASH AND CASH EQUIVALENTS

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

31 March
2023
£’000		 31 March
2024
£’000
323 Bank current accounts 719
6,136 Deposits with Banks on Instant Access 2,043
6,459
Cash and Cash Equivalents categorised as
Current Assets		 2,762
- Bank current accounts -
- Cash and Cash Equivalents categorised as
Current Liabilities		 -
6,459 Total Cash and Cash Equivalents 2,762

61

South Holland District Council Unaudited Financial Statements 2023/24

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 2024 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.

2022/23 2023/24
£’000 £’000
3,592 Balance outstanding at start of year 2,449

Assets newly classified as held for sale:
778
- Property, Plant and Equipment		 738

Assets declassified as held for sale:
(454) - Property, Plant and Equipment (301)
(1,466)
Assets sold		 (1,951)
2,449 Balance outstanding at year end 935

NOTE 21 – CREDITORS

2022/23 2023/24
£’000 £’000
(2,165) Trade payables (3,553)
(3,245)
Council Tax & NDR payables		 (876)
(1,878)
Other payables		 (2,059)

(1,671)
Receipts in Advance
(1,320)
(8,959) Total (7,808)

NOTE 22 – PROVISIONS

Business
Rate Appeals

£’000
Balance at 1 April 2023
Additional provisions made in 2023/24
Amounts used in 2023/24
Unused amounts reversed in 2023/24
Balance at 31 March 2024		 (219)
(74)
-
155
(138)

The provision represents South Holland’s share (40% of £0.548m) of the total provision for appeals against the rateable values set by the Valuation Office Agency (VOA) not settled as at 31 March 2024. The total provision has been recognised in the Collection Fund Statement (page 92).

NOTE 23 – USABLE RESERVES

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

62

South Holland District Council Unaudited Financial Statements 2023/24

NOTE 24 – UNUSABLE RESERVES

31 March
2023
£’000		 31 March
2024
£’000
51,656 Revaluation Reserve 141,444
111,678 Capital Adjustment Account 87,738
(1,525) Pensions Reserve (4,044)
40 Deferred Capital Receipts Reserve 38
1,020 Collection Fund Adjustment Account 748
(76)
2,540
Accumulated Absences Account
Financial InstrumentsRevaluation Reserve		 (80)
1,919
165,333 Total Unusable Reserves 227,763

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.

2022/23 2022/23 2023/24 2023/24
£’000 £’000 £’000 £’000
9,880
(1,590)		 45,572

8,290

(2,206)		 Balance at 1 April
Upward revaluation of assets
Downward revaluation of assets and impairment
losses not charged to the Surplus/Deficit on the
Provision of Services
Surplus or deficit on revaluation of non-current
assets not posted to the Surplus or Deficit on the
Provision of Services
Difference between fair value depreciation and
historical cost depreciation
Accumulated gains on assets sold or scrapped
Amount written off to the Capital Adjustment
Account
Balance at 31 March		 110,860
(17,537)		 51,656
93,323
(3,535)
(1,339)
(867)		 (1,676)
(1,859)
51,656 141,444

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

63

South Holland District Council Unaudited Financial Statements 2023/24

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.

2022/23 2023/24
£’000 £’000
(28,174)
28,719
(4,555)
2,485
(1,525)		 Balance at 1 April
Remeasurements of the net defined benefit liability
Reversal of items relating to retirement benefits debited
or credited to the Surplus or Deficit on the Provision of
Services in the Comprehensive Income and
Expenditure Statement
Employer’s pensions contributions and direct payments
to pensioners payable in the year
Balance at 31 March		 (1,525)
(3,250)
(1,831)
2,562
(4,044)

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.

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

64

South Holland District Council Unaudited Financial Statements 2023/24

2022/23 2022/23 2023/24 2023/24
£’000 £’000 £’000 £’000
(5,831)
(955)
(165)
(9,877)
(2,282)		 111,695

(19,110)
867
1,339

17,035
(148)		 Balance at 1 April
Reversal of items relating to capital
expenditure debited or credited to the
Comprehensive Income and Expenditure
Statement:
Charges for depreciation and impairment of non-
current assets
Reversal of Revaluation losses on Property, Plant
and Equipment
Amortisation of intangible assets
Revenue expenditure funded from capital under
statute
Amounts of non-current assets written off on
disposal or sale as part of the gain/loss on
disposal to the Comprehensive Income and
Expenditure Statement

Adjusting amounts written out of the Revaluation
Reserve
Net written out amount of the cost of non-current
assets consumed in the year
Capital financing applied in the year:
Use of the Capital Receipts Reserve to finance
new capital expenditure
Use of the Major Repairs Reserve to finance new
capital expenditure
Capital grants and contributions credited to the
Comprehensive Income and Expenditure
Statement that have been applied to capital
financing
Minimum Revenue Provision
Application of grants to capital financing from the
Capital Grants Unapplied Account
Capital expenditure charged against the General
Fund and HRA balances

Movements in the market value of Investment
Properties debited or credited to the
Comprehensive Income and Expenditure
Statement
Balance at 31 March		 (6,532)
(37,667)
(163)
(1,386)
(2,944)		 111,678
(48,692)
1,859
1,676
21,430
(213)
227
3,799
9,530
137
-
3,342		 2,461
6,298
3,392
309
-
8,970
111,678 87,738

65

South Holland District Council Unaudited Financial Statements 2023/24

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.

2022/23 2023/24
£’000 £’000
42
(2)
-		 Balance at 1 April
Transfer to the Capital Receipts Reserve upon receipt of
cash
Other Movements
Balance at 31 March		 40
(2)
-
40 38

Collection Fund Adjustment Account

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

2022/23 2023/24
£’000 £’000
(2,568) Balance at 1 April 1,020
3,588 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
accordance with statutory requirements		 (272)
1,020 Balance at 31 March 748

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.

2022/23 2022/23 2023/24 2023/24
£’000 £’000 £’000 £’000
(302) Balance at 1 April (76)
302 Settlement or cancellation of accrual made at the
end of the preceding year		 76
(76) Amounts accrued at the end of the current year (80)
226 Amount by which officer remuneration charged to
the Comprehensive Income and Expenditure
Statement on an accruals basis is different from
remuneration chargeable in the year in accordance
with statutory requirements		 (4)
(76) Balance at 31 March (80)

66

South Holland District Council Unaudited Financial Statements 2023/24

Financial Instruments Revaluation Reserve

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

2022/23 2023/24
£’000 £’000
2,617
(71)
(6)
-		 Balance at 1 April
Welland Homes equity
South Holland Local Housing Community Interest Company
equity
Investment in Municipal Bonds Agency (MBA)
Balance at 31 March		 2,540
(695)
74
-
2,540 1,919

NOTE 25 – CASH FLOW STATEMENT – OPERATING ACTIVITIES

The cash flows for operating activities include the following items:

2022/23 2023/24
£’000 £’000
750
(2,347)		 Interest received
Interest paid		 2,108
(2,348)

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

2022/23 2023/24
£’000 £’000
5,831
470
483
165
(1)
(5,104)
(2,220)
2,070
(293)
-
2,282
-
148		 Depreciation
Impairment and downward valuations
Impairment and revaluation losses/(gains) on HRA non dwellings
Amortisation of intangible assets
(Increase)/decrease in interest debtors
(Increase)/decrease in creditors
Increase/(decrease) in debtors
Movement in pension liability
Contribution to/(from) provisions
Adjustment for movements in fair value of investments classified as Fair
Value through Other Comprehensive Income
Carrying amount of non-current assets and non-current assets held for
sale, sold or derecognised
Movement in Investment Property Values
Other non-cash items charged to the net surplus or deficit on the
provision of services
Adjustment for items included in the net surplus or deficit on the provision
of services that are investing or financing activities
Proceeds from short-term and long-term investments
Capital Grants credited to surplus or deficit on the provision of services
Proceeds from the sale of property, plant and equipment, investment
property and intangible assets		 6,532
37,667
-
163
(303)
698
(602)
(731)
(81)
-
2,943
213
-
3,831
-
(8,749)
(2,576)		 46,499
-
(5,545)
(3,225)
(11,325) (8,770)

67

South Holland District Council Unaudited Financial Statements 2023/24

NOTE 26 – CASH FLOW STATEMENT – INVESTING ACTIVITIES

2022/23 2023/24
£’000 £’000
(9,720)
(32,021)
(1,045)
2,579
35,996
8,762		 Purchase of property, plant and equipment, investment property and
intangible assets
Purchase of short term and long term investments
Other payments for investing activities
Proceeds from the sale of property, plant and equipment, investment
property and intangible assets
Proceeds from sale of short term investments
Other receipts from investing activities
Net cash flows from investing activities		 (21,558)
(25,566)
(1,026)
3,227
31,500
5,826
4,551 (7,597)

NOTE 27 – CASH FLOW STATEMENT – FINANCING ACTIVITIES

2022/23 2023/24
£’000 £’000
1,538 Other payments for financing activities
Net cash flows from financing activities		 (2,296)
1,538 (2,296)

NOTE 28 - RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES

2023/24
1 April
£’000
Financing
Cashflows
£’000		 2023/24
1 April
£’000
Financing
Cashflows
£’000		 2023/24
1 April
£’000
Financing
Cashflows
£’000
Non-Cash
Changes
£’000
2023/24
31 March
£’000
Debtors 547
(1,450)		 (1,407)
14		 (860)
(1,436)		 (2,267)
(1,422)
Creditors
Total Liabilities from Financing
Activities		 (903) (1,393) (2,296) (3,689)

NOTE 29 – MEMBERS’ ALLOWANCES

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

2023/24 2022/23
£’000 £’000
Basic Allowance 230 231
Special Responsibility 146 165
Expenses 10 10
Total 386 406

68

South Holland District Council Unaudited Financial Statements 2023/24

NOTE 30 – OFFICERS’ REMUNERATION

The tables below include those officers who report directly to members or the Chief Executive and who have responsibility for the strategies of the Council. During 2021/22 a partnership was created between South Holland District Council, East Lindsey District Council and Boston Borough Council to form the South and East Lincolnshire Council’s Partnership (S&ELCP) where senior officers are shared between the three authorities. This includes the Chief Executive Officer, Monitoring Officer, Deputy Chief Executive for Communities and SIRO being employed by East Lindsey District Council and the Deputy Chief Executive for Growth being employed by Boston Borough Council with their costs being recharged to the Council. The total remuneration for these employees are as follows; South Holland District Council’s costs for these roles are shown separately. Details relating to other costs of the partnership arrangements are included in the Related Party Transactions Note 33.

2023/24 Salary, Pension Redundanc Total SHDC
Costs Only

fees, and		 Expenses
All		 Contributio y
allowances owances n Payments
Job Title £ £ £ £ £ £
*Chief Executive 142,162 237 35,164 - 177,563 55,045
*Deputy Chief Executive
(Programme Delivery &
SIRO)		 119,747 - 27,963 - 147,710 45,790
* Deputy Chief Executive
(Communities)		 124,905 - 29,141 - 154,046 47,754
Deputy Chief Executive
(Corporate Development
& S151)		 130,697 1,170 29,141 - 161,008 49,912
*Deputy Chief Executive
(to 10/09/23)		 53,080 5,855 11,322 - 70,257 21,780
Assistant Director
(Governance and MO)		 87,737 612 20,365 - 108,714 33,701
2022/23 Salary, Pension Redundanc Total SHDC
Costs Only

fees, and		 Expenses
All		 Contributio y
allowances owances n Payments
Job Title £ £ £ £ £ £
*Chief Executive 142,887 109 24,437 - 167,433 51,904
*Deputy Chief Executive
(Growth)		 108,051 2,006 18,695 - 128,752 39,913
* Deputy Chief Executive
(Programme Delivery &
SIRO)		 108,415 - 18,434 - 126,849 39,323
Deputy Chief Executive
(Corporate Development
& S151)		 126,610 1,310 20,585 - 148,504 46,036
*Deputy Chief Executive
(Communities)		 109,974 - 18,974 - 128,948 39,974
Assistant Director
(Governance and MO) to
31/05/22		 16,364 125 2,639 36,949 56,078 17,384
* Assistant Director
(Governance and MO)
from 01/06/22		 68,321 779 11,597 - 80,698 25,016

*These statutory officers are employed by either East Lindsey District Council or Boston Borough Council, with their costs being recharged to the Council as part of the shared management arrangement for the strategic alliance and S&ELCP, included for completeness.

69

South Holland District Council Unaudited Financial Statements 2023/24

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 2023/24
Number of
Employees		 2022/23
Number of
Employees
£50,000-£54,999 5 7
£55,000-£59,999 5 2
£60,000-£64,999 2 2
£65,000-£69,999 1 1
£70,000-£74,999 3 1
£75,000-£79,999 1 -
£80,000-£84,999 1 1
£85,000-£89,999 - 3
£90,000-£94,999 2 -
£95,000-£99,999 - 1
£100,000-£104,999 1 1
£105,000-£109,999 1 7

The Council terminated the contracts of 5 employees in 2023/24 incurring liabilities of £18,942 (£37,634 in 2022/23). The number of exit packages with total cost per band and total cost of the compulsory and other redundancies are set out in the following table.

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
2023/24 2022/23 2023/24
2022/23		 2023/24 2022/23 2023/24 2022/23
£0-£20,000
£20,001-£40,000		 -
-		 -
-		 5
-		 2
1		 5
-		 2
1		 18,942
-		 685
36,949
Total cost included
in bandings and in
CIES (£)		 18,942 37,634

NOTE 31 – EXTERNAL AUDIT COSTS

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

2023/24 2022/23
£’000 £’000
Statutory Audit Services 140
-
34
15
Fees payable to KPMG with regard to external audit services carried out for
the year by the appointed auditor for the year		 -
45
28
26
Fees payable to Ernst and Young with regard to external audit services
carried out for the year by the appointed auditor for the year
Fees payable to Ernst and Young with regard to external audit services
carried out for the year by the appointed auditor for prior years
Fees payable to KPMG with regard to certification of grants and claims
189 99

70

South Holland District Council Unaudited Financial Statements 2023/24

NOTE 32 – GRANT INCOME

The Council credited the following grants, contributions and donations to the Comprehensive Income and Expenditure Statement in 2023/24.

2023/24 2022/23
£’000 £’000
Credited to Taxation and Non Specific Grant Income and Expenditure
Covid-19 Related Grants and Contributions
Local Authority Covid Support Grant
Covid-19 Income Compensation
Business Rates Relief Grant – Expanded Retail and Nursery Relief
Other Grants and Contributions
Revenue Support Grant
S31 Grant – Business Rates
New Homes Bonus Scheme Grant
Other non-specific grants
Grants in relation to capital expenditure
Total Credited to Taxation and Non Specific Grant Income and Expenditure
Credited to Services
Other Grants and Contributions
Housing Benefit Subsidy
Council Tax and Housing Benefit Administration
Discretionary Housing Payments
Disabled Facilities Grant
UK Shared Prosperity Fund
Homelessness Grants
Grants for Growth
Housing Infrastructure Funding
Covid-19
Other grants
Total Credited to Services
Total Grants
Sources of Grants:
Central Government
Other Local Authorities
Other Bodies
Total		 -
-
-
(424)
(2,944)
(918)
(590)
(4,290)		 -
-
-
(286)
(2,638)
(1,118)
(558)
(230)
(9,166)
(10,335)
(169)
(130)
(1,104)
(988)
(277)
(111)
-
(1,116)		 (4,830)
(10,671)
(259)
(56)
(994)
(43)
(188)
(991)
(6,912)
(135)
(1,183)
(14,230)
(23,396)
(21,387)
(1,878)
(131)		 (21,432)
(26,262)
(24,540)
(1,648)
(74)
(23,396) (26,262)

Grants Received in Advance - Capital

2023/24 2022/23
£’000 £’000
Long Term Liabilities
MHCLG – Gypsy and Travellers
Local Authority Housing Fund
Total		 (196)
(220)		 (196)
-
(416) (196)

71

South Holland District Council Unaudited Financial Statements 2023/24

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.

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. 2022/23 comparators shown in brackets.

• Funding from Government Note 32 £21.387m (£24.540m)
• Non-Domestic Rates Share Payable Collection Fund £12.119m
(£11.341m)
• Debtors £1.098m (£1.808m)
• Creditors £1.147m (£3.493m)

Members

Members of the Council have direct control over the Council’s financial and operating policies. The total of members’ allowances paid in 2023/24 is shown in note 29. During 2023/24 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). During 2023/24 six members were directors of South Holland Local Housing Community Interest Company, and six 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 £20,149 (£18,427 in 2022/23).

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

During 2021/22 a partnership was created between South Holland District Council, Boston Borough Council and East Lindsey District Council to form the South and East Lincolnshire Council’s Partnership (S&ELCP). The partnership shares a Chief Executive, Deputy Chief Executives, Assistant Directors along with a number of shared officers.

South Holland District Council were charged by East Lindsey District Council £636,097 and by Boston Borough Council £309,495 for their share of these posts. South Holland received income of £582,019 from East Lindsey District Council and £329,335 from Boston Borough Council for the share of the costs it incurred in the year.

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 £1.130m in 2023/24 (£1.014m in 2022/23).

72

South Holland District Council Unaudited Financial Statements 2023/24

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 Services (CPBS) (East Coast) Ltd). The company added a further shareholder on 1 April 2021 in Boston Borough Council, and the Council accounts for this as an associate within the Group Accounts from 2021/22. The net balance outstanding between the Council and the Company at the 31 March 2024 was nil (£34,042 in 2022/23).

Two officers and two councillors were directors of PSPS Ltd during the year. During 2022/23 payments totalling £5.0m were paid to PSPS (£4.3m 2022/23).

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 the company secretary for Welland Homes Ltd during 2023/24 and South Holland Homes does not have a formal company secretary, although the company secretarial duties were carried out.

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.

2023/24
£’000		 2022/23
£’000
Opening Capital Financing Requirement 81,592 77,131
Capital Investment

Property, Plant and Equipment		 20,664 10,107

Intangible Assets		 - 19

Revenue Expenditure Funded from Capital under Statute		 1,312 9,877

Long Term Investments – Welland Homes		 567 598

Long Term Debtor – Welland Homes		 1,011 1,045
Sources of finance
Capital receipts (2,461) (377)

Government grants and other contributions
(3,392)
(9,530)

Major Repairs Reserve		 (6,298) (3,799)

Sums set aside from revenue:
Direct revenue contributions (8,970) (3,342)
Minimum Revenue Provision (309) (137)
Closing Capital Financing Requirement 83,716 **81,592 **
Explanation of movements in year

Minimum Revenue Provision
Increase/(Decrease) in underlying need to borrow
(unsupported by government financial assistance)		 (309)
2,433		 (137)
4,598
Increase/(decrease) in Capital Financing Requirement 2,124 4,461

73

South Holland District Council Unaudited Financial Statements 2023/24

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:

31 March
2024		 31 March
2023
£’000 £’000
Not later than 1 year 4
3
11		 38
3
11

Later than 1 year and not later than 5 years

Later than 5 years
18 52

The expenditure charged to the Comprehensive Income and Expenditure Statement during the year in relation to these leases was:

2023/24 2022/23
£’000 £’000
Minimum lease payments 31 25
31 25

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:

31 March
2024
31 March
2023		 31 March
2024
31 March
2023		 31 March
2024
31 March
2023
£’000
£’000
Not later than 1 year 308 306

Later than 1 year and not later than 5 years		 689 632

Later than 5 years		 119 138
1,116 1,076

In addition, the Council received £119,325 as a charge for office space (£119,325 in 2022/23) from Public Sector Partnership Services Ltd in respect of the usage of office space only. No formal long term arrangement currently exists.

There are no contingent rents payable to/from the Council, both as lessee and lessor.

74

South Holland District Council Unaudited Financial Statements 2023/24

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 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.

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.

75

South Holland District Council Unaudited Financial Statements 2023/24

Local Government Pension
Scheme		 Local Government Pension
Scheme
2023/24 2022/23
£’000 £’000
Comprehensive Income and Expenditure Statement
Cost of Services:
Service cost comprising
Current service cost
Administration Costs
Past Service costs (including curtailments)
Financing and Investment Income and Expenditure
Net interest expense
Total Post-employment Benefits charged to the Surplus or Deficit
on the Provision of Services
Other Post-employment Benefits charged to the Comprehensive Income
and Expenditure Statement
Remeasurement of net defined benefit liability comprising:
Return on plan assets (excluding the amount included in the net
interest expense)
Other actuarial gains/(losses) on assets
Actuarial (gains) and losses arising on changes in demographic
assumptions
Actuarial (gains) and losses arising on changes in financial
assumptions
Other experience
Impact of asset ceiling
Total Remeasurements recognised in Other Comprehensive
Income and Expenditure
Total Post-employment Benefit charged to the Comprehensive
Income and Expenditure Statement
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
Actual amount charged against the General Fund Balance for
pensions in the year:
Employers’ contributions payable to scheme
Contributions in respect of unfunded benefits		 1,761
57
-
13		 3,804
51
-
700
1,831 4,555
(3,585)
-
(1,043)
(1,615)
187
9,306		 2,170
-
-
(38,983)
8,094
-
3,250 (28,719)
5,081 (24,164)
731
2,489
73		 (2,070)
2,407
78

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:

Local Government
Pension Scheme		 Local Government
Pension Scheme
2023/24 2022/23
£’000 £’000
Present value of the funded liabilities
Present value of the unfunded liabilities
Fair value of plan assets
Impact of asset ceiling
Net Liability arising from defined benefit obligation		 (69,810)
(599)
75,671
(9,306)		 (69,826)
(658)
68,959
-
(4,044) (1,525)

76

South Holland District Council Unaudited Financial Statements 2023/24

Reconciliation of the Movements in the Fair Value of Scheme (Plan) Assets

Local Government
Pension Scheme		 Local Government
Pension Scheme
2023/24 2022/23
£’000 £’000
Opening fair value scheme assets
Interest Income
Remeasurement gain/(loss)
The return on plan assets, excluding the amount
included in the net interest expense
Contributions from employer
Contributions from employees into the scheme
Contributions in respect of unfunded benefits
Administration Cost
Benefits paid
Closing fair value of scheme assets		 68,959
3,307
-
3,585
2,489
668
73
(57)
(3,353)		 68,818
1,797
-
(2,170)
2,407
598
78
(51)
(2,518)
75,671 68,959

Reconciliation of Present Value of Scheme Liabilities (Defined Benefit Obligation)

Local Government
Pension Scheme		 Local Government
Pension Scheme
2023/24 2022/23
£’000 £’000
Opening Balance at 1 April
Current Service Cost
Past Service Cost
Interest Cost
Contributions from scheme participants
Remeasurements (gains) and losses:
Actuarial (gains) and losses arising on changes in
demographic assumptions
Actuarial (gains) and losses arising from changes in
financial assumptions
Other experience
Benefits paid
Closing Balance at 31 March		 70,484
1,761
-
3,320
668
(1,043)
(1,615)
187
(3,353)		 96,992
3,804
-
2,497
598
-
(38,983)
8,094
(2,518)
70,409 70,484

77

South Holland District Council Unaudited Financial Statements 2023/24

Local Government Pension Scheme assets comprised:
2023/24 2022/23
Quoted
prices in
active
markets
£’000		 % of
Total
assets		 Quoted
prices in
active
markets
£’000		 % of
Total
assets
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
Private equity
Others
Hedge Fund
Infrastructure
Bonds
Commodities
Credit Diversified Income
Other Diversified Alternatives
Private Debt
Forward Currency Contracts		 2,270
6,054
31,781
9,081
-
-
-
-
-
3,784
-
-
-
-
-
7,567
-
-
-		 3%
8%
42%
12%
-
-
-
-
-
5%
-
-
-
-
-
10%
-
-
-		 2,067
10,344
27,584
6,206
-
690
-
690
-
4,138
-
-
-
-
-
3,448
-
-
-		 4%
15%
40%
9%
-
1%
-
1%
-
6%
-
-
-
-
-
5%
-
-
-
Total 60,537 80% 55,167 81%

78

South Holland District Council Unaudited Financial Statements 2023/24

2023/24 2022/23
Unquoted
prices in
active
markets
£’000		 % of
Total
assets		 Unquoted
prices in
active
markets
£’000		 % of
Total
assets
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
Private equity
Others
Hedge Fund
Infrastructure
Bonds
Commodities
Credit Diversified Income
Other Diversified Alternatives
Private Debt
Forward Currency Contracts		 -
-
-
-
-
-
-
-
-
1,513
5,297
4,540
3,027
-
-
-
-
757
-		 -
-
-
-
-
-
-
-
-
2%
7%
6%
4%
-
-
-
-
1%
-		 -
-
-
-
-
-
-
-
-
690
5,517
2,758
2,758
-
-
-
1,379
-		 -
-
-
-
-
-
-
-
-
1%
8%
4%
4%
-
-
-
2%
-
Total 15,134 20% 13,102 19%

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 liabilities have been estimated by Barnett Waddingham, an independent firm of actuaries, estimates for the Lincolnshire Pension Fund being based on the latest full valuation of the scheme as at 31 March 2022. The next actuarial valuation of the Fund will be carried out as at 31 March 2025.

79

South Holland District Council Unaudited Financial Statements 2023/24

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

Local Government
Pension Scheme		 Local Government
Pension Scheme
2023/24 2022/23
Mortality assumptions:
Longevity at 65 for current pensioners (years):
- Men
- Women
Longevity at 65 for future pensioners (years):
- Men
- Women
Rate of increase in salaries
Rate of increase in pensions
Rate for discounting scheme liabilities		 19.5
22.7
20.8
24.1
3.90%
2.90%
4.90%		 19.8
22.9
21.1
24.4
3.95%
2.95%
4.80%

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.

Impact on the Defined Benefit
Obligation in the Scheme		 Impact on the Defined Benefit
Obligation in the Scheme

Present Value of
Obligation
£’000
Projected Service
Cost
£’000
0.1% decrease in Discount Rate
0.1% increase in the Salary Increase Rate
0.1% increase in the Pension Increase Rate		 71,444
70,487
71,386		 1,762
1,704
1,762

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 2022. The employer’s contribution rate, over the period to 31 March 2024, has been stabilised.

Employer contributions payable to the scheme in 2024/25 are estimated to be £2.576m.

NOTE 37 – CONTINGENT LIABILITIES

At 31 March 2024 the Council identified no material contingent liabilities.

NOTE 38 – CONTINGENT ASSETS

At 31 March 2024 the Council has identified the following material contingent assets:

80

South Holland District Council Unaudited Financial Statements 2023/24

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 2024 are £496,000 (£496,000 at 31 March 2023).

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 financial risk management processes focus 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 Capital and 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 Asset Services. 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 2023/24 was approved by Council on 2 March 2023 and is available on the Council’s website.

81

South Holland District Council Unaudited Financial Statements 2023/24

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 following analysis summarises the Council’s maximum exposure to credit risk as at 31 March 2024. The table (composite defaults from Fitch & Moody’s and Standard & Poor’s) gives details of global corporate finance average cumulative default rates for the period to December 2023. Defaults shown are by long term rating category on investments out to one year, which were the most commonly held investments during the year.

Credit Risk Rating Gross Carrying
Amount		 Potential Credit
Risk
% £’000 £’000
‘AA’ rated counterparties 0.02 10,312 2
‘A’ rated counterparties 0.05 11,527 6
Total 32,046 8

The Council maintains strict credit criteria for investment counterparties. As a result of these high credit criteria, we have maintained historical default rates as a good indicator under these current conditions. No credit limits were exceeded during the reporting period and the Council does not expect any losses from nonperformance by any of its counterparties in relation to deposits.

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:

Amount at 31
March 2024		 Historical
experience of
default		 Historical
experience
adjusted for
market
conditions at
31 March
2024		 Estimated
maximum
exposure to
default and
uncollectability
at 31 March
2024		 Estimated
maximum
exposure at
31 March
2023
£’000 % % £’000 £’000
A B C (A x C)
Debtors 3,865 19.36 19.36 748 18

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

The Council does not generally allow credit for its customers, such that £440,851 of the £3.865m trade debtor balance is past its due date for payment. The past due but not impaired amount can be analysed by age as follows:

31 March
2024		 31 March
2023
£’000 £’000
Less than three months 12
22
Three to six months 14
81
Six months to one year 189
371

More than one year		 226
249
TOTAL 441
723

During the reporting period the Council held no collateral as security.

82

South Holland District Council Unaudited Financial Statements 2023/24

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:

31 March
2024		 31 March
2023
£’000 £’000
Less than one year 26 26

More than ten years		 67,456 67,456
67,482 67,482

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.

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:

83

South Holland District Council Unaudited Financial Statements 2023/24

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
Impact on Surplus or Deficit on the Provision of Services
Share of overall impact credited to the HRA		 94
94
38

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

Price Risk - The Council does not generally invest in equity share.

However, it does have a shareholding in Public Sector Partnership Services Ltd), a joint venture with East Lindsey District Council and Boston Borough Council. These shares have been elected/classified as Fair Value through Other Comprehensive Income, meaning that all movements in price will impact on gains and losses recognised in the Financial Instruments Revaluation Reserve.

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 – 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.

84

South Holland District Council Unaudited Financial Statements 2023/24

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 a RICS qualified valuer are shown below. They are not included in the Council’s Balance Sheet.

Ayscoughfee Hall and Gardens £3,424,500 last revalued as at 31 March 2024. Sir Halley Stewart Playing Field £180,000 last revalued as at 31 March 2024.

2023/24 2023/24 2022/23
Trust Fund Revenue Account Expenditure Income Net Expenditure Income Net
£’000 £’000 £’000 £’000 £’000 £’000
Ayscoughfee Hall and Gardens 405 (46) 359 469 (64) 405
Sir HalleyStewart PlayingField 32 (11) 21 35 (10) 25

NOTE 41 – GOING CONCERN

Introduction and Accounting and Audit Requirement

The Council is required to compile its Statement of Accounts in accordance with the Code of Practice for Local Authority Accounting as published by the Chartered Institute of Public Finance and Accountancy (CIPFA).

The provisions in the 2023/24 Code section 3.4 (Presentation of Financial Statements) on the going concern accounting requirements, reflect the economic and statutory environment in which local authorities operate. These provisions confirm that, as authorities cannot be created or dissolved without statutory prescription, it would not be appropriate for their financial statements to be prepared on anything other than a going concern basis.

To demonstrate compliance with the Code and provide our external auditors with the necessary audit evidence, the Council completes an annual going concern assessment. The assessment is contained within this report, and the following areas have been considered as part of the assessment:

a) Current Financial Position b) Medium Term Financial Plan Update

c) Balance Sheet d) Cash Flow

e) Governance Arrangements

f) Regulatory and Control Environment applicable to the Council as a local authority

Current Financial Position

General Fund

The Council underspent on the General Fund revenue budget in 2023/24 by £0.116m. As at 31 March 2024 the Council held a General Fund Balance of £2.078m and held Earmarked Reserves totalling £6.025m. The Earmarked Reserves balance has increased by £0.477m during the year. The adequacy of reserves and balances and the ongoing requirement for specified earmarked reserves, is reviewed on a regular basis.

Housing Revenue Account (HRA)

The financial performance in 2023/24 resulted in a net underspend of £0.701m on the HRA revenue budget. As at 31 March 2024 the Council held an HRA Balance of £15.395m. The level of adequate reserves and balances and the ongoing requirement for specified earmarked reserves, is reviewed on an annual basis.

85

South Holland District Council Unaudited Financial Statements 2023/24

The Section 151 Officer is satisfied that the Council’s 2023/24 financial outturn for both General Fund and HRA, does not present any material uncertainties regarding the Council’s ability to continue as a going concern.

Medium Term Financial Plan Update

The Council sets a five year Medium Term Financial Plan (MTFP) annually. An updated plan which included budget proposals for 2024/25 alongside financial plans for the following four years was considered by Council on 29 February 2024. The financial position and the operating environment of the Council is actively monitored throughout the year to ensure plans remains deliverable.

Balance Sheet

The Council’s net assets as at the 31 March 2024 amounted to £268.531m and Usable Reserves totalled £40.768m. We are satisfied that there are no material liabilities or underlying issues regarding the strength of the Council’s balance sheet which present any material uncertainties regarding the Council’s ability to continue as a going concern.

Cash Flow

The Council maintains short and long term cash flow projections, and manages its cash, investments and borrowing in line with the Council approved Treasury Management Strategy. As at the 31 March 2024 the Council has long term borrowing commitments of £67.456m, held £25.849m in short term investments and had £2.762m in Cash and Cash Equivalents. The Council has adequate financial resources to meet its immediate financial obligations. We are satisfied that there are no significant issues regarding the strength of the Council’s underlying cash flow which present any material uncertainties regarding the Council’s ability to continue as a going concern.

Governance Arrangements

The most recent and comprehensive assessment of the council’s governance arrangements is the Annual Governance Statement. The statement does not identify any significant issues with the council’s governance arrangements.

Regulatory and Control Environment

The Council operates within a highly legislated and controlled environment. The Council is required to set a balanced budget each year considering robustness of the budget estimates and adequacy of reserves. The legal framework, central government control, the role undertaken by external audit as well as the statutory requirement in some cases for compliance with best practice and guidance published by CIPFA and other relevant bodies are other important factors.

Material Uncertainties

The Council is aware that there is a requirement to consider any material uncertainties which would impact on the Councils ability to continue as a going concern.

We are satisfied that there are no material uncertainties which, under the Code of Practice on Local Authority Accounting framework, represent significant issues regarding the Council’s ability to continue as a going concern.

86

South Holland District Council Unaudited Financial Statements 2023/24

SUPPLEMENTARY FINANCIAL STATEMENTS

HOUSING REVENUE ACCOUNT (HRA) INCOME AND EXPENDITURE STATEMENT
2022/23 2023/24
£’000 £’000
3,772
5,271
119
5,017
483
82





















Expenditure
Repairs and maintenance
Supervision and management
Rents, rates, taxes and other charges
Depreciation of non-current assets (Note 6)
Revaluation of non-current assets
Debt management expenses
Total Expenditure
Income
Dwelling and non-dwelling rents
Charges for services & facilities
Contribution towards expenditure
Revaluation of non-current assets
Total Income
Net income of HRA Services as included in the whole
authority Comprehensive Income and Expenditure
Statement
HRA share of Corporate and Democratic Core
Net income for HRA Services
HRA Share of the operating income and expenditure
included in the whole authority Comprehensive Income
and Expenditure Statement
(Gain)/loss on sale of HRA non-current assets
Interest payable and similar charges
Movement in the allowance for bad debts
Interest and investment income
Net interest on the net defined benefit liability
Capital grants and contributions
Deficit for the year on HRA services		 4,136
5,377
80
5,514
37,212
82
14,744

(15,861)
(1,168)
(39)
-		 52,401
(16,827)
(1,266)
(19)
-
(17,068)
(2,324)
834		 (18,112)
(34,289)
575
(1,490)

(393)
2,347
51
(398)
178
(13)		 34,864
(399)
2,347
36
(896)
3
(2,154)
282 33,801

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

87

South Holland District Council Unaudited Financial Statements 2023/24

MOVEMENT ON THE HRA STATEMENT
2022/23 2023/24
£’000 £’000
24,463
(282)
(1,668)		 Balance on the HRA at the end of the previous reporting period
(Surplus)/Deficit for the year on the HRA Income and Expenditure
Statement
Adjustments between accounting basis and funding basis under
statute
Balance on the HRA at the end of the current reporting period		 22,513
(33,801)
26,683
22,513 15,395

Adjustments between accounting basis and funding basis under statute
2022/23 2023/24
£’000 £’000
(393)
21
488
(2,254)
(5,017)
(13)
5,017
483		 (Gain)/loss on sale of HRA non-current assets
Employee Benefits
HRA Share of contributions to or from the Pension Reserve
Capital expenditure financed from Revenue Balances
Transfers to the Major Repairs Reserve
Application of Capital Grants to Capital Adjustment Account
Funding of depreciation from Capital Adjustment Account
Reversal of Revaluation movement on HRA Property
Net additional amount required by statute to be debited or
(credited) to the HRA Balance for the year		 (1,657)
4
(173)
(8,212)
(5,514)
(1,749)
5,514
38,470
(1,668) 26,683

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

88

South Holland District Council Unaudited Financial Statements 2023/24

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 3,792 dwellings at 31 March 2024 (3,739 at 31 March 2023). The stock is analysed below by number of bedrooms. The Council has an equity share in 49 shared ownership properties, with the Council’s equity share being equivalent to 33.7 dwellings.

Analysis of Housing Stock at 31
March 2024		 1 Bed 2 Bed 3 Bed 3+ Bed Total
HRA Housing Stock
Houses
Bungalow
Flats
Shared Ownership
Total		 25
668
110
1		 358
993
153
29		 1,420
-
-
19		 16
-
-
-		 1,819
1,661
263
49
804 1,533 1,439 16 3,792

NOTE 3 – RENT ARREARS

Rent arrears at 31 March 2024 amounted to £787,000 (£753,000 in 2022/23) and are analysed as follows:

31 March
31 March		 31 March
31 March
2024
2023
£’000
£’000
Rent Arrears Due From
Residential - Current Tenants
- Former Tenants
Non Residential - Garages
Total		 366
409
12		 369
371
13
787 753
These arrears include all charges due from tenants: rents, service
charges and other charges.
Allowance for bad debts (492) (456)

89

South Holland District Council Unaudited Financial Statements 2023/24

NOTE 4 – ASSET VALUES

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

31 March 31 March
2024 2023
£’000 £’000
Property, Plant and Equipment
Council Dwellings
Other Land and Buildings
Infrastructure – Housing Sewerage
Vehicles, Plant and Equipment
Surplus Assets
Community Assets
Non-operational assets
Assets Under Construction
Intangible Non-Current Assets
Assets Held for Sale
Total		 264,046
428
362
481
18
46		 201,841
283
201
410
642
46
265,381
363
101
936		 203,423
170
227
881
266,781 204,701

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:

2023/24 2022/23
£’000 £’000
Vacant possession value 614,055 486,637

NOTE 6 – DEPRECIATION
2023/24 2022/23
£’000 £’000
Depreciation
Council dwellings
Other Land and Buildings
Infrastructure - Housing Sewerage
Vehicles, Plant & Equipment
Amortisation
Intangible Assets
Total		 5,099
4
122
120
4,673
4
88
121
5,345
126		 4,886
131
5,471 5,017

90

South Holland District Council Unaudited Financial Statements 2023/24

NOTE 7 – CAPITAL EXPENDITURE AND FINANCING
2023/24 2022/23
£’000 £’000
Expenditure
Improvements and enhancements to Council Dwellings
New Build – Council Dwellings
Improvements to wastewater treatments
Purchase of Units
Vehicles, Plant & Equipment
Information systems
Total Expenditure
Financing
Capital receipts
Major Repairs Reserve
Housing Revenue Account
Grants and Contributions
Total Financing		 7,404
-
283
8,576
94
190		 6,051
7
64
586
132
113
16,547 6,953
1,176
6,298
7,940
1,133		 227
3,799
2,254
673
16,547 6,953

NOTE 8 – CAPITAL RECEIPTS FROM DISPOSAL OF ASSETS

2023/24 2022/23
£’000 £’000
Sale of Council Houses under the Right to Buy Scheme
Repayment of RTB Discount
Shared Ownership Sales Proceeds
Total from Disposals		 1,036
-
619		 2,555
63
-
1,655 2,618

NOTE 9 – MAJOR REPAIRS RESERVE

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

2023/24 2022/23
£’000 £’000
Balance at 1 April
Transfers from the HRA
Depreciation
Funding set-aside for Capital Investment
Financing of Capital Investment
Balance at 31 March		 5,163
5,514
-
(6,298)		 3,944
5,017
-
(3,798)
4,379 5,163

91

South Holland District Council Unaudited Financial Statements 2023/24

COLLECTION FUND STATEMENT

2022/23 2023/24
Council
Tax		 Non-
Domestic
Rates		 Total Council
Tax		 Non-
Domestic
Rates		 Total
£’000 £’000 £’000 £’000 £’000 £’000
Income (61,730)
-
-
-
-		 (23,974)
-
-
-
(1,419)
(57,972)
-
-
-
-
-		 -
(22,308)
(4,400)
(3,521)
(880)
-		 (57,972) Council Tax receivable (Note 2) (61,730)

(22,308)
Non-Domestic Rates receivable (Note 3)
(23,974)
Contributions towards previous year's Collection Fund deficit
(4,400)
(3,521)
(880)
-		 Central Government -
-
-
(1,419)
South Holland District Council
Lincolnshire County Council

Transitional Protection Payments
(57,972)
-
6,821
42,096
8,121
684
-
37
-
225
44		 (31,109)
11,341
9,073
2,268
-
8
(384)
(672)
106
344
-
-
-
-		 (89,081)
11,341		 Total Income (61,730)
-
7,202
44,870
8,691
-
519
-
-
-
40
-
244
47		 (25,393)
12,119
9,695
2,424
-
-
(204)
96
106
420
586
732
146
-		 (87,123)
12,119
Expenditure

Precepts, demands and shares

Central Government
15,894 South Holland District Council 16,897
44,364 Lincolnshire County Council 47,294
8,121
Police and Crime Commissioner for Lincolnshire		 8,691
8 Transitional Protection Payments -

Impairment of debts/appeals
(300)
Increase/(decrease) in allowance for impairment		 315

(672)
Increase/(decrease) in provision for appeals (Note 4)		 96

106
Cost of Collection Allowance		 106
344
37
-
225
44		 Renewable Energy 420
626
732
390
47

Contributions towards previous year's Collection Fund surplus

South Holland District Council
Central Government
Lincolnshire County Council

Police and Crime Commissioner for Lincolnshire
58,028 22,084 80,112 Total Expenditure 61,613 26,120 87,733
56 (9,025) (8,969) (Surplus)/Deficit arising during year (117) 727 610
(437)
6,551
6,114
(Surplus)/Deficit at beginning of year
(381)		 (2,474) (2,855)
(381) (2,474) (2,855) (Surplus)/Deficit at end of year (Note 5) (498) (1,747) (2,245)

92

South Holland District Council Unaudited Financial Statements 2023/24

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:

Band
No. of
properties
on
Valuation
List
No. of
chargeable
dwellings
Ratio		 Band D
equivalent
dwellings
A (with Disabled Relief)
38
5/9
A
16,374
12,213
6/9
B
9,437
8,060
7/9
C
10,426
9,321
8/9
D
4,549
4,401
9/9
E
2,048
1,916
11/9
F
414
389
13/9
G
123
118
15/9
H
17
14
18/9
Band D Equivalents
Allowance for non-collection (1.34%)
District Tax Base		 21
8,142
6,269
8,285
4,401
2,342
562
197
28
30,247
(406)
29,841

The basic amount of council tax for a band D property including an average parish charge, £2,036.22 (2022/23 £1,940.56), 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 2023/24 there are two multipliers, the nondomestic rating multiplier of 51.2p (51.2p in 2022/23) and the small business non-domestic rating multiplier of 49.9p (49.9p in 2022/23).

93

South Holland District Council Unaudited Financial Statements 2023/24

The Council’s total Non-Domestic Rates Rateable Value at 31 March 2024 was £65.841m (31 March 2023 £61.352m).

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 2024.

Business Rate Appeals Business Rate Appeals
£’000 £’000
Balance at 1 April 2023
Amounts used in 2023/24
Additional provisions made in 2023/24
Unused amounts reversed in 2023/24
Balance at 31 March 2024		 (185)
389		 (548)
-
(548)
204
(344)

NOTE 5 – COLLECTION FUND DEFICIT/ (SURPLUS)

As at 31 March 2024, the net surplus on the Collection Fund is £2.246m (Net surplus £2.855m at 31 March 2023).

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 2023/24 is apportioned to South Holland (40%), Central Government (50%) and Lincolnshire County Council (10%).

The balance on the Collection Fund is allocated as follows:

2022/23 2022/23 2023/24 2023/24
Council
Tax
£’000		 Non-
Domestic
Rates
£’000		 Council
Tax
£’000		 Non-
Domestic
Rates
£’000
(1,237)
(990)
(247)		 Central Government
South Holland District Council
Lincolnshire County Council		 (873)
(699)
(175)
(45)
(281)		 (59)
(368)

(55)

Police and Crime Commissioner for Lincolnshire
(71)
(381) (2,474) (Surplus)/deficit (498) (1,747)

94

South Holland District Council Unaudited Financial Statements 2023/24

GROUP ACCOUNTS

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

GROUP COMPREHENSIVE INCOME AND EXPENDITURE STATEMENT

2022/23 2023/24
Gross
Expenditure		 Gross Net Gross
Expenditure		 Gross Net
Expenditure
Income Expenditure Income
£’000 £’000 £’000 £’000 £’000 £’000
2,029 (857) 1,172 General Fund Assets 1,790 (847) 943
16,256 (13,079) 3,177 Finance 15,508 (12,984) 2,524
7,938 (6,972) 966 Economic Growth - - -
1,146
(28)		 1,118 Governance 1,216 (105) 1,111
4,443 (3,025) 1,418 Wellbeing and Community Leadership 5,124 (3,569) 1,555
2,121 (756) 1,365 Leisure and Culture 2,363 (833) 1,530
2,443 (292) 2,151 Corporate 2,124 (408) 1,716
5,757
(800)		 4,957
Neighbourhoods		 6,149
(936)		 5,213
1,364 (1,504) (140)
Planning and Strategic Infrastructure		 3,368 (3,524) (156)
1,384 (844) 540 Regulatory 1,460 (696) 764
1,694 (1,028) 666
Strategic Growth and Development		 2,056 (1,776) 280
14,204
(18,163)		 (3,959)
Housing		 50,810
(18,477)		 32,333
60,779 (47,348) 13,431 Cost of Services 91,968 (44,155) 47,813
6,322 (2,768) 3,554 Other operating expenditure 7,352 (3,333) 4,019
5,416
(3,496)		 1,920
Financing and investment income and expenditure		 7,149
(6,600)		 549
6,291 (21,209) (14,918)
Taxation and non-specific grant income and expenditure		 6,483 (26,764) (20,281)
78,808 (74,821) 3,987 (Surplus)/Deficit on the Provision of Services 112,952 (80,852) 32,100
- - - Excess of fair value of net assets over the cost of
investments of associates		 - - -
(3,674) (3,674) Share of the (Surplus)/Deficit on the provision of services
by associates		 - 53 53
3 - 3 Tax expenses of associates and subsidiaries 4 - 0
78,811 (78,495) 316 Group (Surplus)/Deficit on the Provision of Services 112,956 (80,799) 32,157
(8,290) Surplus on revaluation of property, plant and equipment
assets		 (93,323)
(28,719) Remeasurements of the net defined benefit liability 3,250
(37,009) Other Comprehensive Income and Expenditure (90,073)
(36,693) Total Comprehensive Income and Expenditure (57,915)

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

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South Holland District Council Unaudited Financial Statements 2023/24

GROUP MOVEMENT IN RESERVES STATEMENT

2023/24 General Fund
Balance		 General Fund
Earmarked
Reserves		 Housing
Revenue
Account		 HRA Earmarked
Reserve		 Major Repairs
Reserve		 Capital Receipts
Reserve		 Capital Grants
Unapplied		 Total usable
Reserves		 Unusable
Reserves		 Total Authority
Reserves		 Authority's Share
of Reserves of
Subsidiaries		 Total Reserves
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Balance at 31 March 2023
Movement in Reserves
during 2023/24
Total Comprehensive
Income and Expenditure
Adjustments between
accounting basis & funding
basis under regulations
Adjustments between group
accounts and authority
accounts
Net (Increases)/Decreases
before transfers
Transfer to/from Earmarked
Reserves
Balance at 31 March 2024
carried forward		 2,078
2,270
(1,793)
-		 5,548
-
-
-		 22,513
(33,801)
26,683
-		 200
-
-
-		 5,163
-
(784)
-		 6,735
-
763
-		 3,040
-
2,153
-		 45,277
(31,531)
27,022
-		 164,483
89,452
(27,022)
4		 209,760
57,921
-
4		 1,194
(626)
-
617		 210,954
57,295
-
621
477
(477)		 -
477		 (7,118)
-		 -
-		 (784)
-		 763
-		 2,153
-		 (4,509)
-		 62,434
-		 57,925
-		 (9)
-		 57,916
-
2,078 6,025 15,395 200 4,379 7,498 5,193 40,768 226,916 267,685 1,185 268,870

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South Holland District Council Unaudited Financial Statements 2023/24

2022/23 General Fund
Balance		 General Fund
Earmarked
Reserves		 Housing
Revenue
Account		 HRA Earmarked
Reserve		 Major Repairs
Reserve		 Capital Receipts
Reserve		 Capital Grants
Unapplied		 Total usable
Reserves		 Unusable
Reserves		 Total Authority
Reserves		 Authority's Share
of Reserves of
Subsidiaries		 Total Reserves
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Balance at 31 March 2022
Movement in Reserves
during 2022/23
Total Comprehensive
Income and Expenditure
Adjustments between
accounting basis & funding
basis under regulations
Adjustments between group
accounts and authority
accounts
Net (Increases)/Decreases
before transfers
Transfer to/from Earmarked
Reserves
Transfer to/from Other
Reserves
Balance at 31 March 2023
carried forward		 2,078
(3,632)
(688)
-		 9,537
-
-
-		 24,464
(282)
(1,669)
-		 200
-
-
-		 3,944
-
1,219
-		 4,335
-
2,351
-		 4,152
-
(781)
-		 48,710
(3,914)
432
-		 128,045
36,932
(432)
(13)		 176,755
33,018
-
(13)		 (2,494)
3,598
-
90		 174,261
36,616
-
77
(4,320)
3,989
331		 -
(3,989)
-		 (1,951)
-		 -
-
-		 1,219
-
-		 2,351
-
49		 (781)
-
(331)		 (3,482)
-
49		 36,487
-
(49)		 33,005
-
-		 3,688
-
-		 36,693
-
-
2,078 5,548 22,513 200 5,163 6,735 3,040 45,277 164,483 209,760 1,194 210,954

A description of the nature and purpose of each of the usable reserves can be found in Note 9 on page 48. Unusable reserves can be found in Note 24 on pages 63-67. The accompanying notes form an integral part of the Financial Statements.

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South Holland District Council Unaudited Financial Statements 2023/24

GROUP BALANCE SHEET

31 March 31 March
2023 2024
£’000 £’000
231,920 Property, Plant and Equipment 300,234
113 Heritage Assets 98
12,615 Investment Property 13,360
279
203
347		 Intangible Assets
Long Term Debtors
Liabilities in Associates
Long Term Assets
Short Term Investments
Assets Held for Sale
Short Term Debtors
Cash and Cash Equivalents
Current Assets
Cash and Cash Equivalents
Short Term Borrowing
Short Term Creditors
Provisions
Current Liabilities
Long Term Borrowing
Other Long Term Liabilities
Long Term Provisions
Grants Receipts in Advance – Capital
Long Term Liabilities		 101
296
154
245,477
32,046
2,449
6,562
7,199		 314,243
25,849
935
8,105
3,445
48,256
-
(26)
(8,974)
(219)		 38,334
-
(26)
(7,854)
(138)
(9,219)
(67,456)
(5,501)
(407)
(196)		 (8,018)
(67,456)
(7,463)
(354)
(416)
(73,560) (75,689)
210,954 Net Assets 268,870
48,764 Usable Reserves 43,630
162,190 Unusable Reserves 225,240
210,954 Total Reserves 268,870

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

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South Holland District Council Unaudited Financial Statements 2023/24

GROUP CASH FLOW STATEMENT

2022/23 2022/23 2023/24 2023/24
£’000 £’000 £’000 £’000
3,920
(11,279)		 (3,987)
(7,359)		 Net surplus on the provision of services
Adjustments to net surplus or deficit on the
provision of services for non-cash movements
Adjustments for items included in the net
surplus or deficit on the provision of services
that are investing and financing activities
Net cash flows from Operating Activities
Investing Activities
Financing Activities
Net increase/(decrease) in cash and cash
equivalents
Cash and cash equivalents at the beginning of
the reporting period
Other movements		 47,115
(8,823)		 (32,100)
38,292
(11,346)
3,454
2,583		 6,192
(8,659)
(1,285)
(5,309)
12,517
(9)		 (3,752)
7,199
(2)
7,199 Cash and cash equivalents at the end of
the reporting period		 3,445

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

South Holland Homes and Welland Homes

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.

Public Sector Partnership Services Limited

PSPS Ltd was set up on 1 August 2010 by South Holland and East Lindsey District Councils, who transferred a number of their back office services to the company. On 1 April 2021, the Company gained an additional shareholder, Boston Borough Council. Each Council is required to incorporate the relevant proportion of PSPS Ltd’s financial position into the Group Accounts using the equity method. For South Holland District Council, the relevant proportion is 30%.

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.

1. 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.

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South Holland District Council Unaudited Financial Statements 2023/24

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

2. 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:

2022/23 2023/24
£’000 £’000
(554) Rental Income from investment property (732)
261
Direct operating expenses arising from investment property		 290
(53)
Net (gains)/losses from fair value adjustments		 883
(346) Net (gain)/loss 441

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.

2022/23 2023/24
£’000 £’000
10,692 Balance at start of the year 12,615
2,164
Additions resulting from acquisitions		 1,628
-
Transfers to/from Property, Plant and Equipment		 -
(241)
Net gains/(losses) from fair value adjustments		 (883)
12,715 Balance at end of the year 13,360

Fair Value Hierarchy

Details of the Group’s investment properties and information about the fair value hierarchy as at 31 March 2024 is as follows:

Fair Value
Level 2
2022/23		 Fair Value
Level 2
2022/23		 Fair Value
Level 2
2023/24
£’000 £’000
2,468 Commercial Industrial Units 2,255
10,147 Residential InvestmentProperty 11,105
12,615 Balance at end of the year 13,360

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.

3. GROUP CASH AND CASH EQUIVALENTS

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

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South Holland District Council Unaudited Financial Statements 2023/24

31 March
2023
£’000		 31 March
2024
£’000
1,063 Bank current accounts 1,402
6,136 Deposits with Banks on Instant Access 2,043
7,199
Cash and Cash Equivalents categorised as
Current Assets		 3,445
- Bank current accounts -
- Cash and Cash Equivalents categorised as
Current Liabilities		 -
7,199 Total Cash and Cash Equivalents 3,445

4. 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 2023/24 relating to the interests in the companies and joint venture or in the entities themselves that are not disclosed elsewhere in the Accounts.

4.1 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 strategy for South Holland Homes is to be reviewed and following any decisions taken, a business plan will be produced.

In 2023/24 the Council collected rent of £28,299 on behalf of the Company and charged management, support fees and other expenses of £9,274. There was an outstanding balance of £957 due to the Council at 31 March 2024 (£1,727 31 March 2023). There was an outstanding balance due to South Holland Homes from the Council of £2,177 (£2,595 31 March 2023).

Retained Surplus/Deficit - In 2023/24 the company made a profit after tax of £48,980 (2022/23 loss of £5,730). This is included in the Group Comprehensive Income and Expenditure Statement.

Assets and Liabilities – At 31 March 2024, South Holland Homes held fixed assets valued at £1,020,400 and current assets totalling £568,207. Liabilities consisted of short term creditors of £10,005 and long term creditors of £267,000 and a provision for a deferred tax liability of £99,511.

Commitments under capital contracts - At 31 March 2024 the company had no commitments under capital contracts (31 March 2023 nil).

Audit fees - Accountancy and audit fees were incurred at a cost of £3,600.

Inter-organisation Balances - Group accounting regulations require that inter-organisation balances be removed. The following balances were removed in 2023/24:

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South Holland District Council Unaudited Financial Statements 2023/24

Inter-organisation transactions - Group accounting regulations require that inter-organisation transactions be removed. The following transactions were removed in 2022/23:

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

4.2 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).

During 2021/22, Welland Homes did not purchase any further properties for rental. For the project purchased in 2020/21, the Council committed to providing financial support in the form of a £500,136 loan facility, of which £461,791 was drawn down during 2020/21 and £28,286.40 during 2021/22. In respect of loans, there was a balance of £3,738,318 outstanding to the Council as at 31 March 2022 (£3,710,031 at 31 March 2021).

During 2022/23, Welland Homes Purchased a further 7 properties for rental to private tenants at market value. The Council committed to providing financial support in the form of a £1,111,243 loan facility, of which £1,045,130 was drawn down during the year. As above, £28,286 was also drawn down in respect of the previous years loan facility. In respect of loans, there was a balance of £4,783,448 outstanding to the Council as at 31 March 2022 (£3,738,318 at 31 March 2020).

During 2023/24, Welland Homes Purchased a further 7 properties for rental to private tenants at market value. The Council committed to providing financial support in the form of a £1,052,266 loan facility, of which £952,142 was drawn down during the year. A further £59,207 was also drawn down in respect of the previous years loan facility. In respect of loans, there was a balance of £5,794,797 outstanding to the Council as at 31 March 2024 (£4,783,448 at 31 March 2023).

The Council charged £211,245 interest to Welland Homes during the year, a further £35,700 of expenses was recharged and capitalised. The Council also recharged expenses incurred on behalf of Welland Homes of £34,160 in the year.

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South Holland District Council Unaudited Financial Statements 2023/24

Retained Surplus/Deficit - In 2023/24 the company made a loss after tax of £624,003 (2022/23 £71,315 loss). This is included in the group Comprehensive Income and Expenditure Statement. The majority of the fall in profits was due to the losses on property revaluations £634,450 loss and charitable donations made on behalf of Welland Homes of £128,274 (2022/23 £114,960).

Assets and Liabilities - At 31 March 2024, Welland Homes held fixed assets valued at £10,084,917 and current assets totalling £142,367. Liabilities consisted of short-term creditors of £36,439, long term creditors of £5,794,797 and a provision for a deferred tax liability of £254,100.

Commitments under capital contracts - At 31 March 2024 the company had no commitments under capital contracts. (31 March 2023 nil).

Audit fees - Accountancy and audit fees were incurred at a cost of £4,290.

Inter-organisation Balances - Group accounting regulations require that inter-organisation balances be removed. The following balances were removed in 2023/24:

Creditors: Amounts falling due within one year – (nil) (2022/23 £38,821) Long term creditors – £5,794,797 (2022/23 £4,783,448)

Inter-organisation transactions- Group accounting regulations require that inter-organisation transactions be removed. The following transactions were removed in 2023/24:

Management and support fees and other expenses £28,930 (2022/23 £23,886) Loan Interest £211,245 (2022/23 £131,142)

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

4.3 Public Sector Partnership Services Limited

In 2022/23, the Company’s statement of comprehensive income shows a deficit for the year of £168k. Of this, the Council’s proportion of £50k is included in the Group Comprehensive Income and Expenditure Statement. At 31 March 2024, the net worth of PSPS Ltd was £987k. South Holland’s share of the net worth, £296k, has been incorporated into the Group Balance Sheet.

PSPS Ltd operates from three primary locations at the offices of South Holland District Council in Spalding, East Lindsey District Council in Horncastle and Boston Borough Council in Boston.

Voting Rights

At 31 March 2024, South Holland held 3 seats out of 8 on the Board of Directors, therefore holding 37.5% of the voting rights of the company. This therefore provides the Council with significant influence over PSPS Ltd.

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South Holland District Council Unaudited Financial Statements 2023/24

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.

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South Holland District Council Unaudited Financial Statements 2023/24

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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South Holland District Council Unaudited Financial Statements 2023/24

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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South Holland District Council Unaudited Financial Statements 2023/24

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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South Holland District Council Unaudited Financial Statements 2023/24

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.

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South Holland District Council Unaudited Financial Statements 2023/24

Treasury Management

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

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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South Holland District Council Unaudited Financial Statements 2023/24

ANNUAL GOVERNANCE STATEMENT For the Year Ended 31 March 2024

1. Scope of Responsibility

2. The Purpose of the Governance Framework

3 The Governance Framework

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South Holland District Council Unaudited Financial Statements 2023/24

Key Elements Description of Governance Mechanisms Assurance Received
Identifying and
communicating the
Authority’s vision of its
purpose and intended
outcomes for citizens
and service users		 •
The Sub-regional Strategy was approved at Council on the
22 November 2023. It sets out the vision and priorities for
the Partnership and for the Council. The Annual Delivery
Plan for the Partnership sets out the projects/activities that
will be taken forward to deliver on corporate priorities.
•
The Council is pro-active in reporting activity and outcomes
to the public through the local press and online.
•
The vast majority of Council business is undertaken in public
meetings		 •
The Performance Management Framework quarterly report
is reported through the Cabinet and the Performance
Monitoring Panel (PMP).
•
Portfolio Holders receive updates on key indicators and
finance matters, on a six weekly basis.
•
The Management Team receive the full quarterly reports to
check the position on each indicator. Quarterly
governance clinics (covering performance and risk) are
also in place.
•
The Strategic Risk Register and Internal Audit Plan support
the achievement of the Council’s priorities
•
The Medium Term Financial Strategy which is reported at
the March Council meeting not only sets the scene
financially, it also identifies any change to priorities and/or
new areas of focus.
Reviewingthe
Authority’svisionand
its implications for the
Authority’s governance
arrangements		 •
Challenge sessions are held annually with Senior
Managers to consider the service priorities and the
associated targets set in the performance framework.
•
Council approves the performance framework, following
discussion at Joint Strategy Board.		 •
Review of current performance against priorities reported
to Portfolio Holders.
•
Performance reporting is aligned to the Strategic Priorities
of the Partnership Business Case and Sub-regional
Strategy
•
Feedback from community/member/staff consultation on
Partnership and Council priorities
Translating the Vision
into objectives		 •
The Annual Delivery Plan identifies activity that helps to
deliver the priorities
•
The Medium Term Financial Strategy identifies risks and
opportunities to achieving the delivery of the priorities
•
The Risk Strategy and Risk Registers support the delivery
of priorities.		 •
The Annual Delivery Plan sets out the deliverables in the
year-ahead.
•
Service performance is monitored via Performance
Framework which reports into Cabinet and PMP quarterly.
•
MTFS recommended by the Cabinet and agreed by
Council
Measuring thequality
of servicefor users,
for ensuring they are
delivered in
accordance with the
Authority’s objectives
and for ensuring that
they represent the best		 •
A range of surveys are carried out each year, co-ordinated
through the Corporate Consultation programme
•
Monitoring of social networking
•
Quarterly Monitoring report contains both performance and
finance indicators and to show the overall health of the
organisation
•
Regular Portfolio Holder meetings held with key staff to
monitor performance, project activity and new areas of
work or policy.		 •
Performance Management Framework quarterly report,
reported through Cabinet and PMP; including finance data
and decisions as well as performance target detail.
•
Feedback from service level surveys
•
Portfolio Holder meetings timetabled for the full year.
•
Action plan from Peer Challenge and follow up visit in
2024.

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South Holland District Council Unaudited Financial Statements 2023/24

Key Elements Description of Governance Mechanisms Assurance Received
use of resources and
value for money		 •
Individual Services carry out their own customer
satisfaction surveys which feed into service improvement
•
Corporate Peer Challenge by the LGA in July 2023
Defining and
documenting theroles
and responsibilities
of the Executive, non-
Executive, scrutiny and
officer functions, with
clear delegation
arrangements and
protocols for effective
communication in
respect of the authority
and partnership
arrangements		 •
This is set out in the Council’s Constitution
•
The Constitution is updated where necessary. Significant
changes are reported to the Governance & Audit
Committee and then to Council		 •
Proposed changes/updates to the Constitution brought to
Council for consideration including responsibility for
functions.
•
The South & East Lincolnshire Councils Partnership has a
Memorandum of Agreement in place signed up to by all
three Councils.
•
Monitoring of partnering arrangements on an ongoing
basis take place through the Partnerships Portfolio; and
include reports to the Finance Portfolio Holder where
appropriate.
•
Stakeholder Board and Joint Strategy Board in place to
support the delivery of partnership activity between the
Councils.
Developing,
communicating and
embeddingcodes of
conduct, defining the
standards of behaviour
for members and staff		 •
This is set out in the Council Constitution
•
Expectations and requirements of staff behaviour are set
out in the Staff Handbook provided to all new staff
•
The Constitution sets out expectations and guidance on
Councillor/Officer working relationships
•
Training is provided to all members on the member code of
conduct arrangements (mandatory training)
•
Standards Panel monitors member standards
arrangements. This role is set out in the Constitution.
•
The Monitoring Officer provides ongoing support and
advice to Councillors as required and/or requested.
•
The Monitoring Officer can provide guidance to Town &
Parish Councils as requested
•
The Monitoring Officer considers, and may investigate,
complaints about SHDC Councillors, and Town and Parish
Councillors		 •
Standards Panel oversees functions relating to standards
of conduct of members.
•
A Standards Sub-Committee provides a Hearing Panel
function for dealing with any serious complaints
•
The Officer Code of Conduct is embedded in the Council
Constitution.
•
A Monitoring Officer is shared with the three Councils and
Deputy Monitoring Officers support Councillors as
required.
Reviewing the
effectiveness of the
Authority’sdecision-
making framework,
including delegation		 •
This is set out in the Constitution
•
Decision making arrangements meet legislative
requirements
•
Data sharing protocols are in place where necessary		 •
All members and officers are provided with guidance on
decision making arrangements with detailed delegations
set out in the Constitution; these are updated when
necessary and reported to Council.

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South Holland District Council Unaudited Financial Statements 2023/24

Key Elements Description of Governance Mechanisms Assurance Received
arrangements,
decision making in
partnerships and
robustness of data
quality		 •
Service Level Agreements with partners are in place and
monitored carefully (financial and performance), with
named officers and Portfolio responsibilities set out
•
Memorandum of Understanding documents are
produced/signed up to where appropriate.		 •
A full and comprehensive review of the Constitution is
taking place across the Partnership.
•
Contractual arrangements or partnering arrangements are
subject to GDPR reviews on an ongoing basis, particularly
where there are any changes.
Reviewing the
effectiveness of the
framework for
identifying and
managingrisksand
demonstrating clear
accountability		 •
Partnership Risk Register in place and monitored by SLT
and members
•
Strategic Risk register in place and monitored by
managers and members
•
Operational Risk Registers in place and monitored by the
Group Manager - Insights and Transformation and Senior
Officers
•
Operational staff able to escalate risks reporting to
Management Team.
•
Risk Strategy aligned across the Partnership Councils and
agreed at Full Council on 18thFebruary 2024.		 •
The Risk Strategy has been fully refreshed and brought in-
line with up to date methods of managing risk, and
approved through Full Council.
•
An audit of our Risk Management arrangements in 2023
resulted in Substantial Assurance and included some very
positive feedback.
•
Management Team update the Strategic Risk Register
quarterly and feed into quarterly reporting to members –
Cabinet and Governance & Audit Committee.
•
Operational Risks are identified
•
Service level monitoring
•
Risk is a standing item on the quarterly governance clinic
agenda
•
The committee report template includes risk management
implications.
Ensuring effective
counter-fraud and
anti-corruption
arrangements are
developed and
maintained		 •
A review of Fraud arrangements took place in 2023/4 and
the Council now subscribes to additional internal audit
support in this area.
•
Service Managers complete an on-line training programme
on fraud
•
The Council actively takes part in the National Fraud
Initiative
•
A counter fraud e-learning package is completed by all
staff
•
The Council is a member of the Lincolnshire Counter Fraud
Partnership which provides access to best practice,
guidance and support.		 •
Governance & Audit Committee and Staff training
•
Work with DWP arrangements
•
Reminders provided to staff to be aware of fraud risk.
•
Internal Audit have completed their counter fraud risk work
which is feeding into risk reporting for Q4 and beyond.

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South Holland District Council Unaudited Financial Statements 2023/24

Key Elements Description of Governance Mechanisms Assurance Received
Ensuring effective
management of
change and
transformation		 •
Reporting of significant changes to policy or provision are
reported through Portfolio and Cabinet (and Council where
appropriate)
•
Innovation, Transformation and Efficiency board in place
meets regularly
•
A Corporate Staff Development programme is in place
•
Workforce Strategy in place to ensure appropriate levels of
support and training are in place to enable staff to manage
change
•
Workforce Strategy Action plan in place and being
delivered.
•
Strong internal communication to keep staff and members
informed
•
Regular staff survey to help monitor impact of change, plus
quarterly pulse surveys of workforce
•
Project Management Framework in place
•
Members of Corporate Management Team have corporate
responsibility for projects that deliver change
•
Improved working relationship with PSPS that enables joint
working on change programmes within back office
services.
•
An Organisational Development function and
transformation resource is in place to support change
arrangements across the council – providing additional
support to managers;
•
There is a shared management team in place to support
the development of the Partnership between BBC, ELDC
and SHDC.		 •
Senior Leadership Team decisions
•
Portfolio/Cabinet reports and decisions
•
Cabinet reports considered by Scrutiny Committees prior
to decision making
•
Client/Contractor management meetings are held regularly
to discuss planned changes to service delivery and
priorities
•
The Client Officer and members of management team are
engaged with PSPS in the development of their
Transformation Programme
•
A Workforce Strategy was approved in 2020.
•
Joint scrutiny approach where there are common topics
across the partnership sub-region.
•
Stakeholder Board and Joint Strategy Board in place to
support the delivery of partnership activity between the
Councils.
Ensuring the
Authority’sfinancial
management
arrangements conform
with the governance
requirements of the
CIPFA Statement on
the Role of the Chief
Financial Officer in		 •
Full compliance with the CIPFA guidance:
−Role of Chief Financial Officer (CFO) is undertaken by
the Section 151 Officer with responsibilities set out in
the Constitution; key member of Senior Leadership
Team (SLT) and Corporate Management Team (CMT);
professionally qualified accountant with direct access to
the Chief Executive, Leader, Cabinet, Governance &
Audit Committee & the appointed auditors		 •
Adequacy of financial arrangements are overseen by Chief
Financial Officer, Portfolio Holder for Finance, Cabinet,
Governance & Audit Committee and Full Council.

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South Holland District Council Unaudited Financial Statements 2023/24

Key Elements Description of Governance Mechanisms Assurance Received
Local Government
_(2010)_and, where they
do not, explain why
and how they deliver
the same impact		 −The Finance team is fit for purpose and recently been
reviewed by CIPFA for adequacy.
The Medium Term Financial Strategy, annual budget process,
compliance with CIPFA codes and guidance on capital
finance, treasury management and management of reserves
Ensuring the
authority’sassurance
arrangements
conform with the
governance
requirements of the
CIPFA Statement on
the Role of the Head of
Internal Audit(2019)
and, where they do
not, explain why and
how they deliver the
same impact		 •
Full compliance with the CIPFA guidance:
−The Internal Audit Team/Head of Internal Audit provide
an objective and evidence based opinion on all aspects
of governance, risk management and internal control
−Internal Audit is delivered through Lincolnshire County
Council with a principal auditor allocated to South
Holland District Council. This has improved the
resilience of the audit team and enables access to
specialist audit which previously had to be
commissioned.
−The internal audit service is fit for purpose
−The Internal Audit Team and the Section 151 Officer are
able to meet separately with the Chair of the
Governance & Audit Committee should that be required
−Audit Team attend external training as necessary, and
access national network of governance support through
CIPFA
−The service has been assessed as conforming to the
UK Public Sector Internal Audit Standards, a Quality
Assurance Improvement Programme is maintained as
part of those standards. The next external assessment
is in 2026.
The overall themed areas of Governance, Risk Management,
Internal Control and Financial Control are all assessed as
performing adequately.		 •
The Corporate Management Team receives and considers
all Internal Audit reports
•
Senior Leadership Team reviews all low assurance
reports.
•
Low assurance reports are subject to follow up audits.
•
Governance & Audit Committee monitor audit
recommendations and receive updates where necessary
•
Audit recommendations are discussed at Governance
Clinic.
Ensuring effective
arrangements are in
place for the discharge
of the Monitoring
Officerfunction		 •
Set out in the Constitution
•
The Council shares a monitoring officer with East Lindsey
District Council and Boston Borough Council.		 •
Council through the Constitution
•
Deputy Monitoring Officers appointed
•
The Monitoring Officer sits on the Senior Leadership Team

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South Holland District Council Unaudited Financial Statements 2023/24

Key Elements Description of Governance Mechanisms Assurance Received
Ensuring effective
arrangements are in
place for the discharge
of thehead of paid
servicefunction		 •
Set out in the Constitution
•
The Council shares a Head of Paid Service with East
Lindsey District Council and Boston Borough Council.		 •
Council through the Constitution
Undertaking the core
functions of an Audit
Committee, as
identified in CIPFA’s
Audit Committees:
Practical Guidance for
Local Authorities		 •
The Terms of Reference which include the core functions
are set out in the Constitution
•
The Governance & Audit Committee have had training to
help them understand their role and responsibility
•
Training for a new Governance & Audit Committee and
substitution members is now identified as mandatory in the
Constitution.
•
The Chair and Vice Chair attend external training as
necessary		 •
Council through the Constitution
•
Governance & Audit Committee
Ensuringcompliance
with relevant laws and
regulations, internal
policies and
procedures, and that
expenditure is lawful		 •
Annual Internal Audit Plan work includes the review of
compliance in some of these areas
•
The Section 151 Officer and Monitoring Officer advise on
the legality of activity where appropriate, and Legal
Services Lincolnshire provides advice on legislation and
law
•
An Assurance Framework has been created to monitor
conformance with all Regulatory, Legislative, Policy and
Operational requirements		 •
Corporate Management Team, Governance & Audit
Committee (through IA reporting)
•
External Audit Plan
•
Annual Assurance Report to Senior Management Team
and Governance & Audit Committee following the creation
of the Assurance Framework
Whistleblowingand
for receiving and
investigating
complaintsfrom the
public		 •
A Whistleblowing policy in place
•
A clear Feedback Policy and procedure is in place
(including complaints)
•
A dedicated officer delivers the complaints process and
also trains and advises staff.		 •
Corporate Management Team
Identifying the
development needs
of members and
senior officersin
relation to their
strategic roles,
supported by
appropriate training		 •
Reserved Member Days are held for any training or
awareness sessions requested by members and/or
suggested by officers.
•
A very thorough member induction programme is delivered
following elections.
•
Training for named Committees is mandatory as set out in
the Constitution		 •
Member induction programme in May 2023
•
A corporate training system has been developed and rolled
out to staff. This will enable both individual staff and the
organisation to more easily monitor completed training,
especially where it is a requirement, and/or is linked to
professional standards.
•
The Corporate Training Programme budget continues to
be protected to ensure staff are able to access mandatory
and discretionary training and development.

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South Holland District Council Unaudited Financial Statements 2023/24

Key Elements Description of Governance Mechanisms Assurance Received
•
Training and development opportunities are circulated to
members on a regular basis alongside internal training
provision
•
Groups are encouraged to identify development priorities
through local and national networks
•
Staff survey undertaken quarterly.
•
Staff appraisal in place to set objectives with interim check-
ins mid-year.
•
An annual corporate training programme is developed and
implemented annually, linked to service requirements and
development needs		 •
Corporate and Group training opportunities can be
supported.
Establishing clear
channels of
communicationwith
all sections of the
community and other
stakeholders, ensuring
accountability and
encouraging open
consultation		 •
A range of consultations are carried out with service users
(co-ordinated through a central team)
•
Pro-active communication through the press, along with
communication through the SHDC website, Facebook and
twitter
•
Thorough public consultations take place where there is a
potentially significant change to a service and feedback is
reported through the decision making process e.g. sub-
regional strategy.
•
The Housing Service has in place a Tenant Engagement
Framework.		 •
Partnership Communications Team in place to support
messages to the public, including during emergency
situations.
•
Corporate Management Team
•
Cabinet for key pieces of consultation
•
Information and feedback provided via the council website
•
Communication Strategy approved in 2023/4
Enhancing the
accountability for
service delivery and
effectiveness ofother
public service
providers		 •
The Scrutiny Committees take an active role in overseeing
scrutiny of other public service providers
•
Significant changes to other public services communicated
to members through briefing or awareness sessions
•
Members are informed of any significant consultations
being held by key partner organisations (e.g. NHS)
•
There is now joint scrutiny of common topics for BBC,
ELDC and SHDC.		 •
Joint Scrutiny undertaken by members where there are
common topics across the partnership sub-region
•
Member and Senior Officer contribution to the Community
Safety framework.
•
Joint scrutiny framework in place.
Incorporating good
governance
arrangements in
respect of
partnershipsand
other joint working as
identified by the Audit		 •
Operational /strategic partnering arrangements are subject
to contractual agreements and performance monitoring
and reported on as part of service and budget monitoring
•
Portfolio Holders have responsibilities for receiving reports
on key partner arrangements
•
PSPS arrangements are reported to and overseen by the
Governance & Audit Committee if changes are required. A		 •
Governance & Audit Committee
•
Corporate Management Team
•
Portfolio Holder (Leader)
•
Full Council
•
The governance arrangements of the PSPS Board have
been reviewed following an external evaluation of the
contractual arrangements; and a series of reports have

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South Holland District Council Unaudited Financial Statements 2023/24

Key Elements Description of Governance Mechanisms Assurance Received
Commission’s report
on the governance of
partnerships and
reflecting these in the
Authority’s overall
governance
arrangements		 management Agreement and Service Level Agreements
are in place; with regular client/PSPS meetings held - one
senior manager is client lead across all 3 Councils for
consistency
•
PSPS provide briefing sessions to members on an annual
basis.
•
Joint working arrangements are subject to written
agreements approved by Management Team and portfolio
holders
•
Memorandum of Understanding documents are developed
and signed up to where appropriate.
•
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.		 been submitted to Full Council setting out the contractual
and governance arrangements.
•
Client/Partner meetings held regularly
•
2 Members of SHDC on PSPS Board
Information
Governance		 •
The authority has built up significant expertise in the area
of information governance.
•
Member training on GDPR is built into the post-election
Induction Programme
•
As part of service review and alignment considerations,
priority information processing requirements are reviewed,
aligned and considered against IAPP best practice.
•
The Data Protection Officer is experienced and qualified to
provide advice and is shared across the Partnership
Councils.		 •
Governance & Audit Committee
•
Management Team
•
Portfolio Holder
•
Performance Report
•
Data Protection Officer (DPO)
•
Data Sharing Agreements and contractual arrangements
are reviewed by the DPO on an ongoing basis to ensure
compliance with the UK GDPR. All new DSAs are
assessed by the DPO before being signed, and challenged
where necessary.

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South Holland District Council Unaudited Financial Statements 2023/24

4 Review of Effectiveness

The Council: The Council approves and keeps under regular review all the strategic policies which it reserves for its own
consideration, including
•
The Constitution,
•
The Sub-regional Strategy
•
The Medium Term Financial Plan and Capital Strategy,
•
The Licensing Authority Policy Statement,
•
The Asset Management Strategy
•
The plan and Strategy which comprise the Housing Investment Programme
•
The Treasury Management and Investment Strategies, and
•
The Gambling Policy Statement.
The Leader: Executive powers vest in the Leader and the Leader may determine to exercise any of the executive functions of the
Council personal or may arrange for the exercise of any of the Council’s executive functions by the Cabinet.
Cabinet 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:
•
Takes executive decisions,
•
Approves policies other than those reserved for Council, and
•
Recommends to Council policies and budgetary decisions.
Scrutiny The Overview and Scrutiny Committees may undertake any work relating to the four key principles of scrutiny as
follows:
•
Hold the Cabinet to Account (Call-In),
•
Performance Management,
•
Assist Policy Development and Review, and
•
Internal/External Scrutiny.
Audit and Governance Committee The Governance & Audit Committee:
•
Considers and approves audit plans,
•
Considers audit reports,
•
Comments on the work of audit in addressing the authority’s significant risks,
•
Satisfies itself that the control and governance arrangements have operated effectively by considering audit and
risk reports and undertaking ad hoc reviews,

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South Holland District Council Unaudited Financial Statements 2023/24

•
Annually self-assess themselves against best practice guidance to check their effectiveness,
•
Approves the Statements of Accounts,
•
Reviews treasury policy and performance.
Senior Leadership Team (SLT) SLT review corporate responsibility, direction and delivery of the sub-regional strategy , direction and delivery of
resources, horizon scanning and key controls. SLT has a monthly meeting focused specifically on governance and
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 several other groups
covering cross cutting themes and specific services.
Service Managers 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 Audit External audit is provided by KPMG. Following the annual audit they issue an Audit Results Report to the
Governance & 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 Internal Audit is provided by Assurance Lincolnshire. Regular reports are provided to the Governance & Audit
Committee and the lead auditor attends monthly LT meetings focused around Governance Issues.

5 Update to Significant Governance Issues 2022/23

Action Lead Status
Actions to address financial
capacity and capability		 AD – Governance
and S151 Officer		 Review undertaken supported by CIPFA, action plan in place and regularly being reviewed
at a strategic level. All quarterly reports achieved to expected timescales. Statement of
Accounts prepared in accordance with requirements.
Significant governance issues
monitored and progress regularly
reported		 AD – Governance Any governance issues will be reviewed and discussed at the monthly governance SLT
meetings.

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South Holland District Council Unaudited Financial Statements 2023/24

6 Internal Audit Report 2023/24

7.0 Summary

Action Lead Timescale
In-year Audit Committee update and review of AGS and action plan on Forward
Plan for 2024/25 (from internal audit annual report)		 AD - Governance Q1 2024/25
Monitoring of controls around procurement cards (following no assurance audit) DCX S151 Officer/CFO (PSPS) Follow up audit in 24/25 (Q2 –
Jul-Sep24)
Monitoring of controls around payroll reconciliation (following limited assurance
audit)		 DCX S151 Officer/CFO (PSPS) Follow up audit in 24/25 (Q3 –
Oct-Dec 24)
Align key elements of Council constitutions AD-Governance Q4 2024/25
Relaunch of the Member Development Group across the Partnership AD-Governance Q4 2024/25

Rob Barlow, Chief Executive DATE:

Cllr Nick Worth, Leader of the Council DATE:

121