Agenda Document Pack - Council - 23/10/2025
Renfrewshire Council · 23 October 2025
Back to Council — 23 October 2025 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
Page 1
Notice of Special Meeting and Agenda Council Date Time Venue Thursday, 23 October 2025 09:30 Council Chambers (Renfrewshire), Council Headquarters, Renfrewshire House, Cotton Street, Paisley, PA1 1AN MARK CONAGHAN Head of Corporate Governance Membership Provost Lorraine Cameron (Convener): Councillor Iain Nicolson (Leader): Councillor Cathy McEwan (Depute Convener): Councillor Jacqueline Cameron (Depute Leader): Councillor Jennifer Adam: Councillor Fiona Airlie-Nicolson: Councillor Alison Ann- Dowling: Councillor Stephen Burns: Councillor Michelle Campbell: Councillor Graeme Clark: Councillor Carolann Davidson: Councillor Eddie Devine: Councillor Andy Doig: Councillor Audrey Doig: Councillor Chris Gilmour: Councillor Edward Grady: Councillor Gillian Graham: Councillor Neill Graham: Councillor John Gray: Councillor Anne Hannigan: Councillor John Hood: Councillor Lisa-Marie Hughes: Councillor Robert Innes: Councillor Alec Leishman: Councillor Bruce MacFarlane: Councillor James MacLaren: Councillor Kenny MacLaren: Councillor Mags MacLaren: Councillor Colin McCulloch: Councillor Janis McDonald: Councillor David McGonigle: Councillor Jamie McGuire: Councillor Marie McGurk: Councillor Iain McMillan: Councillor John McNaughtan: Councillor Kevin Montgomery: Councillor Sam Mullin: Councillor Will Mylet: Councillor Jim Paterson: Councillor Emma Rodden: Councillor John Shaw: Councillor Ben Smith: Councillor Andy Steel: Further Information This is a meeting which is open to members of the public. A copy of the agenda and reports for this meeting will be available for inspection prior to the meeting at the Customer Service Centre, Renfrewshire House, Cotton Street, Paisley and online at http://renfrewshire.cmis.uk.com/renfrewshire/CouncilandBoards.aspx For further information, please email democratic-services@renfrewshire.gov.uk Page 1 of 286
Page 2
Hybrid Meeting Please note that this meeting is scheduled to be held in the Council Chambers. However, it is a hybrid meeting and arrangements have been made for members to join the meeting remotely should they wish. Members of the Press and Public Members of the press and public wishing to attend the meeting should report to the customer service centre where they will be met and directed to the meeting. Webcasting of Council Meeting This meeting will be filmed for live or subsequent broadcast via the Council’s internet site – at the start of the meeting the Provost will confirm if all or part of the meeting is being filmed. Generally the public seating areas will not be filmed. The cameras focus on the main participants. If you have any queries regarding this please contact Committee Services on democratic-services@renfrewshire.gov.uk. To find the webcast please navigate to: https://renfrewshire.public- i.tv/core/portal/home and select the meeting from the calendar. Page 2 of 286
Page 3
Apologies Apologies from members. Declarations of Interest and Transparency Statements Members are asked to declare an interest or make a transparency statement in any item(s) on the agenda and to provide a brief explanation of the nature of the interest or the transparency statement. 1 Azets Report to those charged with governance - Renfrewshire Council Group Annual Accounts 2024/25 Report by Director of Finance & Resources 5 - 112 2 Audited Annual Accounts 2024/25 - Renfrewshire Council Group Report by Director of Finance & Resources 113 - 238 3 Azets Report to those charged with governance - Coats Observatory Trust Annual Accounts 2024/25 Report by Director of Finance & Resources 239 - 270 4 Audited Financial Statements 2024/25 – Coats Observatory Trust Report by Director of Finance & Resources 271 - 286 Page 3 of 286
Page 4
Page 4 of 286
Page 5
1 ___________________________________________________________________ To: Council On: 23 October 2025 ___________________________________________________________________ Report by: Director of Finance and Resources ___________________________________________________________________ Heading: Azets Report to those charged with governance - Renfrewshire Council Group Annual Accounts 2024/25 ___________________________________________________________________ 1. Summary 1.1 Each year the Council’s appointed external auditors carry out an audit of the Council’s financial statements and provide an opinion as to whether those statements provide a true and fair view of the financial position of the Council, and its income and expenditure for the year; and also whether they have been prepared in accordance with the Local Government (Scotland) Act 1973. 1.2 In accordance with International Auditing Standards (ISA260), the external auditor, Azets, is obliged to report to those charged with the governance of the organisation matters which have arisen in the course of the audit. 1.3 The attached ISA260 report from Azets outlines their findings from the audit of the 2024/25 the Renfrewshire Council Group accounts. 1.4 Under the Local Authority Accounts (Scotland) Regulations 2014, the Council must meet to consider the Annual Accounts and aim to approve those accounts for signature no later than 30 September. 1.5 Azets officers will attend the Council meeting to present their reports. 1.6 There were five material audit adjustments made to the annual accounts over the course of the audit. The figures and details are listed on page 6 of the Annual Audit Report, and can be explained as follows: • Group pension asset restatement – the accounting requirement to cap pension assets applied to the Council’s accounts had not been applied to Item 1 Page 5 of 286
Page 6
2 one of the entities consolidated into the Group Accounts, and this affected both 2024/25 and 2023/24 figures; • Unfunded pension liabilities restatement – this followed a review by the Finance team of all unfunded pension benefits where the Council was the employer; • Holiday pay creditor restatement – the figure was uplifted by the increase in NI that came into effect on 1 April 2025; • Right Of Use assets restatement – the Clyde Valley Waste contract model had not been updated for the impact of IFRS16 by the lead authority in time for the publication of the Unaudited Accounts. 1.7 Other minor and presentational changes were also agreed, along with the disclosure changes outlined on page 78 of the Annual Audit Report. 1.8 One of these relates to a reclassification of assets from Council to the relevant Common Good Funds. Members may recall that six assets are listed on the published Register of Common Good Property as ‘Under Investigation’. A legal opinion (King’s Counsel) has now been received and the advice suggests that five assets should be classified under the Common Good, as follows: Property Common Good Fund Ferguslie Gardens Paisley Dunn Square Paisley Fountain Gardens Paisley Brodie Park (including Braids Road Play Park) Paisley Robertson Park Renfrew 1.9 Officers must now establish the property, financial and legal implications arising from this change, with a report back to Members at a future meeting. _________________________________________________________________________________ 2. Recommendations 2.1 Members are requested to consider the attached report from Azets. ___________________________________________________________________ Implications of the Report 1. Financial The 2024/25 Annual Accounts demonstrate that the Council continues to operate services within the resources available, and in line with the relevant legislation. Page 6 of 286
Page 7
3 2. HR & Organisational Development There are no direct implications arising from the recommendations in this report. 3. Community/Council Planning Community Plan Our Renfrewshire is thriving The Council’s revenue and capital spend ensures that its facilities are fit for purpose and safe for the community, to maximise accessibility. Our Renfrewshire is well Our Renfrewshire is fair Our Renfrewshire is safe Council Plan Reshaping our place, our economy and our future The Council’s revenue and capital spend ensures that its facilities are fit for purpose and safe for the community, to maximise accessibility. Building strong, safe and resilient communities Tackling inequality, ensuring opportunities for all Creating a sustainable Renfrewshire for all to enjoy Ongoing revenue and capital budget monitoring is a tool to enable good financial management so that the Council has resources now and in the future for continued service delivery. Working together to improve outcomes 4. Legal An audit opinion free from qualification demonstrates the Council’s compliance with the statutory accounting requirements set out in the Local Government (Scotland) Act 1973 and the Local Government in Scotland Act 2003. 5. Property/Assets The property / asset implications of the Common Good opinion will be established and reported back to a future Council meeting. 6. Information Technology There are no direct implications arising from the recommendations in this report. 7. Equality & Human Rights There are no direct implications arising from the recommendations in this report. 8. Health & Safety There are no direct implications arising from the recommendations in this report. Page 7 of 286
Page 8
4 9. Procurement There are no direct implications arising from the recommendations in this report. 10. Risk There are no direct implications arising from the recommendations in this report. 11. Privacy Impact There are no direct implications arising from the recommendations in this report. 12. Cosla Policy Position There are no direct implications arising from the recommendations in this report. 13. Children’s Rights There are no direct implications arising from the recommendations in this report. 14. Climate Change There are no direct implications arising from the recommendations in this report. ___________________________________________________________________ Author: Christine McCourt, Head of Finance and Procurement christine.mccourt@renfrewshire.gov.uk Page 8 of 286
Page 9
OFFICIAL Renfrewshire Council 2024/25 Annual Audit Report to the Council and the Controller of Audit October 2025 Page 9 of 286
Page 10
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 2 Table of Contents Key messages 3 Introduction 14 Annual accounts audit 16 Wider Scope 41 Best Value 62 Appendices 66 Page 10 of 286
Page 11
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 3 Key messages This report concludes our audit of Renfrewshire Council (the “Council”) for the year ended 31 March 2025. This section summarises the key findings and conclusions from our audit. Financial statements audit Under International Standards on Auditing (UK) and the Code of Audit Practice on Local Authority Accounting in the United Kingdom 2024/25, we are required to report whether, in our opinion: • The financial statements give a true and fair view of the Council’s financial position and income and expenditure for the period; and • The Council’s financial statements have been properly prepared in accordance with the Code of Practice on Local Authority Accounting in the UK 2024/25 (the 2024/25 Code), the requirements of the Local Government (Scotland) Act 1973, The Local Authority Accounts (Scotland) Regulations 2014, and the Local Government in Scotland Act 2003;. • The audited parts of the Remuneration Report have been properly prepared in accordance with The Local Authority Accounts (Scotland) Regulations 2014; • The information given in the Management Commentary is consistent with the financial statements and that report has been prepared in accordance with statutory guidance issued under the Local Government in Scotland Act 2003; and • The information given in the Annual Governance Statement is consistent with the financial statements and that report has been prepared in accordance with the Delivering Good Governance in Local Government: Framework (2016). Page 11 of 286
Page 12
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 4 Audit opinion The annual accounts are to be considered and approved by the full Council on 23 October 2025. We intend to report unqualified opinions within our independent auditor’s report. Our audit work is ongoing but there are currently no matters which would require modification of our audit report, subject to the outstanding matters detailed below: • Resolution of enquiries with management relating to: o Receipt of supporting evidence of contracts for payroll samples • Completion of outstanding testing where evidence was received during the drafting of this report: o Review of management responses in relation to audit queries for Common good fund (Paisley & Renfrew) o Review of accounting treatment for asset revaluation movements o Review of sample evidence relating to internal recharges o Receipt of pension fund assurance letter from Strathclyde Pension Fund for Renfrewshire Leisure Limited o Review of elimination of intercompany balances and transactions for group accounts consolidation • At the completion stages of the audit, we are required to undertake the following procedures: o Engagement manager and engagement lead review of the file and evidence therein o Receipt and review of the management representation letter o Review of the final amended statement of accounts and annual report o Response from management regarding subsequent events up to the date of the opinion Page 12 of 286
Page 13
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 5 Audit approach Our audit approach has been based on gaining a thorough understanding of the Council’s control environment and is risk based. This included: • an evaluation of the Council’s internal control environment, including the IT systems and controls; and • substantive testing on significant transactions and material account balances, including the procedures outlined in this report in relation to our key audit risks. On receipt of the unaudited accounts we have amended our audit approach as follows: • to rebut the significant risk of fraud in non-pay expenditure due to the fact that there is little incentive to manipulate expenditure recognition and opportunities to manipulate expenditure recognition are limited; • to increase risk of pay expenditure from low to medium as we identified a control deficiency whereby no year-end reconciliation was undertaken between the ledger and payroll system for all payrolls, the control weakness identified in the prior year remains open for the 2024/25 financial year. Key audit findings The Council has administrative processes in place to prepare the annual accounts and supporting working papers. We received the working papers to support the annual accounts in a timely manner. Subject to the completion of outstanding work noted above, we obtained adequate evidence in relation to the significant audit risks identified in our audit plan. Subject to the outstanding matters outlined on page 4-5 of this report. The accounting policies used to prepare the financial statements are considered appropriate. We are satisfied with the appropriateness of the accounting estimates and judgements used in the preparation of the financial statements. All material disclosures required by relevant legislation and applicable accounting standards have been made appropriately. Page 13 of 286
Page 14
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 6 Audit adjustments Five audit adjustments have been identified and made through the course of the audit. These were: • Restatement of 2023/24 group figure due to overstatement of pension asset of £31.788m and understatement of unfunded pension liability of £0.501m; • Overstatement of the group’s pension asset of £41.941m and understatement of unfunded pension liability of £0.440m; • Understatement of the Council’s unfunded pension liabilities of £0.158m; • Understatement of the holiday pay accrual of £0.425m; • Understatement of Right Of Use assets of £0.544m, lease liabilities of £0.815m, and CIES of £0.271m due to updated waste disposal service concession model. No unadjusted misstatements were identified within the financial statements. We also identified some disclosure and presentational adjustments during our audit, which have been reflected in the final set of financial statements. Details of the adjusted misstatements and disclosure changes are included at Appendix 2. Accounting systems and internal controls We have applied a risk-based methodology to the audit. This approach requires us to document, evaluate and assess the Council’s processes and internal controls relating to the financial reporting process. Our audit is not designed to test all internal controls or identify all areas of control weakness. However, where, as part of our testing, we identify any control weaknesses, we include these in this report. We consider the control environment within the Council and the Group to be satisfactory. One control weakness or deficiency was noted regarding no year- end reconciliation in place between the ledger and payroll systems to ensure that the figures in the financial statements reconcile to the payroll system. We report this at Appendix 3. Page 14 of 286
Page 15
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 7 Wider scope audit Wider scope themes Financial Management Financial management is concerned with financial capacity, sound budgetary processes and whether the control environment and internal controls are operating effectively. Auditor judgement No major weaknesses in arrangements but scope for improvement exists Like all local authorities, financial management continues to remain challenging in the current funding and post- pandemic environment. The Council reported a small General Fund overspend of approximately £0.1m for the year ending 31 March 2025, driven primarily by inflationary pressures and increased costs in various services, particularly within Environment, Housing and Infrastructure services. The Council's revised budget was £536.1m, with actual spend reaching £536.2m. To manage the overspend, the Council applied reserves from its Financial Sustainability Fund. Capital spending was within approved limits, however the Council delivered £119.7m or c.63% of its initially budgeted spend. This is attributed to inflation and contractor availability which affected the cost of projects and progress in delivering planned projects. We recommend that the capital budget setting process be revisited to ensure future estimates better reflect prevailing market conditions and delivery capacity. Thistle Primary School (formerly Dargavel) new build, and Park Mains High School extension were reported on budget and on track to be completed in summer 2027. The Housing Revenue Account reported a break even position and increased its reserves to £6.9m. Council tax collection increased slightly from 94.3% to 94.5% and only slightly below target of 95.0%. The Council maintains one of the lowest ratios of debt to revenue spend amongst local authorities in Scotland. This stood at 2.9% at the year end. Page 15 of 286
Page 16
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 8 The Council has adequate financial monitoring arrangements in place and our audit has not identified any significant weaknesses in financial controls. We do however note that the capital planning process could be improved. Financial Sustainability Financial sustainability looks forward to the medium and longer term to consider whether the Council is planning effectively to continue to deliver its services and the way in which they should be delivered. Auditor judgement Significant unmitigated risks affect achievement of corporate objectives The Council approved its 2025/26 revenue budget at its meeting in February 2025 together with 9.5% increase to council tax and 5% increases to services fees and charges. Medium term financial sustainability remains challenging as the Council is estimating a budget deficit of £49m for the forecast period from 2025/26 and 2030/31 prior to any decisions on council tax. If the council tax increases between 5 and 6.5% are approved within this period the gap reduces to £41m. Again, subject to Council approval half of it would be covered by savings and half by utilising financial sustainability reserve. The Council has reported cost savings of c£190 m since 2011 and further savings will be increasingly difficult to generated at this scale. The Council must now make difficult decisions on spending priorities if it is to remain financially sustainable. The application of reserves does not provide a long term financially sustainable solution to the Council’s current budget position and the Council is developing savings options for members approval to be considered. The Council has an ambitious £580m capital programme in place over the next five years for both housing and non- housing programmes. Since the pandemic, a number of factors have impacted the Council’s ability to fully deliver its capital programme within the originally planned timescales, including: the complexity of the works, the cost of materials, supply chain issues and availability of contractors. Given the scale of the Council’s ongoing Page 16 of 286
Page 17
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 9 capital programme delivery of this programme is likely to remain a continuing area of challenge. We note the detail of the Financial Outlook and Medium- Term Financial Plan improved during the year, with more detailed assumptions presented, together with proposed savings and more detail discussing potential remediate actions. Vision, Leadership and Governance Vision, Leadership and Governance is concerned with the effectiveness of scrutiny and governance arrangements, leadership and decision making, and transparent reporting of financial and performance information. Auditor judgement Effective and appropriate arrangements are in place The Council has a Corporate Plan which articulates the Council’s vision, priorities and strategic objectives. The Plan has five main strategic outcomes: Place, Economy, Fair, Green and Living our values. The Council has taken a number of steps to improve its governance and scrutiny arrangements over the year. It has completed a self-assessment against CIPFA guidance for local authority audit committees, benchmarked its governance against practice in other councils, established a cross-party working group to review governance and scrutiny arrangements and undertaken a review of risk management arrangements. The Council is undertaking a focused Leadership Development Programme aimed at senior management team. The Council has appropriate risk management arrangements in place. Page 17 of 286
Page 18
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 10 Use of Resources to Improve Outcomes Audited bodies need to make best use of their resources to meet stated outcomes and improvement objectives, through effective planning and working with strategic partners and communities. This includes demonstrating economy, efficiency, and effectiveness through the use of financial and other resources and reporting performance against outcomes. Auditor judgement No major weaknesses in arrangements but scope for improvement exists Like all local authorities, the Council has been impacted by a high inflation economy and a challenging local government funding settlement which presents challenges for financial and service sustainability. The Council has generally good arrangements for performance management and operates a layered performance management framework aligned to its strategic objectives. Performance reports are presented to policy boards and published on the Council’s website using a wide range of user friendly and easy to follow presentations, dashboards and narrative. Out of the 21 Council Plan indicators with targets, 5 exceeded the target, 3 narrowly missed the target and seven were behind the target. Compared to other councils Renfrewshire Council achieves strong performance in homeless duty, delayed discharges and conditions of its roads. Some improvements are required in sickness absence levels and customer satisfaction. Page 18 of 286
Page 19
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 11 Best Value Appointed auditors have a duty to be satisfied that local government bodies have made proper arrangements to secure Best Value. Best Value report The Controller of Audit prepared a Best Value report for Renfrewshire Council and was considered by the Accounts Commission on 15 May 2025. Following this, the Accounts Commission published their findings on 5 June 2025 and the report was presented to the Council on 26 June 2025. The key messages were that: Renfrewshire Council has a strong commitment to improving, including creating a positive culture, supporting its staff to develop as leaders, and focusing on engaging with residents. It must now talk to them about tough spending decisions that lie ahead. More detailed summary is included in the body of this report. Transformation Thematic review We have considered the effectiveness of council transformation planning and programme in accordance with the national thematic review programme set out by Audit Scotland. Our key findings and conclusions are reported in a separate report to the Council and summarised below. Transformation: how councils are redesigning and delivering more efficient services to achieve planned outcomes Auditor judgement We have concluded that the Council has appropriate transformation plans in place and is well-placed to deliver complex transformation and change programmes, having successfully delivered a range of transformation programmes over the past 15 years and related savings of c.£190m. The governance arrangements to monitor and scrutinise the transformation programmes are in place, supported by clear structures at Board and management level. The links exist between the Council’s corporate objectives and the transformation plans, however these could be presented more clearly to improve clarity and to help measure the impact. We noted the Council works effectively with partners, including other councils, third and private sector to achieve its transformation objectives. The Council also engages with vulnerable groups and considers impact of service delivery changes and improvements that could be made to support those communities. The Council is Page 19 of 286
Page 20
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 12 meeting requirements of working with partners to develop a clear approach to tackling digital exclusion. We recommended that monitoring arrangements should be supported by further clarity in reporting to Leadership Board on timelines, costs, benefits and measurement methods to support achieving the transformation objectives. Page 20 of 286
Page 21
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 13 Definition We use the following gradings to provide an overall assessment of the arrangements in place as they relate to the wider scope and best vale areas. The text provides a guide to the key criteria we use in the assessment, although not all of the criteria may exist in every case. There is a fundamental absence or failure of arrangements There is no evidence to support necessary improvement Substantial unmitigated risks affect achievement of corporate objectives. Arrangements are inadequate or ineffective Pace and depth of improvement is slow / needs to be extended further Significant unmitigated risks affect achievement of corporate objectives No major weaknesses in arrangements but scope for improvement exists Pace and depth of improvement are adequate Risks exist to the achievement of operational objectives Effective and appropriate arrangements are in place Pace and depth of improvement are effective Risks to the achievement of objectives are managed Page 21 of 286
Page 22
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 14 Introduction Scope of audit The annual external audit comprises the audit of the financial statements and the wider-scope and Best Value audit responsibilities set out in the Code of Audit Practice. Code of Audit Practice 2021 | Audit Scotland We outlined the scope of our audit in our External Audit Plan, which we presented to the Audit, Risk and Scrutiny Board at the outset of our audit. Responsibilities The Council is responsible for preparing its annual accounts, including financial statements which show a true and fair view, and for implementing appropriate internal control systems. The weaknesses or risks identified in this report are only those that have come to our attention during our normal audit work and may not be all that exist. Communication in this report of matters arising from the audit or of risks or weaknesses does not absolve management from its responsibility to address the issues raised and to maintain an adequate system of control. We do not accept any responsibility for any loss occasioned to any third party acting, or refraining from acting on, the basis of the content of this report, as this report was not prepared for, nor intended for, any other purpose. We would like to thank all management and staff for their co-operation and assistance during our audit. Auditor independence International Standards on Auditing in the UK (ISAs (UK)) require us to communicate on a timely basis all facts and matters that may have a bearing on our independence. We confirm that we complied with the Financial Reporting Council’s (FRC) Ethical Standard. In our professional judgement, we remained independent, and our objectivity has not been compromised in any way. We set out in Appendix 1 our assessment and confirmation of independence. Adding value All of our clients quite rightly demand of us a positive contribution to meeting their ever-changing business needs. We add value by being constructive and forward looking, by identifying areas of improvement and by recommending and encouraging Page 22 of 286
Page 23
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 15 good practice. In this way we aim to promote improved standards of governance, better management and decision making and more effective use of public money. Any comments you may have on the service we provide would be greatly appreciated. Comments can be reported directly to any member of your audit team. Openness and transparency This report will be published on Audit Scotland’s website www.audit-scotland.gov.uk. Page 23 of 286
Page 24
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 16 Annual accounts audit The Council’s annual accounts are the principal means of accounting for the stewardship of its resources and its performance in the use of those resources. Our audit opinion Opinion Basis for opinion Conclusions Financial statements We conduct our audit in accordance with applicable law and International Standards on Auditing. Our findings / conclusions to inform our opinion are set out in this section of our annual report. The draft financial statements. management commentary, remuneration report and corporate governance statement were considered by the Council and approved on 26 June 2025. Subject to the outstanding matters outlined on page 4-5 of this report, we anticipate issuing unqualified audit opinions. Pending completion of the work set out earlier in this report there are currently no matters which would require modification of our audit report. Page 24 of 286
Page 25
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 17 Opinion Basis for opinion Conclusions Going concern basis of accounting When assessing whether the going concern basis of accounting is appropriate, the anticipated provision of services is more relevant to the assessment than the continued existence of a particular public body. We assess whether there are plans to discontinue or privatise the Council’s functions. Our wider scope audit work considers the financial sustainability of the Council. Our understanding of the legislative framework and activities undertaken provides us with sufficient assurance that the Council and Group will have continued provision of service for at least 12 months from the signing date. Our audit opinion is therefore unqualified in this respect. Opinions prescribed by the Accounts Commission: Management Commentary Annual Governance Statement Audited parts of the Remuneration Report We plan and perform audit procedures to gain assurance that the management commentary, annual governance statement and the audited part of the remuneration report are prepared in accordance with: statutory guidance issued under the Local Government in Scotland Act 2003 (management Commentary); the Delivering Good Governance in Local Government: Framework (corporate governance statement); and the Local Authority Accounts (Scotland) We have concluded that: • the information given in the management commentary is consistent with the financial statements and has been prepared in accordance with relevant statutory guidance; • the information given in the annual governance statement is consistent with the financial statements and has been prepared in accordance with relevant statutory guidance; • the audited part of the Remuneration Report has been properly prepared in accordance with The Local Authority Accounts (Scotland) Regulations 2014. Page 25 of 286
Page 26
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 18 Opinion Basis for opinion Conclusions Regulations 2014 (remuneration report) Matters reported by exception We are required to report on whether: • adequate accounting records have not been kept; or • the financial statements and the audited part of the remuneration report are not in agreement with the accounting records; or • we have not received all the information and explanations we require for our audit. We have no matters to report. An overview of the scope of our audit The scope of our audit was detailed in our External Audit Plan, which was presented to the Audit, Risk and Scrutiny Board in March 2025. The Plan explained that we follow a risk-based approach to our audit that reflects our overall assessment of the relevant risks that apply to the Council. This ensures that our audit focuses on the areas of highest risk (the significant risk areas). Planning is a continuous process, and our audit plan is subject to review during the course of the audit to take account of developments that arise. We carried out a further review of our risk assessment following receipt of the unaudited annual report and accounts. Our risk assessment was then updated as follows: • to rebut the significant risk of fraud in non-pay expenditure due to the fact that there is little incentive to manipulate expenditure recognition and opportunities to manipulate expenditure recognition are limited; • to increase risk of pay expenditure to medium as we identified a control deficiency whereby no full year end reconciliation was undertaken between the ledger and all payroll systems, the control weakness identified in the prior year remains open for the 2024/25 financial year. Page 26 of 286
Page 27
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 19 In our audit, we test and examine information using sampling and other audit techniques, to the extent we consider necessary to provide a reasonable basis for us to draw conclusions. This includes: • An evaluation of the Council’s internal control environment, including the IT systems and controls; and • Substantive testing on significant transactions and material account balances, including procedures outlined in this report in relation to our key audit risks. Quality indicators We have applied a suite of quality indicators to assess the reliability of the Council’s financial reporting and response to the audit. Metric Grading (Mature / developing / significant improvement required) Commentary Quality and timeliness of draft financial statements Mature We received the unaudited financial statements of a good standard in line with our audit timetable. The unaudited financial statements were delivered on time with minor accuracy of casting and cross-references. We have identified minor presentational issues that management have agreed to update. Quality of working papers provided and adherence to timetable Developing We received the majority of the working papers of an adequate standard in line with our audit timetable. A smaller portion of the working papers, however, were provided after the agreed deadline. The audit was able to start on time as planned. However, some of the key working papers were difficult to follow, requiring additional clarification and follow Page 27 of 286
Page 28
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 20 Metric Grading (Mature / developing / significant improvement required) Commentary up, which caused a slight delay in the completion of the audit. In addition, responses to audit follow-up requests and inquiries were slower than agreed. Details of the recommendation is included at Appendix 3. Timing and quality of key accounting judgements Mature Pending completion of our work as set out on page 4-5, we did not identify any issues with the timing and quality of key accounting judgements. Access to finance team and other key personnel Mature/Developing We received full access to the finance team and other key personnel. Majority of audit queries and requests were responded to in a timely manner. The Finance team and other key personnel were available as agreed. A meeting with management’s experts (actuary and valuer) were arranged in advance and their engagement was helpful to the audit. However, some key personnel outside of the Finance team were not always able to promptly respond to requests and inquiries. Quality and timeliness of the Mature Pending completion of our work as set out on page 4-5, we have concluded that: Page 28 of 286
Page 29
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 21 Metric Grading (Mature / developing / significant improvement required) Commentary • audited parts of the Remuneration Report • Management Commentary • Annual Governance Statement As well as the quality and timeliness of supporting working papers for those statements. We did not identify any issues with quality and timeliness of the audited part of the Remuneration Report, Management Commentary and Annual Governance Statement. Volume and magnitude of identified errors Mature/Developing We identified five audit adjustments and no unadjusted misstatements in year. Significant risk areas and key audit matters Significant risks are defined by auditing standards as risks that, in the judgement of the auditor, require special audit consideration. In identifying risks, we consider the nature of the risk, the potential magnitude of misstatement, and its likelihood. Significant risks are those risks that have a higher risk of material misstatement. Audit procedures were designed to mitigate these risks. As required by the Code of Audit Practice and the planning guidance issued by Audit Scotland, we consider the significant risks for the audit that had the greatest effect on our audit strategy, the allocation of resources in the audit and directing the efforts of the audit team (the ‘Key Audit Matters’), as detailed in the tables below. Our audit procedures relating to these matters were designed in the context of our audit of the annual accounts as a whole, and not to express an opinion on individual accounts or disclosures. Our opinion on the annual accounts is not modified with respect to any of the risks described below. The table below summarises each significant risk. Detail behind each risk and the work undertaken is set out on the following pages. Page 29 of 286
Page 30
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 22 Council and the Group’s significant risks at the financial statement level These risks are considered to have a pervasive impact on the financial statements as a whole and potentially affect many assertions for classes of transaction, account balances and disclosures. Risk area Management override of controls (the Council and the Group) Significant risk description Management is in a unique position to perpetrate fraud because of their ability to manipulate accounting records and prepare fraudulent financial statements by overriding controls that otherwise appear to be operating effectively. Although the level of risk of management override of controls will vary from entity to entity, the risk is nevertheless present in all entities. Due to the unpredictable way in which such override could occur, there is a significant risk of material misstatement due to fraud in relation to estimates & significant judgements, manual journals and one-off transactions outside the ordinary course of the business. Risk of material misstatement: Very High How the scope of our audit responded to the significant risk Key judgement There is the potential for management to use their judgement to influence the financial statements as well as the potential to override controls for specific transactions. Audit procedures • Documented our understanding of the journals posting process and evaluated the design effectiveness of management controls over journals. • Analysed the journals listing and determining criteria for selecting high risk and / or unusual journals. • Tested high risk and / or unusual journals posted during the year and after the unaudited annual accounts stage back to supporting documentation Page 30 of 286
Page 31
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 23 Risk area Management override of controls (the Council and the Group) for appropriateness, corroboration and to ensure approval has been undertaken in line with the Council’s journals policy. • Gained an understanding of the accounting estimates and critical judgements made by management. We challenged assumptions and considered the reasonableness and indicators of bias which could result in material misstatement due to fraud. • Evaluated the rationale for any changes in accounting policies estimate or significant unusual transactions. Key observations We did not identify any material indication of management override of controls from our audit work. We did not identify any material areas of bias in key judgements made by management. Key judgements were consistent with prior years. We identified that large batch journals with over 50 lines require no system approval. We have therefore raised a control recommendation relation to the authorisation and review process of large journals. In addition, one payroll transaction from three payroll transactions selected for testing was prepared and authorised by the same individual. This payroll transaction was for net pay of £8.8m. While this represents a segregation of duties deficiency, our review did not identify any fraudulent or unusual transactions as a result of this control deficiency. We have therefore raised a control recommendation relation to secondary review to segregate the duties of those preparing and authorising such transactions. Details of the recommendations are outlined at Appendix 3. These control findings did not lead to a material error in our substantive testing of journals. Page 31 of 286
Page 32
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 24 Council and the Group’s significant risks at the assertion level for classes of transaction, account balances and disclosures Risk area Fraud in revenue recognition - Rebutted (The Council and the Group) Significant risk description Material misstatement due to fraudulent financial reporting relating to revenue recognition is a presumed risk in ISA 240 (The Auditor's Responsibilities Relating to Fraud in an Audit of Financial Statements). The presumption is that the Council could adopt accounting policies or recognise income in such a way as to lead to a material misstatement in the reported financial position. Given the financial pressures facing the public sector as a whole, there is an inherent fraud risk associated with the recording of income around the year end. However, we do not deem this risk to be present in all revenue streams of the Council due to a lack of incentive and opportunity to manipulate transactions. How the scope of our audit responded to the significant risk Key judgement We have rebutted this risk as we have assessed there is low incentive or opportunity to manipulate revenue streams of the Council and Group. We have performed standard audit procedures on these material transactions and balances. Key observations We have not identified any material issues in relation to this risk. Risk area Fraud in non-pay expenditure – Rebutted (The Council and the Group) Significant risk description We have also considered Practice Note 10, which comments that for certain public bodies, the risk of Page 32 of 286
Page 33
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 25 Risk area Fraud in non-pay expenditure – Rebutted (The Council and the Group) manipulating expenditure could exceed the risk of the manipulation of revenue. We have therefore also considered the risk of fraud in expenditure at the Council. Practice Note 10: audit of Financial Statements of Public Sector Bodies in the United Kingdom (PN10) states: “As most public bodies are net spending bodies, then the risk of material misstatement due to fraud related to expenditure may be greater than the risk of material misstatements due to fraud related to revenue recognition". How the scope of our audit responded to the significant risk Key judgement Having considered the risk factors set out in ISA 240 and the nature of the expenditure streams at the Council, we have determined that the risk of fraud arising from expenditure recognition can be rebutted, because: • There is little incentive to manipulate expenditure recognition; and • Opportunities to manipulate expenditure recognition are very limited. We have performed standard audit procedures on these material transactions and balances. Key observations At the planning stage of our audit we concluded that the risk of fraud in expenditure recognition was present over all non-pay expenditure streams. Upon receipt of the final annual report and accounts we were able to rebut the risk over expenditure We have not identified any material issues in relation to this risk. Page 33 of 286
Page 34
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 26 Key risk area Valuation of land and buildings and council dwellings -key accounting estimate (The Council and the Group) Significant risk description The Council held council dwellings with a net book value of £800.387 m and land and buildings with a net book value of £367.096 m at 31 March 2025. The Council revalues land and buildings and council dwellings on a five-year rolling basis. Council dwellings are valued by the internal valuer using the beacon method which aggregates the vacant possession value of each unit of housing stock based on the value of a beacon or sample property. A full revaluation exercise is completed every five years. In interim years the values of beacon properties are updated to reflect key factors including changes in rental prices. Other land and buildings are held at current value and revalued as part of the five-year rolling programme. In addition, indices are applied to all assets held at Depreciated Replacement Cost (DRC) to reflect market changes within the year. There is a significant degree of subjectivity in the measurement and valuation of land, buildings and council dwellings. This subjectivity and the material nature of the Council’s asset base represents an increased risk of misstatement in the financial statements. There is a significant degree of subjectivity in the measurement and valuation of property, plant and equipment. This subjectivity and the material nature of the Council’s asset base represents an increased risk of misstatement in the annual accounts. We undertook a pinpointing exercise to identify any specific assets or asset types where the in-year valuation movement fell outside of pinpointing thresholds. This resulted in 6 assets being identified at an elevated risk level for testing, with a further 5 items selected at random at a low risk level to obtain assurance over the remainder of the population. Inherent risk of material misstatement: Land & buildings and council dwellings (valuation): High Page 34 of 286
Page 35
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 27 Key risk area Valuation of land and buildings and council dwellings -key accounting estimate (The Council and the Group) How the scope of our audit responded to the significant risk Key judgements Councils are required to revalue property, plant and equipment with sufficient regularity to ensure that the carrying amount does not differ materially from the current value at 31 March. Audit procedures • Evaluated management processes and assumptions for the calculation of the estimates, the instructions issued to their valuation experts and the scope of their work. • Evaluated the competence, capabilities and objectivity of management’s valuation expert. • Considered the basis on which the valuations were carried out and challenging the key assumptions applied. • Evaluated the reasonableness of the valuation movements for assets revalued during the year, with reference to market data. We considered that an auditor’s expert was not required in order to carry out our work. • For unusual or unexpected valuation movements, tested the information used by the valuer to ensure it was complete and consistent with our understanding. • Ensured revaluations made during the year were input correctly into the Council’s fixed asset register and the accounting treatment within the financial statements was correct. • Evaluated the assumptions made by management for any assets not revalued during the year and how management are satisfied that these are not materially different to the current value. Page 35 of 286
Page 36
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 28 Key risk area Valuation of land and buildings and council dwellings -key accounting estimate (The Council and the Group) Key observations Pending completion of our work as set out on page 4-5: On the basis of the work carried out as at the date of writing this report, we have not identified any material issues in relation to this risk. Key risk area Valuation of defined benefit pension asset -key accounting estimate (The Council and the Group) Significant risk description An actuarial estimate of the net defined pension liability/asset is calculated on an annual basis under IAS 19 ‘Employee Benefits’, and on a triennial funding basis, by an independent firm of actuaries with specialist knowledge and experience. The triennial estimates are based on the most up to date membership data held by the pension fund and a roll forward approach is used in intervening years, as permitted by the Code. The calculations involve a number of key assumptions, such as discount rates and inflation and local factors such as mortality rates and expected pay rises. The estimates are highly sensitive to changes in these assumptions (and the calculation of any asset ceiling when determining the value of a pension asset (where relevant)). ISAs (UK) 500 and 540 require us to undertake audit procedures on the use of external experts (the actuary) and the methods, assumptions and source data underlying the estimates. This represents a key accounting estimate made by management within the financial statements due to the size of the values involves, the subjectivity of the measurement and the sensitive nature of the estimate to changes in key assumptions. We have therefore identified the valuation of the net pension liability/asset as a significant risk. Inherent risk of material misstatement: Pensions (valuation): High How the scope of our audit Key judgements A significant level of estimation is required in order to determine the valuation of pension assets/liabilities. Small Page 36 of 286
Page 37
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 29 Key risk area Valuation of defined benefit pension asset -key accounting estimate (The Council and the Group) responded to the significant risk changes in the key assumptions (including discount rates, inflation and mortality rates) can have a material impact on the pension asset/liability. Audit procedures • Evaluated managements processes for the calculation of the estimate, the instructions issued to management’s expert (the actuary) and the scope of their work. • Evaluated the competence, capabilities and objectivity of the actuary. • Assessed the controls in place to ensure that the data provided to the actuary by the Council and their pension fund was accurate and complete. • Evaluated the methods, assumptions and source data used by the actuary in their valuations, with the support of an auditors’ expert. • Evaluated whether any asset ceiling was appropriately considered (if applicable) when determining the value of any pension asset included in the financial statements. • Assessed the impact of any significant differences between the estimated gross asset valuations included in the financial statements and the Council’s share of the investment valuations in the audited pension fund accounts. • Ensured pension valuation movements for the year and related disclosures have been correctly reflected in the financial statements. Key observations Pending completion of our work as set out on page 4-5: We have identified the Council’s adjustment as follows: • Understatement of the Council’s unfunded pension liabilities of £0.158m We have identified material misstatements in relation to the Group’s consolidated pension asset and liability as follows: Page 37 of 286
Page 38
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 30 Key risk area Valuation of defined benefit pension asset -key accounting estimate (The Council and the Group) • Restatement of group comparative figure due to overstatement of pension asset of £31.788m and understatement of unfunded pension liability of £0.501m; • Overstatement of the group’s pension asset of £41.941m and understatement of unfunded pension liability of £0.440m; These adjustments arise from two technical accounting requirements under the CIPFA code. Asset ceiling: OneRen’s (Council’s subsidiary) pension position was reported as a net defined benefit asset. A net defined benefit asset can be only recognised to the asset ceiling cap which is the present value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan. Initially, the pension asset was recognised in full in the group accounts. Upon auditor’s inquiry and receiving the actuarial calculation of the OneRen’s asset ceiling the value of the pension asset was reduced to Nil for 2024/25 and for the prior year. Unfunded pension liability: On post-employment benefits, unfunded obligations not supported by plan assets must be fully recognised as liabilities in the balance sheet. We have also identified disclosure changes as a result of a revised actuarial report, which the Council commissioned after reviewing all entity arrangements for unfunded pension liabilities. The adjustments and disclosure changes are included at Appendix 2. Management has agreed to correct the misstatements and to make disclosure changes in the final audited accounts. Pending completion of our work as set out on page 4-5, there are no material adjustments and findings identified. Page 38 of 286
Page 39
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 31 Key risk area Valuation of defined benefit pension asset -key accounting estimate (The Council and the Group) Key risk area IFRS 16 implementation impact on PPP/PFI arrangements Significant risk description The adoption of IFRS 16 in local government accounts is mandatory from 2024/25. While the leases in place at the council are not material the new standard also applies to service concession arrangements (PFI, PPP, NPD). The council had over £107.5 m worth of assets financed through PPP/PFI arrangements at 31 March 2024. As a result of the implementation of IFRS 16, the accounting treatment for indexation linked payments in liabilities for service concession arrangements has changed. Local authorities must remeasure if there is a change in future lease payments resulting from a change in an index / rate used to determine those payments and ensure that the financial statements accurately reflect the impact of the revised IFRS 16 accounting arrangements. The implementation of the new requirements is complex and could have material impact on the council financial statements and therefore it increases the risk of misstatement. The implementation of the new requirements is complex and could have material impact on the council financial statements and therefore it increases the risk of misstatement. Inherent risk of material misstatement: PPP liability (valuation): High How the scope of our audit responded to the significant risk Key judgements A high level of estimation is required in order to determine the valuation of the PPP/PFI liabilities. The incorrect interpretation and implementation of the new accounting requirements will materially impact the valuation of PPP Liabilities. Page 39 of 286
Page 40
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 32 Key risk area IFRS 16 implementation impact on PPP/PFI arrangements Audit procedures • Obtained the evidence of management consideration of impact of IFRS 16 on its service concession arrangements and assessing work to identify all relevant contracts. • Examined management’s work on application of the new requirements, including indexation changes impact, liability remeasurement and reflecting changes in the financial statements in line with accounting framework requirements. • Reviewed the council’s accounting policies for the year ended 31 March 2025 to reflect the requirements of the new accounting standard. • Assessed the adequacy of disclosures regarding service concession arrangements. Key observations Our work in this area has not identified any material errors in relation to this risk. We identified a non-material adjustment as follows: • Understatement of Right Of Use Asset of £0.544m, lease liabilities of £0.815m, and CIES of £0.271m due to update in waste disposal service concession arrangement model made available to the Council after publication of the Unaudited Accounts. The adjustment is included at Appendix 2. Group and the Council materiality Materiality is an expression of the relative significance of a matter in the context of the financial statements as a whole. A matter is material if its omission or misstatement would reasonably influence the decisions of an addressee of the auditor’s report. The assessment of what is material is a matter of professional judgement and is affected by our assessment of the risk profile the Council and the needs of users. We review our assessment of materiality throughout the audit. Page 40 of 286
Page 41
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 33 Whilst our audit procedures are designed to identify misstatements which are material to our audit opinion, we also report to the Council and management any uncorrected misstatements of lower value errors to the extent that our audit identifies these. Our initial assessment of materiality for the group financial statements was £17.90m and the Council’s financial statements was £17.80m. On receipt of the unaudited financial statements, we reassessed materiality and updated it to £19.60m for the group financial statements and the Council’s financial statements was £19.50m. Based on our updated risk assessment we have determined that no specific materiality levels needed to be set for this audit. We consider that our updated assessment has remained appropriate throughout our audit. Page 41 of 286
Page 42
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 34 Group £m Council £m Overall materiality for the financial statements 19.600 19.500 Performance materiality 14.700 14.625 Trivial threshold 0.980 0.975 Materiality Our assessment is made with reference to the Group and Council’s gross expenditure. We consider this to be the principal consideration for the users of the annual accounts when assessing financial performance of the Council and its group. Our assessment of materiality equates to approximately 2% of gross expenditure as disclosed in the 2024/25 unaudited annual accounts. We perform audit procedures on all transactions, or groups of transactions, and balances that exceed our materiality levels set. We perform a greater level of testing on the areas deemed to be at significant risk of material misstatement. Performance materiality Performance materiality is the working level of materiality used throughout the audit. We use performance materiality to determine the nature, timing and extent of audit procedures carried out. Performance materiality is set at a value less than overall materiality for the financial statements as a whole to reduce to an appropriately low level the probability that the aggregate of the uncorrected and undetected misstatements exceed overall materiality. We have set performance materiality at 75% of overall materiality. Trivial misstatements Trivial misstatements are matters that are clearly inconsequential, whether taken individually or in aggregate and whether judged by any quantitative or qualitative criteria. We have set the trivial threshold as 5% of overall materiality. Page 42 of 286
Page 43
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 35 Common Good Funds materiality Our initial assessment of the Paisley Common Good Fund, Johnstone Common Good Fund, and Renfrew Common Good Fund materiality remained unchanged from the planning stage. We consider that our updated assessments have remained appropriate throughout our audit. Overall materiality (£) Performance materiality (£) Trivial threshold (£) Paisley £191,000 £143,000 £9,600 Johnstone £1,560 £1,170 £100 Renfrew £1,085,000 £814,000 £54,000 Overall materiality: our assessment is based on approximately 2% of net assets. We consider this benchmark to be the principal consideration for the users of the financial statements when assessing the performance of each fund. Performance materiality: Using our professional judgement we have calculated performance materiality at approximately 75% of overall materiality. Trivial threshold: 5% of overall materiality for the financial statements. Group audit As Group auditor, under ISA (UK) 600 (Revised September 2022) we are required to obtain sufficient appropriate audit evidence regarding the financial information of the components and the consolidation process to express an opinion on whether the group financial statements are prepared, in all material respects, in accordance with the applicable financial reporting framework. Component Nature and extent of further audit procedures Level of response required Renfrewshire Council Full Scope Full scope statutory audit, as set out in this audit plan. Page 43 of 286
Page 44
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 36 Renfrewshire Leisure Ltd (OneRen) Specific procedures Specific procedures in relation to pension asset/liability. Common Good Funds None No procedures planned. Paisley Museum Reimagined Ltd None No procedures planned. Park Lane Developments (Renfrewshire) LLP None No procedures planned. Coats Observatory Trust None No procedures planned. (*) Strathclyde Partnership for Transport Specific procedures Specific procedure planned in relation to investment value reflected in council’s accounts. Strathclyde Concessionary Travel Scheme Joint Committee None No procedures planned. Renfrewshire Valuation Joint Board None No procedures planned. (*) Renfrewshire Health and Social Care Integration Joint Board Specific procedures Specific procedures on investment in associates and JV. AMIDS Renfrewshire LLP None No procedures planned. (*) We perform separate statutory audits of these accounts which are not related to the group accounts audit. Definitions: Full Scope Design and perform further audit procedures on the entire financial information of the component, beyond procedures completed to review the consolidation. Specific Scope Design and perform further audit procedures on one or more classes of transactions, account balances or disclosures, beyond procedures completed to review the consolidation. Page 44 of 286
Page 45
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 37 None No further audit procedures required, beyond procedures completed to review the consolidation. We revisited our planning group scope assessment, following receipt of the unaudited accounts and our assessment remained the same. As part of our audit, we reviewed the consolidation entries made within the group accounts, confirmed those entries back to the financial statements of the group bodies and evaluated any significant adjustments made to align the accounting policies or the different year end dates. Overall, subject to completion of our work as set out on page 4-5 we conclude that the results of the group bodies had been appropriately consolidated into the Council’s audited group accounts. Group adjustments We identified adjustments and disclosure changes as a result of: • Restatement of group comparative figure due to overstatement of pension asset of £31.788m and understatement of unfunded pension liability of £0.501m; • Overstatement of the group’s pension asset of £41.941m and understatement of unfunded pension liability of £0.440m; These adjustments arise from two technical accounting requirements under the CIPFA code. Asset ceiling: OneRen’s pension position was reported as a net defined benefit asset. A net defined benefit asset can be only recognised to the asset ceiling cap which is the present value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan. Initially, the pension asset was recognised in full in the group accounts. Upon auditor’s inquiry and receiving the actuarial calculation of the OneRen’s asset ceiling the value of the pension asset was reduced to Nil for 2024/25 and for the prior year. Unfunded pension liability: On post-employment benefits, unfunded obligations not supported by plan assets must be fully recognised as liabilities in the balance sheet. We have also identified disclosure changes for the Council as a result of a revised actuarial report, which the Council commissioned after reviewing all entity arrangements for unfunded pension liabilities. We have included the adjustments and disclosure changes at Appendix 2 and Appendix 3. Page 45 of 286
Page 46
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 38 Other communications Other areas of focus Area of focus Audit findings and conclusion Significant matters on which there was disagreement with management There were no significant matters on which there was disagreement with management. Significant management judgements which required additional audit work and / or where there was disagreement over the judgement and / or where the judgement is significant enough that we are required to report it to those charged with governance before they consider their approval of the accounts There were no other significant management judgements which required additional audit work, where there was disagreement over the judgement or where the judgement is significant enough that requires reporting, in addition to those reflected in this report. Prior year adjustments identified There was one prior year adjustment identified. • Restatement of group comparative figure due to overstatement of other pension asset of £31.788m and understatement of pension liability of £0.440m We have included the adjustments and disclosure changes at Appendix 2 and Appendix 3. Concerns identified in the following: • Consultation by management with other accountants on accounting or auditing matters • Matters significant to the oversight of the financial reporting process • Adjustments / transactions identified as having been made to meet an agreed system position / target No concerns were identified in relation to these areas. Page 46 of 286
Page 47
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 39 Accounting policies The accounting policies used in preparing the financial statements are unchanged from the previous year with the exception of adoption of IFRS16. Our work included a review of the adequacy of disclosures in the financial statements and consideration of the appropriateness of the accounting policies adopted by the Council. The accounting policies, which are disclosed in the financial statements, are in line with the CIPFA LASAAC Code of Audit Practice on Local Authority Accounting in the UK (the ‘CIPFA Code’) 2024/25 and are considered appropriate. Presentation and disclosures There are no significant financial statements disclosures that we consider should be brought to your attention. All the disclosures required by relevant legislation and applicable accounting standards have been made appropriately. Key judgements and estimates As part of the planning stages of the audit we identified all accounting estimates made by management and determined which of those are key to the overall financial statements. Consideration was given to asset valuations, impairment, depreciation and amortisation rates, provisions for legal obligations pension liabilities, and doubtful debts, IFRS 16 implementation and accruals. Other than asset valuations, IFRS 16 implementation, and pension liabilities we have not determined the accounting estimates to be significant. See the section above on “Significant risks at the assertion level for classes of transaction, account balances and disclosures” for detailed findings in relation to key accounting estimates. We reviewed the key estimates and judgements that management made in respect to the identified key accounting estimates for indication of bias and assessed whether the judgements used by management are reasonable. Overall, we concluded that those key accounting estimates were balanced and appropriate. Fraud and suspected fraud We have previously discussed the risk of fraud with management and the Audit, Risk and Scrutiny Board. Internal Audit is providing regular updates to the Council on any internal fraud related investigations. We have not been made aware of any additional incidents in the period nor have any incidents come to our attention as a result of our audit testing. Our work as auditor is not intended to identify any instances of fraud of a non- material nature and should not be relied upon for this purpose. Page 47 of 286
Page 48
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 40 Non-compliance with laws and regulations As part of our standard audit testing, we have reviewed the laws and regulations impacting the Council. There are no indications from this work of any significant incidences of non-compliance or material breaches of laws and regulations. The Local Authority Accounts (Scotland) Regulations 2014 As part of our audit we reviewed the Council’s compliance with the Local Authority Accounts (Scotland) Regulations 2014, in particular with respect to regulations 8 to 10 as they relate to the annual accounts. Overall, we concluded that appropriate arrangements were in place to comply with these Regulations. Written representations We requested written representations from management, and these are to be approved at the same time as the financial statements are approved by the Audit, Risk and Scrutiny Board, signed by the director of finance and resources, and will be provided to us before we complete our audit and issue our auditor’s report. Related parties We are not aware of any related party transactions which have not been disclosed. Confirmations from third parties We are awaiting receipt of the pension fund assurance letter in relation to OneRen from the auditor of the Strathclyde Pension Fund. Page 48 of 286
Page 49
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 41 Wider Scope Financial management Our detailed findings on the Council’s financial management arrangements are set out below. Financial performance The Council reported a small General Fund underspend of £0.1m at 31 March 2025. The revised budget is £536.1m while the actual outturn was £536.2m. Additional spend was incurred due to inflationary pressures during the year offset by additional income from the higher bank interest rates on investments. The Council used its Financial Sustainability Fund (reserves) as planned to cover shortfalls in the year end position and to achieve break-even and used £4.3 m of the earmarked reserves of which £2.3 m was for recurring spend and £2 m was for non- recurring spend. The statutory reserves were at £84m at the year end, a net decrease of £6.9m and in relation to the capital investment programme and school ICT. The unallocated reserves remained at a level just above £10m as per the council’s policy, however we note that the levels of expenditure have been increasing over the years resulting in the unallocated reserve to drop to just below 2% of the total spend. Capital spending of £28.1m for housing and £91.6 m for non-housing projects was managed within the overall expenditure control limits approved by Council. Planned spend was impacted by inflationary pressures and the availability of contractors. The 2024/25 capital plan has been adjusted accordingly and in effect in both categories of spend the Council delivered c.63% of the initial planned budgets (£119.7m of £189m). In-year council tax collection performance for 2024/25 was 94.5% (94.3% in 2023/24), and slightly below its target for the year of 95.0%. However, actual Council tax revenues performed above expectation, returning an over recovery of £0.2m compared to budget due to more prior year arrears being collected. Revenue performance against budget Staff costs for the year was £383.1m and is the largest expenditure item in the accounts representing 38% of total spend. In 2024/25 a national pay settlement of 3.6% was agreed for local government workers and the Scottish Government provided £2.6m of additional funding to the Council to cover part of this cost. The General Fund year end position included £3.8m overspend in Adult Services (£0.8m overspend in 2023/24) which was mainly due to inflationary cost pressures. Page 49 of 286
Page 50
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 42 This decreased the reserves of the Renfrewshire Integration Joint Board (IJB) operating these services and therefore had no impact on the Council’s reserves. The Miscellaneous services underspend of £2.9m resulted mainly from an over- recovery of investment interest income, due to interest rates being higher than anticipated. The overspend of £2.4m in Environment, Housing and Infrastructure services is connected to continued inflationary and cost pressures experienced by the service over the last few years. Exhibit 1 Performance against budget Department Revised budget £m Actual £m Variance £m Chief Executive’s Service 28.3 28.3 - Children’s Services 256.9 257.7 (0.8) Environment, Housing and Infrastructure 68.2 70.7 (2.4) Finance and Resources 47.7 47.5 0.2 Miscellaneous Services 28.1 25.2 2.9 Adult Services 106.8 106.8 - Total Expenditure 536.1 536.2 (0.1) Revenue support grant 338.4 338.4 - Council tax income 97.5 97.7 0.2 Non domestic rates income 107.5 107.5 - Total income and funding 543.4 543.6 0.2 Net expenditure/(income) (7.3) (7.4) 0.1 Source: Renfrewshire council unaudited accounts 2024/25 Housing revenue account (HRA) The Housing Revenue Account (HRA) broke even at year-end and its reserves increased to £6.9m (£6.2m in 2023/24). The remaining reserve level is considered a prudent amount to mitigate the impact of any unforeseen risks and provide a buffer against forecast and inflationary pressures. Capital expenditure Page 50 of 286
Page 51
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 43 Non-Housing Capital Budget Performance In 2024/25, non-housing capital expenditure was £91.6 m against the initial budget of £147.8m therefore the actual spend represented 62% of the budget, prior to any rephasing and delays. The Council attributes the underspend was to inflationary pressures and the availability of contractors. The Council’s useable capital receipts reserve increased slightly to £8.2m. From this, £2.8m was utilised to support current year investment, leaving a balance of £5.5m that has been committed to support the ongoing investment programme in future years. The expenditure stayed within the Council’s approved limits. Housing Capital Budget Performance Housing capital expenditure for 2024/25 was £28.1m against the initial budget of £41.2m. This represents 69% utilisation of the initial budget. The Council attributes the underspend was to inflationary pressures and the availability of contractors. The actual levels of the initial budgets utilisation were below 70% in relation to initial budgets for both housing and non-housing spend. In January 2025 the Council still estimated the outturn on non-housing capital budget at £130m which was significantly above the actual outturn of £91.6m at 31 March 2025.This suggests that the Council may benefit from refining its budget preparation approach to support the development of more accurate and realistic estimates, alongside continued enhancement of in-year monitoring processes. This in the context of long term capital planning which assumes an ambitious capital investment of almost £580m over 5 year period. Dargavel Primary School and Park Mains High School progress The schools were subject to a Controller of Audit s102 report and a follow up report over the last two years and an interim update to the Council in May 2025 on the Council’s approach to community engagement and culture change. The purpose of the narrative below is to update on the progress of the schools’ capital projects. Capital and revenue costs The gross capital cost of building a new primary school has remained as last reported and expected to be c.£82 m, with c.£18 m of contribution expected from the developer, reducing to net capital cost of £64m. The gross cost is allocated as follows: • £45 m for new Dargavel Primary School (renamed to Thistle Primary School) • £37 m for the Park Mains High School extension. The Council plans to borrow only for the Park Mains High School extension, and to fund the build of the new Dargavel Primary School from the investment capital fund (reserves). This fund has had reserves at £86m and is held by the Council to support Page 51 of 286
Page 52
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 44 the Council’s capital investment programme and to support the Council manage its long-term debt position. We previously reported on net running costs associated with operating the new and expanded schools and totalling to net of c£1.6 m. When the £1.2m of the additional borrowing interest cost is added that comes to a total of £2.8m. These costs are early estimates and will likely start to be impacting the budget when the school is built and full pupil roll is achieved, which is expected over the next 5-10 years. It is currently estimated that the Council will require to budget for increased teaching staffing costs of £0.2-0.3m in 2026/27; increasing incrementally in the following years (more significantly in 2027/28 when the Thistle Primary School opens) up to the total additional net cost estimate of £2.8m over a sustained period and into the next decade. Projects progress Progress on both schools’ projects is reported to the Education and Children’s Services Policy Board as part of the regular Learning Estate Programme update. Thistle Primary School build is at a technical design stage and has the planning permission granted with an intention of a contract recommendation for the first major phase of the construction contract to be submitted to the relevant Board in September 2025. This would allow start of the construction works towards the end of 2025. The project remains on track to complete in summer 2027. Park Mains High School extension progressed with its design process and the next steps are to add necessary technical detail to finalise it. The major planning application has been also submitted with an expectation that the application will be made to a relevant Board later in the year. The final contractor award is planned for early 2026. The project remains on track to complete in summer 2027. Treasury management The Council actively manages treasury risks to minimise its exposure to financial market volatility and protect funding for services. It follows CIPFA’s Code of Treasury Management and has policies covering credit, liquidity, and market risks. The Council approves a Treasury Management Strategy that outlines how to manage risks related to financial instruments, including an Investment Strategy that prioritises security and liquidity over yield, in line with Scottish Government guidance. The strategy aims to balance risk with returns or costs. The strategy for 2024/25 was approved by Council on 29 February 2024. Based on the Council’s planned programme of investments and interest rate forecasts for the year, the Council’s borrowing strategy was to firstly use internal cash balances to finance the Capital Investment Programme. This approach was prudent as borrowing rates remained high throughout the year. Page 52 of 286
Page 53
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 45 Overall, the Council’s total external borrowings decreased by £2.5m. The Council has one of the lowest debt to revenue spend ratios in Scotland. The ratio at the end of 2023/24 was 3.1%, falling to 2.9% at the end of 2024/25. The most recent national benchmark data available confirms the average in Scotland at the end of 2023/24 was 5.8%. Short term investments held by the Council decreased from £67.7m to £17.6m and the movement related mainly to the Council exiting from any deposits with other local authorities during the year. The decrease in investments is attributable to several factors, including higher spending in the capital programme and Non-Domestic Rates refunds following the retrospective revaluation of some accounts. The council achieved a better rate of return on their investments when compared to the benchmark due to several fixed-term deposits at a higher rate of interest which continued beyond the bank rate interest rate reductions. Systems of internal control We have evaluated the Council’s key financial systems and internal financial controls to ensure internal controls are operating effectively to safeguard public assets. We did not identify any significant weaknesses in the Council’s accounting and internal control systems during our audit. Prevention and detection of fraud and irregularity The Council is responsible for establishing arrangements for the prevention and detection of fraud, error and irregularities, bribery and corruption. We have reviewed the arrangements and concluded that there are appropriate arrangements for the prevention and detection of fraud, error and irregularities. National fraud initiative The National Fraud Initiative (NFI) is a counter-fraud exercise co-ordinated by Audit Scotland working together with a range of Scottish public bodies to identify fraud and error. The National Fraud Initiative (NFI) is a counter-fraud exercise co-ordinated by Audit Scotland working together with a range of Scottish public bodies to identify fraud and error. The most recent NFI exercise commenced in 2024, with matches received for investigation in early 2025. The Council engages well with the NFI exercise, and we have concluded that its arrangements with respect to NFI are satisfactory. The Council uploaded all relevant data for the 2024 NFI exercise by the timescale of 31 October 2024. The Council risk assessed the matches and is progressing with investigations. Page 53 of 286
Page 54
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 46 Financial sustainability Significant audit risk Our audit plan identified a significant risk in relation to financial sustainability under our wider scope responsibilities. We continue to recognise it as a significant risk and so is the Council as this as one of its highest risks in the corporate risk register. Financial sustainability The Council considers its medium-term financial planning through its Financial Outlook and Medium-Term Financial Plan on a regular basis. In its latest report presented to the full Council the expected cumulative budget gap prior to any decisions on council tax would be £49m over the period between 2025/26 and 2030/31. The Council voted an increase of the council tax of 9.5% in March 2025 and increases of 5% for fees and charges which helped to reduce the gap for 2025/26. Assuming 5% to 6.5% council tax increases in that period the funding gap reduces to £41m and would require the Council to achieve savings of c.£20m and use the financial sustainability reserve of c£20m to achieve break even. This is the target level of savings planned for the next three years, but the Council anticipates that further savings will be required in order to reduce reliance on reserves. The Council has a Financial Sustainability reserve of £21.2m which it plans to utilise over the coming years. Various commitments to utilise this reserve and a reduction in employer pensions contributions of further £12m will grow that reserve to an estimated £31m the following year. The pension contributions increase from 6.5% to 17.5% from April 2026 and no further savings are expected from this source. The Council maintains a policy to hold a minimum of £10m of unallocated reserves (just over 2% of net expenditure) for unplanned or emergency purposes. This has dropped below 2% due to the increasing annual spend, with the absolute reserve value being constant over years. The Council reviewed its budget planning assumptions to reflect the financial challenges impacting on the external environment in which the Council operates. The revised budget allocated for 2025/26 in February 2025 by the Scottish Government provided funding of £461.8m for the Council, an increase of £16.9m (3.8%) on the previous year allocation of £444.9m. The Council estimates that after adjusting for new responsibilities, areas of growing responsibility and other conditional aspects of the settlement, this provides a like-for-like comparison to 2024/25 where the Council’s underlying core grant has increased by £9.9m (2.3%). The Council highlights the fact that there is a timing disconnect between its ability to develop and deliver recurring savings to match the spend pressures which are Page 54 of 286
Page 55
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 47 Financial sustainability emerging, resulting in a growing recurring financial gap. There is an increasing risk that the Council will require to utilise reserves over the medium term to achieve financial balance. In addition to the funding and council tax increase, other planning assumptions included pay and contractual inflation cost pressures. The continuing and uncertain impact of cost pressures on the Council’s finances and ability to deliver services in a sustainable manner remains an ongoing challenge and risk. The medium-term financial challenge and financial gap is regularly considered by the Council, and a further £7m of savings has been incorporated into the 2025/26 draft budget. This does still leave a gap over the medium term, which poses an increasing risk to the Council’s delivery of services. Our detailed findings on the Council’s arrangements for achieving long term financial sustainability are set out below. 2025/26 revenue budget The Council approved its 2025/26 revenue budget at a meeting in February 2025. The Council voted a council tax increase of 9.5%, and an inflationary increase of 5% to services fees and charges. The budget was updated as of May 2025 for the final Scottish Government allocation and the above decisions. The Council estimates a total spend of £592.6m and a break even position achieved by reserves utilisation of £0.5m. The projected outturn at June 2024/25 is a deficit of £1.9m against its total budget of £579.7m. The main items driving the deficit are Education and Children’s Services with £1m overspend and Finance, Resources & Customer Services overspend of £0.7m, both associated with inflationary pressures. What is excluded from the above position is the Adult Services deficit of £5.9m as this is managed by a separate body (Renfrewshire IJB). There are a number of financial risk areas that provide a level of uncertainty as to the final outturn: • Employers’ national insurance contributions increased from April 2025 from 13.8% to 15% translating into additional cost of £6m for the Council, for which the additional Scottish Government funding is expected to cover part of it i.e. £4.7m. • The Council’s settlement figure includes a number of adjustments for new spending burdens, responsibilities, and conditional funding totalling £20.5m, linked primarily to the pass-through of funding to the Integration Joint Board; and Page 55 of 286
Page 56
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 48 the baselining of funding for the 2024/25 pay award and increases to teachers’ pension contributions. • The Scottish Government also announced a Public Sector Pay Policy for the medium term period 2025/26 to 2027/28. This indicates a 9% pay increase covering this period, with flexibility for employers to configure three-year proposals within this range. The budget assumed a 3% pay increase which the Council has assessed as affordable. The actual pay award agreed for local government workers (excluding teachers) was 4%. The teachers’ pay award is still to be determined. Despite current lower levels of inflation, pay expectations are significantly above these levels (initial claims received average 6.5%), and will therefore still present a testing environment in which to reach agreement. • Given the very significant financial challenges and risks facing the Council over the medium term, and in line with historic practice, general non-pay inflation is not provided for in the 2025/26 budget. Medium term financial plan The medium-term financial challenge and financial gap has been considered by the Council numerous times as the budget gap poses an increasing risk to the Council’s delivery of services over the medium-term. The Council will potentially move into a position of using its reserves in the medium term to cover budget gaps but recognises this is not sustainable. In the short term the 9.5% increase in council tax for 2025/26 helped to close the budget gap, but further years will require either continuing increases, savings or other income generation. The current medium-term forecast is as follows: Exhibit 2 Medium term financial plan Item 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 £m £m £m £m £m £m Opening budget gap 9.3 (2.6) 7.7 16.8 26.0 34.4 New pressures 58.3 26.5 32.6 38.6 47.5 54.7 Savings (8.3) (1.4) (1.4) (1.5) (1.6) (1.7) Increase in SG revenue grant (41.9) (9.3) (5.8) (4.0) (4.0) (4.0) Budget gap prior to 8.0 15.8 25.4 33.1 41.9 49.0 Page 56 of 286
Page 57
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 49 council tax decisions CT increase (10.6) (8.0) (8.6) (7.1) (7.5) (8.0) Remaining budget gap (2.6) 7.7 16.8 26.0 34.4 41.0 Source: Financial Outlook and Medium-Term Financial Plan at September 2025 It is clear from the above forecast that the Council will have to face difficult choices to address this gap, however these will essentially be restricted to three main themes: reduce planned spend ; generate savings to offset the forecast increase in cost; or increase income. For context, to close the gap completely by increasing council tax would require a 13.5% increase in 2026/27 (each 1% increase in council tax generates c£1.1m). The most likely solution will be a combination of each of these. The Council is aware that there would also be a short-term option of utilising reserve balances to temporarily close the gap, however the underlying financial gap would remain to be addressed on a recurring basis. Key assumptions The most recent medium-term plan contains a good level of detail and is based on a number of assumptions and uncertainties, including: • The Scottish Government revenue support grant is likely to incorporate only very moderate increases over the next few years, giving no assurance that the local government settlement in future years will reflect a sufficient degree of increase to address core budget pressures. • The current and forecast challenging financial position of Renfrewshire IJB, and consequent potential impact on the Council financial position is an increasing concern. • Assumed moderate growth in revenue settlement over the medium term, with additional slight improvement anticipated based on the relative population growth of Renfrewshire. For context, the 2024 mid-year estimate for population in Renfrewshire was published in late August and shows Renfrewshire’s population has increased again and now stands at 189,170, an increase of 2,020 (1.1%) on 2023 and above the national rate of 0.7%. This is seen as a positive factor by the Council as the area attracts new people, supporting economy, but on the other hand can create other challenges for the ageing population, schools and local services. • The most recent local government pay settlement for non-teaching staff agreed was 4% in 2025/26 and 3.5% in 2026/27. The pay settlement for teachers is currently to be agreed for 2025/26 and while assumed at 3% it might be that it will be agreed in line with 4% already agreed for non-teaching staff. The pay is the Page 57 of 286
Page 58
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 50 largest element of Council cost, so small movements will impact the total cost (1% increase in total pay equals to almost c£3.8m increase in cost). • The Council is facing further uncertainty and pressures on a few areas which will depend on future confirmation: reduced class contact time for teachers (potential cost of £3-4m per year), lifecycle maintenance and net zero will likely increase the cost, and school transport cost has increased significantly in the recent years indicating further increases possible. • The IJB most recently reported a 2024/25 forecast year-end overspend position of £6.2m, which is expected to be funded from IJB reserve balances. The total gap for the year is expected to be at £33m, and is partly to be covered by savings, additional SG contribution leaving a final gap of £10m to be covered by utilisation of the existing reserves. This will however leave the IJB reserves depleted, and Renfrewshire IJB will seek additional funds in the coming years from NHS Greater Glasgow & Clyde and Renfrewshire Council. The detail of the assumptions used in preparation of the medium term financial plan is presented below: Exhibit 3 Core medium term plan assumptions Assumption 2026/27 % 2027/28 % 2028/29 % 2029/30 % 2030/31 % Pay award 3.5 3.0 2.5 2.5 2.5 Non-pay inflation 0 0 0 0 0 Contract inflation 3.0 2.0 2.0 2.0 2.0 Revenue grant 1.2 1.2 1.0 1.0 0 Council tax (rate) 6.5 6.5 5.0 5.0 5.0 Council tax (base) 1.2 0.9 0.9 0.8 0.8 Source: Financial Outlook and Medium-Term Financial Plan September 2025 Scottish Government indicated it is working on its financial forecasts going beyond one year estimates and to be published together with the 2026/27 Scottish budget. This would help councils in Scotland with their medium-term planning and introduce an element of certainty into budget forecasts. Cost improvement plans Page 58 of 286
Page 59
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 51 As a part of its transformation programmes the Council has achieved cumulative savings of £190m since 2011/12. However, in each successive year it is increasingly difficult to continue to generate savings at this scale. From an average saving of £19.5m per annum in the period from 2011/12 to 2014/15, the average saving over 2022/23 to 2025/26 is £8.5m. Renfrewshire Council previously agreed an £8m departmental savings target each year for three years from 2025/26. This scale of recurring savings is necessary to ensure that the Council returns to a position of recurring financial balance over the medium term. The planned savings as well as the full-year impact of increased income from interest on cash balances, and legacy Right for Renfrewshire and Financial Sustainability workstreams, will provide £7.046 m of recurring support to the 2025/26 revenue budget position. For the next three years 2026/27- 2028/29 the Council is proposing setting savings targets at £6.3m, £8.3m and £5.2m respectively and linked to transformation programmes. Assuming approval of those targets by the Council and delivery of those savings It is likely that the remaining funding gap of £19.8m over the three years will be funded from the reserves. The estimates assume cost growth in the next five years of the forecast and the means of closing the gap in the two final years of this forecast are yet to be determined. Capital plans Scottish Government allocated £12.9m of the general capital grant to the Council for 2025/26 which is a 10.5% increase on prior year allocation. This finances a small part of the council’s annual capital programme which adds up to a cumulative amount of £578.6m over the next five years. The Council has a number of medium and longer-term capital projects, financed though borrowing, general capital grant, capital receipts and current revenue. The largest capital projects over the next 5 years includes the School Estate Programme, Advanced Manufacturing Innovation District Scotland South project and Paisley Museum. These projects are supported by asset lifecycle maintenance programmes. Exhibit 4: Capital programme 2025/26 (£m) 2026/27 (£m) 2027/28 (£m) 2028/29 (£m) 2029/30 (£m) Total (£m) Non- housing 129.0 102.6 27.2 13.7 13.7 286.2 Housing 61.3 67.6 67.7 42.5 53.3 292.4 Total 190.3 170.2 94.9 56.2 67.0 578.6 Page 59 of 286
Page 60
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 52 Source: Capital programmes approved in February 2025 We note that the non-housing capital budget for 2025/26 was subject to significant changes within the period since the budget approval. First, it was reduced to £105m in May, then forecast increased to £118m in September 2025. The housing budget reduced from £61.3m to £52.8m. We note a separate recommendation on the capital budget preparation in the financial management section. We recommend that the capital budget setting process be revisited to ensure future estimates better reflect prevailing market conditions and delivery capacity More detail is included in Appendix 3. The projected borrowing position for the next three years starting 2025/26 is £397m, £465m and £524m. Borrowing is the key source of the capital programmes funding. Since the pandemic, a number of factors have impacted the Council’s ability to fully deliver its capital programme within the originally planned timescales. This was due to a number of factors, including the complexity of works, cost of materials, supply chain issues and availability of contractors. Given the scale of the Council’s ongoing programme this is likely to remain a continuing area of challenge. Housing Revenue Account The Council plans to deliver total housing capital investment of £292.4m over the 5- year period up to 2029/30. The Council expects that £34.5m of the total will be financed from government grant. The capital programme will deliver: • £147.0m in planned investment programmes in existing housing stock, • £31.8m in New Supply of housing stock out with the regeneration areas; and • £113.6m included as part of the Regeneration and Renewal Plan including New Supply within regeneration areas. The HRA operates a rolling 30-year Business Plan model which is the standard operating practice amongst local authorities and Registered Social Landlords. The 30-year basis of the model reflects the need for a long term planned approach to the replacement of major items such as rewiring and central heating aligned to the lifecycle of the element. Similar to non-housing construction, the sector is still experiencing the impact of pandemic recovery, with the backlog of repairs to void properties influencing income generation. The Council is focusing on the first phase of its capital programme to deliver c.1,100 housing properties and to invest £30m in the existing high-rise accommodation. To ensure sufficient funding in the long term, an assumption of 1% above CPI as an uplift to rents is assumed for every year across the 30-year plan. Page 60 of 286
Page 61
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 53 Vision, leadership and governance Our detailed findings on the Council’s arrangements are set out below. Vision The Council approved its Council Plan in September 2022, articulating its vision, priorities and strategic outcomes for the Council. The Council Plan strategic outcomes are used to underpin the Council’s internal and external communication and engagement and these align to their organisational values. The Plan has five main strategic outcomes: Place, Economy, Fair, Green and Living our values. The Council Plan was subject to a review in early 2024 and a refreshed plan with refined priorities, actions and indicators was recently approved by the Leadership Board in June 2024. Corporate leadership team The Council senior team consists of the Chief Executive, 3 Directors of departments and 15 Heads of Service (along with the Chief Officer of the HSCP and Chief Executive of partner organisation OneRen). Governance arrangements The Council’s governance framework comprises the systems and processes, and culture and values, by which the Council is directed and controlled and through which it accounts to, engages with and leads the community. It enables the Council to monitor the achievement of its strategic objectives set out in the Council plan. The Council has approved and adopted a Local Code of Corporate Governance and publishes information on how it complies with that Code. The Council has a number of Boards (Committees) with delegated authorities and specific remits in place. The Audit, Scrutiny and Risk Board (ARSB) is chaired by an independent member and comprises nine members from all political parties represented on the Council. Its remit is to consider internal and external audit and scrutiny reports, note Internal Audit and Counter Fraud performance, consider and monitor progress reports against any action points raised by internal and external auditors. The Board also has responsibility for considering the Council’s code of corporate governance, approving the risk management policy and strategy and reviewing the effectiveness of risk management arrangements. Other functions include monitoring and reviewing service delivery performance, policies and practices and to submit recommendations to the Council. The Council’s governance arrangements have been substantially reviewed during the year, including fully implementing the comprehensive assessment of the Audit, Risk and Scrutiny Board arrangements against the CIPFA practical guidance for Audit Committees which has made a positive impact on scrutiny arrangements. In Page 61 of 286
Page 62
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 54 addition the recommendation arising from the Council’s 11 comprehensive review of its governance arrangements by the member led cross party working group, which were reported to and approved by the Council on 29 February 2024 have been actioned. Leadership programme The council introduced a Leadership Development Programme, consisting of 5 modules and developed by the Society of Local Authority Chief Executives (SOLACE) based on their discussions with the key stakeholders within the council. The programme was developed primarily due to changes within the Corporate Management Team (CMT) membership, including the appointment of the Chief Executive. Provision of further leadership training opportunities was identified following the independent Dargavel review. This included Governance, Risk Management, Leadership, Culture and Performance Management. Cohort 1 of this programme was delivered between October 2023 and February 2024 and delivered to up to 37 delegates, comprising CMT members and Chief Officers. In general, the feedback from delegates has been positive in relation to the effectiveness and impact of resilience, communication and governance, risk, accountability modules. Other modules provided improved levels of knowledge to the delegates. Following this, at the Chief Officers Team Away Day in September 2024 there was also a discussion on the learning from the programme which linked to ongoing personal development opportunities. The programme for cohorts 2 and 3 has now been completed and an evaluation has been undertaken, which will inform plans for future programmes. Additional deep-dive training took place for all key officers at a variety of grades specifically on governance during 2023/24. There is a programme of Chief Officer Team Away Days (4 are scheduled for this year) and Our Leaders Forum, (aiming for 3 in person plus one additional virtual this year) to support ongoing personal and professional development and maintain and develop cross corporate networking and relationships which is seen as a key priority in a new hybrid working environment. These sessions include external speakers/experts . Officers from the council’s People & OD team are currently undertaking a benchmarking exercise across Scottish Local Authorities to explore other practices and scope opportunities for potential collaborations in future. Risk Management Renfrewshire Council has a risk management framework in place formed over key components and supported by a high-level combined risk management policy and strategy ‘Risk Matters’, last revised in November 2023. The strategic risk management objectives refer to: Page 62 of 286
Page 63
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 55 • Leadership and management; • Policy and strategy; • People; • Partnership and resources; • Processes; • Risk handing and assurance; and • Outcomes and delivery. To support the implementation of ‘Risk Matters’ and the continuous improvement of risk management practice within the council, a Strategic Risk Management Development Plan is in place, outlining key actions that require to be completed over the life cycle of Risk Matters. Performance against these key actions is reported as follows: • YEAR 1, 2024-25 Key performance figure - 100%, (12 of 12 actions) complete, against an 85% in-year target. • YEAR 2, 2025-26 10 of 10 actions in progress. In 2024/25 Willis Towers Watson undertook an independent review of the Council’s risk management arrangements and concluded that “Renfrewshire Council has a well-established approach to risk management with many positive features, especially in terms of strong governance and a positive cultural attitude towards risk management at a corporate level.” Updates on progress reports and monitoring of risks are reported to the ARSB on a six-monthly basis. Each Council department has at least one representative on the Corporate Risk Management Group (the Group). The Group now includes at least one Head of Service for each department, and has overseen reporting of the 2023/24 strategic and corporate risk, monitoring progress on behalf of the Council. Services have taken ownership of their risks with processes being followed for reporting, and where necessary ‘escalation’ of significant risks to the strategic or corporate registers. All service departments submitted their risk data on time for the progress reports to the ARSB as planned. Internal audit The internal audit service operates in accordance with the Public Sector Internal Audit Standards and reports to the Audit, Risk and Scrutiny Board. Internal audit undertakes an annual programme of work, approved by the Board, based on a strategic risk assessment. The Council’s Chief Auditor provides an independent opinion on the adequacy and effectiveness of the governance framework, risk management and internal control. Page 63 of 286
Page 64
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 56 To ensure the integrity of the internal audit function, the annual internal audit strategy and plan is determined by the Chief Auditor in consultation with all service Directors and their senior management teams. The internal audit opinion for 2024/25 was that, subject to management addressing the critical and important recommendations made and the limited assurance report findings, it is considered that reasonable assurance can be placed upon the adequacy and effectiveness of the Council’s internal control, risk management and governance arrangements. This opinion is consistent with prior years. Internal audit presented results of their activity for 2024/25; 93.6% of the internal audit plan was completed against a target of 90%. The outstanding work is planned to be completed in 2025/26. We consider internal audit work during our risk assessment and on ongoing basis. In line with the requirements of the Public Sector Internal Audit Standards (PSIAS) the internal audit function was subject to an external assessment performed by an internal auditor of another local authority. The external reviewer concluded in 2023 that Renfrewshire Council’s internal audit fully complies with PSIAS requirements. Page 64 of 286
Page 65
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 57 Use of resources to improve outcomes Our detailed findings on the Council’s arrangements are set out below. Performance management framework The Council has a performance framework to measure against its 2022-27 Council Plan objectives. A high level summary of the Framework is presented below: Source: The Council’s internal documentation The framework assumes 6 monthly reporting to Leadership Board with performance indicators against action progress grouped by Council Plan strategic outcomes. These outcomes have also one cross-cutting theme – Improving outcomes for children and families. Service Improvement Plans (SIP) at each service level were also given a new format to make them aligned with the above. The reporting is done on a 6 monthly basis to relevant Boards including an annual outturn report. All performance indicators and actions in the Council Plan Framework are included in SIPs. The next stage of performance reporting is at operational level with a range of service-specific performance reporting across Council to the appropriate Policy Board, together with statutory performance reports. The Chief Executive holds performance scrutiny meetings with each Directorate team twice a year, and the council advised it is also planned to introduce a new Performance Board which will drive further improvements to service level performance from April 2025. Page 65 of 286
Page 66
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 58 Local Government Benchmark Framework (LGBF) is scrutinised by the Corporate Management Team (CMT) with reports to the Audit, Risk and Scrutiny Board. The CMT would also review a number of performance reports, scorecards, people metrics and have ‘deep dives’ into specific areas on a quarterly basis. These documents are then used to create public performance reporting in user friendly formats, and by using interactive presentations, case studies and dashboards. Service improvement and reporting 2024/25 We have considered how the Council demonstrates a trend of service improvement in delivering their strategic priorities, as required by Audit Scotland’s planning guidance for 2024/25. The Council Plan reports on 34 indicators, of which 21 have a target. In 2024/25, five of the indicators met or exceeded their target, three narrowly missed the target, and seven were behind target. There are six indicators for which 2024/25 data is not yet available. Statutory performance information The Accounts Commission has a statutory responsibility to define the performance information that councils must publish. This responsibility links with the Commission’s best value audit responsibilities. In turn, councils have their own responsibilities, under their best value duty, to report performance to the public. The Accounts Commission issued a revised Statutory Performance Information Direction (‘2024 Direction’) in December 2024, which applies for the three-year period from 1 April 2025. The 2024 Direction requires a council will report information about its performance in a way that enables that council, other councils, the Accounts Commission, local residents and communities, and any other interested parties to draw comparisons and make judgements in relation to: • that council’s performance over time, and • the performance of different councils in a given period of time. The Council has made proper arrangements for preparing and publishing its statutory performance information in accordance with the Direction. The information reported on the Council’s website is the Council’s response to meeting the requirements. Local Government Benchmarking Framework The most recent period available through LGBF is 2023/24 and demonstrates that the overall performance improved in the majority of the areas as presented in the exhibit below. Page 66 of 286
Page 67
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 59 Exhibit 5 Performance overview Source: Local Government Benchmarking Framework website The council’s overall performance is generally positive, with good progress being made and sustained across the Council Plan priority areas. The council is demonstrating improved or sustained performance across 52% of the 88 indicators published to date. Strong performance areas Areas for improvement Completion of homeless duty - in common with many other councils, homeless applications continue to rise, and housing services are under considerable demand pressure in Renfrewshire. The service continues to exceed targets and averages around 21 weeks to complete a case. A key area of focus is performance in relation to issuing building warrants and first reports. Workforce measures have been introduced to support capacity issues, with further reviews of these service areas planned during 2025 by the new Performance Board. Renfrewshire is consistently one of the best performing areas in relation to delayed discharge – that is, minimising the number of days a person spends in hospital once they are fit to be discharged. The proportion of the council’s procurement spend with local businesses is behind the national average at 19.3% but has shown improvements over the last few years. Local analysis indicates that a further 46% of council spend (taking total spend to around two thirds) was made Page 67 of 286
Page 68
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 60 with local authorities in surrounding local authorities reflecting strong local and regional connectivity and Renfrewshire’s tight geography. Number of invoices processed within 30 days. Sickness absence levels for non- teaching staff remains a key area for improvement and is being actively targeted across service teams, which has resulted in an improvement in relative performance in 23/24 The council consistently outperforms most other areas in terms of the condition of its roads. Some of the customer satisfaction measures included in the LGBF indicate lower levels of satisfaction with selected services than in other local authorities. Like other local authorities, the council has concerns around some of the national survey approach, and has commissioned an external firm to conduct a resident survey which will allow the council to assess this in more depth and respond accordingly. The council’s employability programme – INVEST – has had a great deal of success in supporting people into training, to achieve qualifications and to find paid work. The poverty-related attainment gap has widened since the council first started reporting on it in 2018/19. As with all other local authority areas, the Covid-19 pandemic had a significant impact on attainment, and it has been well documented that children and young people experiencing deprivation were disproportionately affected by the disruption to learning. Improvement can be seen - in 2023/24, the gap narrowed for both literacy and numeracy and has now returned to broadly pre-pandemic levels in relation to numeracy, in line with the council’s family group comparators for educational indicators, albeit this remains above the national average. Literacy remains a core focus for improvement. Page 68 of 286
Page 69
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 61 The council is in the top two quartiles for 11 out of the 18 educational indicators available for 2023/24 and officers have reiterated the strong ambition they have to further improve educational outcomes, using data to drive targeted improvements in performance. The percentage of leavers entering a positive destination has increased to 97.1%. This is an increase over 5 years and Renfrewshire is ahead of both the virtual comparator and national figures. Renfrewshire now has the 5th highest leaver destination figure in Scotland. There has been a significant increase in the proportion of S4 leavers going into positive destinations. In 2023/24, this was 98.49%, up from 91.79% in 2022/23 and 91.88% in 2021/22. Nationally the Figure is 91.9%. Quick turnaround of housing benefit applications and amendments contributes to relieving financial pressures that some of the most vulnerable citizens may feel. Source: An interim follow up audit report on the council’s approach to community engagement and culture change April 2025. Page 69 of 286
Page 70
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 62 Best Value Appointed auditors have a duty to be satisfied that local government bodies have made proper arrangements to secure Best Value. There are the following four aspects to auditors’ work: • Contributing to Controller of Audit reports. • Thematic reviews; • Follow-up and risk-based work; • Service improvement and reporting. Contributing to Controller of Audit reports – Best Value report The Controller of Audit reports to the Accounts Commission on each council’s performance in meeting its Best Value duties at least once over the five-year audit appointment. Auditors are required to include judgments on the pace and depth of continuous improvement in the council as part of their wider scope work to contribute to these reports. A Controller of Audit Best Value report for Renfrewshire Council has been prepared by Audit Scotland and was considered by the Accounts Commission on 15 May 2025. Following this, the Accounts Commission published their findings on 5 June 2025 and the report was presented to the Council on 26 June 2025. During 2024/25 we were working with the Controller of Audit to allow preparation and finalisation of the Best Value report for the Council. This report is based on previous reporting on the Council as prepared by Azets and the Controller of Audit. The report was largely positive and stated that Renfrewshire Council has a strong commitment to improving, including creating a positive culture, supporting its staff to develop as leaders, and focusing on engaging with residents. The report noted that the Council must now talk to them about tough spending decisions that lie ahead. It highlighted the Council’s commitment to leadership and creating a positive working culture across services, welcomed positive response to the issues associated with the Dargavel school, expressed interest in the Cultural Assurance Model, outlined good examples of activities enabling and supporting community engagement. The report also commented on prudent financials and financial sustainability, commented on existence of the complex capital programme and member development in place, it referred to the areas of strong performance (education). The report also contained some suggestions for further development and improvement in relation to continuous improvement, the need to evidence continuing engagement with community and how it then flows into decision making, policy Page 70 of 286
Page 71
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 63 development and service planning, it highlighted the financial gap and the role of the transformation plan in closing it. It brought attention to the IJB financial situation which will require difficult decisions and talked about areas of lower performance in the health area. Thematic review Auditors are required to report on Best Value or related themes prescribed by the Accounts Commission. This year’s thematic review is on Transformation: how councils are redesigning and delivering more efficient services to achieve planned outcomes. We present the findings in a separate report with a summary set out below: To what extent does the council have clear plans for transformation that link to its priorities and support long-term financial sustainability? Renfrewshire Council has had a corporate transformation programme in place since 2009. These have been overarching, transformative and adapted to changing circumstances. The most recent phase of the Council’s transformation programme, Reshaping Renfrewshire, commenced in early 2025 and continues this ambitious approach. The Council is well-placed to deliver complex transformation and change programmes, having successfully delivered a range of transformation programmes over the past 15 years. Over this past period the Council have achieved £190m of savings and efficiencies through various projects and debt smoothing. The Council has outlined with appropriate detail its key future transformation projects, the importance of financial sustainability, and how these are to be achieved in the medium term. We are satisfied that links exist between the Council’s corporate objectives and the transformation plans, however these could be presented more clearly to improve clarity and to help measure the impact. To what extent do the council’s programme management arrangements facilitate effective oversight of its transformation plans? The governance arrangements to monitor and scrutinise the transformation programmes are in place The Council operates the monitoring arrangements at the Boards and management levels with a clear structure of reporting in place. Page 71 of 286
Page 72
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 64 This is supported at an operational level by the existence of appropriate capacity and expertise at Project Management Office function and by using external specialist support where this is deemed more effective. Monitoring arrangements should be supported by further clarity in reporting to Leadership Board on timelines, costs, benefits and measurement methods to support achieving the transformation objectives. To what extent are communities and partners involved in the development and delivery of the council’s plans for transformation? Renfrewshire Council works effectively with partners, including other councils, third and private sector to achieve its transformation objectives. There are good examples of working with communities demonstrating the Council’s increased focus on the needs of service users. Renfrewshire Council is meeting requirements of working with partners to develop a clear approach to tackling digital exclusion as part of their strategies and plans, understanding digital exclusion locally, who is affected and how. The Council engages with vulnerable groups and considers impact of service delivery changes and improvements that could be made to support those communities. To what extent has the council considered the impact of its transformation activity, including on vulnerable or protected groups? The Council have equality impact assessments which are prepared for a range of projects, policy decisions and service redesigns. The approaches to measuring, monitoring and reporting varies project to project depending on the nature of the project, the benefits and the timescales in which the benefits are seen. The arrangements are appropriate at a project level. Community Benefits are built into contracts with third party suppliers. Page 72 of 286
Page 73
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 65 Follow-up and risk-based work Best Value report Auditors are required to follow up Accounts Commission findings, Controller of Audit recommendations and any outstanding improvement actions reported in Best Value Assurance Reports and Annual Audit Reports. We are also required to have regard to the seven Best Value themes when completing our wider scope work. The full Best Value report was published in June 2025 and we will monitor Council’s progress in considering its findings in the coming years. An interim follow up audit report on the council’s approach to community engagement and culture change In April 2025 we presented an interim report on areas of interest to the Controller of Audit linked to community engagement and the council’s culture. Overall, we found that the council has made good progress in continuing to build its existing approach to consultation and community engagement including a refresh of the council’s overall approach, with appropriate arrangements established or in-place to support effective governance and scrutiny of those revised arrangements. The council is able to evidence a positive corporate culture and continues to take a range of actions aimed at supporting and further developing a positive culture of openness and transparency. The report had one recommendation in relation to transparency and openness in decision making processes. In response the council plans to review the existing corporate guidance, board reporting arrangements and will benchmark with approaches adopted by other Scottish local authorities to identify specific areas of best practice and recommended improvement actions to be adopted into existing arrangements. This action is due to be completed by 31 October 2025. Service improvement and reporting We have considered this as part of our wider scope work within Vision, leadership and governance and Use of resources sections of this report. Page 73 of 286
Page 74
Renfrewshire Council: 2024/25 Annual Audit Report to the Council and the Controller of Audit 66 Appendices Appendix 1: Responsibilities of the Council and the Auditor 67 Appendix 2: Audit adjustments 75 Appendix 3: Action plan 80 Appendix 4: Follow up of prior year recommendations 90 Page 74 of 286
Page 75
67 Appendix 1: Responsibilities of the Council and the Auditor Responsibilities of the Council The Council is required to make arrangements for the proper administration of its financial affairs and to secure that one of its officers has responsibility for the administration of those affairs. The Director of Finance and Resources has been designated as that officer. The Director of Finance and Resources is responsible for the preparation of the Council’s annual accounts in accordance with proper practices as set out in the CIPFA/LASAAC Code of Practice on Local Authority Accounting in the United Kingdom (the Code). Area The Council’s responsibilities Corporate governance The Council is responsible for establishing arrangements to ensure the proper conduct of its affairs including the legality of activities and transactions, and for monitoring the adequacy and effectiveness of these arrangements. Those charged with governance should be involved in monitoring these arrangements. Financial statements and related reports The Council has responsibility for: • preparing financial statements which give a true and fair view of the financial position of the Council and its group and their expenditure and income, in accordance with the applicable financial reporting framework and relevant legislation; • maintaining accounting records and working papers that have been prepared to an acceptable professional standard and support the balances and transactions in its financial statements and related disclosures; • preparing and publishing, along with the financial statements, an annual governance statement, management commentary (or equivalent and a remuneration report that is consistent with the disclosures made in the financial statements and prepared in accordance with prescribed requirements. The management commentary should be fair, balanced and understandable and also address the longer- term financial sustainability of the Council. Management is responsible, with the oversight of those charged with governance, for communicating relevant information to users about the Council and its financial performance, including providing Page 75 of 286
Page 76
68 Area The Council’s responsibilities adequate disclosures in accordance with the applicable financial reporting framework. The relevant information should be communicated clearly and concisely. The Council is responsible for developing and implementing effective systems of internal control as well as financial, operational and compliance controls. These systems should support the achievement of its objectives and safeguard and secure value for money from the public funds at its disposal. The Council is also responsible for establishing effective and appropriate internal audit and risk-management functions. Standards of conduct for prevention and detection of fraud and error The Council is responsible for establishing arrangements to prevent and detect fraud, error and irregularities, bribery and corruption and also to ensure that its affairs are managed in accordance with proper standards of conduct. Financial position The Council is responsible for putting in place proper arrangements to ensure its financial position is soundly based having regard to: • Such financial monitoring and reporting arrangements as may be specified; • Compliance with statutory financial requirements and achievement of financial targets; • Balances and reserves, including strategies about levels and their future use; • Plans to deal with uncertainty in the medium and long term; and • The impact of planned future policies and foreseeable developments on the financial position. Best Value The Council has a specific responsibility to make arrangements to secure Best Value. Best Value is defined as continuous improvement in the performance of the body’s functions. In securing Page 76 of 286
Page 77
69 Area The Council’s responsibilities Best Value, the local government body is required to maintain an appropriate balance among: • The quality of its performance of its functions • The costs to the body of that performance • The cost to persons of any service provided by it for them on a wholly or partly rechargeable basis. In maintaining the balance, the Council shall have regards to: • Efficiency • Effectiveness • Economy • The need to meet the equal opportunity requirements. The Council should discharge its duties in a way which contributes to the achievement of sustainable development. In measuring the improvement of the performance of a local government body’s functions for the purposes of this section, regard shall be had to the extent to which the outcomes of that performance have improved. The Scottish Government’s Statutory Guidance on Best Value (2020) requires bodies to demonstrate that they are delivering Best Value in respect of seven themes: 1. Vision and leadership 2. Governance and accountability 3. Effective use of resources 4. Partnerships and collaborative working 5. Working with communities 6. Sustainability 7. Fairness and equality. The Community Empowerment (Scotland) Act 2015 is designed to help empower community bodies through the ownership or control of land and buildings, and by strengthening their voices in decisions about public services. Page 77 of 286
Page 78
70 Area The Council’s responsibilities Specified audited bodies are required to prepare and publish performance information in accordance with Directions issued by the Accounts Commission. Auditor responsibilities Code of Audit Practice The Code of Audit Practice (the Code) describes the high-level, principles-based purpose and scope of public audit in Scotland. The Code outlines the responsibilities of external auditors and it is a condition of our appointment that we follow it. Our responsibilities Auditor responsibilities are derived from the Code, statute, International Standards on Auditing (UK) and the Ethical Standard for auditors, other professional requirements and best practice, and guidance from Audit Scotland. We are responsible for the audit of the accounts and the wider-scope responsibilities explained below. We act independently in carrying out our role and in exercising professional judgement. We report to the Council and others, including Audit Scotland, on the results of our audit work. Weaknesses or risks, including fraud and other irregularities, identified by auditors, are only those which come to our attention during our normal audit work in accordance with the Code and may not be all that exist. Wider scope audit work Reflecting the fact that public money is involved, public audit is planned and undertaken from a wider perspective than in the private sector. The wider scope audit specified by the Code broadens the audit of the accounts to include additional aspects or risks in areas of financial management; financial sustainability; vision, leadership and governance; and use of resources to improve outcomes. Page 78 of 286
Page 79
71 Financial management Financial management means having sound budgetary processes. Audited bodies require to understand the financial environment and whether their internal controls are operating effectively. Auditor considerations Auditors consider whether the body has effective arrangements to secure sound financial management. This includes the strength of the financial management culture, accountability, and arrangements to prevent and detect fraud, error and other irregularities. Financial sustainability Financial sustainability means being able to meet the needs of the present without compromising the ability of future generations to meet their own needs. Auditor considerations Auditors consider the extent to which audited bodies show regard to financial sustainability. They look ahead to the medium term (two to five years) and longer term (over five years) to consider whether the body is planning effectively so it can continue to deliver services. Vision, leadership and governance Audited bodies must have a clear vision and strategy and set priorities for improvement within this vision and strategy. They work together with partners and communities to improve outcomes and foster a culture of innovation. Auditor considerations Auditors consider the clarity of plans to implement the vision, strategy and priorities adopted by the leaders of the audited body. Auditors also consider the effectiveness of governance arrangements for delivery, including openness and transparency of decision-making; robustness of scrutiny and shared working arrangements; and reporting of decisions and outcomes, and financial and performance information. Page 79 of 286
Page 80
72 Use of resources to improve outcomes Audited bodies need to make best use of their resources to meet stated outcomes and improvement objectives, through effective planning and working with strategic partners and communities. This includes demonstrating economy, efficiency and effectiveness through the use of financial and other resources, and reporting performance against outcomes. Auditor considerations Auditors consider the clarity of arrangements in place to ensure that resources are deployed to improve strategic outcomes, meet the needs of service users taking account of inequalities, and deliver continuous improvement in priority services. Best Value Appointed auditors have a duty to be satisfied that local government bodies have made proper arrangements to secure best value. Our work in respect of the Council’s best value arrangements has been integrated into our audit approach, including our follow up on the Council’s Best Value Assurance Report and work on the wider scope dimensions. Audit quality The Auditor General and the Accounts Commission require assurance on the quality of public audit in Scotland through comprehensive audit quality arrangements that apply to all audit work and providers. These arrangements recognise the importance of audit quality to the Auditor General and the Accounts Commission and provide regular reporting on audit quality and performance. Audit Scotland maintains and delivers an Audit Quality Framework. The most recent audit quality report can be found at Quality of public audit in Scotland: Annual report 2025. Independence and ethics The Ethical Standards and ISA (UK) 260 require us to report full and fair disclosure of matters relating to our independence. In accordance with our profession’s ethical requirements and further to our external audit plan issued confirming audit arrangements we confirm that there are no further facts or matters that impact on our integrity, objectivity and independence as auditors that we are required or wish to Page 80 of 286
Page 81
73 draw attention to. We consider an objective, reasonable and informed third party would take the same view. We confirm that Azets Audit Services and the engagement team complied with the FRC’s Ethical Standard. We confirm that all threats to our independence have been properly addressed through appropriate safeguards and that we are independent and able to express an objective opinion on the financial statements. Non-audit services: There are no non-audit services provided to the Council. Contingent fees: No contingent fee arrangements are in place for any services provided. Gifts and hospitality: We have not identified any gifts or hospitality provided to, or received from, any member of the Council, senior management or staff. Relationships: We have no other relationships with the Council, its directors, senior managers and affiliates, and we are not aware of any former partners or staff being employed, or holding discussions in anticipation of employment, as a director, or in a senior management role covering financial, accounting or control related areas. Our period of total uninterrupted appointment as at the end of 31 March 2025 was three years. Page 81 of 286
Page 82
74 Audit fee The total fees charged to the Council for the provision of services in 2024/25 were as follows. Prior year charges are also shown for comparative purposes: 2024/25 £ 2023/24 £ Auditor remuneration 329,710 316,514 Pooled costs 7,530 10,490 Contribution to PABV costs 79,800 82,680 Sectoral cap adjustment 61,830 59,660 Extended Audit Procedures 8,584 - Total audit fees 487,454 469,344 Page 82 of 286
Page 83
75 Appendix 2: Audit adjustments We are required to inform the Council of any significant misstatements within the financial statements presented for audit that have been discovered during the course of our audit. The non-trivial misstatement discovered during the course of our audit which have been adjusted for by management are summarised in the table below. Adjusted misstatements Details of the item corrected following discussions with management is as below. No Detail CIES Balanc e Sheet Impact on total net expendit ure Impact on usable reserve s Impact on unusable reserves Dr / (Cr) £m Dr / (Cr) £m Dr / (Cr) £m Dr / (Cr) £m Dr / (Cr) £m 1. Restatement of group comparative figure due to overstatement of other long-term asset due to asset ceiling cap of £31.788m and understatement of other long-term liability due to unfunded liability portion of £0.501 Impact: Group 32.289 (32.289) 32.289 2. Overstatement of the group’s other long- term asset of £41.941m due to asset ceiling cap and understatement of other long-term liability due to unfunded liability portion of £0.440 42.381 (42.381) 42.381 Page 83 of 286
Page 84
76 No Detail CIES Balanc e Sheet Impact on total net expendit ure Impact on usable reserve s Impact on unusable reserves Impact: Group 3. Understatement of the Council’s other long- term liabilities due to updated version of the IAS19 report Impact: Council and Group 0.158 (0.158) 0.158 4. Understatement of the holiday pay accrual Impact: Council and Group 0.425 (0.425) 0.425 5. Understatement of ROU and lease liabilities due to update in waste disposal service concession model Impact: Council and Group 0.271 (0.271) 0.271 0.271 Council’s account Group’s account As at 31 March 2024 As at 31 March 2025 As at 31 March 2024 As at 31 March 2025 Total reserves per the unaudited annual accounts 1,524.836 1,557.192 1,656.543 1,703.634 Net impact on the Council’s reserves increase/ (decrease) - (0.854) (32.289) (43.235) Page 84 of 286
Page 85
77 Total reserves per the audited annual accounts 1,524.836 1,556.338 1,624.254 1,660.399 Page 85 of 286
Page 86
78 Unadjusted misstatements We identified no unadjusted misstatements during our audit. Misclassification and disclosure changes Our work included a review of the adequacy of disclosures in the financial statements and consideration of the appropriateness of the accounting policies and estimation techniques adopted by the Council. We identified a number of reclassification adjustments and some minor presentational issues in the Council’s accounts, and these have all been amended by management. Details of all disclosure changes amended by management following discussions are as below. No Detail 1. Disclosure changes in external audit costs of fee payable to be £0.487m. 2. Disclosures changes in note 23: nature and extent of risks arising from financial instruments to update total investment portfolio by credit rating of A+ to £2.465m. 3. Disclosures changes in group accounting policies to update the number of combining entities and to update combining entities subject to value added tax. 4. Updated Note 4: Expenditure and income analysed by nature to cast with the CIES and to exclude internal recharge. 5. Pension liability disclosure after receiving the revised actuarial report. 6. Disclosures changes in note 14: Capital expenditure and capital financing to update commitments on capital contracts for non-housing projects from £35.412m to £65.412m 7. Reclassification of fixed assets relating to Common Goods Fund of £1.090m; 8. Accumulated depreciation for nil net book value assets was adjusted in the property, plant and equipment note to the accounts for £156.369m in 2024/25 and for £149.551m in 2023/24. This had no impact on the net book value of assets in the balance sheet. 9. Minor presentational and disclosure issues. Page 86 of 286
Page 87
79 The audit team have raised minor and presentational issues with management, and we recommend that this is updated. Overall other than the above detail, we found the disclosed accounting policies, significant accounting estimates and the overall disclosures and presentation to be appropriate. Prior year unadjusted misstatements There were no prior year unadjusted misstatements reported in the prior year audit. Page 87 of 286
Page 88
80 Appendix 3: Action plan Our action plan details the weaknesses and opportunities for improvement that we have identified during our 2024/25 audit. The matters reported are limited to issues we have identified during the course of our audit which we feel are of sufficient importance to merit reporting to you under the auditing standards. The recommendations are categorised into three risk ratings: Key: 1. Significant deficiency 2. Other deficiency 3. Other observation Page 88 of 286
Page 89
81 Financial statements action plan 1. IT general controls Other observation Observation Our specialist Technology Risk team reviewed the design and implementation of IT general controls in the key systems impacting preparation of the financial statements and identified a few areas for improvement in relation password, active directory and undertaken testing of incident management planning. (As this is a public report and for reasons of IT/control sensitivity, we have provided specific details to the Council separately). Implication There is a risk of system issues adversely impacting the control environment and/or financial statements. Recommendation We recommend that the specific IT points identified are addressed. Management response A detailed management response has been completed. The recommendation will be implemented during 2025/26 Responsible officer: Phil Feeney and Anne Marie Flavell Implementation date: FY2025/26 Page 89 of 286
Page 90
82 2. Unapproved posted journal Other observation Observation We identified from our journals testing undertaken that large batch journals with over 50 lines require no system approval and therefore can be posted and approved by individuals who hold relevant access. This is due to a system issue where there are too many line items for approval within the system. Management have mitigating controls in place to review period end budgetary controls where any significant variances against budget are investigated and followed up. Implication As these specific journals do not required approval, this could mean that someone could post inappropriate or fraudulent journals without review or authorisation. As part of our testing of management override of controls we have not identified any instances of inappropriate or fraudulent journal postings during the financial year. Recommendation Management should strengthen controls over large batch journals by introducing an independent approval requirement (e.g., manual secondary review) before posting. Management response Work will be undertaken to assure that the batch process is only used where necessary, and an internal policy will be developed in the Finance team that outlines guidance/recommended practice in relation to journal operation and authorisation, and separation of duties. Responsible officer: Head of Finance and Procurement Implementation date: FY2025/26 Page 90 of 286
Page 91
83 3. Payroll transaction approval Other observation Observation For one of the payroll transactions, we noted that one individual prepared the payroll run and also authorised this. There was no additional review by another team member. Based on the journals selected for audit testing we did not identify any instances of inappropriate journals being posted to the finance system. Implication There is a risk of inappropriate journals postings where there is not a secondary review process of journals. Recommendation Management should strengthen controls over journals by introducing an independent approval requirement (e.g., manual secondary review) before posting. Management response Following an Internal Audit, the processes around payrun operation and signing of the associated BACS payment has been reviewed, with further separation of duties and checks now in place. Alerts and processes within the ERP system are already in place to mitigate any risk of fraudulent bank account changes. Responsible officer: Payroll Services Manager Implementation date: 31 March 2026 4. Common Good Funds - Property register Other observation Observation At the time of producing the Unaudited Accounts, there were still some assets under investigation as to whether they belonged to the Common Good. This was highlighted on the public asset register. Implication There is a risk that misclassification of assets could lead to inaccurate financial reporting and regulatory non- compliance. Page 91 of 286
Page 92
84 4. Common Good Funds - Property register Other observation Recommendation We recommend a decision is reached to determine whether these are Common Good assets and if not, update the Common Good Property register. Management response It is the opinion of King’s Counsel that six of the seven properties under investigation are confirmed as Common Good assets, and will be adjusted in the fixed asset register. The Common Good Note in the audited accounts 2024/25 will be updated to reflect this change. Responsible officer: Corporate Finance Manager Implementation date: FY 2025/26 5. Common Good Funds – Rental arrangements review Other observation Observation Renfrewshire Council administers the Common Good Fund for Renfrew on its behalf. Not all rental properties have their rental fees reviewed and updated on regular basis. Implication The absence of documented regular rents reviews creates uncertainty over the financial return to the fund. Recommendation While the Common Good Fund cannot enter into formal lease agreements, the rents should be subject to periodic review to confirm that they remain appropriate, transparent, and provide a fair return to the fund. Management response Current arrangements between the Council and Common Good Funds will be reviewed to assess the appropriateness of any charges between these operations. Responsible officer: Principal Estates Surveyor Implementation date: 30 June 2026 Page 92 of 286
Page 93
85 6. Quality of working papers Other observation Observation Our review of the working papers identified that some of the documentation provided for audit was not always presented in a clear or easily navigable format. To support improvements in this area, we delivered a training session this year and provided feedback and suggestions to the finance team and other officers in advance of the audit. While progress has been made, further enhancements to the clarity and structure of some of the working papers below would help reduce the extent of follow-up queries, thereby supporting a more efficient audit process. In particular, the reconciliation of the trial balance to the accounts could be presented in a more structured format, with manual adjustments more clearly identified and supported by sufficient explanation and evidence. Similarly, the debtor and creditor listings provided to audit presented the opening balance plus movements however per audit requirements we require a detailed breakdown of all closing balances as at 31 March. In addition, ongoing work on the reconciliation of revalued and non-revalued assets to the fixed asset register took longer than anticipated. Implication These issues can lead to delays in the audit process, increase the risk of misstatements within the financial statements, and reduce the efficiency of the overall audit review. Recommendation We recommend that working papers be standardised and presented with improved clarity. Reconciliations should clearly identify manual adjustments, supported by explanations and appropriate evidence. Debtor and creditor listings should be reformatted to ensure all closing balances are presented. In addition, reconciliations between revalued and non-revalued assets and the fixed asset register should be prepared in advance and shared earlier in the audit cycle. Page 93 of 286
Page 94
86 6. Quality of working papers Other observation Management response As with all year-end processes, working papers are subject to annual review to achieve continuous improvement. Discussion will take place with Azets after the audit is completed to discuss areas for particular attention in relation to clarity and avoidance of follow-up work. Responsible officer: Corporate Finance Manager Implementation date: FY 2025/26 7. Asset Classification Other observation Observation As part of our audit procedures, we reviewed the Council’s approach to the classification of components within property, plant and equipment (PPE), specifically in relation to council dwellings and schools. The Council currently classifies certain components (such as kitchens, heating systems, and other fixtures and fittings) under the Vehicles, Plant, Furniture and Equipment (VPFE) asset class. While this treatment reflects management’s interpretation of the applicable accounting standards, our view based on IAS 16 and the CIPFA Code of Practice on Local Authority Accounting is that such components form part of the primary asset classes (i.e. “Council Dwellings” or “Other Land and Buildings”) as they share the same nature and use in the authority’s operations. Implication The issue identified gives rise to an increased risk of misstatement or classification error. Page 94 of 286
Page 95
87 7. Asset Classification Other observation Recommendation We recommend that the Council reviews its classification policy for asset components within council dwellings and schools, with a view to either: • Aligning the treatment to ensure that components remain within the primary asset class, or • Enhancing disclosures and policy documentation to clearly explain the rationale for classifying components separately. Management response The Council’s current treatment of components aligns to CIPFA Guidance (LAAP 86); however this will be considered in advance of the 2026/27 year-end to ensure clarity of reporting and best practice. Responsible officer: Head of Finance and Procurement Implementation date: FY 2025/26 Wider scope action plan 1. Appraisals and business cases reporting Other observation Observation We found that officers and members work well together in a constructive and appropriately challenging culture which supports good overall decision making. Whilst there is evidence of options appraisals and business cases being reported to Board in relation to specific projects and officers provided a range of information on project management governance and processes ,our analysis of Board and Committee papers indicates some scope for the council to further develop how it presents options appraisal and business case development in supporting effective council decision making and achieving more transparency and openness in decision making processes Page 95 of 286
Page 96
88 1. Appraisals and business cases reporting Other observation Implication There is a risk of system issues adversely impacting the control environment and/or financial statements. Recommendation We recommend that the council considers how it presents options to the members to improve decision making effectiveness and openness. Management response The council already makes extensive use of options appraisal and business case development as part of major investment projects and has an established business case and options appraisal process as part of its corporate project management framework to support the development and delivery of projects across the council. It is proposed that officers will undertake a review of the existing corporate guidance, board reporting arrangements and will benchmark with approaches adopted by other Scottish local authorities to identify specific areas of best practice and recommended improvement actions to be adopted into existing arrangements. Responsible officer: Director of Finance and Resources Implementation date: 31 October 2025 2. Capital budgeting and monitoring Other observation Observation The actual levels of the initial budgets utilisation were below 70% in relation to initial budgets for both housing and non-housing spend. In January 2025 the Council still estimated the outturn on non-housing capital budget at £130m which was significantly above the actual outturn of £91.6m at 31 March 2025. This in the context of long term capital planning which assumes an ambitious capital investment of almost £580m over 5 year period. Implication Over optimistic assumptions can lead to under delivery of the capital programme. Page 96 of 286
Page 97
89 2. Capital budgeting and monitoring Other observation Recommendation We recommend that the capital budget setting process be revisited to ensure future estimates better reflect prevailing market conditions and delivery capacity Management response The Capital budget set for 2025/26 was adjusted at the outset to account for some of the planning and delivery reprofiling that generally occurs before a project is fully procured. Future reporting and implementation of capital budgets and associated planning will be reviewed for the 2026/27 estimates exercise. Responsible officer: Head of Finance and Procurement Implementation date: FY 2026/27 Page 97 of 286
Page 98
90 Appendix 4: Follow up of prior year recommendations As part of our audit work we have followed up on control weaknesses and recommendations either raised in last year’s Annual Audit Report or carried forward from prior years. 1. Related party disclosures Recommendation The information held relating to member and officer interests could be enhanced to ensure that all relevant information is recorded to support the governance and financial reporting requirements around the disclosure of related parties. Processes and controls to consider and identify relevant relationships and transactions that require to be disclosed within the annual accounts should be reviewed for appropriateness. Risk: There is a risk that the council fail to identify related parties due to underlying documentation lacking sufficient detail. The recommendation was that a review of controls and processes around related parties is undertaken. This will include the documentation of member and officer interests as well as the processes in place to identify the relevant disclosures for inclusion in the financial statements. Auditor assessment We have followed up this prior year recommendation as part of the audit work performed in 2024/25 and are satisfied the recommendation has been actioned by management. Status: Closed Response: The Related Parties disclosure was refreshed and significantly expanded in the 2024/25 accounts. Responsible officer: Head of Finance and Procurement Implementation date: Complete Page 98 of 286
Page 99
91 2. Financial strategy to support financial sustainability Recommendation The Council faces continuing financial challenges and significant uncertainty. It is anticipated that new financial flexibilities may become available and the impact of these should be assessed within the scope of the wider financial strategy. Risk: There is a risk that decisions around financial flexibilities, transformation and redesign of savings are made without detailed financial impacts being available to support the decision-making process. The recommendation was to develop a revised financial strategy incorporating new or temporary financial flexibilities and assess how the total balances available are best utilised to support the financial sustainability of the council over the medium term. The Council will need to actively engage with local and national partners to deliver the required level of efficiencies and savings.. Auditor assessment The Council increased the level of detail and assumptions reported in its Financial Outlook and Medium Term Strategy to include impact of flexibilities and other key factors. Status: Closed Response: The revised Financial Strategy was developed. The next Financial Outlook incorporating a medium-term financial strategy will be reported to Council in September 2025. Members and officers are continuing to work on proposals to mitigate forecast budget gaps. Responsible officer: Director of Finance and Resources Implementation date: Complete Page 99 of 286
Page 100
92 2. Dargavel school response Recommendation The Council has responded in a transparent and open manner to issues raised through the Bowles Report. We welcome the creation of a detailed action plan response to Bowles report recommendation and we note the planned reviews of overall governance arrangements and the specific review of the role the Audit, Risk and Scrutiny Board should have going forward. The Council recognises that it faces an ongoing challenge to build the trust and confidence of local communities in its school estate decision making. A recent report to the Education, Children’s Services Policy Board comments on the community negative reaction to the Council’s decision on extending (rather than replacing) an existing secondary school and indicates that decisions on the future school estate will remain a high profile area for the Council. Lack of clarity over the above points might lead to slow pace of remediating issue or re-occurrence in the future We recommend that the Council: Performs a more comprehensive and continuous assessment of future operating costs for planned new school provision. Consider whether any additional monitoring and assessment arrangements for pupil educational attainment may be required for pupils in the Bishopton and Dargavel communities Consider how it will evidence better joint working between council departments in future projects Remains open and measures its effectiveness in rebuilding its relationship with the affected communities. Page 100 of 286
Page 101
93 2. Dargavel school response Auditor Assessment The Council performed a number of actions in response to s102 report, its follow up and our annual audit reports. The Council continues to report on financial impact if the schools cost in its regular reporting to the relevant Board and to the Council within its Financial Outlook and Medium Term Strategy. We conclude that the above arrangements are satisfactory. Status: Complete Response: There have been a number of update report to the Audit, Risk and Scrutiny Board on the actions related to the Bowles Review and subsequent Accounts Commission s102 report. The Audit, Risk and Scrutiny Board’s meeting on 4 November 2024 agreed that all relevant actions were either complete or now incorporated into other reporting arrangements. The Board agreed there would be no further specific monitoring reports, but the Board will continue to receive updates as appropriate through existing monitoring arrangements, and the Board also will receive update reports on major programme such as the learning estate at appropriate reporting periods (so as not to cut across reporting arrangements on this programme through the Education and Children's Service Policy Board). The Board will also maintain a wider interest in the development of the learning estate strategy, including estate planning, roll projections, funding and other associated issues. Responsible officer: Chief Executive Implementation date: Complete Page 101 of 286
Page 102
94 3. Financial sustainability Recommendation The medium term financial challenge and financial gap has been considered by the Council numerous times, but no clear options have been presented or decision have been made as to how to address those challenges. The Council now needs to make difficult spending priority decisions to secure financial sustainability going forward. This poses an increasing risk to the Council’s delivery of services over the medium term and we would recommend addressing as a priority. To present the Council with a range of options and services implications. Auditor assessment The updated Financial Outlook and Medium Term Strategy increases the level of detail and we will continue to review its next iterations to ensure the information provided to members is appropriate. Status: Ongoing Response: The Council’s senior management team continues to identify options for further savings and service transformation, for agreement by elected members in setting future annual revenue budgets. Responsible officer: Director of Finance & Resources Implementation date: FY 25/26 4. Cut off de minimis Recommendation The Council applies a ‘de minimis’ limit to determining how it will process transactions into the correct financial year. However, we identified that this threshold is not formally set. There could be inconsistent treatment of the transactions with no formal limit set leading to misstatements. To formalise arrangements around cut-off recording. Auditor assessment As part of our testing, we performed detailed cut-off testing on both income and expenditure. Based on the Page 102 of 286
Page 103
95 4. Cut off de minimis work performed, we did not identify any material misstatements. The transaction tested were appropriately recorded in the correct accounting period, and the cut off applied was considered reasonable. Status: Complete Response: Page 1 of the Service Year-end Guidance document for 24/25 stated that all errors over £2,500 should be corrected into the appropriate financial year. This figure is also quoted in the Prepayments section. Responsible officer: Head of Finance and Procurement Implementation date: 31 March 2025 5. Payroll reconciliation Recommendation The Council has a number of payruns running at different frequencies. However, there is no year-end reconciliation in place between the ledger and payroll systems to ensure that the figures in the financial statements reconcile to the payroll system. There is a risk that the ledger is not complete or accurate when reflecting payroll figures and impacting on the financial statements. We recommend that the Council performs regular reconciliation between the ledger and payroll. Page 103 of 286
Page 104
96 5. Payroll reconciliation Status: Ongoing Response: The Council’s payroll and ledger systems are fully integrated in its ERP system, Business World. This results in the risk of any disparity between the payrun batches and the General Ledger transactions being very low. However, officers recognise that testing this on an annual basis would be beneficial for control assurance and will undertake development of a process over 2024/25. Work to progress this took place during the financial year and a sample year-end reconciliation was produced to provide this assurance. There is still some improvement work on going to enhance the reporting and streamlining of reconciliation work to enable this to be more frequent and more efficient. Responsible officer: Director of Finance and Resources Implementation date: 31 March 2026 6. Related parties Recommendation The Council should disclose intercompany transactions between group entities in the related parties note. There is a risk that the disclosure is not complete. We recommend that the Council makes the relevant disclosure in the 2024/25 financial statements. Status: Closed Response: The Related Parties Note was updated in the 2024/25 accounts for relevant group transactions. Responsible officer: Head of Finance and Procurement Implementation date: 31 March 2025 Page 104 of 286
Page 105
97 7. Performance information Recommendation The performance information reported on the Council’s website is the Council’s response to meeting the requirements. However, we note that a lot of the information on this section of the Council website has not been updated to the newest available. This includes reporting against the council plan, service outturn reports, summarising findings in relation to BV work and progress against those, including leadership work from last year. We recommend the Council updates this section of their website on regular and at least annual basis. The Council’s performance section on the website has been updated with most reports with a few update reports from May and June 2024 board cycles requiring to be updated We recommend that the Council updates the information. Status: Closed All information continues to be updated on the webpage through a dedicated "Our Performance" web page. We have recently supplemented this with a new Best Value page which provides links to external assessments of performance. Responsible officer: Head of Policy and Partnerships Implementation date: 30 September 2024 Page 105 of 286
Page 106
98 © Azets 2025. All rights reserved. Azets refers to Azets Audit Services Limited. Registered in England & Wales Registered No. 09652677. VAT Registration No. 219 0608 22. Registered to carry on audit work in the UK and regulated for a range of investment business activities by the Institute of Chartered Accountants in England and Wales. Page 106 of 286
Page 107
My Ref: AMacA/CB Your Ref: RENFC101-LOR-2425 Contact: Alastair MacArthur Telephone Number: 0300 300 0285 Email: alastair.macarthur@renfrewshire.gov.uk Finance and Resources Director: Alastair MacArthur CPFA Renfrewshire House, Cotton Street, Paisley, PA1 1JB www.renfrewshire.gov.uk Azets Audit Services Quay 2 139 Fountainbridge EH3 9QG Dear Sirs Renfrewshire Council Financial Statements for the year ended 31 March 2025 This representation letter is provided in connection with the audit of the financial statements of Renfrewshire Council (the ‘Council’) for the purpose of expressing an opinion on whether the financial statements present a true and fair view, in all material respects, in accordance with applicable law and UK adopted international accounting standards, as interpreted and adapted by the Code of Practice on Local Authority Accounting in the United Kingdom 2024/25 (the 2024/25 Code). I confirm that to the best of my knowledge and belief, having made such inquiries as I considered necessary for the purpose of appropriately informing myself: Financial Statements i. I have fulfilled my responsibilities as Section 95 Officer for the preparation of the Council’s financial statements in accordance with applicable law and UK adopted international accounting standards, as interpreted and adapted by the Code of Practice on Local Authority Accounting in the United Kingdom 2024/25 (the 2024/25 Code), for being satisfied that they give a true and fair view and for making accurate representations to you. ii. I have complied with the requirements of all statutory directions affecting the Council and these matters have been appropriately reflected and disclosed in the financial statements. iii. I have considered whether accounting transactions have complied with the requirements of the Housing (Scotland) Act 1987 in respect of the Housing Revenue Account. iv. The financial statements are free of material misstatements, including omissions. Page 107 of 286
Page 108
My Ref: AMacA/CB Your Ref: RENFC101-LOR-2425 Contact: Alastair MacArthur Telephone Number: 0300 300 0285 Email: alastair.macarthur@renfrewshire.gov.uk Finance and Resources Director: Alastair MacArthur CPFA Renfrewshire House, Cotton Street, Paisley, PA1 1JB www.renfrewshire.gov.uk v. I have reviewed and approved all audit adjustments made in the financial statements. (See Appendix 2 of the Annual Audit Report for details of such audit adjustments). vi. Prior year adjustments have been made to the financial statements where required and these are appropriately disclosed in the financial statements. (See Appendix 2 of the Annual Audit Report for details of such audit adjustments). vii. I have reviewed and approved all disclosures made in the financial statements and I am not aware of any other matters which require disclosure in order to comply with the requirements of UK adopted international accounting standards, as interpreted and adapted by the 2024/25 Code (A summary of the main disclosure changes is at appendix 2 of the Annual Audit Report). viii. No uncorrected misstatements were identified during the audit and the prior years. ix. The Council has complied with all aspects of contractual agreements that could have a material effect on the financial statements in the event of non-compliance. There has been no non-compliance with requirements of any regulatory authorities that could have a material effect on the financial statements in the event of non-compliance. x. I acknowledge my responsibility for the design, implementation and maintenance of internal control to prevent and detect fraud and error, and I believe that I have appropriately fulfilled these responsibilities. xi. I am satisfied that the methods, data and significant assumptions used in making accounting estimates, including those measured at fair value, are appropriate to achieve recognition, measurement and disclosure that is reasonable in accordance with the 2024/25 Code and adequately disclosed in the financial statements. Such accounting estimates include valuation of the pension fund net liability and valuation of council dwellings and other land and buildings. I am satisfied that the material judgements used in the preparation of the financial statements are soundly based, in accordance with the 2024/25 Code and adequately disclosed in the financial statements. I understand my responsibilities include identifying and considering alternative methods, assumptions or source data that would be equally valid under the financial reporting framework, and why these alternatives were rejected in favour of the estimate used. xii. I confirm that I am satisfied that the actuarial assumptions underlying the valuation of pension scheme assets and liabilities for IAS19 Employee Benefits disclosures are consistent with my knowledge. I confirm that all settlements and curtailments have been identified and properly accounted for. I also confirm that all significant post- employment benefits have been identified and properly accounted for. xiii. The Council has satisfactory title to all assets disclosed in the accounts. The Council has no plans or intentions that may materially alter the carrying value and, where Page 108 of 286
Page 109
My Ref: AMacA/CB Your Ref: RENFC101-LOR-2425 Contact: Alastair MacArthur Telephone Number: 0300 300 0285 Email: alastair.macarthur@renfrewshire.gov.uk Finance and Resources Director: Alastair MacArthur CPFA Renfrewshire House, Cotton Street, Paisley, PA1 1JB www.renfrewshire.gov.uk relevant, the fair value measurements or classification of assets and liabilities as at 31 March 2025 reflected in the financial statements. xiv. The Council has complied with all aspects of ring-fenced grants that could have a material effect on the Council’s financial statements in the event of non-compliance. xv. Except as disclosed in the financial statements: a. there are no unrecorded liabilities, actual or contingent b. none of the assets of the Council has been assigned, pledged or mortgaged c. there are no material prior year charges or credits, nor exceptional or non- recurring items requiring separate disclosure. xvi. Related party relationships and transactions have been appropriately accounted for and disclosed in accordance with the requirements of applicable law and accounting standards. xvii. All events subsequent to the date of the financial statements and which require adjustment or disclosure have been adjusted or disclosed. xviii. Actual or possible litigation and claims have been accounted for and disclosed in accordance with the requirements of UK adopted international accounting standards, as interpreted and adapted by the 2024/25 Code. xix. Having assessed going concern, I believe that the Council and Group’s financial statements should be prepared on a going concern basis. I do not expect the Council to demise in its current organisational form in the next twelve months; however, my basis for going concern acknowledges that if that situation arose the services would be transferred to another body. I have not identified any material uncertainties relating to going concern and believe that no further disclosures relating to the Council or Group’s ability to continue as a going concern need to be made in the financial statements. Information Provided xx. I have communicated to you all deficiencies in internal control of which management is aware. xxi. All transactions undertaken by the Council have been recorded in the accounting records and are properly reflected in the financial statements. xxii. I have disclosed to you the results of my assessment of the risk that the financial statements may be materially misstated as a result of fraud. Page 109 of 286
Page 110
My Ref: AMacA/CB Your Ref: RENFC101-LOR-2425 Contact: Alastair MacArthur Telephone Number: 0300 300 0285 Email: alastair.macarthur@renfrewshire.gov.uk Finance and Resources Director: Alastair MacArthur CPFA Renfrewshire House, Cotton Street, Paisley, PA1 1JB www.renfrewshire.gov.uk xxiii. I have disclosed to you all information in relation to known fraud or suspected fraud that I am aware of and that affects the Council and involves: a. management; b. employees who have significant roles in internal control; or c. others where the fraud could have a material effect on the financial statements. xxiv. I have disclosed to you all information in relation to instances of, or allegations of fraud, or suspected fraud, affecting the financial statements communicated by employees, former employees, analysts, regulators or others. xxv. I have disclosed to you all known instances of non-compliance or suspected non- compliance with laws and regulations whose effects should be considered when preparing financial statements. xxvi. I have disclosed to you the identity of the Council’s related parties and all the related party relationships and transactions of which I am aware. xxvii. I have disclosed to you all known actual or possible litigation and claims whose effects should be considered when preparing the financial statements. xxviii. I have provided you with: a. access to all information of which I am aware that is relevant to the preparation of the Council’s financial statements such as accounting records, and all other records requested; b. additional information that you have requested from us for the purpose of your audit; and c. unrestricted access to persons within the Council (via remote arrangements where necessary), from whom you determined it necessary to obtain audit evidence. xxix. I acknowledge our legal responsibilities regarding disclosure of information to you as auditors and confirm that so far as I am aware, there is no relevant audit information needed by you in connection with preparing your audit report of which you are unaware. I have taken all the steps that I ought to have taken in order to make myself aware of any relevant audit information and to establish that you are aware of that information. Page 110 of 286
Page 111
My Ref: AMacA/CB Your Ref: RENFC101-LOR-2425 Contact: Alastair MacArthur Telephone Number: 0300 300 0285 Email: alastair.macarthur@renfrewshire.gov.uk Finance and Resources Director: Alastair MacArthur CPFA Renfrewshire House, Cotton Street, Paisley, PA1 1JB www.renfrewshire.gov.uk Management Commentary xxx. The disclosures within the Management Commentary fairly reflect my understanding of the Council’s financial and operating performance over the period covered by the financial statements. Annual Governance Statement xxxi. I am satisfied that the Annual Governance Statement fairly reflects the Council’s risk assurance and governance framework and I confirm that I am not aware of any significant risks or weaknesses in governance or internal control that are not disclosed within the Statement. Remuneration Report xxxii. I am satisfied that the disclosures within the Remuneration Report have been properly prepared in accordance with The Local Authority Accounts (Scotland) Regulations 2014. Wider Scope xxxiii. I have made you aware of any issues that could affect your Wider Scope reporting responsibilities, including any external or internal reports which highlight weaknesses in our arrangements for securing economy, efficiency and effectiveness in our use of resources. Approval The approval of this letter of representation was minuted by the Renfrewshire Council at its meeting on 23 October 2025. Yours faithfully Signature: Name: Alastair MacArthur Position: Director of Finance and Resources Date: 7 October 2025 Page 111 of 286
Page 112
Page 112 of 286
Page 113
1 ___________________________________________________________________ To: Council On: 23 October 2025 ___________________________________________________________________ Report by: Director of Finance and Resources ___________________________________________________________________ Heading: Audited Annual Accounts 2024/25 - Renfrewshire Council Group ___________________________________________________________________ 1. Summary 1.1 The 2024/25 unaudited Annual Accounts were approved by Council on 26 June 2025. Each year the Council’s appointed external auditors carry out an audit of the Council’s financial statements and provide an opinion as to whether those statements provide a true and fair view of the financial position of the Council, and its income and expenditure for the year; and also whether they have been prepared in accordance with the relevant regulations. 1.2 The audited annual accounts are now presented for members’ noting and further recommendation to the Council that the audited accounts be approved. 1.3 There were five material adjustments made to the annual accounts over the course of the audit, along with other presentational and disclosure changes. These are detailed in Azets’ Annual Audit report, presented at agenda item 1. ___________________________________________________________________ 2. Recommendations 2.1 The Council is asked to approve the attached audited Annual Accounts 2023/24 for signature in accordance with the Local Authority Accounts (Scotland) Regulations 2014. Item 2 Page 113 of 286
Page 114
2 ___________________________________________________________________ Implications of the Report 1. Financial – The 2024/25 Annual Accounts demonstrate that the Council continues to operate services within the resources available, and in line with the relevant legislation. 2. HR & Organisational Development – none directly arising from this report. 3. Community/Council Planning – none directly arising from this report. 4. Legal – An audit opinion free from qualification demonstrates the Council’s compliance with the statutory accounting requirements set out in the Local Government (Scotland) Act 1973 and the Local Government in Scotland Act 2003. 5. Property/Assets – none directly arising from this report. 6. Information Technology – none directly arising from this report. 7. Equality & Human Rights – none directly arising from this report. 8. Health & Safety – none directly arising from this report. 9. Procurement – none directly arising from this report. 10. Risk – none directly arising from this report. 11. Privacy Impact – none directly arising from this report. 12. Cosla Policy Position – none directly arising from this report. 13. Children’s Rights – none directly arising from this report. 14. Climate Risk – none directly arising from this report. ___________________________________________________________________ Author: Christine McCourt, Head of Finance and Procurement Page 114 of 286
Page 115
Page 115 of 286
Page 116
1 Contents Management Commentary ................................ 2 Statement of Responsibilities .......................... 16 Annual Governance Statement ........................ 17 Remuneration Report ...................................... 27 Independent auditor’s report ........................... 35 Comprehensive Income and Expenditure Statement ....................................................... 39 Movement in Reserves Statement .................... 40 Balance Sheet ................................................. 41 Cashflow Statement ........................................ 42 Note 1: Expenditure and Funding Analysis ........ 43 Note 2: Financing and investment income & expenditure ..................................................... 45 Note 3: Taxation and non-specific grant income 45 Note 4: Expenditure and income analysed by nature ............................................................. 45 Note 5: Grant income ...................................... 46 Note 6: Adjustment between accounting basis and funding basis under regulations ....................... 47 Note 7: Usable reserves ................................... 48 Note 8: Unusable reserves ............................... 51 Note 9: Property, Plant and Equipment ............. 55 Note 10: Heritage Assets .................................. 58 Note 11: Investment properties ........................ 58 Note 12: Assets held for sale ............................ 58 Note 13: Intangible assets ................................ 58 Note 14: Capital expenditure and capital financing ....................................................................... 59 Note 15: Service Concession Arrangements ..... 60 Note 16: Leases ............................................... 62 Note 17: Inventories ........................................ 64 Note 18: Cash and cash equivalents ................. 64 Note 19: Debtors ............................................. 64 Note 20: Creditors ........................................... 65 Note 21: Provisions .......................................... 65 Note 22: Financial Instruments ......................... 66 Note 23: Nature and extent of risks arising from Financial Instruments ...................................... 70 Note 24: External audit costs ............................ 73 Note 25: Agency services ................................. 73 Note 26: Related parties ................................... 74 Note 27: Pension schemes accounted for as defined contribution schemes .......................... 76 Note 28: Defined benefit pension schemes ....... 77 Note 29: Contingent liabilities .......................... 82 Note 30: Events after the balance sheet date .... 82 Note 31: Accounting Standards Issued not Adopted .......................................................... 82 Note 32: Accounting Policies – Renfrewshire Council ........................................................... 83 Note 33: Judgements in Applying Accounting Policies ........................................................... 95 Note 34: Assumptions made about the future ... 96 Common Good Funds ...................................... 97 Housing Revenue Account ............................... 99 Council Tax Income Account .......................... 101 Non-Domestic Rates Income Account ............ 102 Group Accounts ............................................ 104 Notes to the Group Accounts ......................... 107 Group Accounting Policies ............................. 120 Page 116 of 286
Page 117
2 Annual Accounts 2024/25 Management Commentary The purpose of the Management Commentary is to present an overview of Renfrewshire Council’s performance during the 2024/25 financial year and to help readers understand its financial position at 31 March 2025. In addition, it outlines the main issues and risks that may impact the performance of the Council in the future. Renfrewshire Council, one of 32 local authorities in Scotland, was established by the Local Government (Scotland) Act 1994 and came into being on 1 April 1996. It provides services to over 184,000 residents in the entire Renfrewshire area, which has a mixed geography, with many villages complementing its three main towns of Johnstone, Paisley and Renfrew. The Council is part of a wider Group, with partnerships spanning a number of organisations to varying degrees. The Council also works closely with the Renfrewshire Health and Social Care Partnership, which delivers adult care services across the region; and with OneRen, which delivers leisure and cultural services. During 2024/25, Renfrewshire Council was organised into four services, as follows: The services that the Council provides includes: 0-15 - 16% 16-64 - 64% 65+ - 20% Women - 51.7% Population - 184,340 Men - 48.3% Page 117 of 286
Page 118
3 Annual Accounts 2024/25 Our Aims and Objectives The aims of the Council Plan 2022-2027 were revised during 2024 with a refreshed Community Plan and a new Council Plan. The Community Plan is Renfrewshire’s Local Outcomes Improvement Plan, and the Council works with local partners to achieve a Renfrewshire that is Thriving, Well, Fair and Safe. The Council’s vision to 2027, as described in the Council Plan is: The five strategic outcomes, which the Council is working with partners, communities, and businesses to deliver, and one cross-cutting theme that underpins the delivery of these outcomes, are: Place: Working together to enhance wellbeing across communities Economy: Building an inclusive, green, and resilient economy Fair: Nurturing bright, happy, and healthy futures for all Green: Leading Renfrewshire to Net Zero Living Our Values: Making a difference together Improving outcomes for Children and Families: Cross-cutting Linked closely to this is the new phase of the Council’s transformation programme, Reshaping Renfrewshire. This programme links the Council’s financial challenge, and the vision for place, as described through the Council Plan, and explores how we can continue to develop how we work and operate to ensure a financially sustainable long-term future, while transforming our impact across Renfrewshire and improving outcomes for our communities. This phase of our transformation programme also has a sharp external focus on the needs of our communities and to ensure our vital services are financially sustainable for the longer term, again closely aligned to the Council Plan. Each Council service prepares a Service Improvement Plan, themed around the Council Plan’s strategic outcomes, demonstrating how the services will contribute to the delivery of the Council Plan. Financial Strategy The financial strategy and service plans of the Council support the delivery of the Council’s priorities outlined in the Council Plan. To achieve this, the financial strategy must ensure that resources are effectively and efficiently used in line with overall objectives; and ensure that resources are managed sustainably and in a way that continues to ensure the stability of service delivery. The medium-term Financial Outlook was reported to the Council on 12 December 2024, with a further update on 27 February 2025. These reports highlight the increasingly challenging financial and economic environment the Council is facing, predominantly linked to high levels of cost growth, coupled with lower real terms income. The Council’s medium-term financial outlook continues to be based on an assumed flat-cash revenue settlement over the short term; this, coupled with significant cost pressures, particularly around pay inflation, is the principal driver for the extremely challenging financial outlook. On 27 February 2025, the Council decided to increase council tax in 2025/26 by 9.5%. At that time, it was reported to Council that it is estimated to be facing a £25-40m funding gap over the period to 2027/28, before any further decisions on council tax. The Council therefore continues to target cost reductions and savings averaging £8m each year over the medium term, Page 118 of 286
Page 119
4 Annual Accounts 2024/25 and financial sustainability and stability risks remain high going into 2025/26. Information on the year-end financial position of the Council at 31 March 2025 is detailed later in the Financial Performance section. Review of the Year The Council publishes updates on progress delivering the Council Plan every six months, and the next update will be reported to the Leadership Board on 18 June 2025. The December report can be found here. The Council also publishes an annual Public Performance Report, which gives residents an overview of how the Council performs in relation to its key priorities, and how we perform in terms of the 108 indicators included in the Local Government Benchmarking Framework (LGBF). A detailed report on Renfrewshire’s performance against the LGBF indicators was considered by the Audit, Risk and Scrutiny Board on 19 May 2025. Key Achievements 2024/25 Place The Council continues to work with owners of prominent town centre buildings on regenerating them and bringing them back into use. Recent investments have included the Liberal Club, St Matthew’s Church and County Place in Paisley. Other town centre work includes current work on designs for civic squares in Erskine and Johnstone. A new Transport Strategy - Travel Renfrewshire 2035 – has been through an extensive consultation programme including online surveys, workshops with community organisations and pop-up engagement sessions in supermarkets. It is anticipated that the finalised strategy will be ready for approval in summer 2025. Economy Our employability services worked with over 1,800 people in 2024/25. Over 600 people gained new qualifications through the service and 491 were supported into paid employment. At the Advanced Manufacturing Innovation District Scotland (AMIDS), ground has been broken for CPI’s Oligonucleotide Manufacturing Innovation Centre (OMICE); CPI already operate the Medicines Manufacturing Innovation Centre on the AMIDS site. The Council’s events programme during 2024/25 attracted 108,665 attendees against an annual target of 95,000. The target was in part exceeded due to good weather throughout the spring programme, increasing the number of attendees at each of the Gala Days and the Food and Drink Festival. Halloween continues to be the key driver for attendees and visitors, with 37% of the 40,000 attendees identifying as visitors to the area. Fair: Officers continued to work with partners to progress the Fairer Renfrewshire Programme, ensuring that residents and communities are able to benefit from targeted advice and support. This has included the establishment of new schools and family advice provision, pension credit take-up campaigns, and support for the ongoing work programme of the Fairer Renfrewshire Lived Experience Panel. Successful programmes for both Summer of Fun and Winter Connections ran in 2024/25. Summer of Fun allocated £60,000 of funding to 21 organisations to deliver free activities over the school summer holidays, including toddler play sessions, sports, arts and crafts and day trips to visitor attractions. Green: The Council has developed an initial carbon budget with interim targets covering the period until 2030/31. Identifying emissions by service area will be key to understanding how emissions relate to service delivery, and help develop initiatives to reduce these. Priority projects to support our journey to Net Zero continue to be identified, costed and progressed in partnership Projects include Sustainable Travel, and Local Heating and Energy Efficiency (LHEES). A project register will be finalised within the new Carbon Management Plan, outlining our approach to reducing carbon emissions over a 3-year period. Living Our Values: External auditors Azets have published an interim Best Value follow-up report on the Council’s approach to community engagement and culture change. Reported to the Audit, Risk and Scrutiny Board on 17 April 2025, the report was positive, with the auditors noting that Page 119 of 286
Page 120
5 Annual Accounts 2024/25 the Council has made good progress, building on a range of existing good practice alongside refreshed approaches. In late 2024, the Council undertook an Employee Survey covering issues including how people felt about the Council, their job and management, their wellbeing and key HR policies. The survey was issued to all staff and 1,956 responses were received. There were many positive results, including in relation to line management and job satisfaction. A full report on the results can be found here. The Council’s Digital Experience Programme is progressing well, with new content for the highest- demand areas of the Council website now completed. The team has undertaken user testing with local residents, with feedback on ease of use and clarity of information being positive. The programme remains on track to deliver the first phase of renfrewshire.gov.uk in summer 2025. Renfrewshire has performed well in external inspections of its services to support and protect children and adults. The Care Inspectorate’s Children at Risk of Harm Inspection identified major strengths in Renfrewshire, with an overall grade of ‘Very Good’ and its joint inspection (with Healthcare Improvement Scotland) of Adult Support and Protection found that processes were ‘very effective’ with major strengths, supporting positive experiences and outcomes for adults at risk of harm. Improving Outcomes for Children and Young People: Renfrewshire Council's new Learning Estate Strategy was approved by the Education and Children’s Services Policy Board on 22 August 2024. It provides a long-term framework for planning and investment in the school estate across the region, including projections and capacity planning for the next 10-15 years. The report can be found here. Renfrewshire Council’s Promise Keeper Network has 362 Promise Keepers and work continues to support further growth. Our approach has attracted national interest. Three of Renfrewshire’s Promise-funded projects were featured in March at a Promise Partnership Event organised by CORRA. The Renfrewshire Whole Family Wellbeing service has supported over 1,000 families so far, currently trialling technology that allows third sector partners to make referrals and record wellbeing information, which is facilitating better data-sharing. To date, the service can demonstrate positive outcomes against a range of measures, including improved parental understanding of the needs of the child, improved participation in / engagement with universal services, and improvements in family functioning and relationships. Construction is well underway on the new Paisley Grammar School Community Campus and remains on track to welcome pupils in 2026. This is a flagship project for the Council, with the school being built to Passivhaus energy standards. Performance Indicators Our Council Plan is one way in which we report to elected members and Renfrewshire residents on our performance. The Council Plan reports on 34 indicators, of which 21 have a target. In 2024/25, five of our indicators met or exceeded their target, three narrowly missed the target, and seven were behind target. There are six indicators for which 2024/25 data is not yet available. Our areas of strong performance include: • Helping our citizens back into work, with 491 people supported by our employability service moving into paid employment this year; • The percentage of primary school children taking up their free school meal entitlement, which is now over 60% following menu changes and taster session to encourage pupils to try the meals; • The number of young people entering a positive destination after leaving school has maintained strong performance, with approximately 97% of the 2024 leavers cohort entering a positive destination; Page 120 of 286
Page 121
6 Annual Accounts 2024/25 • Keeping our looked after children in family settings wherever possible, with 91.6% looked after in the community; • The condition of local roads, which reflects year- on-year investment in this area; and • Promoting Renfrewshire as a great place to live, work and visit, with extensive media reach for council activity and local events. We are narrowly missing our annual targets in the following areas: • Responding to frontline complaints and Freedom of Information requests within the required timescales; • Reducing the level of CO2 emissions from our vehicle fleet and public space lighting; • Visits to fly-tipping hotspots. Areas for Improvement and Development Detailed consideration of performance is a core part of our Service Improvement Plan and Council Plan reporting, which note areas for continued improvement and development as well as successes. As well as the achievements noted above, services have identified areas where progress has been delayed or where further work is required. These are: • The percentage of Council housing stock which meets the Scottish Housing Quality Standard; • The time taken for planning applications and building warrants; • The average days lost to sickness absence per employee. We do not yet have 2024/25 data on affordable housing comple�ons, pothole comple�ons, the percentage of procurement spend with local businesses, average �mes to complete homelessness duty, percentage of household waste recycled, or average days of staff sickness absence. Data in rela�on to educa�onal atainment and accredited awards are based on academic years (August to July) so the latest available repor�ng year is 2023/24 and this has been included in the data. General performance information can be found on the Council’s website at the following path: Your Council>Information, performance and statistics>Council Performance. LGBF data can be found at: Your Council>Information, performance and statistics>Council Performance>Benchmarking. Service Update Reports, Service Delivery Plans and Operational Performance Reports are reported to the relevant Policy Board and can be found on the Council Committee Management Information System at: https://renfrewshire.cmis.uk.com/renfrewshire/Council andBoards.aspx Working Towards Net Zero by 2030 Renfrewshire Council’s Public Bodies Climate Change Du�es reported a 3.3% emissions reduc�on compared with the previous year, and overall annual emissions reduc�on of 64.6% against the 2012/13 baseline. Ac�vity includes delivering change across Council opera�ons, and large-scale projects with local benefits aligned to the five themes of Renfrewshire’s Plan for Net Zero, which are Clean Energy, Sustainable Transport, Circular Economy, Connected Communi�es and Resilient Place. Further detail of ac�vity within each theme is set out in the following sec�ons. Clean Energy: • Following the launch of the AMIDS district hea�ng network (DHN), the Council has secured Sco�sh Government grant funding to develop Outline Business Cases for poten�al heat networks in Paisley Central and an extension of the AMIDS DHN. • The Council is also exploring large scale renewable energy genera�on in collabora�on with external specialists to evaluate sites that could be commercially viable. This aims to op�mise locally generated energy opportuni�es and maximise the Page 121 of 286
Page 122
7 Annual Accounts 2024/25 renewable energy generated locally, thereby increasing energy security and resilience. Sustainable Transport: • Working in collabora�on as part of the Glasgow City Region to accelerate the delivery of public EV Charging Infrastructure which aims to install over 3,000 addi�onal charge points over the coming years. The project is currently being scoped out, with suitable loca�ons being iden�fied and priori�sed based on clear metrics such as depriva�on, flood risk and exis�ng local infrastructure. • Con�nued use of hydrotreated vegetable oil (HVO) as alterna�ve fuel for bin lorries and large fleet, reducing CO2 emissions by up to 90% and contribu�ng to improved air quality. Circular Economy: • Exploring opportuni�es to maximise recycling, building on successful recycling ini�a�ves across the school estate. An ini�al public buildings project is focusing on the implementa�on of full recycling facili�es within Renfrewshire House. Resilient Place: • An Adapta�on Plan, including an Offse�ng Strategy for Renfrewshire will be developed over the next 12 months. Early engagement has taken place with internal services and with communi�es. • Restoring Renfrewshire Rivers: Con�nued project to tackle non-na�ve species (INNS) and restore natural habitats along 5 watercourses within the Renfrewshire Council area. Gender Pay Gap The gender pay gap is the difference between the average hourly rates of pay of men and women expressed as a percentage, where a positive figure indicates that women are paid less than men. A negative figure indicates that women are paid more than men. The gender pay gap is different from equal pay, which is a direct comparison of two people or groups carrying out the same or an equivalent role. At 31 March 2025, the mean gender pay gap for Renfrewshire Council was -0.52% (0.44% at 31 March 2024). Page 122 of 286
Page 123
8 Annual Accounts 2024/25 Key Financial Ratios The following tables provide information regarding the financial performance of the Council in 2024/25 and the affordability of its ongoing commitments: 2023/24 Estimate Actual Actual Reserves Uncommitted General Fund reserves as a % of budgeted net expenditure 1.9% 1.9% 2.0% Reflects the level of funding available to meet unplanned expenditure and manage financial risk Movement in uncommitted General Fund balance n/a 0.0% -0.4% Reflects Council spending decisions during the financial year Council Tax In-year collection rate 95.0% 94.5% 94.3% Reflects the Council’s effectiveness in collecting Council Tax debt Council Tax income as a proportion of total taxation and non-specific grant income 18.8% 18.3% 19.8% Reflects the Council’s ability to vary expenditure by raising Council Tax, the principal local authority controlled source of finance Debt/Long term borrowing Capital Financing Requirement (CFR) £591.7m £599.6m £510.1m External debt £475.1m £397.7m £386.1m Ratio of financing costs to net revenue stream (General Fund) 2.7% 2.9% 2.9% Financial Indicator 2024/25 Commentary The information is this section demonstrates that the level of external debt (driven by the capital programme) is affordable, owing to the low proportion of our budget spent on servicing debt. Further information, including descriptions of these terms and their significance, is available in the Treasury Management Annual Report, presented to h C il i h Financial Performance Primary Financial Statements The annual accounts summarise the Council’s transactions for the year, its financial position at 31 March 2025, and its cashflows. The annual accounts are prepared in accordance with the International Accounting Standards Board Framework for the Preparation and Presentation of Financial Statements as interpreted by the Code of Practice on Local Authority Accounting in the United Kingdom (“the Code”). The Primary Financial Statements include the Comprehensive Income and Expenditure Statement (CIES), Movement in Reserves Statement (MIRS), Balance Sheet and Cashflow Statement. These statements are accompanied by notes to the accounts, which provide more details on the figures shown in the statements and set out the accounting policies adopted by the Council. There are also separate statements for Council Tax, Non-Domestic Rates, the Housing Revenue Account and the Common Good Funds. The Comprehensive Income and Expenditure Statement (CIES) presents the total cost of providing Council services in 2024/25 along with the income available to fund those services. The outturn explained in the following section differs from the accounting deficit shown in the CIES due to accounting adjustments required to comply with proper accounting practice, but which under statute should not impact on local taxpayers. A reconciliation of these figures can be found in the Note 1: Expenditure and Funding Analysis. Page 123 of 286
Page 124
9 Annual Accounts 2024/25 General Fund The General Fund is funded by government grant and Council Tax revenues and the Council is also able to apply usable reserves from the General Fund Balance to fund expenditure. As mentioned previously, the Council’s medium-term Financial Outlook highlights the continuing challenging financial and economic environment the Council is facing, linked to inflation, coupled with slower income growth. For the General Fund in 2024/25, increases in waste collection and disposal costs, high inflation on vehicle parts and specialist contractors, and public building repairs, have featured in regular budget monitoring reports throughout the financial year. These pressures have been offset by increased investment income, culminating in a minor service overspend against budget of £0.145m (0.03%). The Council’s largest category of spend is staffing, so naturally any pay settlement linked to high levels of inflation will create a further cost pressure. In 2024/25 a national pay settlement of 3.6% was agreed for local government workers. In recognition of the challenging financial environment, the Scottish Government provided councils with additional funding to support this pay settlement. For Renfrewshire, this amounted to £2.6m. Adult Services experienced a year-end overspend of £3.8m which decreased the reserves of the Renfrewshire Health and Social Care Partnership, who operate these services. As this reserve drawdown does not affect the Council’s General Fund balance, it is shown as a break-even position in the table below. The Council fell just short of its target in-year council tax collection rate of 95.9% in 2024/25, instead returning a creditable 94.5% in light of the persisting cost of living strain on household finances. Income from Council Tax actually over-recovered by £0.249m, owing mainly to more prior year arrears being collected than had been anticipated. After adjusting for the over-recovery in Council Tax revenues, the final position for the Council’s General Fund balance at 31 March 2025 was an underspend of £0.104m. Revised Budget Actual Variance £m £m £m Chief Executive's Service 28.333 28.330 0.003 Children's Services 256.897 257.721 (0.824) Environment, Housing and Infrastructure 68.521 70.671 (2.150) Finance and Resources 47.702 47.537 0.165 Miscellaneous Services 27.837 25.176 2.661 Adult Services* 106.810 106.810 0.000 Net Expenditure 536.100 536.245 (0.145) Revenue Support Grant (338.436) (338.436) 0.000 Council Tax Income (97.453) (97.702) 0.249 Non-Domestic Rates Income** (107.505) (107.505) 0.000 Funding (543.394) (543.643) 0.249 Contribution to General Fund Balances (7.294) (7.398) 0.104 2024/25 *Adult Services overspent against budget in the year by £3.808m; this was drawn from HSCP reserves and does not impact on the Council’s General Fund balance. **The Council collected £107.2m directly from local businesses with £0.3m due back to the Scottish Government National Non- Domestic Rates Pool. Page 124 of 286
Page 125
10 Annual Accounts 2024/25 The Council’s Reserves The Council holds the following balances in reserve. Further details can be found in Note 7: Usable reserves. As at 31 March 2024 Usable Reserves As at 31 March 2025 £m £m 117.620 General Fund Balance 138.769 6.164 Housing Revenue Account 6.933 7.518 Capital Receipts Reserve 5.485 90.917 Other Statutory Funds 84.008 222.219 Total 235.195 The General Fund balance of £138.8m will be carried forward to 2024/25. Of this balance, £128.5m has been earmarked for a particular purpose, as outlined in Note 7: Usable reserves. This leaves unallocated reserves of £10.3m (1.9% of the Council’s net annual running costs), which is in line with levels agreed by the Council under its revised financial planning principles. It is viewed that this balance is appropriate to the financial risk environment the Council is facing both in light of the recovery from the pandemic, but also to mitigate adverse risks anticipated in public finances generally over the medium to longer term. Housing Revenue Account The balance on the Housing Revenue Account (HRA) as at 31 March 2025 has increased to £6.9m. This remains a prudent level of unallocated reserves for the HRA to mitigate the impact of any unforeseen risks and to provide an element of mitigation against forecast pressures related to the prevailing economic climate. The year-end break-even position was arrived at after some budget variances were experienced in-year. Property repairs and maintenance, including voids management, significantly overspent; however, this was offset by lower capital charges and increased interest receivable following higher interest rates over the year, allowing a contribution to reserves of £0.77m. Infrastructure Assets The Scottish Government published a Statutory Override in August 2022, which has been extended to allow councils to continue the current accounting treatment for Infrastructure assets until 31 March 2025. Further detail is provided at Note 9. Capital and Borrowing Renfrewshire Council continues to make significant capital investment in council housing, schools, culture, roads and the town centre estate. On 29 February 2024, the Council approved the housing capital investment programme for 2024/25 of £35m; and the General Fund capital investment programme for 2024/25 of £148m. The capital investment programmes were affected by the availability of contractors, the complexity of refurbishment and construction works as well as high levels of inflation impacting construction costs and professional fees. Programmes have therefore been re- profiled during the year to reflect revised timescales of individual projects, or where project completion dates have been delayed, resulting in actual capital spend for the year of £28m for housing capital investment and £92m for the General Fund. Further detail is provided in Note 14: Capital expenditure and capital financing. The following charts show the actual expenditure incurred and income received in relation to the 2024/25 capital programme. Page 125 of 286
Page 126
11 Annual Accounts 2024/25 During the course of 2024/25 there was no new long- term external borrowing. The level of cash balances available to the Council remains consistent with daily cash requirements, treasury and capital investment plans. The decrease in cash balances compared to 31 March 2024 is attributable in part to a significant capital programme, particularly the Council’s investment in the new Paisley Grammar School and Community campus, along with completion of the Renfrew Bridge. The Council’s borrowing strategy is prepared in accordance with the Code of Practice on Treasury Management in Local Authorities. The majority of the Council’s borrowing comes from the Public Works Loan Board with the remainder from market and other loans. Further details are provided in Note 22: Financial Instruments. The Council regulates its capital spending limits within a prudential framework recommended by CIPFA and endorsed by the Scottish Government. Each year, the Council sets its capital financing requirement (CFR) for the forthcoming year in its Treasury Management Strategy Statement (TMSS), approved by the Council on 29 February 2024 with a mid-year update on 12 December 2024. The TMSS for 2024/25 can be found on the Council Committee Management Information System at: http://renfrewshire.cmis.uk.com/renfrewshire/Home.as px. The CFR is a prudent assessment of the aggregate external borrowings for capital investment purposes that are affordable and sustainable over the longer- term. The actual CFR at 31 March 2025 was £598.7m, within the authorised limit of £620.0m. The Council’s external borrowings have only been applied for capital investment purposes, with the Council’s net external debt being £397.7m at 31 March 2025 compared to the operational boundary of £595.0m. The Council’s costs of borrowing remain consistently one of the lowest of all Scottish local authorities, are affordable, and align to the Council’s medium to long-term financial strategy. The Council’s non-housing financing costs were 2.9% as a proportion of the Council’s non-housing net revenue stream. Housing related financing costs as at 31 March 2025 were 22.7% of net housing revenues, lower than the budgeted level of 28.6%. Page 126 of 286
Page 127
12 Annual Accounts 2024/25 Net Pension Position The disclosure requirements for pension benefits under IAS19 are detailed in Notes 27 and 28. The appointed actuaries, have confirmed an increase of £187m in their assessment of the Council’s share of the actuarial position of the local government pension fund as at 31 March 2025. This is largely attributable to the corporate bond yield (upon which the pension discount rate is derived) having risen over the past year, which served to reduce the employer's pension obligations and led to the gain on the balance sheet. The assessment provides only a snapshot as at 31 March 2025 and necessarily changes on a day-to-day basis to reflect stock market movements in particular. The appointed actuaries remain of the view that the asset holdings of the Strathclyde Pension Scheme and the contributions from employees and employers provide sufficient security and income to meet future pension liabilities. Accounting rules require that a cap is placed on the value of a pension asset that can be reported in the Balance Sheet. For 2024/25, this has adjusted the value of the pension asset shown in the balance sheet from £754m to nil. The value of Unfunded liabilities at the same date is £65m. A potential change to pension rules is outlined in Note 29: Contingent liabilities; however, this has not been reflected in the pension liability reported in the Balance Sheet. Provisions and Contingencies The Council has provided for eventualities which may have a material effect on the financial position of the Council. The reasons for the provisions made are outlined in Note 21: Provisions. In general, any contingent liabilities known to the Council are covered by insurance arrangements. As outlined at Note 7, the Council has also set aside £3.0m for uninsured claims. Any contingencies that cannot yet be accurately quantified are outlined in Note 29: Contingent Liabilities. The Renfrewshire Council Group Local authorities are required to prepare Group Accounts in addition to their own Council’s accounts where they have a material interest in other organisations. The Group Accounts consolidate the results of the Council with five subsidiaries: • Renfrewshire Leisure Limited, trading as OneRen; • the Common Good Funds; • the Coats Observatory Trust; • Park Lane Developments (Renfrewshire) LLP; and • Paisley Museum Reimagined Limited. The Group Accounts also consolidate the Council’s share of five other entities treated as associates or joint ventures: • Strathclyde Partnership for Transport; • Strathclyde Concessionary Travel Scheme Joint Committee; • Renfrewshire Valuation Joint Board; • Renfrewshire Health and Social Care Integration Joint Board; and • AMIDS Renfrewshire LLP. The Council has non-material interests in a number of other entities namely Scotland Excel; Glasgow and the Clyde Valley Strategic Development Planning Authority; and Glasgow City Region – City Deal Cabinet. Financial Outlook and Key Risks Financial Sustainability The Financial update reports throughout 2024/25 outlined continued uncertainty for local government finances. In 2020, the Council agreed to replenish unallocated reserves to a threshold of £10m in order to address the risks of significant and unplanned cost pressures which may emerge over the medium term, and this has been maintained in 2024/25. Page 127 of 286
Page 128
13 Annual Accounts 2024/25 The Council continued to feel the impact of global political and economic change during 2024/25, and though general inflation did reduce mid-year, it increased again towards the end of the financial year. The Scottish Government most recently published its Medium Term Financial Strategy (MTFS) on 25 May 2023, outlining its potential spending and funding position over the subsequent 5 years. The MTFS outlined a growing financial gap for the Scottish Government, with spending pressures are expected to outstrip the resources available from 2024/25, with an estimated funding gap of approaching £2 billion by 2027/28. The outlook for the local government settlement is likely to remain very constrained and in line with that previously outlined in the Resource Spending Review i.e. effectively real terms cuts. An updated MTFS is now expected in summer 2025. As outlined in the Revenue Estimates 2024/25 report to Council in February 2024, after adjusting for new responsibilities, areas of growing responsibility and other conditional aspects of the settlement to provide a like-for-like comparison to 2024/25, the underlying core grant for Renfrewshire Council increased by £1.507m (0.4%). The Scottish Government announced a council tax freeze in 2024/25, and the Council used £2.299m of earmarked reserves to balance the recurring revenue budget. Existing service and cost pressures arising from pay settlements, demographic and socio-economic factors will continue to play a major role in driving spending pressures for the Council; however, the predominant focus of the Council will be addressing its projected medium-term funding gap. As reported to the Council in February 2025, the central forecast is a financial gap of £25-40m by the end of 2028. This forecast is prior to any decisions on council tax increases in 2026/27 or 2027/28. Assuming a decision to uplift in council tax by 6.5% in each of these two years, the cumulative gap would reduce to a range of £5-25m. The Council continues to mitigate treasury risks, including those associated with the security of cash deposits, by actively considering debt restructuring as outlined in the Council's agreed Treasury Management Strategy. The Council also continually reviews, in consultation with its treasury advisors, the criteria for placing deposits with financial institutions on the Council’s approved counterparty list. As part of the Council’s treasury strategy, it continues to utilise internal cash balances, deferring or minimising external borrowing with the dual objectives of reducing the level of cash deposits held by the Council, whilst generating ongoing savings in net interest costs. This strategy is monitored carefully in order to ensure that the Council retains sufficient cash balances to support its ongoing requirements and remains alert to any anticipated adverse movement in future borrowing rates. Common Good Funds and Coats Observatory Trust The Council administers the Common Good Funds for the areas of Paisley, Renfrew and Johnstone, as well as the Coats Observatory Charitable Trust. In order to comply with the Code, Audit Scotland and the Office of the Scottish Charity Regulator (OSCR) requirements, the Council separately prepares the financial statements of the Coats Observatory Trust, with the financial performance of the Common Good Funds disclosed in the Council’s Annual Accounts. Balances are also included in the Group Accounts. Azets is the appointed auditor for the Coats Observatory Charitable Trust. Overall, the Common Good Funds incurred a combined in-year deficit of £0.262m which is subtracted from the previous surplus brought forward. The total net asset value increased by £0.828m, including a decrease in investments of £0.387m. Both the market values of investments and income generated from dividends are likely to be subject to ongoing volatility as the economy responds to global political and economic changes, and is subject to increased inflationary risk. The total net asset value of the Observatory Trust increased by Page 128 of 286
Page 129
14 Annual Accounts 2024/25 £0.352m owing to investment in the Observatory as part of the Paisley Museum Reimagined project. Other Key Risks Renfrewshire Council has a robust risk management approach and strategic, corporate and service risks are monitored through our Audit, Risk and Scru�ny Board. The areas iden�fied as highest risk for the year ahead are detailed below. Risk Mitigating Actions Economy A range of strategic challenges impact on the local and national economy. Renfrewshire’s economy has well-established strengths in transport, manufacturing, construction, and retail, but all sectors and supply chains have been impacted by these global economic challenges. The impact is mitigated through our large-scale infrastructure investment programme which includes the AMIDS development, our investment in schools, housing and heritage assets, our employability programmes, and our support for new and existing businesses, which includes support to bid for council contracts and to reduce carbon emissions. Reducing inequalities The COVID-19 pandemic exacerbated many existing inequalities and had a disproportionate impact on our poorer communities. In Renfrewshire, we seek to address unequal outcomes through strong partnership working, through our Fairer Renfrewshire programme, through specific programmes which tackle local priorities (such as our focus on alcohol and drug use), through national programmes such as the Scottish Attainment Challenge, and on building community capacity. In the short-term, we are significantly focused on food insecurity and income maximisation. Financial Sustainability In common with other Scottish local authorities, Renfrewshire Council continues to face significant financial challenges. These have arisen from demographic pressures, the level of grant settlements, national policy decisions relating to areas of spend, inflationary cost pressures, and the impact of external events across the world. The Council has delivered savings through successive transformation programmes and financial sustainability workstreams to support delivery of further efficiencies. The managed use of reserves is also a factor that supports financial sustainability planning in the phasing of achievable savings. Successful Cyber Attack The risk has been updated from cyber-attack to risk of a successful cyber-attack>The likelihood of this risk has escalated, despite sophisticated technical security protocols and cyber architecture being in place. For those organisations who have been impacted by successful attacks, the effects are devastating. For security reasons, we do not publish details of the mitigating actions in place. Page 129 of 286
Page 130
15 Annual Accounts 2024/25 Conclusion and Acknowledgements We would like to acknowledge efforts by the whole Finance team in producing the annual accounts, as well as colleagues in other services for their continued hard work and support. Further information on the annual accounts or on the Council’s general finances can be obtained on the Council website (www.renfrewshire.gov.uk), or by telephoning 0300 300 0285. Cllr Iain Nicolson Alan Russell Alastair MacArthur Leader of the Council Chief Executive Director of Finance and Resources Page 130 of 286
Page 131
16 Annual Accounts 2024/25 Statement of Responsibilities The Authority's Responsibilities The Authority is required to: • make arrangements for the proper administration of its financial affairs and to secure that one of its officers has responsibility for the administration of those affairs (section 95 of the Local Government (Scotland) Act 1973). In Renfrewshire Council, that officer is the Director of Finance and Resources; • manage its affairs to secure economic, efficient and effective use of resources and safeguard its assets; • ensure that the Annual Accounts are prepared in accordance with legislation (The Local Authority Accounts (Scotland) Regulations 2014), and so far as is compatible with that legislation, in accordance with proper accounting practices (section 12 of the Local Government in Scotland Act 2003), and; • approve the Annual Accounts for signature. I can confirm that these annual accounts were approved for signature by the Council at its meeting on 23 October 2025. Signed on behalf of Renfrewshire Council. Cllr Iain Nicolson Leader of the Council The Director of Finance and Resources’ Responsibilities The Director of Finance and Resources is responsible for the preparation of the Authority's Annual Accounts in accordance with proper practices as required by legislation and as set out in the CIPFA/LASAAC Code of Practice on Local Authority Accounting in the United Kingdom (the Accounting Code). In preparing the Annual Accounts, the Director of Finance and Resources has: • selected suitable accounting policies and then applied them consistently; • made judgements and estimates which were reasonable and prudent; • complied with legislation; and • complied with the local authority Accounting Code (in so far as it is compatible with legislation). The Director of Finance and Resources has also: • kept adequate accounting records that were up to date; and • taken reasonable steps for the prevention and detection of fraud and other irregularities. I certify that the financial statements give a true and fair view of the financial position of the Council and its group at the reporting date and the transactions of the Council and its group for the year ended 31 March 2025. Alastair MacArthur Director of Finance and Resources Page 131 of 286
Page 132
17 Annual Accounts 2024/25 Annual Governance Statement Scope of responsibility Renfrewshire Council is responsible for ensuring that its business is conducted in accordance with the law and proper standards, and that public money is safeguarded, properly accounted for, and used economically, efficiently and effectively. The Council also has a statutory duty to make arrangements to secure best value under the Local Government in Scotland Act 2003. In discharging this overall responsibility, the Council’s members and the corporate management team are responsible for putting in place proper arrangements for its affairs and facilitating the effective exercise of its functions, which includes arrangements for the management of risk. The Council has approved and adopted a Local Code of Corporate Governance, which is consistent with the principles of the Chartered Institute of Public Finance and Accountancy (CIPFA) and the Society of Local Authority Chief Executives (SOLACE) framework; Delivering Good Governance in Local Government. A copy of the Local Code is available on our website at: www.renfrewshire.gov.uk > Your Council > Information, performance and statistics > Information Governance This statement explains how Renfrewshire Council has complied with the Local Code and also meets the Code of Practice on Local Authority Accounting in the UK, which details the requirements for an Annual Governance Statement. The purpose of the governance framework The governance framework comprises the systems and processes, and culture and values, by which the Council is directed and controlled and through which it accounts to, engages with and leads the community. It enables the Council to monitor the achievement of its strategic objectives set out in the Council Plan. The system of internal control is a significant part of that framework and is designed to manage risk to a reasonable level. Internal control cannot eliminate all risk of failure to achieve policies, aims and objectives and can therefore only provide reasonable and not absolute assurance of effectiveness. The system of internal control is based on an ongoing process designed to identify and prioritise the risks to the achievement of the Council’s policies aims and objectives, to evaluate the likelihood of those risks being realised and the impact should they be realised, and to manage them efficiently, effectively and economically. The governance framework The main features of our governance arrangements are described in the Local Code but are summarised below: The overarching strategic priorities and vision of the Council are set out in the Council Plan 2022-2027, which was refreshed in 2024 to make sure our priorities were clear and focused and to reflect how quickly the context was changing. The Council Plan is aligned to the Renfrewshire Community Plan 2017-2027 and sets out 5 strategic outcomes that the organisation will work to achieve over a 5-year period with specific priorities relating to tackling inequality, promoting economic and cultural regeneration, attainment, and sustainability. These strategic outcomes are underpinned by a cross- cutting theme of improving outcomes for children and families. Renfrewshire’s Community Plan (which also acts as Renfrewshire’s Local Outcome Improvement Plan as required by the Community Empowerment (Scotland) Act 2015) details how community planning partners will work together to achieve the key priorities identified for Renfrewshire. A mid-term review of the Community Plan was also undertaken in 2022 in tandem with the development of the new Council Plan, which identified three key areas of focus which should be progressed by partners. • The key outcomes the Council is committed to delivering with its partners, are set out in the Community Plan; • The Council operates within an established governance framework which incorporates a scheme of delegated functions, financial regulations, standing orders relating to contracts and procedural standing orders. These elements of the framework are kept under regular review by the Council; Page 132 of 286
Page 133
18 Annual Accounts 2024/25 • The Council facilitates policy and decision making through a policy board structure; • Services can demonstrate how their own activities link to the Council’s vision and priorities through their service improvement plans. Performance management and monitoring of service delivery is reported through policy boards regularly including six monthly updates to the Leadership Board on progress against the implementation of the Council Plan alongside six-monthly updates to policy boards on the service improvement plans. Operational reports are also provided to relevant policy boards by different services; • With regard to Performance Monitoring, the Council Plan scorecard is considered alongside other performance information each quarter by the Corporate Management Team. In addition, an in- depth look at performance in one service particular area of interest is undertaken at regular intervals. Performance scrutiny sessions between the Chief Executive and Directorate teams are undertaken, supported by a Peer Director model; • The Council has developed a performance management framework and uses the Pentana ICT system to co-ordinate and host all performance information. A performance management guide has been refreshed and shared with relevant Council officers to guide practice; • A Performance Board is being established which will be chaired by the Director of Environment, Housing and Infrastructure and will drive improvements in performance corporately and across Council services; • An annual report on the Local Government Benchmarking Framework, which includes data for over 100 indicators for all 32 local authorities, is provided to the Audit, Risk and Scrutiny Board each year. This will increase in frequency in relation to the recently revised Accounts Commission’s Statutory Performance Direction; • The Council makes a range of performance information available on its website, including the publication of its public performance report “How are we doing?”, in line with statutory requirements; • The Council has adopted a code of conduct for its employees. Elected members adhere to the nationally prescribed Code of Conduct for Members. In addition, the Council has in place a protocol for Relationships between Political Groups, Elected Members and Officers; • In 2024/25 Willis Towers Watson undertook an independent review of the Council’s risk management arrangements and concluded that “Renfrewshire Council has a well-established approach to risk management with many positive features, especially in terms of strong governance and a positive cultural attitude towards risk management at a corporate level.” The Council’s approach to risk management is set out in the combined risk management policy and strategy, Risk Matters, and is well embedded. Risks are reported 6 monthly to the Audit, Risk and Scrutiny Board and a Risk Management Annual Report is also provided to Board in respect of corporate risk management arrangements. Online and in-person risk management courses are available to all staff. In 2023/24 the council launched an innovative approach for business-as-usual risks (BaURAM © Renfrewshire Council). Now in year two of implementation, Heads of Service have continued to engage well with the model. All 12 modules within the model showed an improved position in assurance levels when compared with year one. Directors are required to confirm their assurance levels for their service areas and the Heads of Service returns within BaURAM provide Directors with a tangible evidence base to support their assurance. To complete the loop in terms of organisational learning and continuous improvement, each module in BaURAM has its own identified subject matter experts (SME) and the SMEs use responses within the modules to inform any corporate improvements that can be taken forward; • The Director of Finance and Resources is the Council’s Senior Information Risk Owner and information risk is monitored through the Information Management and Governance Group and its sub-groups. The Managing Solicitor (DPO) is the statutory Data Protection Officer; Page 133 of 286
Page 134
19 Annual Accounts 2024/25 • Comprehensive arrangements are in place to ensure members and officers are supported by appropriate training and development; • Registers of interests for elected members and senior officers are maintained and published on the Council’s website; • The Council complies with the CIPFA Code of Practice on Managing the Risk of Fraud and Corruption and the Council’s arrangements for fraud prevention, detection and investigation are managed through the corporate counter fraud service. The Council’s Counter Fraud Policy was updated during 2024/25; • The Council’s approach to ‘whistleblowing’ is outlined in the whistleblowing policy; • Cyber-attacks are growing in both frequency and sophistication. While no system or internal control can offer absolute protection, the Council has implemented a comprehensive, multilayered set of cyber security controls. These controls are subject to annual testing to ensure alignment with current government standards and best practices. The Council adheres to recognised industry and public sector cyber security standards, including those set by the Public Sector Network (PSN), the National Cyber Security Centre (NCSC), the Scottish Government Public Sector Cyber Resilience Framework, and the Payment Card Industry Data Security Standards (PCI DSS). The O365 security and compliance toolset provides a wide range of protection against cyber-attacks including identity theft and phishing. The Council holds a current Certificate of Compliance for PSN standards. ICT network and digital services are continuously monitored for threats, with ongoing vulnerability assessments conducted every 2 weeks in partnership with our external cyber security provider. All activity is overseen by the Security & Compliance Team, led by a Security & Compliance Manager (Cyber) holding both CISSP and CISM certifications. Security events and alerts are monitored 24/7 by our cyber security partner, who are authorised to take immediate preventative action when necessary to protect systems and data; • Clear and independent governance arrangements are in place with One Ren and the Renfrewshire Health and Social Care Partnership with oversight from the Head of Policy and Commissioning and the Head of Corporate Governance respectively and the Council’s Leadership Board. • Seven Local Partnerships have been established and have identified initial local priorities. Decision making including that relating to relevant grants is delegated to each Local Partnership through a Lead Officer appointed by the Council, through the Chief Executive. This governance framework has been in place at Renfrewshire Council for the year ended 31 March 2025. The system of internal financial control The system of internal financial control is based on a framework of regular management information, financial regulations, administrative procedures (including segregation of duties), management and supervision, and a system of delegation and accountability. Development and maintenance of the system is undertaken by managers within the Council. The system includes: • Guidance on financial management supported by comprehensive financial regulations and codes; • Comprehensive budgeting systems, and detailed guidance for budget holders; • Regular reviews of periodic and annual financial reports which indicate financial performance against the forecasts; • Setting targets to measure financial and other performance; • Clearly defined capital expenditure guidelines; • As appropriate, formal project management principles; • The Chief Finance Officer is the Director of Finance and Resources who complies with the CIPFA Statement on the Role of The CFO in Public Services. Page 134 of 286
Page 135
20 Annual Accounts 2024/25 The role and responsibilities of the Audit Committee and the Chief Auditor The role of the audit committee is under the remit of the Audit, Risk and Scrutiny Board, which is chaired by a member of the opposition. Its role is: • to approve the internal audit charter and annual internal audit plans; • to review internal and external audit reports and the main issues arising, including those relating to the annual accounts and seek assurance that action has been taken and make recommendations to the Council where appropriate; • to receive and consider the Chief Auditor’s annual report, summarising internal audit activity and the level of assurance this provides over the arrangements for internal control, risk management and governance within the Council; • to monitor the performance of Internal Audit; • to consider the annual review of the Local Code of Corporate Governance. The internal audit service operated in accordance with Public Sector Internal Audit Standards during 2024/25 and reports to the Audit, Risk and Scrutiny Board. Internal audit undertakes an annual programme of work, approved by the Board, based on a strategic risk assessment. The Council’s Chief Auditor provides an independent opinion on the adequacy and effectiveness of the governance framework, risk management and internal control. The Council conforms to the requirements of the CIPFA Statement on the Role of the Head of Internal Audit (2019). Members and officers of the Council are committed to the concept of sound governance and the effective delivery of Council services. The Audit, Risk and Scrutiny Board complies with the CIPFA guidance Audit Committees: Practical Guidance for Local Authorities and Police. The Council’s Chief Auditor has responsibility to review independently and report to the Audit, Risk and Scrutiny Board annually, to provide assurance on the adequacy and effectiveness of the Local Code and the extent of compliance with it. The Audit, Risk and Scrutiny Board performs a scrutiny role in relation to the application of the Local Code of Corporate Governance and regularly monitors the performance of the Council’s Internal Audit service. Internal Audit reporting arrangements include communication of finalised audit engagements, monitoring the progress of agreed management actions and communication of any unacceptable risk identified to the Board. Review of effectiveness and continuous improvement Renfrewshire Council has responsibility for conducting, at least annually, a review of the effectiveness of its governance framework including the system of internal control. The review of effectiveness of the framework is informed by the work of the Corporate Management Team who have responsibility for the development and maintenance of the governance environment, the Chief Auditor’s annual report, and reports from the external auditors and other review agencies and inspectorates. The effectiveness of the governance framework and how the organisation manages its risks is reviewed annually by the Corporate Management Team, including the use of an annually updated self-assessment tool covering twelve key areas of governance, internal control and risk as follows: • Asset Management • Complaints, Comments and Claims • Financial Control and Governance • Health and Safety, and managing adverse events • Information Handling • Organisational Resilience • Partnership Management • People, Wellbeing and Development • Programme Management • Service Performance • Community and Public Safety This self-assessment indicated the governance framework is being complied with in all material respects. The 2024/25 outturn compares favourably Page 135 of 286
Page 136
21 Annual Accounts 2024/25 with 2023/24, with all modules showing an improved position. In addition, the review of the effectiveness of the governance arrangements and the systems of internal control within the group entities places reliance upon the individual bodies’ management assurances in relation to the soundness of their systems of internal control. The Council’s approach to continuous improvement has several strands and is closely aligned to our Council value of “we value learning”. Our Council Plan and Service Improvement Planning processes drive much of this and allow for elected member scrutiny of improvement activity. Services also undertake improvement work linked to their core duties and to statutory requirements. Registered services in education, housing, social work and social care regularly undertake self-assessment activity as part of their regulatory framework and inspection process. Services within Environment, Housing and Infrastructure maintain their ISO 9001 accreditation as one means of demonstrating quality. The Council has embedded self-assessment as a core element of its approach to improvement. A full corporate self- assessment was undertaken in 2023, which was based on the PSIF/EFQM model widely used across the public sector. In 2024/25 this was supplemented by a specific self-assessment exercise on organisational culture, through our new Cultural Assurance Model. Developed in partnership with the Improvement Service, this is the first model of this type in Scotland for local government and will used in conjunction with Employee Survey and Employee forum outputs to strengthen organisational culture. Improvements identified through the self-assessment process have been used to inform the development of a Corporate Improvement Plan. The Plan also includes specific actions identified by our external auditors through the Annual Audit Report and will also include any specific improvement actions flowing from the Council’s Best Value report, with the findings due to be published by the Accounts Commission in June 2025. The first iteration of the Corporate Improvement Plan was reported to the Leadership Board in February 2025. A new Strategic Learning Estate Strategy was developed in 2024/25 and its implementation will span across several years. To assist in the governance of this programme a new Learning Estate Strategy and Delivery Board has been established with clear Terms of Reference to manage and control the delivery of the learning estate programme effectively and ensure all formal governance requirements within the Council are observed. The Council continues to recognise the need to exercise strong financial management arrangements to manage the financial pressures common to all local authorities and has robust financial control and financial planning processes in place. The CIPFA Financial Management (FM) Code was first adopted by the Council in June 2021, and the resulting action plan contained 59 improvement actions. There are currently 16 outstanding actions with target dates up to December 2026. Work to refresh the initial engagement will be undertaken by the end of 2025/26 to ensure that improvement work continues to be focused, relevant and effective. The Council continues to manage a number of very significant challenges and is operating within a context of new and emerging challenges which require the Council to respond very flexibly to the changing needs of local businesses, communities and citizens. These factors include: • Ongoing economic uncertainty, which has significantly increased costs and impacted supply chains utilized by the Council and its partners. The linked cost of living crisis has also required the Council to respond in new ways with partners to meet the needs of those most vulnerable across Renfrewshire through our Fairer Renfrewshire Programme. • Inflationary cost pressures, including those linked to pay, continue to significantly impact the Council’s financial position. The Council continues to progress its long-term change and transformation programme which will drive a range of service improvements and financial savings across the organisation over the next three years. Page 136 of 286
Page 137
22 Annual Accounts 2024/25 • New and developing demand pressures continue to impact the Council, including in relation to issues such as migration and asylum, in relation to support for Ukrainian Displaced Persons, Unaccompanied Asylum-Seeking Children and Young People and more recently the widening out of the asylum dispersal programme and Afghan Resettlement programmes. The Council continues to mitigate some of the impacts on our communities from the pandemic, including those relating to increasing living costs and by supporting routes to employment to try and boost our working age population. Improving outcomes for children and families underpins all that we wish to achieve as a Council. As an organisation, the Council has continued to adopt new ways of working, building on the strong approach developed during the pandemic in areas such as digital access for customers, and embracing hybrid working. Much of the business-as-usual work has fully resumed, including: • The work on social renewal is now part of the wider Fairer Renfrewshire programme, which is overseen by the Fairer Renfrewshire sub-committee of the Leadership Board. • The current Right for Renfrewshire transformation programme is now reaching its natural end but there is a requirement for the Council to continue to maintain a focus on progressing the delivery of further change, transformation and improvement to address the ongoing financial challenge that is expected to persist over the medium term. Therefore, the next phase of the long-term programme will continue to have a similar focus on development of the organisation, which will be critical for the Council to deliver further financial savings, but it will be coupled with a strategically wider outward focused perspective that considers Renfrewshire’s geography and its communities. A report summarising progress to date and outlining the next phase of transformation through the Reshaping Renfrewshire programme, was approved by the Leadership Board in February 2025. • A new 5-year digital strategy has been developed using customer insights, which focuses on corporate transformation to ensure the Council and its services continue to develop for the future needs of its customers in the most appropriate and efficient manner. The organisation has been recognised for its best practice in terms of its activities to reduce digital exclusion in a recent national report by Audit Scotland and is working collaboratively at pace to progress significant programmes of digital transformation, including in relation to Artificial Intelligence utilisation. Audit Scotland have introduced a new approach to auditing Best Value in local government which commenced in 2023 as part of the next 5-year Best Value Audit programme. This approach involves thematic areas of focus each year which will be considered for all local authorities within the same snapshot in time rather than the previous rolling programme of deep dive audits which inspect each local authority across a five-year programme. This is a significant shift in approach and has involved thematic reviews of leadership in 2023 and workforce innovation in 2024. In 2025, the Accounts Commission have identified a focus on transformation, and officers have provided information to our external auditors to assist with this process. Following the findings of the independent review into the circumstances of the errors in the planning and delivery of school provision in the Dargavel area and the related Account Commission s102 Investigation Report, a combined action plan was drawn up, detailing the Council’s response. The progress of this action plan was regularly reported to the Audit, Risk and Scrutiny Board until all the actions were completed in November 2024. The Accounts Commission notified the Council that further updates in relation to the s102 report would be incorporated within wider best value audit activity planned for Renfrewshire Council, which would be accelerated to early 2025. This work has been ongoing in recent months in conjunction within our external auditors and it is anticipated that a report relating to local best value activity will be presented to the Accounts Commission in May 2025. Page 137 of 286
Page 138
23 Annual Accounts 2024/25 The Council’s best value report was drafted by Audit Scotland in recent months, utilising published information drawn from reports by the Council’s external auditors Azets. The report summarises improvements identified within these reports, which as highlighted above, are embedded and are being progressed through the Council’s overarching Corporate Improvement Plan. This includes the best value thematic reviews which the Accounts Commission requires external auditors to progress each year, reviewing the Council through a specific lens. In the last few years this has covered themes such as Leadership, Workforce Innovation, whilst this year’s theme of Transformation has not yet been formally audited and reported. The report will be considered by the Accounts Commission on 15 May, with findings subsequently being published. The Best Value report is positive and notes “Renfrewshire Council remains committed to the principles of Best Value and has made good progress on previous improvement actions identified in best value reports.” “In a recent follow-up report the auditor reported they are satisfied that the council has demonstrated evidence of a positive corporate culture and continues to take a range of actions aimed at supporting further development of openness and transparency”. The Council undertook a comprehensive review of its governance arrangements through a member led cross party working group, the recommendations arising were reported to and approved by the Council on 29 February 2024 and have now all been actioned. The Action plan from the separate self-assessment against the CIPFA guidance for effective Audit Committees which was undertaken with the members of the Audit, Risk and Scrutiny Board has now been completed. A further annual self-assessment has been planned to reflect on the Board’s operations and facilitate continuous improvement. Following the successful roll out of the bespoke Leadership Development Programme to Chief Officers, this has been extended to 3rd tier managers over 2 cohorts. This includes a governance module. The programme for cohorts 2 and 3 has now been completed and an evaluation has been undertaken, which will inform plans for future programmes. The external auditors, Azets, provided an unqualified and unmodified audit opinion on the 2023/24 annual accounts. Regular reviews of the Council’s arrangements are undertaken by Internal Audit. Three specific areas were identified in the 2023/24 governance statement as impacting on the overall internal control, risk management and governance arrangements. These were: • Disaster recovery – The review identified that improvements were required, including formal identification of critical systems and formalising the procurement guidance to ensure that services procured meet the required disaster recovery arrangement. All the recommended actions have now been implemented. • Health and Safety – An external health check, which was commissioned, has just been completed and management are progressing the recommendations. • Purchasing processes (corporate credit cards) - Compliance against the corporate procedures required to be improved upon. All the recommendations have now been implemented. The programme of work undertaken by internal audit in 2024/2025 identified 3 occasions where a limited assurance level was provided in relation to the internal control, risk management and governance objectives for the specific areas of each audit review which is an improvement on last year. All were specific to individual service areas and although these areas require to be addressed there is no significant impact on the Council’s overall system of internal control and action plans are in place to address the risks identified. Internal audit undertakes an annual exercise to ensure that recommendations arising from internal audit engagements have been implemented by service management and the results are reported to the Audit, Risk and Scrutiny Board. This work highlighted that 76% Page 138 of 286
Page 139
24 Annual Accounts 2024/25 of recommendations were implemented by the due date. 21% had passed their original due date and revised implementation dates have now been set and 4% were superseded. Of the 19 recommendations followed up that were deemed to be critical, 13 have been fully implemented, 1 has been superseded, 1 has been partially implemented, and 4 have not yet been implemented. Revised implementation dates have been agreed for each of these recommendations. It is our view that the Council has in place a sound framework for governance, risk management and internal control and that appropriate mechanisms are in place to identify any areas of weakness. This is corroborated by an Annual Report incorporating the Annual Assurance Statement prepared by the Council’s Interim Chief Auditor stating that subject to management addressing the critical and important recommendations made and the limited assurance report findings, it is considered that reasonable assurance can be placed upon the adequacy and effectiveness of the Council’s internal control, risk management and governance arrangements. Action Plan Following consideration of the review of adequacy and effectiveness the following action plan has been agreed to ensure continual improvement of the Council’s governance. Agreed action Responsible person Date Implement recommendations from Best Value Reports, including the follow up report on the council’s approach to community engagement and culture change Chief Executive & Director of Finance and Resources 31 October 2025 Agreed action Responsible person Date Implement the new Statutory Performance Information Direction in line with statutory timescales Head of Policy and Partnerships 31 December 2025 Agreed action Responsible person Date Address the improvement action arising from the independent review of the Council’s Risk Management Arrangements Director of Finance and Resources 31 December 2025 The agreed actions will be subject to review to identify the progress being made in implementing them. Update on the 2023/24 Action Plan Agreed action Progress Update Responsible person Date Implement improvement plan arising from the Corporate Self- Assessment Exercise. The vast majority of actions have been completed or are nearing completion and represent a significant programme of work across the range of Best Value themes. The Improvement Plan will be regularly updated and we last Head of Policy and Partnerships July 2025 Page 139 of 286
Page 140
25 Annual Accounts 2024/25 Agreed action Progress Update Responsible person Date reported progress to Leadership Board in February 2025 The recommendations arising from the review of the corporate health and safety internal audit report, will be considered and an action plan developed for implementation. In addition to the Internal Audit Report, an external health check on Health & Safety management and systems was undertaken. The independent review made a number of improvement recommendations which will be actioned during 2025 Director of Finance and Resources December 2025 Update on the 2022/23 Action Plan Agreed action Progress Update Responsible person Date All service level business continuity plans are to be updated to record all the ICT risks referred to in the council’s business continuity plan template for all service areas. All service areas have updated their business continuity plan templates. An external quality assurance review has now completed and any improvement actions from this review will be implemented Service Directors December 2025 A review of the current manual payment process is under review with key stakeholders from the Corporate Procurement Unit and the Finance Business Partners, this will enable and introduce an exception policy to support the No Purchase Order No Payment. Once the review is conducted the exception policy will be implemented and the No Purchase Order No Payment approach will commence, this is anticipated to take up to 12 Months The Council’s No PO No Pay Policy was approved by the Finance, Resources and Customer Services Policy Board in November 2024. While early adoption is encouraged across services, the policy will be formally implemented upon launch of the new P2P Module within Business World ERP, currently targeted for September 2025 Strategic Lead (P2P) September 2025 Page 140 of 286
Page 141
26 Annual Accounts 2024/25 Assurance Subject to the above, and on the basis of the assurances provided, we consider the governance and internal control environment operating during 2024/25 provides reasonable and objective assurance that any significant risks impacting on the achievement of our principal objectives will be identified and actions taken to avoid or mitigate their impact. Systems are in place to continually review and improve the governance and internal control environment and action plans are in place to address identified areas for improvement. Cllr Iain Nicolson Alan Russell Leader of the Council Chief Executive Page 141 of 286
Page 142
27 Annual Accounts 2024/25 Remuneration Report The Local Authority Accounts (Scotland) Amendment Regulations 2014 (SSI No. 2014/200) amend the Local Authority Accounts (Scotland) Regulations 2011 (SI No 2011/64) and requires local authorities in Scotland to prepare a Remuneration Report as part of the annual statutory accounts. All information disclosed in sections 3 to 8 in this Remuneration Report will be audited by the Council’s appointed auditor, Azets. The other sections of the Remuneration Report will be reviewed by Azets to ensure that they are consistent with the financial statements. 1. Remuneration Policy for Senior Employees The salary of senior employees is set by reference to national arrangements. The Scottish Joint Negotiating Committee (SJNC) for Local Authority Services sets the salaries for the Chief Executives of Scottish local authorities. The salaries of the Corporate Directors and Heads of Service are based on a spinal column point model as agreed by the Finance and Resources Policy Board on 14 May 2014. Senior employees received a 3.6% pay award in 2024/25 and no other benefits. 2. Remuneration policy for the Leader of the Council, the Provost and Senior Councillors The annual salary of the Leader of the Council and the upper limit for the annual salary of the Provost (or civic head) are set by the Scottish Government in terms of the Local Governance (Scotland) Act 2004 (Remuneration) Regulations 2007, as amended by the Local Governance (Scotland) Act 2004 (Remuneration) Amendment Regulations 2021. The salary for the Leader of the Council in 2024/25 was £42,698 per annum (£40,205 in 2023/24) and the salary for the Provost was £32,024 per annum (£30,154 in 2023/24). In terms of the same Regulations, the Scottish Government permits Renfrewshire Council to nominate up to 14 senior councillors (in addition to the Leader of the Council and the Provost), whose salaries in aggregate must not exceed a specified amount, in 2024/25 being £373,580 per annum; and whose salaries individually must be on a specified scale, in 2024/25 £21,345 to £32,024. At the Council meeting of 30 June 2022, it was agreed that Renfrewshire Council would have 13 senior councillors: six Policy Board Conveners (salary of £30,746 per annum in 2024/25); four Regulatory Board Conveners (salary of £25,522 in 2024/25); Chair of OneRen Board and Chair of Integration Joint Board (salary of £30,746 in 2024-25); and one Leader of the Opposition (salary of £25,522 in 2024/25). 3. Remuneration of Senior Employees The regulations define a senior employee as any employee who meets one or more of the following criteria: • has responsibility for the management of the local authority to the extent that the person has power to direct or control the major activities of the authority whether solely or collectively with other persons. • holds a post that is politically restricted by reason of section 2(1)(a), (b) or (c) of the Local Government and Housing Act 1989. • whose annual remuneration, including any annual remuneration from a local authority subsidiary body is £150,000 or more. The Council has interpreted the above criteria as including the Chief Executive, Directors and the Chief Executive of OneRen. The term ‘remuneration’ means gross salary, fees and bonuses, allowances and expenses and compensation for loss of office. The table below outlines the remuneration details for senior employees, including prior year figures. The table shows the relevant amounts, before tax and other deductions, due to, or receivable by, each of the persons named for the year to 31 March 2025, whether or not those amounts were actually paid to, or received by, those persons within that period. There were no non-consolidated bonuses or performance-related payments made to any senior officer in 2024/25 nor any remuneration in connection with election activities. Page 142 of 286
Page 143
28 Annual Accounts 2024/25 2023/24 Total Remuneration Annual Salary Election Allowances Total Remuneration £ £ £ £ 167,893 Alan Russell Chief Executive 174,470 6,664 181,134 2,839 Mary Crearie Director of Communities and Housing Services until 2 April 0 0 0 136,907 Alastair MacArthur Director of Finance and Resources 142,287 2,666 144,953 136,924 Gordon McNeil Director of Environment, Housing & Infrastructure until 23 May 142,287 1,666 143,953 41,002 Janie O'Neil Director of Children's Services from 04 December 2023 138,112 0 138,112 51,508 Steven Quinn Director of Children's Services until 11 August 2023 0 0 0 537,073 Total 597,156 10,996 608,152 Senior employees Name Post held 2024/25 2023/24 2024/25 Total Remuneration Total Remuneration £ £ 115,493 Victoria Hollows 120,016 115,493 120,016 Chief Executive, OneRen Total Name Senior Employees of Subsidiary Bodies Post held 4. Remuneration of Senior Councillors Under the regulations, remuneration disclosures are to be made for the Leader of the Council, the Civic Head and any councillor designated a Senior Councillor by the Council. The table below shows the relevant amounts, before tax and other deductions, due to each of the persons named for the year to 31 March 2025, whether or not those amounts were actually paid or received within that period and relate only to the Senior Councillor posts indicated. No payments were made in connection with loss of employment or office, nor were any other payments made that are not included in the table. Page 143 of 286
Page 144
29 Annual Accounts 2024/25 2023/24 2024/25 Total Remuneration Name Position held Total Remuneration £ £ 40,089 Iain Nicolson Leader Of the Council 42,698 30,067 Lorraine Cameron Provost 32,024 28,868 Michelle Campbell Policy Board Convener 30,746 28,868 Marie McGurk Policy Board Convener 30,746 28,868 Jim Paterson Policy Board Convener 30,746 28,868 Emma Rodden Policy Board Convener 30,746 28,868 John Shaw Policy Board Convener 30,746 28,868 Andy Steel Policy Board Convener 30,746 23,963 Stephen Burns Regulatory Board Convener 25,522 23,963 Andy Doig Regulatory Board Convener 25,522 23,963 Cathy McEwan Regulatory Board Convener 25,522 23,963 John McNaughtan Regulatory Board Convener 25,522 28,868 Jennifer Adam Chair/Vice Chair IJB 30,746 28,868 Lisa-Marie Hughes Chair, OneRen 30,746 23,963 Iain McMillan Leader of largest opposition group 25,522 420,915 448,300 Total Senior Councillors No payments were made in connection with loss of employment or office, nor were any other payments made which are not included in the table. 5. Pension Entitlement Pension benefits for councillors and local government employees are provided through the Local Government Pension Scheme (LGPS). Councillors’ pension benefits are based on career average pay. The councillor’s pay for each year or part year ending 31 March (other than the pay in the final year commencing 1 April) is increased by the increase in the cost of living, as measured by the appropriate index (or indices) between the end of that year and the last day of the month in which their membership of the scheme ends. The total of the revalued pay is then divided by the period of membership to calculate the career average pay. This is the value used to calculate the pension benefits. From 1 April 2015 benefits for local government employees are based on career average pay. Pension benefits are based on the pay received for each year in the scheme increased by the increase in the cost of living, as measured by the appropriate index (or indices). The scheme’s normal retirement age is linked to the state pension age of each member. From 1 April 2009 a five-tier contribution system was introduced with contributions from scheme members being based on how much pay falls into each tier. This is designed to give more equality between the cost and benefits of scheme membership. Prior to 2009 contributions rates were set at 6% for all non-manual employees. The tiers and members contribution rates are as follows: Equivalent bandings for 2023/24 Up to £27,000 5.5% Up to £25,300 £27,001 to £33,000 7.25% £25,301 to £31,000 £33,001 to £45,300 8.5% £31,001 to £42,500 £45,301 to £60,400 9.5% £42,501 to £56,600 Over £60,401 12% Over £56,601 Tiered contribution rates on whole time pay 2024/25 If a person works part-time their contribution rate will be based on their part-time pay. There is no automatic entitlement to a lump sum. Members may opt to give up (commute) pension for Page 144 of 286
Page 145
30 Annual Accounts 2024/25 lump sum up to the limit set by the Finance Act 2004. The accrual rate guarantees a pension based on 1/49th of pensionable pay for each year of membership, adjusted in line with the cost of living (prior to 2015 the accrual rate guaranteed a pension based on 1/60th of final pensionable salary). The value of the accrued benefits has been calculated on the basis of the age at which the person will first become entitled to receive a pension on retirement without reduction on account of its payment at that age; without exercising any option to commute pension entitlement into a lump sum; and without any adjustment for the effects of future inflation. The pension entitlements for Senior Employees and Senior Councillors for the year to 31 March 2025 are shown in the table below, together with the contribution made by the Council to each individual’s pension during the year. Any senior employees or councillors omitted from the following tables are not members of the Local Government Pension Scheme (LGPS). 2024/25 2023/24 Pension Lump Sum Pension Lump Sum £ £ £000 £000 £000 £000 Alan Russell Chief Executive 11,541 32,403 86 105 6 4 Mary Crearie Director of Communities and Housing Services until 2 April 2023 n/a 548 0 0 n/a n/a Alastair MacArthur Director of Finance and Resources 9,412 26,423 67 80 5 2 Gordon McNeil Director of Environment, Housing & Infrastructure until 23 May 2023 then Director of Environment, Housing & Infrastructure from 24 May 2023 9,412 26,426 54 37 4 1 Steven Quinn Director of Children's Services until 11 August 2023 n/a 9,941 0 0 n/a n/a Janie O'Neil Director of Children's Services from 04 December 2023 9,129 7,913 15 0 n/a n/a 39,494 103,654 222 222 15 7 Senior Employees Name Post held In-year pension contributions by Renfrewshire Council Accrued pension benefits as at 31 March 2025 Change in accrued pension benefits since 31 March 2024 Total Page 145 of 286
Page 146
31 Annual Accounts 2024/25 2024/25 2023/24 Pension Lump Sum Pension Lump Sum £ £ £000 £000 £000 £000 Victoria Hollows Chief Executive, OneRen 7,939 22,290 51 53 3 2 7,939 22,290 51 53 3 2 Senior Employees of Subsidiary Bodies Name Post held In-year pension contributions by Renfrewshire Leisure Accrued pension benefits as at 31 March 2025 Change in accrued pension benefits since 31 March 2024 Total The following table reports on in-year pension contributions relating to senior councillor positions only. Pension benefits shown relate to those that the individual has accrued as a consequence of their total local government service and not just their current appointment. 2024/25 2023/24 Pension Lump Sum Pension Lump Sum £ £ £000 £000 £000 £000 Iain Nicolson Leader Of the Council 2,822 7,737 13 3 0 0 Michelle Campbell Policy Board Convener 2,032 5,571 4 0 0 0 Marie McGurk Policy Board Convener 2,032 5,571 6 0 1 0 Jim Paterson Policy Board Convener 2,032 5,571 5 0 1 0 Emma Rodden Policy Board Convener 2,032 5,571 4 0 0 0 John Shaw Policy Board Convener 2,032 5,571 5 0 0 0 Andy Steel Policy Board Convener 2,032 5,571 5 0 1 0 Cathy McEwan Regulatory Board Convener 0 787 0 0 (9) 0 Stephen Burns Regulatory Board Convener 1,687 4,625 4 0 1 0 Andy Doig Regulatory Board Convener 1,687 4,625 4 0 1 0 John McNaughtan Regulatory Board Convener 1,687 4,625 4 0 0 0 Jennifer Adam Chair/Vice Chair IJB 2,032 5,571 5 0 1 0 Lisa-Marie Hughes Chair, OneRen 2,032 5,571 5 0 0 0 Iain McMillan Leader of opposition group 1,687 4,625 2 0 1 0 Total 25,826 71,592 66 3 (2) 0 Leader of the Council, Provost, Senior councillors Name Post held In-year pension contributions by Renfrewshire Council Accrued pension benefits as at 31 March 2025 Change in accrued pension benefits since 31 March 2024 Page 146 of 286
Page 147
32 Annual Accounts 2024/25 6. Councillors’ remuneration The Council paid the following amounts to its elected members (councillors) during the year. 2023/24 2024/25 £ £ 987,073 Salaries 1,051,873 1,915 Travel costs – reimbursed 917 5,971 Travel costs – paid directly by the Council 5,456 1,802 Training and Conferences 2,951 2,870 Telephone and information technology expenses – paid directly by the Council 2,983 999,631 Total 1,064,180 The public record of members' salaries, allowances and expenses for 2024/25 is available for inspection on the Register of Councillors’ Interests page of the Council’s website and navigating to: Your Council>Councillors> Record of councillor salaries, allowances, expenses and training register. 7. Remuneration of Employees The following table gives a statement of the number of employees whose remuneration, excluding pension contributions, was in excess of £50,000 during 2024/25, in bands of £5,000; and also details of the number of those employees highlighted who left the employment of the Council during 2024/25. This information includes those senior employees who are subject to the fuller disclosure requirements in the tables above. Note that leavers may be included due to retirement or redundancy costs. Bands with nil employees for both years are not shown. Teachers Non-teachers Total Remuneration band Teachers Non-teachers Total 113 116 229 £50,000 to £54,999 228 159 387 85 60 145 £55,000 to £59,999 65 64 129 116 58 174 £60,000 to £64,999 102 58 160 67 24 91 £65,000 to £69,999 84 47 131 52 30 82 £70,000 to £74,999 76 13 89 10 6 16 £75,000 to £79,999 27 19 46 4 10 14 £80,000 to £84,999 9 7 16 2 5 7 £85,000 to £89,999 3 4 7 8 5 13 £90,000 to £94,999 6 1 7 1 4 5 £95,000 to £99,999 1 6 7 2 4 6 £100,000 to £104,999 1 2 3 0 3 3 £105,000 to £109,999 2 4 6 0 1 1 £110,000 to £114,999 0 0 0 0 4 4 £115,000 to £119,999 0 5 5 0 2 2 £135,000 to £139,999 0 1 1 0 0 0 £140,000 to £144,999 0 2 2 0 1 1 £165,000 to £169,999 0 0 0 0 0 0 £170,000 to £174,999 0 1 1 460 333 793 604 393 997 2023/24 2024/25 In 2023/24, there were 26 employees who left and received termination payments and would have been included as an over £50k earner in a normal year. There were no such employees in 2024/25. Page 147 of 286
Page 148
33 Annual Accounts 2024/25 8. Exit Packages The Council has agreed a number of exit packages in 2024/25 as detailed in the table below. The exit packages agreed were all on a voluntary basis; there were no compulsory redundancies. The Council only agrees exit packages where they are consistent with wider workforce planning and service delivery objectives; and where the savings accruing from an individual ceasing employment with the Council are sufficient to pay back the costs of the exit package within an acceptable period. The assessment of the payback period takes account of the total costs of the exit package. The total exit package costs in the table below include redundancy, pension strain and compensatory lump sum payments; and also, the notional capitalised costs of compensatory added years. These notional costs are not based on actual costs, but are the estimated present value of projected costs over the lifetime of the individuals in receipt of the exit package, based on the following assumptions: 2024/25 2023/24 Future Life expectancy at age 65 – males 20.5 years 20.6 years Future Life expectancy at age 65 – females 24.1 years 24.2 years Pension increase rate 2.80% 2.80% Discount Rate 5.80% 4.80% Value Value £m £m £0 - £20,000 6 0.046 2 0.024 £20,001 - £40,000 2 0.059 4 0.111 £40,001 - £60,000 4 0.203 1 0.055 £60,001 - £80,000 2 0.145 3 0.204 £80,001 - £100,000 2 0.176 2 0.187 £100,001 - £150,000 3 0.365 2 0.230 £150,001 - £200,000 3 0.497 2 0.318 £200,001 - £250,000 0 0.000 2 0.411 £300,001 - £350,000 0 0.000 2 0.621 Total 22 1.491 20 2.161 Exit Package Cost 2024/25 2023/24 Number of Employees Number of Employees Page 148 of 286
Page 149
34 Annual Accounts 2024/25 Trade Union Facility Time Renfrewshire Council recognises that it is to the mutual benefit of the Council and its employees that employees are represented by Trade Unions. The Council is committed to the principle of collective bargaining at both national and local level. The Council recognises the key role of Trade Unions in promoting and developing good employee relations and health and safety practices. The Trade Union (Facility Time Publication Requirements) Regulations 2017 requires public sector employers to publish information relating to facility time taken by union representatives. 28 Total cost of facility time £278,394 Total pay bill £348,931,359 FTE employee number 27.03 Percentage of the total pay bill spent on facility time 0.08% Number of representatives % time 23 1% - 50% 36.99% 3 51% - 99% 2 100% Percentage of time spent on facility time Trade Union (TU) representative Number of employees who were relevant union officials during the period Paid Trade Union activities Percentage of pay bill spent on facility time Time spent on paid TU activities as a percentage of total paid facility time hours Cllr Iain Nicolson Alan Russell Leader of the Council Chief Executive Page 149 of 286
Page 150
35 Annual Accounts 2024/25 Independent auditor’s report to the members of Renfrewshire Council and the Accounts Commission Reporting on the audit of the financial statements Opinion on financial statements We certify that we have audited the financial statements in the annual accounts of Renfrewshire Council and its group for the year ended 31 March 2025 under Part VII of the Local Government (Scotland) Act 1973. The financial statements comprise the group and Council-only Comprehensive Income and Expenditure Statements, Movement in Reserves Statements, Balance Sheets, Cashflow Statements, the Council-only Common Good Funds Income and Expenditure Statement, the Common Good Funds Balance Sheet, the Housing Revenue Account Income and Expenditure Statement, the Movement on the Housing Revenue Account Statement, the Council Tax Income Account, the Non-Domestic Rates Income Account and notes to the financial statements, including material accounting policy information. The financial reporting framework that has been applied in their preparation is applicable law and UK adopted international accounting standards, as interpreted and adapted by the Code of Practice on Local Authority Accounting in the United Kingdom 2024/25 (the 2024/25 Code). In our opinion the accompanying financial statements: • give a true and fair view of the state of affairs of the Council and its group as at 31 March 2025 and of the income and expenditure of the Council and its group for the year then ended; • have been properly prepared in accordance with UK adopted international accounting standards, as interpreted and adapted by the 2024/25 Code; and • have been prepared in accordance with the requirements of the Local Government (Scotland) Act 1973, The Local Authority Accounts (Scotland) Regulations 2014, and the Local Government in Scotland Act 2003. Basis for opinion We conducted our audit in accordance with applicable law and International Standards on Auditing (UK) (ISAs (UK)), as required by the Code of Audit Practice approved by the Accounts Commission for Scotland. Our responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of our report. We were appointed by the Accounts Commission on 18 May 2022. Our period of appointment is five years, covering 2022/23 to 2026/27. We are independent of the Council and its group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK including the Financial Reporting Council’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. Non-audit services prohibited by the Ethical Standard were not provided to the Council. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Conclusions relating to going concern basis of accounting We have concluded that the use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the ability of the Council and its group to continue to adopt the going concern basis of accounting for a period of at least twelve months from when the financial statements are authorised for issue. These conclusions are not intended to, nor do they, provide assurance on the current or future financial sustainability of the Council and its group. However, We report on the Council’s arrangements for financial sustainability in a separate Annual Audit Report available from the Audit Scotland website. Page 150 of 286
Page 151
36 Annual Accounts 2024/25 Risks of material misstatement We report in our Annual Audit Report the most significant assessed risks of material misstatement that we identified and our judgements thereon. Responsibilities of the Director of Finance and Resources and Audit, Risk and Scrutiny Board for the financial statements As explained more fully in the Statement of Responsibilities, the Director of Finance and Resources is responsible for the preparation of financial statements that give a true and fair view in accordance with the financial reporting framework, and for such internal control as the Director of Finance and Resources determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Director of Finance and Resources is responsible for assessing the ability of the Council and its group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless there is an intention to discontinue the operations of the Council and its group. The Council is responsible for overseeing the financial reporting process. Auditor’s responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the decisions of users taken on the basis of these financial statements. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities outlined above to detect material misstatements in respect of irregularities, including fraud. Procedures include: • using our understanding of the local government sector to identify that the Local Government (Scotland) Act 1973, The Local Authority Accounts (Scotland) Regulations 2014, and the Local Government in Scotland Act 2003 are significant in the context of the Council and its group; • inquiring of management as to other laws or regulations that may be expected to have a fundamental effect on the operations of the Council and its group; • inquiring of management and the Convener of the Audit, Risk and Scrutiny Board concerning the policies and procedures of the Council and its group regarding compliance with the applicable legal and regulatory framework; • discussions among our audit team on the susceptibility of the financial statements to material misstatement, including how fraud might occur; and • considering whether the audit team collectively has the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations. The extent to which our procedures are capable of detecting irregularities, including fraud, is affected by the inherent difficulty in detecting irregularities, the effectiveness of the Council’s controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud are inherently more difficult to detect than irregularities that result from error as fraud may involve collusion, intentional omissions, misrepresentations, or the override of internal control. The capability of the audit to detect fraud and other irregularities depends on factors such as the skilfulness of the perpetrator, the frequency and extent of manipulation, the degree of collusion involved, the relative size of individual amounts manipulated, and the seniority of those individuals involved. Page 151 of 286
Page 152
37 Annual Accounts 2024/25 A further description of the auditor’s responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report. Reporting on other requirements Opinion prescribed by the Accounts Commission on the audited parts of the Remuneration Report We have audited the parts of the Remuneration Report described as audited. In our opinion, the audited parts of the Remuneration Report have been properly prepared in accordance with The Local Authority Accounts (Scotland) Regulations 2014. Other information The Director of Finance and Resources is responsible for the other information in the annual accounts. The other information comprises the Management Commentary, Annual Governance Statement, Statement of Responsibilities and the unaudited parts of the Remuneration Report. Our responsibility is to read all the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements, or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon except on the Management Commentary and Annual Governance Statement to the extent explicitly stated in the following opinions prescribed by the Accounts Commission. Opinions prescribed by the Accounts Commission on the Management Commentary and Annual Governance Statement In our opinion, based on the work undertaken in the course of the audit: • the information given in the Management Commentary for the financial year for which the financial statements are prepared is consistent with the financial statements and that report has been prepared in accordance with statutory guidance issued under the Local Government in Scotland Act 2003; and • the information given in the Annual Governance Statement for the financial year for which the financial statements are prepared is consistent with the financial statements and that report has been prepared in accordance with the Delivering Good Governance in Local Government: Framework (2016). Matters on which we required to report by exception We are required by the Accounts Commission to report to you if, in our opinion: • adequate accounting records have not been kept; or • the financial statements and the audited parts of the Remuneration Report are not in agreement with the accounting records; or • we have not received all the information and explanations we require for our audit. We have nothing to report in respect of these matters. Page 152 of 286
Page 153
38 Annual Accounts 2024/25 Conclusions on wider scope responsibilities In addition to our responsibilities for the annual accounts, our conclusions on the wider scope responsibilities specified in the Code of Audit Practice, including those in respect of Best Value, are set out in our Annual Audit Report. Use of our report This report is made solely to the parties to whom it is addressed in accordance with Part VII of the Local Government (Scotland) Act 1973 and for no other purpose. In accordance with paragraph 108 of the Code of Audit Practice, we do not undertake to have responsibilities to members or officers, in their individual capacities, or to third parties. Rebecca Lister, (for and on behalf of Azets Audit Services), Quay 2 139 Fountainbridge Edinburgh EH3 9QG Date: Page 153 of 286
Page 154
39 Annual Accounts 2024/25 Comprehensive Income and Expenditure Statement This statement shows the accounting cost of providing services and managing the Council during the year. It includes, on an accruals basis, all of the Council’s day-to-day expenses and related income. It also includes transactions measuring the value of non-current assets actually consumed during the year and the real projected value of retirement benefits earned by employees during the year. The statement shows the accounting cost in accordance with generally accepted accounting practices, rather than the cost according to the statutory regulations that specify the net expenditure that Councils need to take into account when setting the annual Council Tax charge. The required adjustments between accounting basis and funding basis under regulations are shown in the Movement in Reserves Statement. Gross expenditure Gross income Net expenditure Note Gross expenditure Gross income Net expenditure £m £m £m £m £m £m 298.501 (39.097) 259.404 333.826 (19.481) 314.345 251.324 (142.398) 108.926 Environment, Housing and Infrastructure 258.763 (145.277) 113.486 105.680 (59.449) 46.231 Finance and Resources 107.418 (58.981) 48.437 49.507 (12.629) 36.878 50.454 (12.186) 38.268 19.641 (13.728) 5.913 Miscellaneous Services 12.771 (13.098) (0.327) 144.335 (44.290) 100.045 Adult Services 186.377 (73.758) 112.619 868.988 (311.591) 557.397 949.609 (322.781) 626.828 0.000 (0.302) (0.302) (Gain)/Loss on the disposal of non-current assets 0.000 (0.057) (0.057) 21.333 (16.863) 4.470 Financing and investment income and expenditure 2 25.807 (5.741) 20.066 0.000 (513.914) (513.914) Taxation and non-specific grant income 3 0.000 (562.381) (562.381) 890.321 (842.670) 47.651 975.416 (890.960) 84.456 (33.187) 8 (86.295) (0.030) 8 0.058 185.455 28 (29.724) 152.238 Other comprehensive (income) and expenditure (115.961) 199.889 Total comprehensive (income) and expenditure (31.505) (Surplus)/Deficit from investments in equity instruments designated as Fair Value through Other Comprehensive Income Actuarial (gain)/loss on pension assets and liabilities 2023/24 2024/25 Children’s Services Chief Executive’s Service Deficit/(Surplus) on the Provision of Services Cost of Services (Surplus)/Deficit on the revaluation of non- current assets Figures shown in brackets represent income or gains and figures without brackets represent expenditure or losses. Page 154 of 286
Page 155
40 Annual Accounts 2024/25 Movement in Reserves Statement This statement shows the movement in the year on the different reserves held by the Council, analysed into usable reserves (those reserves that can be applied to fund expenditure or to reduce local taxation) and unusable reserves. The surplus or deficit on the provision of services line shows the true economic cost of providing the Council’s services, more details of which are shown in the CIES. These are different from the statutory amounts required to be charged to the General Fund Balance and the Housing Revenue Account for Council Tax-setting and dwellings rent-setting purposes. The net increase or (decrease) before transfers to other statutory reserves line shows the statutory General Fund Balance and the Housing Revenue Account Balance before any discretionary transfers to or from the other statutory reserves of the Council. 2024/25 General Fund Balance Housing Revenue Account Revenue statutory funds Capital Funds Total Usable Reserves Unusable Reserves Total reserves Note £m £m £m £m £m £m £m Balance at 1 April 2024 117.618 6.164 3.428 95.007 222.217 1,302.619 1,524.836 Movement in reserves during the year (67.578) (16.878) 0.000 0.000 (84.456) 115.961 31.505 24.204 14.910 0.000 0.000 39.114 (39.114) 0.000 Transfers to / (from) other statutory reserves 7 (0.099) 0.000 0.145 (0.046) 0.000 0.000 0.000 Adjustment for Service Concession Arrangements 13.901 0.000 0.000 0.000 13.901 (13.901) 0.000 Adjustments between accounting basis and funding basis under regulations 6 50.723 2.737 0.000 (9.041) 44.419 (44.419) 0.000 21.151 0.769 0.145 (9.087) 12.978 18.527 31.505 Balance at 31 March 2025 138.769 6.933 3.573 85.920 235.195 1,321.146 1,556.341 Increase / (Decrease) in year Total Comprehensive Income and Expenditure Adjustments to Usable Reserves permitted by accounting standards Comparative movements in 2023/24 General Fund Balance Housing Revenue Account Revenue statutory funds Capital Funds Total usable reserves Unusable reserves Total reserves Note £m £m £m £m £m £m £m Balance at 1 April 2023 127.391 6.497 3.095 99.068 236.051 1,488.674 1,724.725 Movement in reserves during the year (31.647) (16.004) 0.000 0.000 (47.651) (152.238) (199.889) 21.356 14.832 0.000 0.000 36.188 (36.188) 0.000 Transfers to / (from) other statutory reserves 7 (0.333) 0.000 0.333 0.000 0.000 0.000 0.000 Adjustment for Service Concession Arrangements 1.597 0.000 0.000 0.000 1.597 (1.597) 0.000 Adjustments between accounting basis and funding basis under regulations 6 (0.746) 0.839 0.000 (4.061) (3.968) 3.968 0.000 (9.773) (0.333) 0.333 (4.061) (13.834) (186.055) (199.889) Balance at 31 March 2024 117.618 6.164 3.428 95.007 222.217 1,302.619 1,524.836 Increase / (Decrease) in year Total Comprehensive Income and Expenditure Adjustments to Usable Reserves permitted by accounting standards Page 155 of 286
Page 156
41 Annual Accounts 2024/25 Balance Sheet The balance sheet shows the value as at 31 March 2025 of the assets and liabilities recognised by the Council. The net assets of the Council are matched by the reserves held by the Council. Reserves are reported in two categories. The first category comprises usable reserves, which are 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, which may only be used to fund capital expenditure or to repay debt). The second category of reserves comprises those that the Council is not able to use to provide services. This category includes reserves that hold unrealised gains and losses in the value of assets (for example the Revaluation Reserve), where amounts would only become available to provide services if the assets are sold, and reserves that hold differences shown as ‘adjustments between accounting basis and funding basis under regulations’ in the Movement in Reserves Statement. As at 31 March 2024 As at 31 March 2025 £m Note £m 1,858.221 Property, plant and equipment 9 1,956.091 44.186 Heritage assets 10 44.186 1.724 Intangible assets 13 1.189 4.321 Long-term investments 22 4.391 2.365 Long-term debtors 19 2.002 1,910.817 2,007.859 0.100 Assets held for sale 12 2.492 67.755 Short-term investments 22 17.534 1.287 Inventories 17 1.060 66.354 Short-term debtors 19 62.480 29.461 Cash and cash equivalents 18 5.505 164.957 89.071 (65.492) Short-term borrowing 22 (89.745) (83.332) Short-term creditors 20 (70.339) (0.721) Short-term provisions 21 (0.406) (149.545) (160.490) (63.352) Long-term creditors 20 (77.581) (4.630) Long-term provisions 21 (5.230) (258.931) Long-term borrowing 22 (232.050) (74.480) Other long-term liabilities 28 (65.238) (401.393) (380.099) 1,524.836 1,556.341 Alastair MacArthur (222.219) Usable reserves 7 (235.195) (1,302.617) Unusable reserves 8 (1,321.146) (1,524.836) (1,556.341)Total reserves Long-term assets Current assets Current liabilities Long-term liabilities Net assets Director of Finance and Resources The unaudited accounts were issued on 26 June 2025 and the audited accounts were authorised for issue on 23 October 2025. Page 156 of 286
Page 157
42 Annual Accounts 2024/25 Cashflow Statement This statement shows the changes in cash and cash equivalents of the Council during the year. It 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 that 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 (that is, borrowing) to the Council. 2023/24 2024/25 £m £m (47.651) Net surplus/(deficit) on the provision of services (84.456) Adjustment for non-cash movements: 97.867 Depreciation, amortisation, impairment and revaluations 125.191 (1.423) Increase/(decrease) in creditors (11.462) 1.285 (Increase)/decrease in debtors 4.237 0.027 (Increase)/decrease in inventories 0.227 (8.576) Pension (liability)/asset 20.482 1.531 Carrying amount of non-current assets sold 1.923 0.157 Other non-cash items charged to the net surplus or deficit on the provision of services 0.285 (30.658) Adjustments for items included in the net surplus or deficit on the provision of services that are investing and financing activities (25.010) 12.559 Net cash flows from operating activities 31.417 Net cash flows from investing activities : (128.149) Purchase of property, plant and equipment, investment property and intangible assets (123.212) (1.832) Proceeds from the sale of property, plant and equipment, investment property and intangible assets (1.980) 98.862 Proceeds from short-term and long-term investments 50.093 32.490 Other receipts from investing activities 27.091 Net cash flows from financing activities (3.271) Cash payments for the reduction of the outstanding liability relating to right of use assets and on-balance sheet PFI /PPP contracts (4.737) 7.170 Repayment of short-term and long-term borrowing (2.628) 17.829 Net increase/(decrease) in cash and cash equivalents (23.956) 11.632 Cash and cash equivalents at the beginning of the reporting period 29.461 29.461 Cash and cash equivalents at the end of the reporting period 5.505 The Net cash flow from operating activities above includes the following elements of interest paid and received: 2023/24 2024/25 £m £m (16.863) Interest received (5.741) 11.347 Interest paid 16.213 4.976 Interest element of right of use and PPP payments 4.919 (0.540) 15.391 Interest Paid and Received Page 157 of 286
Page 158
43 Annual Accounts 2024/25 Note 1: 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 non-domestic rates) by the Council in comparison with those resources consumed or earned by the Council in accordance with generally accepted accounting practices. It also shows how this expenditure is allocated for decision making purposes between the Council’s service departments. Income and expenditure accounted for under generally accepted account practices is presented more fully in the CIES. 2024/25 Net Expenditure chargeable to the General Fund and HRA Adjustments between Funding and Accounting basis Depreciation charged to Revaluation Reserve Net Expenditure in the CIES £m £m £m £m Children's Services 257.721 39.666 16.958 314.345 Environment, Housing and Infrastructure 69.902 26.189 17.395 113.486 Finance & Resources 47.537 (1.023) 1.923 48.437 Chief Executive's Service 28.330 7.323 2.615 38.268 Miscellaneous Services 25.322 (25.872) 0.223 (0.327) Adult Services 106.810 5.809 0.000 112.619 Net cost of services 535.622 52.092 39.114 626.828 Other income and expenditure (543.643) 1.271 0.000 (542.372) (Surplus) / Deficit (8.021) 53.363 39.114 84.456 Opening General Fund and HRA balance (123.784) Less (Surplus) / Deficit in the year (8.021) Add other items not charged to the Surplus / (Deficit) (13.897) Closing General Fund and HRA at 31 March 2025 (145.702) 2024/25 Adjustments for capital purposes Net change for the pensions adjustments Other differences Total Adjustments £m £m £m £m Children's Services 38.142 6.372 (4.848) 39.666 Environment, Housing and Infrastructure 19.208 7.021 (0.040) 26.189 Finance & Resources 2.208 2.344 (5.575) (1.023) Chief Executive's Service 5.965 1.389 (0.031) 7.323 Miscellaneous Services (6.350) (4.755) (14.767) (25.872) Adult Services 0.003 4.097 1.709 5.809 Net cost of services 59.176 16.468 (23.552) 52.092 Other income and expenditure (27.119) 4.014 24.376 1.271 Total adjustments between accounting basis and funding basis 32.057 20.482 0.824 53.363 • Adjustments for capital purposes: adds in depreciation, impairment and revaluation gains and losses to the service net expenditure including income on the disposal of assets and the amounts written off for those assets and the statutory charges for capital financing and capital grants which are not chargeable under generally accepted accounting practices. Page 158 of 286
Page 159
44 Annual Accounts 2024/25 • Net change for the pensions adjustments: removes employer pension contributions as allowed by statute and replaces with the current and past service costs within the IAS 19 employee benefits pension related expenditure and income. The net interest on the defined benefit liability is also included as charged to the CIES. • Other differences: any other differences between those amounts debited or credited to the CIES and amounts payable or receivable to be recognised under statute, including those primarily involved in the financial instruments adjustment account, the employee statutory adjustment account and other statutory funds. Any other non-statutory adjustments would also be included here. 2023/24 Net Expenditure chargeable to the General Fund and HRA Adjustments between Funding and Accounting basis Depreciation charged to Revaluation Reserve Net Expenditure in the CIES £m £m £m £m Children's Services 252.456 (9.362) 16.310 259.404 Communities and Housing Services 74.560 18.753 15.613 108.926 Environment & Infrastructure 48.972 (4.796) 2.055 46.231 Finance & Resources 28.749 5.791 2.000 36.878 Chief Executive's Service 14.373 (8.670) 0.210 5.913 Miscellaneous Services 98.765 1.280 0.000 100.045 Net cost of services 517.875 2.996 36.188 557.397 Other income and expenditure (507.771) (1.975) 0.000 (509.746) (Surplus) / Deficit 10.104 1.021 36.188 47.651 Opening General Fund and HRA balance (133.888) Less (Surplus) / Deficit in the year 10.140 Closing General Fund and HRA at 31 March 2024 (123.748) * For a split of this balance between the General Fund and the HRA, see the Movement in Reserves Statement. 2023/24 Adjustments for capital purposes Net change for the pensions adjustments Other differences Total Adjustments £m £m £m £m Children's Services 17.796 (0.830) (26.328) (9.362) Environment, Housing and Infrastructure 17.542 (0.518) 1.729 18.753 Finance & Resources 1.846 (0.500) (6.142) (4.796) Chief Executive's Service 5.206 (0.178) 0.763 5.791 Miscellaneous Services (0.433) 2.286 (10.523) (8.670) Adult Services 0.003 (0.475) 1.752 1.280 Net cost of services 41.960 (0.215) (38.749) 2.996 Other income and expenditure (32.792) (8.361) 39.178 (1.975) Total adjustments between accounting basis and funding basis 9.168 (8.576) 0.429 1.021 Page 159 of 286
Page 160
45 Annual Accounts 2024/25 Note 2: Financing and investment income & expenditure 2023/24 2024/25 £m £m 21.333 Interest payable and similar charges 21.793 (8.360) Net interest on the net defined benefit liability 4.014 (8.503) Interest receivable and similar income (5.741) 4.470 Total 20.066 Note 3: Taxation and non-specific grant income 2023/24 2024/25 £m £m (95.528) Income from Council Tax and community charge (97.701) (131.322) Distribution from the national non-domestic rate pool (107.505) (254.574) General Revenue Grant from the Scottish Government (330.084) (32.490) Capital grants and contributions (27.091) (513.914) Total (562.381) Note 4: Expenditure and income analysed by nature This note presents the subjective analysis of expenditure and income shown by operational service area in the CIES. 2023/24 2024/25 £m Note £m Expenditure 369.489 Employee benefits expenses 383.541 401.632 Other service expenses 479.992 97.867 Depreciation, amortisation, impairment 86.076 21.333 Interest Payments 2 25.807 0.103 (Gain) /Loss on the disposal of assets 8 0.000 890.424 Total expenditure 975.416 Income (311.591) Fees, charges and other service income (322.781) (16.863) Interest and investment income 2 (5.741) (0.302) Gain on the disposal of assets 9 (0.057) (226.850) Income from council tax and non-domestic rates 3 (205.206) (287.067) Government grants and contributions 3 (357.175) (842.673) Total income (890.960) 47.751 (Surplus) or deficit on the provision of services 84.456 Page 160 of 286
Page 161
46 Annual Accounts 2024/25 Note 5: Grant income The Council credited the following grants, contributions and donations direct to services in the CIES during 2024/25. 2023/24 2024/25 £m £m 40.841 Housing benefit 39.996 0.549 Housing benefit and Council Tax administration 0.638 0.687 Discretionary Housing Payment 0.937 0.200 Private sector housing grant 0.600 0.491 Education Maintenance Allowance 0.554 0.061 Gaelic Education 0.050 4.663 Pupil Equity Fund 4.663 18.716 Early Years Expansion 18.430 7.772 Other Education 6.833 3.203 Children's Services 3.203 12.254 Adult Services 12.257 3.406 Employability 4.809 3.415 Other grants 8.040 96.258 Total 101.010 Page 161 of 286
Page 162
47 Annual Accounts 2024/25 Note 6: Adjustment between accounting basis and funding basis under regulations This note details the adjustments that are made to the total comprehensive income and expenditure recognised by the Council in the year in accordance with proper accounting practice to the resources that are specified by statutory provisions as being available to the Council to meet future capital and revenue expenditure. The first table outlines the current year position, and the second table outlines the comparative prior year position. General Fund Balance Housing Revenue Account Balance Capital Statutory Funds Capital Receipts Reserve £m £m £m £m £m Reversal of items charged to the CIES: Charges for depreciation and impairment of non-current assets (67.936) (17.292) 0.000 0.000 85.228 Amortisation of intangible assets (0.848) 0.000 0.000 0.000 0.848 Capital grants and contributions applied 25.080 2.112 0.000 0.000 (27.192) Revenue expenditure funded from capital under statute (0.352) 0.000 0.000 0.000 0.352 Amounts of non-current assets written off on disposal or sale as part of the gain or loss on disposal to the CIES 0.075 (0.018) 0.000 0.000 (0.057) Insertion of items not charged to the CIES: Statutory provision for the repayment of Loans Fund & Finance Lease principal 3.893 9.105 0.000 0.000 (12.998) Capital expenditure charged against the General Fund and HRA Balances 9.557 4.567 7.008 0.000 (21.132) Transfer of cash sale proceeds credited as part of the gain or loss on disposal to the CIES 0.000 0.000 0.000 (1.980) 1.980 Use of the Capital Receipts Reserve to finance new capital expenditure 0.000 0.000 0.000 4.013 (4.013) Amount by which finance costs charged to the CIES are different from finance costs chargeable in the year in accordance with statutory requirements 0.298 0.107 0.000 0.000 (0.405) Reversal of items relating to retirement benefits debited or credited to the CIES (37.486) (1.958) 0.000 0.000 39.444 Employer’s pension contributions and direct payments to pensioners payable in the year 18.357 0.605 0.000 0.000 (18.962) Amount by which officer remuneration charged to the CIES on an accruals basis is different from remuneration chargeable in the year in accordance with statutory requirements (1.361) 0.035 0.000 0.000 1.326 Total adjustments (50.723) (2.737) 7.008 2.033 44.419 Usable reserves Unusable reserves2024/25 Adjustment primarily involving the Employee Statutory Adjustment Account: Adjustments primarily involving the Pension Reserve: Adjustment primarily involving the Financial Instruments Adjustment Account: Adjustments primarily involving the Capital Receipts Reserve: Adjustments primarily involving the Capital Adjustment Account: Page 162 of 286
Page 163
48 Annual Accounts 2024/25 General Fund Balance Housing Revenue Account Capital Statutory Funds Capital Receipts Reserve £m £m £m £m £m Reversal of items charged to the CIES: Charges for depreciation and impairment of non-current assets (44.202) (16.610) 0.000 0.000 60.812 Amortisation of intangible assets (0.866) 0.000 0.000 0.000 0.866 Capital grants and contributions applied 30.424 2.066 0.000 0.000 (32.490) Revenue expenditure funded from capital under statute (0.793) 0.000 0.000 0.000 0.793 Amounts of non-current assets written off on disposal or sale as part of the gain or loss on disposal to the CIES 0.145 0.157 0.000 0.000 (0.302) Insertion of items not charged to the CIES: Statutory provision for the repayment of Loans Fund & Finance Lease principal 3.708 9.747 0.000 0.000 (13.455) Capital expenditure charged against the General Fund and HRA Balances 3.285 3.924 3.395 0.000 (10.604) Transfer of cash sale proceeds credited as part of the gain or loss on disposal to the CIES 0.000 0.000 0.000 (1.832) 1.832 Use of the Capital Receipts Reserve to finance new capital expenditure 0.000 0.000 0.000 2.498 (2.498) Amount by which finance costs charged to the CIES are different from finance costs chargeable in the year in accordance with statutory requirements 0.176 0.077 0.000 0.000 (0.253) Reversal of items relating to retirement benefits debited or credited to the CIES (31.271) 0.050 0.000 0.000 31.221 Employer’s pension contributions and direct payments to pensioners payable in the year 40.027 (0.230) 0.000 0.000 (39.797) Amount by which officer remuneration charged to the CIES on an accruals basis is different from remuneration chargeable in the year in accordance with statutory requirements 0.113 (0.020) 0.000 0.000 (0.093) Total adjustments 0.746 (0.839) 3.395 0.666 (3.968) Usable reserves Unusable reserves2023/24 Adjustments primarily involving the Capital Receipts Reserve: Adjustment primarily involving the Financial Instruments Adjustment Account: Adjustments primarily involving the Pension Reserve: Adjustment primarily involving the Employee Statutory Adjustment Account: Adjustments primarily involving the Capital Adjustment Account: Note 7: Usable reserves Usable reserves are those reserves the Council is able to apply to fund expenditure or reduce taxation and comprise both capital and revenue reserves. Movements in the revenue reserves during the year are outlined in the Movement in Reserves Statement and a summary is shown in below. More information about the Housing Revenue Account can be found on page 99. Page 163 of 286
Page 164
49 Annual Accounts 2024/25 As at 31 March 2024 As at 31 March 2025 £m £m (117.620) General Fund Balance (138.769) (6.164) Housing Revenue Account Balance (6.933) (7.518) Capital Receipts Reserve (5.485) (90.917) Other Statutory Funds (84.008) (222.219) Total (235.195) Usable Reserves This note sets out the amounts set aside from the General Fund Balance in statutory funds established under Schedule 3 of the Local Government (Scotland) Act 1975 to provide financing for specific areas of expenditure, and the amounts transferred back from these funds to meet General Fund expenditure in 2024/25. Balance at 1 April 2023 Transfers out Transfers in Balance at 31 March 2024 Transfers out Transfers in Balance at 31 March 2025 £m £m £m £m £m £m £m Insurance Fund 2.768 0.000 0.133 2.901 0.000 0.128 3.029 DHN Repair and Renewal Fund 0.000 0.000 0.186 0.186 0.000 0.000 0.186 Reservoir Repair Fund 0.327 0.000 0.014 0.341 0.000 0.017 0.358 Revenue statutory funds 3.095 0.000 0.147 3.428 0.000 0.145 3.573 Education Capital Items Fund 2.106 (0.883) 0.231 1.454 (0.279) 0.232 1.407 Investment Capital Fund 88.778 (2.743) 0.000 86.035 (8.714) 1.707 79.028 Capital statutory funds 90.884 (3.626) 0.231 87.489 (8.993) 1.939 80.435 Total 93.979 (3.626) 0.378 90.917 (8.993) 2.084 84.008 • The Insurance Fund is the funding mechanism for the control of insurable risk and covers the main classes of insurance. It is earmarked for premiums and self-funded insurance costs. • The DHN Repair and Renewal Fund is earmarked for future component replacement of the District Heating Network at the Advanced Manufacturing Innovation District Scotland (AMIDS). • The Reservoir Repair Fund is funding received from a contractor for repairs in perpetuity to the Thornly Dam. • The Education Capital Items Fund is earmarked funding for specific schools to be used in future years for planned purchases of a capital nature, such as computers and information communication technology equipment. • The Investment Capital Fund represents planned funding earmarked to support the Council’s investment programme and the wider strategic management of the Council’s associated debt profile. • In addition to the capital statutory funds above the Capital Receipts Reserve is also a statutory fund. The Capital Receipts Reserve holds cash receipts from asset sales and is used to fund planned capital expenditure. Balance at 1 April 2023 Sale proceeds Capital exp funded Balance at 31 March 2024 Sale proceeds Capital exp funded Balance at 31 March 2025 £m £m £m £m £m £m £m Capital Receipts Reserve 8.184 1.832 (2.498) 7.518 1.980 (4.013) 5.485 Page 164 of 286
Page 165
50 Annual Accounts 2024/25 The following note sets out the amounts within the General Fund Balance that the Council has ring-fenced for future expenditure plans. The unallocated balance of £10.279m represents 1.9% of the Council’s net annual running costs. Balance at 1 April 2023 Transfers out Transfers in Balance at 31 March 2024 Transfers out Transfers in Balance at 31 March 2025 £m £m £m £m £m £m £m Alcohol and Drugs Commission 1.303 (0.536) - 0.767 (0.139) - 0.628 City Deal 1.619 (0.716) 1.000 1.903 (1.007) 0.654 1.550 Civil Contingencies Shared Service 0.114 (0.026) 0.038 0.126 (0.032) 0.025 0.119 Culture Bid Legacy 3.093 (1.084) - 2.009 (0.621) 0.438 1.826 Development Contribution – Paisley T 1.057 (0.538) - 0.519 (0.265) - 0.254 Digital Infrastructure 2.422 (0.981) - 1.441 (1.000) - 0.441 Discretionary business grants 0.392 (0.392) - 0.000 - - 0.000 Early Years Change Fund 2.900 (1.112) 0.312 2.100 - - 2.100 Employability 9.310 (1.355) 2.635 10.590 - 0.110 10.700 Environment & Infrastructure 0.560 (0.510) 0.740 0.790 (0.250) 0.300 0.840 Fairer Renfrewshire Programme 4.497 (1.642) - 2.855 (0.542) 0.023 2.336 Financial Sustainability Fund 21.506 (8.262) - 13.244 (5.116) 13.069 21.197 Fly Tipping Enforcement 0.242 (0.242) - 0.000 (0.200) 0.250 0.050 Learning Estate Support Fund - - - - - 2.000 2.000 Leisure: Inclusive Play Facility 0.007 - - 0.007 - - 0.007 Loan Charges Flexibility Fund 44.759 - 4.000 48.759 - 14.897 63.656 Local Authority Economic Recovery 0.305 (0.800) 0.595 0.100 - - 0.100 Local Heat and Energy Efficiency 0.075 (0.075) - - - 0.036 0.036 Memorial Headstone Safety 0.114 (0.114) - 0.000 - - 0.000 Oakshaw Heritage Trail - - - - - 0.050 0.050 Paisley Town Centre Heritage Asset 0.885 (0.551) - 0.334 (0.334) - (0.000) Planning Enforcement - - - - - 0.120 0.120 Private Sector Housing Grant 2.039 (0.231) 0.500 2.308 (0.141) - 2.167 Pupil Equity Fund 1.030 (0.506) - 0.524 - 0.137 0.661 Rapid Rehousing Transition Plan 0.040 (0.040) - 0.000 - - 0.000 Resettlement and Asylum Fund 0.585 (0.398) 1.242 1.429 (0.537) 0.247 1.139 School Music Participation 0.222 - 0.054 0.276 (0.179) 0.162 0.259 Service Modernisation and Reform 11.019 (1.331) 0.974 10.662 (0.756) 0.269 10.175 Sustainable Communities Fund 0.656 (0.262) - 0.394 (0.163) 0.028 0.259 Villages Improvement Fund - - 0.200 0.200 (0.064) - 0.136 Welfare Reform 1.079 (0.780) 0.700 0.999 (0.713) 0.666 0.952 Year end flexibility: Children's Services 5.243 (1.365) 1.127 5.005 (2.110) 1.837 4.732 General Fund: Ring-fenced 117.073 (23.849) 14.117 107.341 (14.169) 35.318 128.490 Unallocated Balance 10.318 (0.039) - 10.279 - - 10.279 Total General Fund Balance 127.391 (23.888) 14.117 117.620 (14.169) 35.318 138.769 Ring-fenced elements of the General Fund Balance Page 165 of 286
Page 166
51 Annual Accounts 2024/25 Note 8: Unusable reserves Unusable reserves are those reserves that the Council is not able to utilise to provide services, and comprise: • Reserves that hold unrealised gains and losses, particularly in relation to the revaluation of property, plant and equipment and financial instruments, where amounts will only become available to provide services (or limit resources in the case of losses) once the gains or losses are realised as the assets are disposed of. This category of reserves comprises the Revaluation Reserve and the Financial Instruments Revaluation Reserve. • Adjustment accounts that deal with situations where income and expenditure are recognised according to statutory regulations against the General Fund Balance and the Housing Revenue Account Balance on a different basis from that expected by generally accepted accounting practices. These adjustment accounts will carry either a debit balance (showing that the Council is required by statute to fund its expenditure more slowly than accounting standards would expect) or a credit balance (where the Council has set resources aside under statute earlier than accounting standards require). The adjustment accounts effectively offset the General Fund Balance and the Housing Revenue Account Balance to give the Council more or less spending power in the short term than proper accounting practices would allow. The adjustment accounts comprise the Capital Adjustment Account, the Financial Instruments Adjustment Account, the Capital Receipts Reserve, the Pension Reserve and the Employee Statutory Adjustment Account. As at 31 March 2024 As at 31 March 2025 £m £m (768.193) Revaluation Reserve (814.232) 74.480 Pension Reserve 65.238 (625.941) Capital Adjustment Account (590.168) 10.688 Financial Instruments Adjustment Account 10.283 (0.558) Financial Instruments Revaluation Reserve (0.500) 6.907 Employee Statutory Adjustment Account 8.233 (1,302.617) Total Unusable Reserves (1,321.146) Unusable Reserves Revaluation Reserve The Revaluation Reserve contains the gains made by the Council arising from increases in the value of its non-current assets. The balance is reduced when assets with accumulated gains are: i) revalued downwards or impaired and the gains are lost, ii) used in the provision of services and the gains are consumed through depreciation; or iii) disposed of and the gains are realised. The Revaluation Reserve contains only revaluation gains accumulated since 1 April 2007, which was the date that the Revaluation Reserve was created. Accumulated gains arising before that date are consolidated into the balance on the Capital Adjustment Account. Page 166 of 286
Page 167
52 Annual Accounts 2024/25 As at 31 March 2024 As at 31 March 2025 £m £m (772.123) Balance at 1 April (768.193) (33.185) Upward revaluation of non-current assets (86.293) 36.188 Difference between fair value depreciation and historic cost depreciation 39.114 0.927 Accumulated (gains) / losses on disposal of non-current assets transferred to the Capital Adjustment Account 1.140 3.930 Movement in Year (46.039) (768.193) Balance at 31 March (814.232) Revaluation Reserve Pension Reserve The Pension 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 or regulations. The Council accounts for post-employment benefits in the CIES 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. The debit balance on the Pension Reserve shows a significant shortfall in the benefits earned by past and current employees and the Council’s share of Strathclyde Pension Fund resources available to meet them. The statutory arrangements will ensure that funding will have been set aside by the time the benefits come to be paid. As at 31 March 2024 As at 31 March 2025 £m £m (102.399) Balance at 1 April 74.480 258.948 Actuarial (gains) / losses on pension assets and liabilities (786.019) (73.493) Restriction to Asset Ceiling 756.295 31.221 Reversal of items relating to retirement benefits debited or credited to the surplus or deficit on the provision of services in the CIES 39.444 (39.797) Employer’s pension contributions payable in the year (18.962) 74.480 Balance at 31 March 65.238 Pension Reserve Capital Adjustment Account The Capital Adjustment Account absorbs the timing differences arising from the different arrangements for accounting for the consumption of non-current assets and for financing the acquisition, construction or enhancement of those assets. The Capital Adjustment Account is debited with the cost of acquisition, construction or enhancement as depreciation, impairment losses and amortisations are charged to the CIES (with reconciling postings from the Revaluation Reserve to convert fair value figures to a historical cost basis). The Capital Adjustment Account is credited with the amounts set aside by the Council as finance for the costs of acquisition, construction and enhancement. Page 167 of 286
Page 168
53 Annual Accounts 2024/25 The Capital Adjustment Account contains accumulated gains and losses on investment properties and gains recognised on donated assets that have yet to be consumed by the Council, and also revaluation gains accumulated on property, plant and equipment before 1 April 2007. The Revaluation Reserve was created to hold such gains arising from 1 April 2007 onwards. As at 31 March 2024 As at 31 March 2025 £m £m (631.565) Balance at 1 April (625.941) Reversal of items relating to capital expenditure charged to the CIES: 60.812 Charges for depreciation, impairment and revaluation losses of non-current assets 85.228 0.866 Amortisation of intangible assets 0.848 0.793 Revenue expenditure funded from capital under statute 0.352 1.832 Non-current assets sale proceeds 1.980 (0.302) (Gain)/Loss on disposal of non-current assets charged to the CIES (0.057) (0.927) Adjusting amounts written out of the Revaluation Reserve (1.140) 63.074 Net written out amount of non-current assets consumed in the year 87.211 Capital financing applied in the year: (2.498) Use of the Capital Receipts Reserve to finance new capital expenditure (4.013) (32.490) Capital grants and contributions credited to the CIES that have been applied to capital financing (27.192) (13.455) Loans Fund and Finance Lease principal repayments (14.404) (10.604) Capital expenditure charged against the General Fund and Housing Revenue (21.132) 1.597 Adjustment for Service Concession Arrangements 15.303 (57.450) (51.438) (625.941) Balance at 31 March (590.168) Capital Adjustment Account Financial Instruments Adjustment Account The Financial Instruments Adjustment Account absorbs the timing differences arising from the different arrangements for accounting for income and expenses relating to certain financial instruments, and for bearing losses or benefiting from gains in accordance with statutory provisions [or regulations]. The Council uses the Financial Instruments Adjustment Account to: • Manage premiums incurred on the early repayment of borrowings. Generally accepted accounting practices require that premiums are debited to the CIES when they are incurred (except where the loan debt being repaid is exchanged for new loan debt on substantially similar terms). However, statutory arrangements or regulations allow any premiums that would normally require to be to be taken immediately to the surplus or deficit on the provision of services, to be amortised to the General Fund Balance over the various periods of time as specified in the regulations/statutory guidance. Furthermore, statutory arrangements [or regulations] require that any premiums that were on the Council’s balance sheet at 31 March 2007 be amortised to the General Fund Balance over the unexpired term that was outstanding on the associated loans when they were redeemed. The Council had various premiums totalling £17.630m at 31 March 2007 and, under the statutory arrangements, these will be fully amortised to the General Fund Balance by financial year 2053-2054. • Manage borrowings that were on the Council’s balance sheet at 31 March 2007 and that have a stepped interest rate feature. These borrowings comprise four ‘lender option borrower option’ (LOBO) loans for which the interest rate Page 168 of 286
Page 169
54 Annual Accounts 2024/25 was fixed for an initial period, and at a pre-agreed later date the interest rate changed. Generally accepted accounting practices require that interest charges relating to borrowings that have a stepped interest rate feature are debited to the CIES on the basis of a single effective interest rate (EIR) over the expected life of the loans, rather than based on the contractual cash outflows of interest. However, statutory arrangements [or regulations] allow such borrowings that were on the Council’s balance sheet at 31 March 2007 to be charged to the General Fund Balance in accordance with the accounting treatment prior to 1 April 2007, which did not require the use of the effective interest rate as the basis for the interest charge. • Manage ‘soft loans’ that were on the Council’s balance sheet at 31 March 2007. Soft loans are loans advanced by the Council at nil or below prevailing interest rates. Generally accepted accounting practices require that the discounted interest rate is recognised as a reduction in the fair value of the loan, with the difference being debited to the CIES as service expenditure. However, statutory arrangements [or regulations] require that, for soft loans on the Council’s balance sheet at 31 March 2007, the reduction in value and corresponding charge to be reversed, so that there is no impact on the General Fund Balance. As at 31 March 2007 interest free loans amounting to £0.156m had been advanced to employees who had had changes implemented to their pay cycle. These loans are repayable when employees leave the Council’s employment. Financial Instruments Adjustment Account Refinancing premiums and discounts Borrowing on stepped interest rate loans Loans to third parties at less than market rate Total £m £m £m £m Balance at 1 April 2024 9.608 1.066 0.014 10.688 Premiums incurred in previous financial years to be charged against the General Fund Balance in accordance with statutory requirements (0.389) 0.000 0.000 (0.389) Amount by which finance costs charged to the CIES are different from finance costs chargeable in the year in accordance with statutory requirements 0.000 (0.013) (0.003) (0.016) Balance at 31 March 2025 9.219 1.053 0.011 10.283 Financial Instruments Revaluation Reserve The Financial Instruments Revaluation Reserve contains the gains made by the Council arising from increases in the value of its investments that are measured at fair value through other comprehensive income. The balance is reduced when investments with accumulated gains are: i) revalued downwards or impaired and the gains are lost; or ii) disposed of and the gains are realised. As at 31 March 2024 As at 31 March 2025 £m £m (0.528) Balance at 1 April (0.558) (0.030) Downward/(Upward) revaluation of investments 0.058 (0.558) Balance at 31 March (0.500) Financial Instruments Revaluation Reserve Page 169 of 286
Page 170
55 Annual Accounts 2024/25 Employee Statutory Adjustment Account The Employee Statutory Adjustment Account absorbs the differences that would otherwise arise on the General Fund Balance from accruing for short-term accumulating compensated absences at the end of the financial year. As at 31 March 2024 As at 31 March 2025 £m £m 7.000 Balance at 1 April 6.907 (7.000) Settlement or cancellation of accrual made at the end of the prior year (6.907) 6.907 Amounts accrued at the end of the current year 8.233 6.907 Balance at 31 March 8.233 Employee Statutory Adjustment Account Note 9: Property, Plant and Equipment The Code requires that where a component of an asset is replaced, the carrying amount (i.e. net book value) of the old component shall be derecognised to avoid double counting and the new component is reflected in the carrying amount of the infrastructure asset. However, due to practical difficulties in applying component accounting for the recognition and derecognition of replaced components of infrastructure assets, most local authorities have been unable to comply with the requirement to assess the net book value of the replaced component and have treated the amount of the replaced component as zero, because the replaced component is considered to have been fully used up at the point that it is replaced. In recognition of this difficulty, the Scottish Government issued a Statutory Override in August 2022. Finance circular 8/2024 extended the temporary measures until 31 March 2025. Renfrewshire Council has elected to apply both of the following provisions: • Statutory Override 1: For accounting periods commencing from 1 April 2021 until 31 March 2025 a local authority is not required to report the gross cost and accumulated depreciation for infrastructure assets. • Statutory Override 2: For accounting periods commencing from 1 April 2010 until 31 March 2025 the carrying amount to be derecognised in respect of a replaced part of an infrastructure asset is required to be a nil amount, and no subsequent adjustment shall be made to the carrying amount of the asset with respect to that part. Page 170 of 286
Page 171
56 Annual Accounts 2024/25 Note 9: Property, Plant and Equipment (continued) Council dwellings Other land and buildings Vehicles, plant, furniture and equipment Infrastructure assets Assets under construction Surplus assets Total Of which funded by PPP/ROU £m £m £m £m £m £m £m £m Balance sheet net carrying amount at 31 March 2024 733.908 375.022 349.145 228.036 149.695 22.415 1,858.221 107.508 Reclassified (to)/ from Assets Held for Sale 0.000 0.000 (2.492) 0.000 0.000 0.000 (2.492) 0.000 Other Reclassifications 5.918 4.504 (0.017) 0.464 (10.869) 0.000 0.000 0.000 Recognition of Right of Use Assets and Increase in PPP liability 0.000 19.294 1.501 0.000 0.000 0.000 20.795 20.795 Additions 10.010 2.549 27.954 18.604 60.144 0.179 119.440 2.411 Disposals (1.204) (0.310) (0.005) 0.000 0.000 (0.304) (1.823) 0.000 Depreciation (24.464) (11.368) (49.195) (11.628) 0.000 (0.121) (96.776) (8.846) Impairment adjustments recognised in the CIES 0.000 0.000 0.000 0.000 (2.934) 0.000 (2.934) 0.000 Revaluation adjustments taken to the Revaluation Reserve 76.219 0.549 9.458 0.000 0.000 0.067 86.293 11.454 Revaluation adjustments recognised in the CIES 0.000 (23.144) (1.492) 0.000 0.000 0.003 (24.633) (16.395) Balance sheet net carrying amount at 31 March 2025 800.387 367.096 334.857 235.476 196.036 22.239 1,956.091 116.927 Gross carrying amount at 31 March 2025 800.387 393.903 477.120 n/a 196.036 27.451 1,894.897 133.320 Accumulated depreciation at 31 March 2025 0.000 (26.807) (142.263) n/a 0.000 (5.212) (174.282) (16.393) Infrastructure Assets 0.000 0.000 0.000 235.476 0.000 0.000 235.476 0.000 Balance sheet net carrying amount at 31 March 2025 800.387 367.096 334.857 235.476 196.036 22.239 1,956.091 116.927 Movements in 2024/25 Page 171 of 286
Page 172
57 Annual Accounts 2024/25 Council dwellings Other land and buildings Vehicles, plant, furniture and equipment Infrastructure assets Assets under construction Surplus assets Total Of which funded by PFI £m £m £m £m £m £m £m £m Balance sheet net carrying amount at 31 March 2023 714.690 343.150 371.154 222.732 124.526 21.098 1,797.350 127.539 Reclassified (to)/ from Assets Held for Sale 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Other Reclassifications 8.153 35.812 2.612 5.519 (51.856) 1.353 1.593 0.000 Additions 17.184 5.469 14.554 10.393 77.025 0.000 124.625 1.735 Disposals (1.094) (0.035) (0.063) 0.000 0.000 (0.339) (1.531) 0.000 Depreciation (23.823) (10.408) (45.885) (10.608) 0.000 (0.088) (90.812) (9.585) Revaluation adjustments taken to the Revaluation Reserve 18.798 4.538 8.814 0.000 0.000 1.035 33.185 (10.185) Revaluation adjustments recognised in the CIES 0.000 (3.504) (2.041) 0.000 0.000 (0.644) (6.189) (1.996) Balance sheet net carrying amount at 31 March 2024 733.908 375.022 349.145 228.036 149.695 22.415 1,858.221 107.508 Gross carrying amount at 31 March 2024 733.908 398.942 476.991 n/a 149.695 27.551 1,787.087 123.901 Accumulated depreciation at 31 March 2024 0.000 (23.920) (127.846) n/a 0.000 (5.136) (156.902) (16.393) Infrastructure Assets 0.000 0.000 0.000 228.036 0.000 0.000 228.036 0.000 Balance sheet net carrying amount at 31 March 2024 733.908 375.022 349.145 228.036 149.695 22.415 1,858.221 107.508 Movements in 2023/24 (restated) Page 172 of 286
Page 173
58 Annual Accounts 2024/25 Note 10: Heritage Assets 2023/24 2024/25 £m £m 44.186 Balance at 1 April 44.186 0.000 Revaluations to CIES 0.000 0.000 Revaluations to Revaluation Reserve 0.000 44.186 Balance at 31 March 44.186 Heritage Assets A valuation of the fair value of the Council’s Heritage Assets was carried out by an external valuer in 2021/22. In the five years prior to 2024/25, there were no acquisitions, donations, or disposals of Heritage Assets. The combined collections managed by the Renfrewshire Arts and Museums Service number in excess of 350,000 objects and it is impractical to undertake a full valuation of all the items in the collection. The balances above reflect the valuation of materials examined by the external valuer during 2021/22. Further detail on the valuation of each category of asset is outlined in Accounting Policy K on page 88. The details of the valuations of the assets are as follows: • Archaeology items • Natural history and science book collections • Art collection • Ceramics • Natural history and Numismatics • Science and social history collections • Special collections • Textiles • Transport collection • World cultures Note 11: Investment properties 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, nor does it have contractual obligations in relation to repairs, maintenance or enhancement. The following table summarises the movement in the fair value of investment properties during the year: 2023/24 2024/25 £m £m 1.593 Opening balance at 1 April 0.000 0.000 Net gains or (losses) from fair value adjustments 0.000 (1.593) Transfers from inventories and property, plant and equipment 0.000 0.000 Closing balance at 31 March 0.000 Fair Value of Investment Properties Note 12: Assets held for sale The following table summarises the movement in the fair value of assets held for sale during the year: 2023/24 2024/25 £m £m 0.100 Opening balance at 1 April 0.100 Assets reclassified as held for sale: 0.000 Other Land and Buildings 2.492 0.000 Assets sold (0.100) 0.100 Closing balance at 31 March 2.492 Assets Held for Sale Note 13: Intangible assets The Council accounts for purchased software licences as intangible assets. The cost of the licences is amortised on a straight-line basis over the expected life of the licences, which is three to five years for all ICT systems. Amortisation charges are initially charged to ICT services and then absorbed as an overhead across all the service headings in the net expenditure of services. Page 173 of 286
Page 174
59 Annual Accounts 2024/25 The movement on intangible asset balances during the year is shown in the following table. 2023/24 2024/25 £m £m Balance at 1 April 5.861 Gross carrying amount 5.927 (3.337) Accumulated amortisation (4.203) 2.524 Net carrying amount at 1 April 1.724 0.066 Additions: purchases 0.313 0.000 Disposals (0.180) 0.000 Disposal amortisation 0.180 (0.866) Amortisation for the year (0.848) 1.724 Net carrying amount at 31 March 1.189 Comprising: 5.927 Gross carrying amount 6.060 (4.203) Accumulated amortisation (4.871) 1.724 Balance at 31 March 1.189 Purchased Software Licences There are no individual intangible assets that are material to the financial statements and there are currently no contractual commitments for the acquisition of intangible assets. Note 14: Capital expenditure and capital financing Capital expenditure involves the creation of assets, the benefit of which will be available to future Council Tax and non-domestic rate payers. It is financed from borrowing and capital income (sales receipts), and so the cost of the asset is effectively borne over a number of years. The Council’s overall capital investment programme is sub-divided into two programmes: housing and non- housing. In 2024/25 total spending on capital projects was £119.705m (£125.484m in 2023/24) and was within the overall prudential limits approved by Council. Capital receipts of £4.013m (£2.498m in 2023/24) were used to fund spending on capital projects. The net capital expenditure for the year of £67.469m (£79.892m in 2023/24) was financed from external borrowing, credit arrangements and from cash balances. The table below shows the total amount of capital expenditure incurred in the year, including the value of assets acquired under finance leases and Service Concession Arrangements. Also shown are the resources that have been used to finance this capital expenditure. Where capital expenditure is to be financed in future years by charges to revenue as assets are used by the Council, the expenditure results in an increase in the Capital Financing Requirement (CFR), a measure of the capital expenditure incurred historically by the Council that has yet to be financed. The movement in the CFR during the year is also analysed in the table below. Page 174 of 286
Page 175
60 Annual Accounts 2024/25 As at 31 March 2024 As at 31 March 2025 £m £m 442.065 Opening Capital Financing Requirement 510.099 Capital investment: 124.625 Property, plant and equipment 119.440 0.066 Intangible assets 0.313 0.793 Revenue expenditure funded from capital under statute 0.352 0.000 Recognition of Right of Use Assets and increase in PPP Liability 20.795 Sources of finance: (2.498) Capital receipts – sale of council assets (4.013) (32.490) Government grants and other contributions (27.192) (10.604) Sums set aside from revenue – direct revenue contributions (21.132) (13.455) Loans Fund/Finance Lease principal repayments (14.404) 1.597 Adjustment for Service Concession Arrangements 15.303 510.099 Closing Capital Financing Requirement 599.561 Explanation of movements in year: 71.265 Increase/(decrease) in underlying need to borrow (unsupported by government financial assistance) 58.971 (0.117) Increase/(decrease) in Right of Use Asset Creditor 3.529 (3.114) Increase/(decrease) in PPP finance lease creditor 26.962 68.034 Increase/(Decrease) in Capital Financing Requirement 89.462 At 31 March 2025 the Council had commitments on capital contracts for non-housing projects of £65.412m (£29.614m in 2023/24) and for housing projects of £11.534m (£25.932m in 2023/24). This expenditure will be funded from a combination of government grants, external borrowing, income from selling assets and contributions from revenue budgets. Note 15: Service Concession Arrangements The Council entered into a Public Private Partnership on 1 July 2006 for the provision and maintenance of educational buildings and other facilities. This agreement provides the Council with replacement buildings such as primary and secondary schools and community education premises. The provider is required to ensure the availability of these buildings to a pre- agreed standard, with deductions from the fee payable being made if facilities are unavailable or performance is below the minimum standard. When the agreement ends in 2038, the buildings will be handed to the Council at nil consideration with a guarantee of no major maintenance requirements for a five-year period. The Council only has rights to terminate the contract if it compensates the contractor in full for costs incurred and future profits that would have been generated over the course of the remainder of the contract. The assets used to provide services are recognised on the Council’s Balance Sheet. Movements in their value over the year are shown in the movement on the Property, Plant and Equipment balance in Note 9. The Council makes an agreed payment each year which is increased by inflation and can be reduced if the contractor fails to meet availability and performance standards. Under the agreement the Council is committed to paying the following sums (assuming an average inflation rate of 2.5% per annum and excluding any performance/availability deductions). The discount rate used in this calculation is the interest rate implicit in the PFI agreement, which was fixed at the outset at 7.6%. Page 175 of 286
Page 176
61 Annual Accounts 2024/25 After the adoption of IFRS 16, the opening liability as at 1 April 2024 was remeasured to include the net present value of contingent rental payments. Contingent rental payments are those payments where an inflationary increase is applied to the unitary payments. Future Repayment Periods - Schools Service Charges Liability Repayment Interest Repayment Total £m £m £m £m Payable within 1 year 7.910 4.345 8.881 21.136 Payable within 2-5 years 32.214 19.274 36.637 88.125 Payable within 6-10 years 39.707 31.118 47.850 118.675 Payable within 11-15 years 28.727 17.291 23.023 69.041 Total 108.558 72.028 116.391 296.977 In 2019/20, the Council entered into a Service Concession Agreement for the use of a waste materials recovery facility at Bargeddie. Residual waste is then processed at a thermal treatment plant in Dunbar. North Lanarkshire Council is the lead authority and is contracted to Viridor. Five councils, including Renfrewshire, have an inter-authority agreement with North Lanarkshire Council. Renfrewshire Council’s share of the contract is 20%. The discount rate used in this calculation is the interest rate implicit in the agreement, which was fixed at the outset at 5.68% Future Repayment Periods - Waste Facility Service Charges Liability Repayment Interest Repayment Total £m £m £m £m Payable within 1 year 4.601 0.017 0.306 4.924 Payable within 2-5 years 18.989 0.729 1.158 20.876 Payable within 6-10 years 27.609 0.183 1.237 29.029 Payable within 11-15 years 30.037 1.696 1.056 32.789 Payable within 16-20 years 31.347 2.756 0.470 34.573 112.583 5.381 4.227 122.191Total Outstanding Service Concession Arrangements Schools Waste Facility Total £m £m £m Balance at 1 April 2023 (63.349) (4.858) (68.207) Payments during the year 3.114 0.157 3.271 Balance at 31 March 2024 (60.235) (4.701) (64.936) Increase in liability to recognise net present value of contingent rents (16.285) (0.580) (16.865) Payments during the year 4.492 (0.100) 4.392 Balance at 31 March 2025 (72.028) (5.381) (77.409) In accordance with Accounting Policy and in line with Finance Circular 10/2022, the Council applied the permitted PPP Service Concession Arrangement flexibility in financial year 2022/23 on a retrospective annuity basis with a useful life of 40 years. The flexibility being applied is consistent with the current Loans Fund arrangements and is considered prudent, sustainable and affordable over the life of the asset. The current annuity charges based on the estimated useful life for the schools service concession Page 176 of 286
Page 177
62 Annual Accounts 2024/25 arrangement have been compared against the liability repayment profile based on the estimated useful asset lives for the schools service The most appropriate asset life was considered to be 40 years which replicated the useful life of other similar type assets on the council’s balance sheet i.e. schools. The calculation of the repayment charges for the service concession arrangement using asset life annuity is compared to the current charges which are made over the contract period. As the opening liability was remeasured at 1 April 2024 to include the net present value of contingent rents, the calculation of the repayment charges for the service concession arrangement have also been remeasured. This has resulted in a further one-off pre 2024/25 retrospective saving of £13.897m. In addition to the one-off retrospective element, an in- year saving occurred in the scheduled debt repayments in 2024/25 of 1.406m (£1.597m in 2022/23). This will be followed by a reduction in the annual charges for a further 13 years and then the continuation of statutory charges after the contract arrangements have been repaid. Over the full asset life of the service concession arrangement, the total debt liability remains the same. Prior Repayment Current Repayment (Cost)/Reduction £m £m £m Pre 2024/25 62.368 19.272 43.096 Paid in 2024/25 4.492 3.086 1.406 Payable within 1 year 4.345 2.298 2.047 Payable within 2-5 years 19.274 11.089 8.185 Payable within 6-10 years 31.118 19.353 11.765 Payable within 11-15 years 17.291 27.977 (10.686) Payable within 16-20 years 0.000 40.444 (40.444) Payable within 21-25 years 0.000 15.369 (15.369) Total 138.888 138.888 0.000 PPP Service Concession Liability Repayment Note 16: Leases Renfrewshire Council as Lessee Right of Use Assets The Council has adopted IFRS 16 leases from 1 April 2024, as per the Code of Practice for Local Authority Accounting. The main impact of the new requirements is that for arrangements previously accounted for as operating leases, a right of use asset and a lease liability have been brought into the balance sheet at 1 April 2024. Leases for items of low value and leases that expire on or before 31 March 2025 are exempt from the new arrangements. IFRS 16 has been applied retrospectively but with the cumulative effect recognised at 1 April 2024. This means that right of use assets and lease liabilities have been calculated as if IFRS 16 had always applied but recognised in 2024/25 and not by adjusting prior year figures. However, some practical expedients have been applied as required or permitted by the Code: • Lease liabilities are measured at the present value of the remaining lease payments at 1 April 2024 discounted by the authority’s incremental borrowing rate at that date; • The weighted average of the incremental borrowing rates used to discount liabilities was 4.92%; • Right of use assets were initially measured at the amount of the lease liability, any initial direct costs have been excluded. Page 177 of 286
Page 178
63 Annual Accounts 2024/25 This has resulted in the following additions to the balance sheet at 1 April 2024: • £2.907m Other land and buildings; • £0.921m Vehicle, plant furniture and equipment; • £3.465m Non-current creditors (lease liabilities); • £0.363m Current creditors (lease liabilities). The newly recognised lease liabilities of £3.828m compare with the operating lease commitments of £4.399m disclosed in the 2023/24 annual accounts. The difference of £0.571m is explained by the fact the lease liability has been discounted to net present value, leases that expired at 31 March 2025 have been excluded, partially offset by the extending the lease term in some of the contracts. The Council has 17 properties classed as a right of use asset with a liability. As at 31 March 2025, outstanding obligations to make payments are as follows: As at 31 March 2024 As at 31 March 2025 £m £m 0.000 Not later than one year 0.413 0.000 Between one and five years 1.220 0.000 Between six and ten years 1.457 0.000 Later than ten years 0.376 0.000 3.466 Finance Leases Finance leases, which have substantially transferred to the Council the benefits and risks of ownership of a non- current asset, are treated as if the asset had been purchased outright. Assets acquired under finance leases are included in non-current assets at the lower of the fair value or the present value of the minimum lease payments. The capital element of the lease is included as obligations under creditors. After the adoption of IFRS 16 on the 1 April 2024 all finance leases will be recognised as right of use assets in the same way as operating leases. There were no finance leases which were recognised as right of use assets as the existing contracts ceased prior to the 31 March 2025 and were therefore exempt from the new arrangements. As at 31 March 2024 As at 31 March 2025 £m £m 0.037 Not later than one year 0.000 0.037 0.000 Renfrewshire Council as Lessor Operating Leases The Council leases out property and equipment under operating leases for the following purposes: • for the provision of community services, such as sports facilities, tourism services and community centres • for economic development purposes to provide suitable affordable accommodation for local businesses. The future minimum lease payments receivable under non-cancellable leases in future years are: As at 31 March 2024 As at 31 March 2025 £m £m 0.158 Not later than one year 0.235 0.511 Between one and five years 0.494 6.112 Later than five years 1.355 6.781 2.084 The minimum lease payments receivable does not include rents that are contingent on events taking place after the lease was entered into, such as adjustments following rent reviews. Page 178 of 286
Page 179
64 Annual Accounts 2024/25 Note 17: Inventories 2023/24 2024/25 £m £m 1.314 Balance at 1 April 1.287 9.163 Additions during the year 9.670 (9.188) Recognised as an expense during the year: inventories sold, exchanged or distributed (9.893) (0.002) Recognised as an expense during the year: inventories written down (0.004) 1.287 Balance at 31 March 1.060 Inventories Note 18: Cash and cash equivalents The balance of cash and cash equivalents is made up of the following components. With the exception of imprest accounts held at Council establishments, the balances in all of the categories listed below are used together to manage the Council’s overall cash balances on a day-to-day basis. 2023/24 2024/25 £m £m (7.653) Current account balances with the council's banker (13.479) 3.707 Euro account balances with the council's banker - sterling equivalent 0.516 13.263 Callable deposits with UK banks and building societies 5.301 20.101 Callable deposits in money market funds and ultra-short bond funds 13.127 0.043 Imprest accounts held at council establishments 0.040 29.461 Total cash and cash equivalents 5.505 Note 19: Debtors Amounts due to be received by the Council at 31 March are set out below. This is analysed by type of debtor to provide greater transparency of the sums due. Short-term Long-term Short-term Long-term £m £m £m £m 22.904 0.000 Central government bodies (non-NHS) 23.728 0.000 5.075 0.990 Central government bodies (NHS) 5.037 0.900 5.476 0.000 Other local authorities 1.535 0.000 5.170 0.000 HM Revenue and Customs 8.281 0.000 0.084 0.029 Employees 0.064 0.029 21.084 0.000 Council Tax arrears 21.889 0.000 (13.296) 0.000 less impairment (14.397) 0.000 4.939 0.000 Rent arrears 4.376 0.000 (2.945) 0.000 less impairment (3.240) 0.000 37.425 6.046 Other entities and individuals 35.814 6.045 (19.562) (4.700) less impairment (20.607) (4.972) 66.354 2.365 Total Debtors 62.480 2.002 31 March 2024 As at 31 March 2025 Page 179 of 286
Page 180
65 Annual Accounts 2024/25 Note 20: Creditors Amounts due to be paid by the Council as at 31 March are set out below. This is analysed by type of creditor to provide greater transparency of the sums due. Short-term Long-term Short-term Long-term £m £m £m £m (7.510) (0.732) Central government bodies (non-NHS) (5.485) (0.549) (1.976) 0.000 Central government bodies (NHS) (1.894) 0.000 (3.635) 0.000 Other local authorities (2.506) 0.000 (7.437) 0.000 HM Revenue and Customs (7.895) 0.000 (6.946) 0.000 Strathclyde Pension Fund and Scottish Public Pensions Agency (5.368) 0.000 (10.440) 0.000 Employees (14.069) 0.000 (3.038) (57.197) Service concession arrangements: schools (4.345) (67.683) (0.134) (4.567) Service concession arrangements: waste (0.017) (5.364) (0.037) 0.000 Right of Use Assets (0.413) (3.053) (4.044) 0.000 Council Tax refundable to taxpayers (3.488) 0.000 (1.018) 0.000 Council Tax receipts in advance (1.656) 0.000 (37.117) (0.856) Other entities and individuals (23.203) (0.932) (83.332) (63.352) Total Creditors (70.339) (77.581) As at 31 March 2024 As at 31 March 2025 Note 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. Teacher’s maternity pay is a short-term provision, made to reflect the changes in European legislation that allow teachers to accrue all holidays during parental leave. The movement in these short-term provisions is detailed below: Short-term Provisions Teachers’ maternity pay Other Total £m £m £m As at 1 April 2024 (0.121) (0.600) (0.721) Additional provisions made during the year (0.142) (0.264) (0.406) Amounts used during the year 0.121 0.600 0.721 As at 31 March 2025 (0.142) (0.264) (0.406) A summary of the movements in the long-term provisions made by the Council is detailed below, along with an explanation of the reason for the provision: Page 180 of 286
Page 181
66 Annual Accounts 2024/25 Long-term Provisions Holiday pay compensation Insurance claims Total £m £m £m Balance at 1 April 2024 (0.445) (4.185) (4.630) Additional provisions made during the year 0.000 (1.172) (1.172) Amounts used during the year 0.000 0.572 0.572 As at 31 March 2025 (0.445) (4.785) (5.230) Holiday pay compensation payments The Council has received a number of claims arising from a European Court of Justice ruling in relation to holiday pay. A provision has been made to reflect the potential outcome of known claims. A contingent liability is recognised in Note 29 for potential claims that have not yet materialised. Insurance claims The provision for insurance claims represents the actuarial assessment of excess costs arising from insurance claims together with identified liabilities in respect of insurance claims outstanding against Renfrewshire Council and predecessor local authorities. The Council has increased its net assessment by £1.172m on the basis of information held by the Council and notified by Glasgow City Council, the coordinating authority for the former Strathclyde Regional Council. Note 22: Financial Instruments Categories of 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 entity. The term ‘financial instrument’ covers both financial assets and financial liabilities and includes trade payables, borrowings (for example Public Works Loan Board debt and market debt), financial guarantees, bank overdraft, trade receivables, loans receivable, cash deposits with financial institutions (some on a fixed term basis and some which are immediately available) and longer-term investments. The following categories of financial instrument are carried in the balance sheet. Page 181 of 286
Page 182
67 Annual Accounts 2024/25 Long-term Current Long-term Current £m £m £m £m (238.592) (5.000) (232.050) (5.000) 0.000 (2.815) 0.000 (2.694) (238.592) (7.815) (232.050) (7.694) (20.000) (26.766) 0.000 (46.766) 0.000 (0.864) 0.000 (0.858) (0.339) (0.262) 0.000 (0.588) (20.339) (27.892) 0.000 (48.212) 0.000 (29.785) 0.000 (33.839) (258.931) (65.492) (232.050) (89.745) 0.000 (49.988) 0.000 (33.091) (61.763) (3.210) (75.183) (4.775) 0.000 0.000 (0.395) 0.000 (61.763) (53.198) (75.578) (37.866) At amortised cost trade payables Service Concession and Right of Use Asset liabilities Financial guarantees Borrowing from group entities Total Borrowing Financial Liabilities included in Creditors Principal sum borrowed Accrued interest Principal sum borrowed Accrued interest EIR adjustments Total non-PWLB borrowing (“market debt”) As at 31 March 2025 Financial Liabilities Total Public Works Loan Board (PWLB) borrowing As at 31 March 2024 Long-term Current Long-term Current £m £m £m £m 0.000 66.000 0.000 17.521 0.000 1.755 0.000 0.017 0.000 0.000 0.000 (0.004) 4.321 0.000 4.391 0.000 4.321 67.755 4.391 17.534 0.000 5.617 0.000 (8.165) 0.000 0.048 0.000 0.029 0.000 0.012 0.000 (0.003) 0.000 23.808 0.000 13.644 0.000 29.485 0.000 5.505 1.030 74.996 5.959 70.444 4.826 0.054 4.826 0.044 1.208 0.000 0.000 0.000 (4.700) (21.739) (4.972) (23.847) 2.364 53.311 5.813 46.641 Loss allowance Financial Assets included in Debtors Accrued interest As at 31 March 2025 Loss allowance At fair value through other comprehensive income - designated equity instruments At fair value through profit or loss Principal Accrued interest Loss allowance Total Investments Total Cash and cash equivalents At amortised cost: At amortised cost: Trade receivables Loans made for service purposes As at 31 March 2024 Financial Assets At amortised cost: Principal Accrued interest Page 182 of 286
Page 183
68 Annual Accounts 2024/25 Loans to other entities and individuals comprise a loan to Kilbarchan Amateur Athletic Club of £0.073m (2023/24 £0.074), home loans of £0.213m (2023/24 £0.256m) and social care charging order debtors of £0.737m (2023/24 £0.736m). Note that these balances are not principal amounts owed, rather valued at amortised cost based on a notional (effective) interest rate. Equity instruments elected to fair value through other comprehensive income The Council has elected to account for the Insurance Fund at fair value through other comprehensive income because it is a long-term strategic holding and changes in its fair value is not considered to be part of the Council’s annual financial performance. The Insurance Fund is invested in the Phoenix Fund, managed on behalf of the Council by LGT Wealth Management. The objective of the fund is to achieve long term growth with low volatility, through a widely diversified portfolio. The fair value of the investment is £4.391m at 31 March 2025 (£4.321m as at 31 March 2024). Income from the Fund is reinvested. Fair value of financial instruments Financial instruments, except those classified at amortised cost, are carried in the Balance Sheet at fair value. For most assets, including money market funds, the fair value is taken from the market price. The fair values of other instruments have been estimated by calculating the net present value of the remaining contractual cash flows at 31 March 2025. The Council’s ‘Fair value through other comprehensive income’ assets comprise its insurance fund investments. The fair value of the insurance fund investments equates to the market value of those investments, and this valuation has been provided by the Council’s investment manager, LGT Wealth Management. Financial instruments classified at amortised cost are carried in the Balance Sheet at amortised cost. Their fair values have been estimated by calculating the net present value of the remaining contractual cash flows at 31 March 2025, using the following methods and assumptions: • Loans borrowed by the Council have been valued by discounting the contractual cash flows over the whole life of the instrument at the appropriate market rate for local authority loans. • For ‘lender option borrower option’ (LOBO) loans, PWLB premature repayment rates have been applied to provide the fair value under PWLB debt redemption procedures. The PWLB redemption rates provide a reasonable proxy for rates and a number of market participants have used this basis when considering early redemption costs for market loans. It is likely that lenders will only exercise their options when market rates have risen above the contractual loan rate. The interest rate risk associated with the Council’s LOBOs is not deemed to be significant and the potential penalties charged may make the redemption of the loans an uneconomic option. • The fair values of other long-term loans and investments have been discounted at the market rates for similar instruments with similar remaining terms to maturity on 31 March. • The fair values of financial guarantees have been estimated based on the likelihood of the guarantees being called and the likely payments to be made. • No early repayment or impairment is recognised for any financial instrument. • The fair value of short-term instruments, including trade payables and receivables, is assumed to approximate to the carrying amount given the low and stable interest rate environment. Fair values are shown in the table below, split by their level in the fair value hierarchy: • Level 1 – fair value is only derived from quoted prices in active markets for identical assets or liabilities, e.g. bond prices • Level 2 – fair value is calculated from inputs other than quoted prices that are observable for the asset or liability, e.g. interest rates or yields for similar instruments • Level 3 – fair value is determined using unobservable inputs, e.g. non-market data such as cash flow forecasts or estimated creditworthiness. Page 183 of 286
Page 184
69 Annual Accounts 2024/25 The fair value for each category of financial instrument is shown below, with the balance sheet carrying amount shown for comparison. Carrying Amount Fair value Financial Liabilities Carrying Amount Fair value £m £m £m £m Financial liabilities measured at amortised cost: (246.407) (220.126) Public Works Loan Board borrowing 2 (239.743) (189.683) (48.231) (53.523) Non-PWLB borrowing (“market debt”) 2 (48.211) (53.523) Other liabilities: (64.973) (119.570) Service Concession and Finance Lease liabilities 3 (79.958) (79.958) 0.000 0.000 Financial guarantees 3 (0.395) (0.395) (359.611) (393.219) (368.307) (323.559) Financial liabilities measured at amortised cost: (29.785) n/a Borrowing from group entities (33.839) n/a (49.988) n/a Trade payables: short-term (33.091) n/a (79.773) (66.930) Total financial liabilities for which fair value is disclosed Total financial liabilities for which fair value is not disclosed As at 31 March 2024 As at 31 March 2025 Fair value level Carrying Amount Fair value Financial Assets Carrying Amount Fair value £m £m £m £m 20.101 20.101 Callable deposits in money market funds and ultra-short bond funds 1 13.128 13.128 3.707 3.707 Euro current account balances with the council’s banker 2 0.516 0.516 4.321 4.321 Investments in pooled funds (insurance fund) 1 4.391 4.391 28.129 28.129 18.035 18.035 67.755 67.751 Fixed term deposits with UK local authorities 2 0.000 0.000 0.000 0.000 Fixed term deposits withUK building societies 2 17.534 17.534 5.610 5.610 Callable deposits with UK banks and building societies (including sterling current account balances with the Council’s banker) 2 (8.178) (8.178) 0.043 0.043 Imprest accounts held at council establishments 2 0.040 0.040 1.387 1.543 Loans made for service purposes 3 1.023 1.037 74.795 74.947 10.419 10.433 102.924 103.076 28.454 28.468 Fair value level Total Financial assets measured at fair value Total Financial assets measured at amortised cost As at 31 March 2024 As at 31 March 2025 Total financial assets for which fair value is disclosed Items of income, expense, gain and loss relating to financial instruments The following items of income, expense, gain and loss relating to financial instruments are included within the lines ‘Financing and investment income and expenditure’ and ‘(Surplus)/Deficit from investments in equity instruments designated as Fair Value through Other Comprehensive Income’ in the CIES. Page 184 of 286
Page 185
70 Annual Accounts 2024/25 2023/24 Amortised cost Elected to Fair Value through Other Comprehensive Income Fair Value through Profit or Loss 2024/25 £m £m £m £m £m £m 16.323 Interest expense 0.000 0.000 0.000 17.118 17.118 3.720 Impairment losses 2.472 0.000 0.000 0.000 2.472 0.007 Fee expense 0.000 0.000 0.000 0.007 0.007 20.050 Total expense in the Surplus / Deficit on the Provision of Services 2.472 0.000 0.000 17.125 19.597 (8.259) Interest income (4.025) 0.000 (1.711) 0.000 (5.736) (0.133) Dividend income 0.000 (0.128) 0.000 0.000 (0.128) (8.392) Total income in the Surplus/Deficit on the Provision of Services (4.025) (0.128) (1.711) 0.000 (5.864) 0.008 Net (gain) or loss on revaluation 0.000 0.058 0.010 0.000 0.068 0.008 (Surplus)/Deficit on the revaluation of financial assets 0.000 0.058 0.010 0.000 0.068 11.666 Net (Gain)/Loss for the year (1.553) (0.070) (1.701) 17.125 13.801 Financial Assets Financial liabilities at amortised cost Note 23: Nature and extent of risks arising from Financial Instruments The Council’s management of treasury risks actively works to minimise the Council’s exposure to the unpredictability of financial markets and to protect the financial resources available to fund services. The Council complies with CIPFA’s Code of Treasury Management Practices and has written principles for overall risk management as well as written policies and procedures covering specific areas such as credit risk, liquidity risk and market risk. In line with the Treasury Management Code, the Council approves a Treasury Management Strategy before the commencement of each financial year. The Strategy sets out the parameters for the management of risks associated with financial instruments. The Council also produces Treasury Management Practices specifying the practical arrangements to be followed to manage these risks. The Treasury Management Strategy includes an Investment Strategy in compliance with Scottish Government guidance on Local Government Investments. This Guidance emphasises that priority is to be given to security and liquidity, rather than yield. The Council’s Treasury Management Strategy and its Treasury Management Practices seek to achieve a suitable balance between risk and return or cost. Credit Risk Credit risk arises from the short-term lending of surplus funds to financial institutions and local authorities, as well as credit exposures to the Council’s customers. It is the policy of the Council to place deposits only with other local authorities and a limited number of high- quality banks, building societies and money market funds whose credit rating is independently assessed as sufficiently secure by the Council’s treasury advisers and to restrict lending to a prudent maximum amount for each entity. The Treasury Management Strategy outlines the limits placed on investments with any counterparty. Page 185 of 286
Page 186
71 Annual Accounts 2024/25 The table below summarises the credit risk exposures of the Council’s treasury investment portfolio (including accrued interest) by credit rating. 2023/24 2024/25 £m £m 20.015 AAA (money market funds and ultra-short bond funds) 13.071 6.736 A+ 2.465 0.000 A 2.810 6.491 A– 0.000 66.000 UK local authorities 0.000 0.000 UK Debt Management Office 17.521 99.242 Total 35.867 Total Investment Portfolio by Credit Rating The Council does not generally allow credit for customers such that, at 31 March 2025, £9.111m of sundry income debt is past its due date for payment (£9.903m as at 31 March 2024). The past due amount can be analysed by age as follows: 2023/24 2024/25 £m £m 2.258 Less than three months 1.549 0.635 Three to six months 1.864 1.612 Six months to one year 0.666 5.398 More than one year 5.032 9.903 Total 9.111 Sundry Income Debt Past Due Loss allowances on trade receivables have been calculated by reference to the Council’s historic experience of default, adjusted for current and forecast economic conditions. Receivables are determined to have suffered a significant increase in credit risk where they are 30 or more days past due and they are determined to be credit-impaired where they are 90 or more days past due. Receivables are written off to the Surplus or Deficit on the Provision of Services when there is no reasonable prospect of payment, or when they become prescribed; but steps are still taken to collect sums owing when information becomes available which suggests the debtor can make payment. Collateral Renfrewshire Council occasionally provides loans to residents who wish to buy their homes under Right to Buy legislation. In such cases the Council takes a standard security over the property. As at 31 March 2025 the outstanding value of home loans advanced by the Council was £0.213m (£0.256m as at 31 March 2024). Liquidity risk The Council’s main source of borrowing is HM Treasury’s Public Works Loan Board, but the Council also has loans classed as ‘lender option borrower option’ (LOBO). There is no significant risk that the Council will be unable to raise finance to meets its commitments under financial instruments. The Council has safeguards in place to ensure that a significant proportion of its borrowing does not mature for repayment at any one time in the future to reduce the financial impact of re-borrowing at a time of unfavourable interest rates. The Council’s policy is to ensure that not more than 15% of loans are due to mature within any financial year and 50% within any rolling five-year period through a combination of prudent planning of new loans taken out and, where it is economic to do so, making early repayments. Page 186 of 286
Page 187
72 Annual Accounts 2024/25 The maturity analysis of the principal element of borrowing is as follows: £m % £m % 5.000 1.72% Less than one year 5.000 1.76% 5.000 1.72% Between one and two years 0.007 0.00% 0.011 0.00% Between two and five years 0.000 0.00% 280.347 96.56% More than five years 278.809 98.24% 290.358 100.00% Total 283.816 100.00% As at 31 March 2024 Principal Borrowing Maturity Analysis As at 31 March 2025 Market risk: interest rate risk Changes in market interest rates influence the interest payable on borrowings and on interest receivable on surplus funds invested. For example, a rise in interest rates would mean an increase in the interest charged on borrowing at variable rates and an increased cost to the taxpayer. An increase in interest rates would also mean an increase in the income received on lending at variable rates and a reduction in cost for the taxpayer. Changes in market rates also affect the notional ‘fair value’ of lending and borrowing. For example, a rise in interest rates would reduce the fair value of both lending and borrowing at fixed rates. Changes in the fair value of lending and borrowing do not impact upon the taxpayer and are confined to prescribed presentational aspects in the Accounts. The Council has a variety of strategies for managing the uncertainty of future interest rates and the financial impact on the Council’s finances: • it is the policy of the Council to limit its exposure to variable rate borrowing to a maximum of 25% of what it borrows; • during periods of falling rates and where it is economically advantageous to do so, the Council will consider the repayment and restructuring of fixed interest rate debt; • the Council takes daily advice from its specialist treasury advisers and actively monitors changes in interest rates to inform decisions on the lending of surplus funds, new borrowings and restructurings of existing borrowings. To illustrate the notional impact of changes in interest rates upon the Council, the following table shows the financial effect if rates had been 1% higher during 2024/25, with all other variables held constant. As at 31 March 2025 £m Interest rate risk Decrease in the fair value of fixed rate loans and deposits Decrease in the fair value of fixed rate borrowing (1.113) (1.113) (0.297) 0.011 32.389 Increase in interest receivable on deposits placed during the year Notional impact on the Surplus/Deficit on the Provision of Services Share of this impact which would be attributable to the Housing Revenue Account Other changes that would have no impact on the Surplus/Deficit on the Provision of Services or Other Comprehensive Income and Expenditure: The impact of a 1% fall in interest rates would be as above but with the changes being reversed. Page 187 of 286
Page 188
73 Annual Accounts 2024/25 Market risk: price risk The Council’s Insurance Fund is invested in an externally managed fund under the powers of schedule 3 of the Local Government (Scotland) Act 1975 and section 3 of the Local Government etc. (Scotland) Act 1994. The investments are managed on behalf of the Council by LGT Wealth Management in the Phoenix Fund. The objective of the fund is to achieve long-term growth with low volatility, through a widely diversified portfolio. The benchmark return is SONIA+2% per annum. During 2024/25 the book cost of investments increased by £0.135m (£0.133m increase during 2023/24). The investment is classified as fair value through other comprehensive income, meaning that all movements in price will impact on the gains and losses recognised in other comprehensive income and expenditure. This is an accounting requirement that has no impact on the taxpayer. To illustrate the impact of changes in share price upon the Council, an increase or fall of 5% in the general price of shares at 31 March 2025 would have resulted in a £0.089m gain or loss being recognised in Other Comprehensive Income and Expenditure for 2024/25. Market risk: foreign exchange risk As at 31 March 2025 the Council had a foreign currency deposit of €0.617m with the Council’s banker (€4.335m as at 31 March 2024). This sum was being held in order to mitigate the foreign exchange risk associated with a contract being entered into as part of the Glasgow and Clyde Valley City Deal programme. The sterling valuation of this deposit as at 31 March 2025, based on the euro to sterling exchange rate at that time, was £0.516m. To illustrate the impact of changes in foreign exchange rates upon the Council, a relative increase or decrease of 1% in the euro to sterling exchange rate at 31 March 2025 would have resulted in a £0.005m gain or loss being recognised in Other Comprehensive Income and Expenditure for 2024/25. Note 24: External audit costs 2023/24 2024/25 £m £m 0.443 Fees payable with regard to external audit services carried out by the appointed auditor for the year 0.487 0.443 Total 0.487 Audit Fees Note 25: Agency services The Council bills and collects non-domestic rates on behalf of the Scottish Government from ratepayers situated within Renfrewshire Council and East Renfrewshire Council. The Council also bills and collects, along with its own Council Tax, domestic water and sewerage charges on behalf of Scottish Water. 2023/24 2024/25 £m £m 131.322 Scottish Government - Contributions (to)/from the non-domestic rates pool 107.505 14.880 Non-domestic rates collected: East Renfrewshire 15.951 0.070 Service income from East Renfrewshire Council for collection of non-domestic rates 0.073 (14.950) Cost of collection of Non-domestic rates from East Renfrewshire (16.024) 34.461 Domestic water and sewerage charges collected 38.164 (34.461) Domestic water and sewerage charges paid over to Scottish Water (38.164) 0.706 Service income from Scottish Water for collection of domestic water and sewerage 0.730 Agency Services Page 188 of 286
Page 189
74 Annual Accounts 2024/25 Note 26: Related parties The Council’s related parties are those bodies or individuals that have the potential to control or significantly influence the Council, or to be controlled or significantly influenced by the Council, or where those individuals or bodies and the Council are subject to common control. The Council is required to disclose material transactions that have occurred with related parties and the amount of any material sums due to or from related parties. Related party relationships require to be disclosed where control exists, irrespective of whether there have been transactions between the related parties. Disclosure of this information 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. Senior Officers and Elected Members Members of the council and senior officers have control over the Council’s financial and operating policies. They have the responsibility to adhere to a Code of Conduct, requiring them to declare an interest in matters that directly or indirectly influence, or appear to influence, their judgement or decisions taken during the course of their work. The total of councillors’ and senior officers’ remuneration allowances paid in 2024/25 are shown in the Remuneration Report on page 27. Senior Officers No senior officer holds a remunerated position outside of their Council employment. For details of Senior Officers’ interests, please check the register of interests on the Council website at: Register-of-senior-officers-interests Senior Elected Members Under the Council Code of Conduct, elected members and senior officials must declare any registered interests in any bodies where the Council itself does not have significant influence over their operations. Each member’s Register of Interest is available at Councillors - Renfrewshire Website. In 2024/25, the Council made payments totalling £6.581m (£7.979m 2023/24) to bodies where members hold a position where they have significant influence or control as listed below: 2023/24 2023/24 2023/24 2023/24 2024/25 2024/25 2024/25 2024/25 Expenditure £m Income £m Debtor £m Creditor £m Expenditure £m Income £m Debtor £m Creditor £m 0.015 0.000 0.000 0.000 Public Health Scotland 0.000 0.000 0.000 0.000 5.084 0.000 0.000 0.000 Quarriers - Charity Care Organisation 4.401 (0.108) 0.107 0.000 0.423 0.000 0.000 0.000 Renfrewshire Citizens' Advice Bureau 0.599 0.000 0.000 0.000 2.401 0.000 0.000 0.000 Kibble Trust 1.520 0.000 0.000 0.000 0.056 0.000 0.000 0.000 Erskine Arts - Charity 0.061 0.000 0.000 0.000 7.979 0.000 0.000 0.000 Total 6.581 (0.108) 0.107 0.000 NB: This disclosure excludes group entities and trade union membership. Page 189 of 286
Page 190
75 Annual Accounts 2024/25 Key Related Parties: subsidiaries and associates The organisations set out in the group accounts note are those which the Council is considered to have control or influence over. For further details of the nature of group relationships, please refer to the Group Accounts and Notes from page 104. IAS 24 requires related party transactions during the year to be disclosed. This disclosure should include the nature of the transaction and any outstanding balances. Significant transactions with other public bodies are displayed below: 2023/24 2023/24 2023/24 2023/24 2024/25 2024/25 2024/25 2024/25 Expenditure £m Income £m Debtor £m Creditor £m Expenditure £m Income £m Debtor £m Creditor £m 142.817 (44.052) 0.000 (26.103) Renfrewshire Health and Social Care Integration Joint Board 155.834 (49.083) 0.000 (24.186) 142.817 (44.052) 0.000 (26.103) Total 155.834 (49.083) 0.000 (24.186) Joint Ventures 2023/24 2023/24 2023/24 2023/24 2024/25 2024/25 2024/25 2024/25 Expenditure £m Income £m Debtor £m Creditor £m Expenditure £m Income £m Debtor £m Creditor £m 16.819 (0.511) 0.209 (0.001) Renfrewshire Leisure Ltd trading as OneRen 16.186 (0.631) 0.274 (1.487) 0.455 0.000 0.000 0.000 Coats Observatory Trust 0.352 0.000 0.000 0.000 0.000 0.000 0.275 0.000 Park Lane Developments (Renfrewshire) LLP 0.000 0.000 0.000 0.000 0.668 (1.453) 0.000 0.000 Paisley Museum Reimagined Ltd 0.048 (0.056) 0.000 0.000 17.942 (1.964) 0.484 (0.001) Total 16.586 (0.687) 0.274 (1.487) Subsidiary 2023/24 2023/24 2023/24 2023/24 2024/25 2024/25 2024/25 2024/25 Expenditure £m Income £m Debtor £m Creditor £m Expenditure £m Income £m Debtor £m Creditor £m 2.914 (1.483) 0.000 0.000 Strathclyde Partnership for Transport 2.955 (0.165) 0.000 0.000 0.332 0.000 0.000 0.000 Strathclyde Concessionary Travel Scheme Joint Committee 0.332 0.000 0.000 0.000 1.637 (0.160) 0.000 (0.962) Renfrewshire Valuation Joint Board 1.643 (0.162) 0.000 (1.493) 4.883 (1.643) 0.000 (0.962) Total 4.930 (0.327) 0.000 (1.493) Associates Page 190 of 286
Page 191
76 Annual Accounts 2024/25 Key Related Parties: Other Public Bodies Scottish Government The Scottish Government has effective control over the operations of the Council as 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, such as Council Tax and Non-Domestic Rates. Significant transactions with the Scottish Government are shown in the table below: 2023/24 2023/24 2023/24 2023/24 2024/25 2024/25 2024/25 2024/25 Expenditure £m Income £m Debtor £m Creditor £m Expenditure £m Income £m Debtor £m Creditor £m 0.000 (404.553) 0.173 0.000 Scottish Government 0.000 (452.499) 0.202 0.000 0.000 (404.553) 0.173 0.000 0.000 (452.499) 0.202 0.000 Note 27: Pension schemes accounted for as defined contribution schemes Renfrewshire Council participates in the Scottish Teachers' Superannuation Scheme. The scheme is an unfunded statutory public service pension scheme with benefits underwritten by the UK Government. The scheme is financed by payments from employers and from those current employees who are members of the scheme and paying contributions at progressively higher marginal rates based on pensionable pay, as specified in the regulations. The rate of employer contributions is set with reference to a funding valuation undertaken by the scheme actuary. The last four-yearly valuation was undertaken as at 31 March 2024, which set the contribution rate payable from 1 April 2024 to 31 March 2026. Renfrewshire Council has no liability for other employers’ obligations to the multi-employer scheme. As the scheme is unfunded there can be no deficit or surplus to distribute on the wind-up of the scheme or withdrawal from the scheme. The scheme is an unfunded multi-employer defined benefit scheme. It is accepted that the scheme can be treated for accounting purposes as a defined contribution scheme in circumstances where Renfrewshire Council is unable to identify its share of the underlying assets and liabilities of the scheme. While the employee rate applied is variable, it will provide an actuarial yield of 9.4% of pensionable pay. At the last valuation a shortfall of £1.3bn was identified in the notional fund, which will be repaid by the increased rate of employers’ pension contribution, effective from 1 April 2024, of 23%. Based on the proportion of employer contributions paid in 2024/25, Renfrewshire Council’s level of participation in the scheme is 3.1%. The Council paid £24.806m (£21.041m in 2023/24) for employer's contributions to the Scottish Public Pensions Agency. £0.375m of expenditure (£0.401m in 2023/24) was charged to service revenue accounts in respect of “added years” pension enhancement termination benefits, representing 0.4% of teachers’ pensionable pay (0.4% in 2023/24). The estimated contribution for 2025/26 is £23.785m. Page 191 of 286
Page 192
77 Annual Accounts 2024/25 Note 28: Defined benefit pension schemes 28a: Participation in pension schemes The pension scheme for teachers (the Scottish Teachers’ Superannuation Scheme) is explained in the previous note, whilst this note relates exclusively to the pension scheme for all other employees: the Local Government Pension Scheme. The Local Government Pension Scheme in Scotland (LGPS) is a funded, defined benefit, statutory occupational pension scheme. It is regulated by the Scottish Public Pensions Agency but is administered locally by fund administering authorities through regional pension funds. For Renfrewshire Council, the fund administering authority is Glasgow City Council and the regional pension fund is the Strathclyde Pension Fund. As a funded scheme, the Council and employees pay contributions into the fund, calculated at a level intended to balance the scheme’s pension liabilities with the scheme’s investment assets. The statutory nature of the fund means that the post-employment benefits are defined and set out in law. The Strathclyde Pension Fund is a multi-employer fund, and it is possible for each employer to identify its own share of the assets and liabilities of the fund on a consistent and reasonable basis. The principal risks to the scheme are assumptions relating to longevity, inflation, and investment performance; in addition, statutory changes to the scheme. These risks are mitigated to an extent by statutory requirements limiting charges to the Council’s general fund. The Council has additional liabilities for unfunded discretionary pension payments outside the main schemes such as arrangements for the award of discretionary post-employment benefits upon early retirement. This is an unfunded defined benefit arrangement, under which liabilities are recognised when awards are made. However, there are no investment assets built up to meet these pensions liabilities, and cash has to be generated to meet actual pensions payments as they eventually fall due. 28b: Transactions relating to post- employment benefits The Council accounts for post-employment benefits in the CIES as the benefits are earned by employees accruing years of service, updating the liabilities recognised to reflect inflation, changing assumptions and accounting for investment returns on any resources set aside to meet the costs. However, the charge according to statutory regulations that is required to be made against the General Fund Balance and the Housing Revenue Account Balance is based upon the employer contributions payable by the Council to the pension fund in the year. This requires an adjustment to be made in the movement in reserves statement to remove the cost (according to generally accepted accounting practices) of post-employment benefits and replace that cost with the value of employer contributions payable to the fund in the year. The following transactions have been made in the CIES and the General Fund Balance via the movement in reserves statement during the year: Page 192 of 286
Page 193
78 Annual Accounts 2024/25 2023/24 2024/25 £m £m Included within net cost of services: 31.776 Current service cost 34.765 7.805 Past service cost/(gain) 0.665 Included within Financing and Investment income and expenditure: 57.468 Interest cost 62.127 12.265 Interest on the effect of the asset ceiling 27.231 (78.093) Expected return on scheme assets (85.344) 31.221 Total of Post-employment benefits charged to the Surplus/Deficit on the Provision of Services 39.444 Included within Other Comprehensive Income and Expenditure: (84.242) Return on Assets excluding amounts included in net interest 22.312 (20.669) Actuarial gains and losses arising on changes in Demographic Assumptions (2.183) (44.838) Actuarial gains and losses arising on changes in Financial Assumptions (196.867) 111.846 Actuarial gains and losses arising on changes in Other Assumptions (14.730) 296.851 Changes in effect of Asset Ceiling (594.551) 290.169 Total of LGPS post-employment benefits charged to the CIES (746.575) Movement in reserves statement: 258.948 Actuarial losses or (gains) (786.019) (73.493) Restriction on pension asset to Asset Ceiling 756.295 0.000 Effect of business combinations and disposals (1.383) 31.221 Reversal of items relating to post-employment benefits debited or credited to the Surplus/Deficit on the Provision of Services 39.444 (39.797) Employer contributions and direct payments to pensioners payable in the year (17.579) 176.879 Movement in the year on the Pension Reserve (9.242) The cumulative amount of actuarial gains and losses recognised in the CIES as at 31 March 2025 is a gain of £1,179.986m (£1,121.675m gain as at 31 March 2024). 28c: Assets and liabilities relating to post-employment benefits Renfrewshire Council's share of the defined benefit obligation (that is, the scheme liabilities) and of the scheme assets in the Strathclyde Pension Fund has been assessed by Hymans Robertson LLP, the Fund’s independent actuaries. The assessment indicates that, as at 31 March 2025, scheme assets exceeded the defined benefit obligation by £691.057m (£492.840m excess of obligations over assets as at 31 March 2024). The defined benefit obligation is valued on an actuarial basis using the “projected unit credit” method, which estimates the pensions that will be payable in future years (dependent on assumptions about mortality rates, salary levels and other factors) discounted to their present value. The discount rate used at 31 March 2025 was 5.8% based on the indicative rate of return on high quality corporate bonds. Scheme assets are valued at fair value which, in the case of marketable securities, is market value using the current bid price. Where no market price is available, the fair value of scheme assets is estimated. The valuations are based on the latest formal valuation of the Strathclyde Pension Fund which was carried out as at 31 March 2024. The common position for employers participating in the Strathclyde Pension Fund is that, based on a snapshot valuation as at 31 March 2025, a net pension asset is disclosed as a result of prevailing market conditions at that date. The net pension position of £691.057m represents an increase in asset of £198.217m between 31 March 2024 and 31 March 2025. Page 193 of 286
Page 194
79 Annual Accounts 2024/25 The net pension asset has a substantial impact on the net worth of the Council as recorded in the balance sheet). However, this surplus of scheme assets is restricted to the “asset ceiling” i.e., the net present value of future service costs less net present value of future contributions over the future working lifetime as at 31 March 2025. This has been calculated to be £0 for funded obligations. After adjusting for the asset ceiling, the balance sheet now reflects a pension liability of £65.238m, representing the unfunded obligations of the scheme. Local government legislation provides that local authorities have an obligation to meet the expenditure of the joint boards of which they are constituent members. As a consequence, Renfrewshire Council has additional liabilities arising from the pension scheme deficits of the Renfrewshire Valuation Joint Board. In accordance with accounting regulations, the group accounts include a share of the post-employment benefits transactions, defined benefit obligations and scheme assets of this joint board. Further information can be found in the annual report and accounts of each joint board. The main fund (Fund 1) of Strathclyde Pension Fund does not have an asset and liability matching (ALM) strategy. 28d: Movement in defined benefit obligation (scheme liabilities) The following is a reconciliation of the 2024/25 opening and closing balances of the present value of Renfrewshire Council’s share of the Strathclyde Pension Fund’s defined benefit obligation (that is, scheme liabilities). 2023/24 2024/25 £m £m 1,211.991 Balance at 1 April 1,297.361 31.776 Current service cost 34.765 7.805 Past service cost (including curtailments) 0.665 57.468 Interest cost 62.127 9.277 Member contributions 10.447 0.000 Effect of business combinations and disposals 2.686 32.218 Actuarial losses or (gains) (213.780) Losses or (gains) on curtailment (5.157) Estimated benefits paid: unfunded (5.398) (48.017) Estimated benefits paid: other (44.813) 1,297.361 Balance at 31 March 1,144.060 Page 194 of 286
Page 195
80 Annual Accounts 2024/25 28e: Movement in scheme assets The following is a reconciliation of the 2024/25 opening and closing balances of the fair value of Renfrewshire Council’s share of the Strathclyde Pension Fund’s scheme assets. 2023/24 2024/25 £m £m 1,646.087 Balance at 1 April 1,790.201 78.093 Expected return on scheme assets 85.344 9.277 Member contributions 10.447 34.640 Employer contributions 12.181 5.157 Contributions in respect of unfunded benefits 5.398 (14.121) Effect of other experience 0.000 0.000 Effect of business combinations and disposals 4.069 84.242 Actuarial (losses) or gains (22.312) (5.157) Estimated benefits paid: unfunded (5.398) (48.017) Estimated benefits paid: other (44.813) 1,790.201 Balance at 31 March 1,835.117 The expected return on scheme assets is determined by considering the expected returns available on the assets underlying the current investment policy as provided by the administering authority. Expected yields on fixed interest investments are based on gross redemption yields as at the balance sheet date. Expected returns on equity investments reflect long-term real rates of return experienced in the respective markets. The actual return on scheme assets from 1 April 2024 to 31 March 2025 was 3.5%. The fair value of the assets held in the scheme may be analysed as follows: Quoted Prices in active markets Prices not quoted in active markets Total Quoted Prices in active markets Prices not quoted in active markets Total £m £m £m £m £m £m 361.564 0.392 361.956 Equity instruments 380.166 1.187 381.353 0.000 427.395 427.395 Private Equity 0.000 424.190 424.190 0.000 140.763 140.763 Real Estate 0.000 138.456 138.456 7.352 819.550 826.902 Investment Funds 6.719 839.751 846.470 0.000 (0.001) (0.001) Derivatives 0.000 (0.001) (0.001) 2.789 30.397 33.186 Cash and cash equivalents 0.000 44.651 44.651 371.705 1,418.496 1,790.201 Fair value of scheme assets 386.885 1,448.234 1,835.119 As at 31 March 2024 As at 31 March 2025 28f: Scheme history: analysis of defined benefit obligation and scheme assets The Council’s share of the accumulated deficit or surplus in the scheme is shown below. The analysis shows the nature of various elements of the Council’s share of the scheme’s defined benefit: Page 195 of 286
Page 196
81 Annual Accounts 2024/25 As at 31 March 2024 As at 31 March 2025 £m £m (537.973) Current employee members (485.593) (53.892) Pre-local government reorganisation (1996) liabilities (49.398) (128.007) Deferred pensioners (115.874) (503.009) Pensioners (427.957) (1,222.881) Total Present Value of the Defined Benefit Obligation - Funded liabilities (1,078.822) 1,790.201 Fair value of scheme assets 1,835.117 567.320 Net Asset / (Liability) arising from funded obligations 756.295 (567.320) Restriction to asset ceiling (756.295) (67.713) Retirals from Renfrewshire Council (59.651) (6.767) Retirals pre-local government reorganisation (1996) (5.587) (74.480) Total Present Value of the Defined Benefit Obligation - Unfunded liabilities (65.238) (74.480) Net Pension Asset / (Liability) (65.238) The presentation of this table has been revised to better reflect the Unfunded Pension obligation. Basis for estimating assets and liabilities The following table shows the principal assumptions used by Hymans Robertson LLP, the Fund’s independent actuaries, to estimate the Council’s post-employment benefits transactions for 2024/25, and the Council’s share of the Strathclyde Pension Fund’s defined benefit obligation (scheme liabilities) and scheme assets as at 31 March 2025: 2023/24 2024/25 4.8% Discount rate for defined benefit obligation 5.8% 2.7% Long-term expected rate of return on scheme assets* 2.7% 3.5% Rate of increase in salaries 3.5% 2.8% Rate of increase in pensions 2.8% 2.8% Rate of inflation 2.8% Mortality assumptions (years): Longevity at age 65 for current pensioners: 19.6 Men 19.5 22.3 Women 22.3 Longevity at age 65 for future pensioners: 20.6 Men 20.5 24.2 Women 24.1 Take up of option to convert annual pension into retirement lump sum 75% For Pre-April 2009 service 75% 75% For Post-April 2009 service 75% *The expected rates of return are set equal to the discount rate as per IAS19. 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 Page 196 of 286
Page 197
82 Annual Accounts 2024/25 assumption analysed changes while all the other assumptions remain constant. 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 did not change from those used in the previous period. The limitations of methods and assumptions used are associated with any changes in market conditions that affect the net discount rate. These can have a significant effect on the value of the obligations reported. Impact on the Defined Benefit Obligation on the Scheme % £m 0.1% decrease in the Real Discount 2% 19.002 1 year increase in the member life expectancy 4% 45.762 0.1% increase in the Salary Increase 0% 1.238 0.1% increase in the Pension Increase Rate 2% 18.273 Impact on the Authority’s cash flows An objective of the Fund is to keep employers’ contributions at as constant a rate as possible. The Fund has agreed a strategy to achieve a funding rate of 100% in the longer term. Employers’ and employees’ contributions have been determined so that rates are standard across all participating employers. The rate for employer contributions has been set at 6.5% for 2024/25 to 2025/26, rising to 17.5% from 2026/27. The total contribution expected to be made by the Council to the Strathclyde Pension Fund in the forthcoming year to 31 March 2026 is £11.229m. The weighted average duration of the defined benefit obligation is 17 years. Note 29: Contingent liabilities i) The Council has been notified of a number of contractor claims for additional costs incurred on construction contracts. The Council disputes the claims, which may be referred for arbitration. The Council recognises a contingent liability for potential costs, which may be incurred to resolve this dispute. It is not considered practicable at this stage to estimate the financial effect. ii) Following two court cases, including Mrs Goodwin v Department for Education, it is expected that proposed changes to public service pension schemes will be required, to ensure that surviving same-sex spouses and civil partners receive benefits equivalent to those received by the surviving spouses of opposite-sex marriages. Strathclyde Pension Fund’s actuary estimates that the potential impact may be 0.1% of gross obligations, which equates to £1.141m for the Council. This estimate is not reflected in the Primary Financial Statements because the trigger event that would require recognition has not yet occurred. Note 30: Events after the balance sheet date Events taking place after the authorised date for issue per the balance sheet are not reflected in the financial statements or notes. Where events taking place before this date provided information about conditions existing at 31 March 2025, the figures in the financial statements and notes have been adjusted in all material respects to reflect the impact of this information. Note 31: Accounting Standards Issued not Adopted The Code requires the disclosure of information relating to the impact of an accounting change that will be required by a new standard that has been issued but not yet adopted. Page 197 of 286
Page 198
83 Annual Accounts 2024/25 The following new standards and amendments to existing standards have been published but not yet adopted by the Code: • IAS 21 The Effects of Changes in Foreign Exchange Risk issued in August 2023. • IFRS 17 Insurance Contracts, IFRS 17 replaces IFRS 4 setting out principles for recognition, measurement, presentation and disclosure of insurance contracts. There is no material impact anticipated in future years from the implementation of these standards. Note 32: Accounting Policies – Renfrewshire Council The Financial Statements for the year ended 31 March 2025 have been prepared in accordance with proper accounting practice as per section 12 of the Local Government in Scotland Act 2003. Proper accounting practice comprises the Code of Practice on Local Authority Accounting in the United Kingdom (the Accounting Code) and the Service Reporting Code of Practice, supported by International Financial Reporting Standards and recommendations made by the Local Authority (Scotland) Accounts Advisory Committee (LASAAC). They are designed to give a true and fair view of the financial performance and position of the Council and comparative figures for the previous financial year are provided. There are no significant departures from these recommendations. The accounts have been prepared under the historic cost convention, other than changes resulting from the revaluation of certain categories of non-current assets and financial instruments, and on a going concern basis. A Accruals of Expenditure and Income Activity is accounted for in the year that it takes place, not simply when cash payments are made or received. In particular: i) Revenue from the sale of goods or provision of services is recognised when the performance obligation relating to the transaction has been satisfied, and it is probable that the economic benefits or service potential associated with the transaction will flow to the Council. ii) Supplies are recorded as expenditure when they are consumed. Where there is a gap between the date supplies are received and their consumption, they are carried as inventories on the Balance Sheet. Works are charged as expenditure when they are completed, before which they are carried as assets under construction on the Balance Sheet. iii) Interest payable on borrowings and receivable on investments is accounted for on the basis of the effective interest rate for the relevant financial instrument. Interest receivable and dividend income is recognised when it is probable that the economic benefits or service potential associated with the transaction will flow to the Council. iv) Where income and expenditure have been recognised but cash has not been received or paid, a debtor or creditor for the relevant amount is recorded in the Balance Sheet. Where there is evidence that debts are unlikely to be settled, the balance of debtors is written down and a charge made to revenue for the income that might not be collected. v) Supplier invoices paid in the two weeks following the year-end are accrued together with specific accruals in respect of further material items provided the goods or services were received by 31 March 2025 or relate to services associated with the prior financial year. B Business Improvement District Following the formation of the Paisley First BID company on 15 January 2015, the Council has entered into an agreement to act as the billing body for the purposes of the Planning etc. (Scotland) Act 2006 and the Regulations and is responsible for the administration, collection and recovery of the BID Levy. As the Council is acting as agent for the BID company, no transactions in relation to the BID levy or BID Revenue Account are included in the CIES with the exception of any contribution made by the Council to the BID project, the costs and income related to the collection of the BID levy or any income from the BID company in relation to services provided. Page 198 of 286
Page 199
84 Annual Accounts 2024/25 C Cash and Cash Equivalents Cash is defined as cash in hand and deposits repayable on demand less overdrafts repayable on demand. Cash equivalents are defined as call accounts, money market funds and instant deposits. Fixed term deposits are not classified as cash or cash equivalents as these are held for investment purposes rather than for meeting short- term cash commitments. D Charges for the Use of Assets Services are charged for the use of assets no matter how they are financed, and this charge includes a provision for depreciation where appropriate. E Contingent Assets and Liabilities Contingent assets and liabilities are not recognised in the financial statements but are disclosed as a note to the accounts where they are deemed material. F Employee Benefits Benefits payable during employment All salaries and wages earned up to 31 March 2025 are included in the Accounts irrespective of when payment was made. An accrual is made for the cost of holiday entitlements earned by employees, but not taken before the year end and which employees may carry forward into the next financial year; along with any pay inflation agreed for the year and not yet paid. 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. They are charged on an accruals basis to the relevant service line in the CIES when the Council is demonstrably committed to either terminating the employment of an officer or making an offer to encourage voluntary redundancy. The Council is only demonstrably committed to a termination when it has a detailed formal plan for the termination, and it is without realistic possibility of withdrawal. Where termination benefits involve the enhancement of pensions, statutory provisions require the General Fund 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 to 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 The Council participates in two formal pension schemes: the Local Government Pension Scheme which is administered by Strathclyde Pension Fund; and the Scottish Teachers’ Superannuation Scheme. Liabilities for the Scottish Teachers’ Superannuation Scheme cannot be identified specifically to the Council; therefore, the scheme is accounted for as a defined contributions scheme. The Local Government Pension Scheme is accounted for as a defined benefit scheme in accordance with International Accounting Standard 19 (IAS19) (as revised in 2011). Renfrewshire Council's share of the net pension asset or liability in Strathclyde Pension Fund and a pension reserve are recognised in the Balance Sheet. The CIES recognises changes during the year in the pension asset or liability. Service expenditure includes pension costs based on employers' pension contributions payable and payments to pensioners in the year. Liabilities are included in the Balance Sheet on an actuarial basis using the projected unit method. Liabilities are discounted to their value at current prices using a discount rate based on the indicative rate of return on high quality corporate bonds. Assets are included in the Balance Sheet at their fair value, principally the bid price for quoted securities, and estimated fair value for unquoted securities. Page 199 of 286
Page 200
85 Annual Accounts 2024/25 G Events after the Balance Sheet date Events after the Balance Sheet date are those events that occur between the end of the reporting period and the date when the Statements are authorised for issue. There are two types of events: • Adjusting events – those that provide evidence of conditions that existed at the end of the reporting period, and the Statements are adjusted to reflect such events • Non-adjusting events – those that are indicative of conditions that arose after the reporting period, and the Statements are not adjusted. Events taking place after the date of authorisation for issue are not reflected in the Statements. H Prior Period Adjustments When items of income and expense are material, their nature and amount is disclosed separately, either on the face of the CIES or in the notes to the accounts, depending on how significant the items are to an understanding of the Council’s financial performance. Where there has been a change in accounting policy, that change will be applied retrospectively. Where there has been a change in accounting estimate, that change will be applied prospectively. Where a material misstatement or omission has been discovered relating to a prior period, that misstatement or omission will be restated unless it is impracticable to do so. I Financial Instruments Financial Assets Financial assets are classified into three categories of valuation: • At amortised cost; • At fair value through other comprehensive income – designated equity instruments; and • At fair value through profit or loss. Financial Assets Measured at Amortised Cost Financial assets measured at amortised cost are recognised on the Balance Sheet when the Council becomes a party to the contractual provisions of a financial instrument and are initially measured at fair value. They are subsequently measured at their amortised cost. Annual credits to the Financing and Investment Income and Expenditure line in the 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 loans made by the Council, this means that the amount presented in the Balance Sheet is the outstanding principal receivable (plus accrued interest) and interest credited to the 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. The Council has assets such as investments and debtors which are classified as financial assets measured at amortised cost. Financial Assets Measured at Fair Value through other Comprehensive Income (FVOCI) Financial assets that are measured at FVOCI are recognised on the Balance Sheet when the Council becomes party to the contractual provisions of a financial instrument and are initially measured and carried at fair value. Investment income is credited to Financing and Investment Income and Expenditure in the CIES when it becomes receivable by the Council. Where an equity instrument is designated as FVOCI, changes in fair value are posted to Other Comprehensive Income and Expenditure and are balanced by an entry in the Financial Instruments Revaluation Reserve (an unusable reserve). When the asset is derecognised, the cumulative gain or loss previously recognised in Other Comprehensive Income and Expenditure is transferred from the Financial Instruments Revaluation Reserve and recognised in the Surplus or Deficit on the Provision of Services. The Council has made an irrevocable election to designate these assets as FVOCI on the basis that they Page 200 of 286
Page 201
86 Annual Accounts 2024/25 are held for non-contractual benefits, not for trading, but for strategic purposes. Financial assets measured at fair value through profit and loss Assets are recognised on the Balance Sheet when the Council becomes a party to the contractual provisions of a financial instrument and are initially measured and carried at fair value. Where there are no fixed or determinable payments, income (e.g. dividends) is credited to the CIES when it becomes receivable by the Council. Assets values are based on the following principles: • instruments with quoted market prices – the market price • other instruments with fixed and determinable payments – discounted cash flow analysis • equity shares with no quoted market prices – independent appraisal of company valuations. Any gains and losses that arise on the derecognition of the asset are credited/debited to the Financing and Investment Income and Expenditure line in the CIES. Where fair value cannot be measured reliably, the instrument is carried at cost (less any impairment losses). Expected Credit Loss Model Where assets are identified as impaired as a result of an expected credit loss, the asset is written down and a charge made to the Financing and Investment Income and Expenditure line in the CIES. If the asset has fixed or determinable payments, the impairment loss is measured as the difference between the carrying amount and the present value of the revised future cash flows discounted at the asset’s original effective interest rate. Otherwise, the impairment loss is measured as any shortfall of fair value against the acquisition cost of the instrument (net of any principal repayment and amortisation). 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 initially measured at fair value and carried at their amortised cost. Annual charges to the Financing and Investment Income and Expenditure line in the CIES for interest payable are based on the carrying amount of the liability, multiplied by the effective rate of interest for the instrument. The effective interest rate is the rate that exactly discounts estimated future cash payments over the life of the instrument to the amount at which it was originally recognised. For most of the 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 CIES is the amount payable for the year according to the loan agreement. Gains and losses on the repurchase or early settlement of borrowing are credited and debited to the Financing and Investment Income and Expenditure line in the Income and Expenditure Account in the year of extinguishment. However, where repurchase has taken place as part of a restructuring of the loan portfolio that involves the modification or exchange of existing instruments, the premium or discount is respectively deducted from or added to the amortised cost of the new or modified loan and the write-down to the CIES is spread over the life of the loan by an adjustment to the effective interest rate. Where premiums and discounts have been charged to the CIES, regulations allow the impact on the General Fund Balance to be spread over future years. The Council has a policy of spreading the gain/loss over the term that was remaining on the loan against which the premium was payable or discount receivable when it was repaid. The reconciliation of amounts charged to the CIES to the net charge required against the General Fund Balance is managed by a transfer to or from the Financial Instruments Adjustment Account in the Movement in Reserves Statement. Page 201 of 286
Page 202
87 Annual Accounts 2024/25 Financial Guarantees Financial guarantees are recognised at fair value assessed as the probability of the guarantees being called and the likely amount payable under the guarantees. Loans Fund The Council operates a Loans Fund and all loans raised are paid into the Fund. Advances are made to departments to finance capital expenditure during the year. Repayments to the Loans Fund are calculated using the annuity method. The local Authority (Capital Financing and Accounting) (Scotland) Regulations 2016 - loans fund accounting came into force on 1 April 2016 and replaced the statutory provisions for local authority borrowing, lending and loans funds as set out in Schedule 3 of the local Authority (Scotland) Act 1975. The regulations contain the following provisions in respect of the loans fund: • Regulation 12 places a duty on a local authority to maintain a loans fund, which is to be administered in accordance with the proper accounting practices and prudent financial management, • Regulation 13 requires a local authority to make loans fund advances each year for expenditure of or lending to third parties by, the local authority which it has determined should be met from borrowing, and • Regulation 14 requires a local authority to determine for each loans fund advance the period over which it will be repaid and the amount of each repayment. Both the period and the annual amounts must be considered by the authority to be prudent. Interest is calculated and allocated to the CIES in accordance with Local Authorities Scotland Accounts Advisory Committee’s (LASAAC) Guidance Note 2: Statement on the Calculation and Allocation of Loans Fund Interest and Expenses. Financial Instruments - Fair Value Measurement Fair value is defined as 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 take place either in the principal market for that asset or liability or, in the absence of a principal market, in the most advantageous market for the asset or liability. The fair value of an asset or liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. Valuation techniques used are appropriate in the circumstances and have sufficient data 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 financial statements are categorised within the fair value hierarchy, as follows: • Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities that the authority can access at the measurement date • Level 2 – inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly • Level 3 – unobservable inputs for the asset or liability. The fair value hierarchy gives priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1 inputs) and the lowest priority to unobservable inputs (Level 3 inputs). J Government Grants and other Contributions Government grants and third-party contributions and donations are recognised as due to the Council when there is reasonable assurance that: Page 202 of 286
Page 203
88 Annual Accounts 2024/25 • the Council will comply with the conditions attached to the payments; and • the grants or contributions will be received. Amounts recognised as due to the Council are not credited to the CIES until conditions attaching to the grant or contribution have been satisfied. 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 or Taxation and Non-Specific Grant Income in the CIES. Where capital grants are credited to the CIES, they are reversed out of the General Fund Balance in the Movement in Reserves Statement. Where the grant has yet to be used to finance capital expenditure, it is posted to the Capital Grants Unapplied Account. Where it has been applied, it is posted to the Capital Adjustment Account. Amounts in the Capital Grants Unapplied Account are transferred to the Capital Adjustment Account once they have been applied. K Heritage Assets The Council’s heritage assets are held in the museums operated by OneRen (Paisley Museum and Art Gallery, Renfrew Town Hall and Museum, and The Secret Collection). The purpose of holding these assets according to the Museums’ Statement of Purpose is “to enhance public understanding of the human and natural world, principally by the use of original objects”. 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. The accounting policies in relation to heritage assets that are deemed to include elements of intangible heritage assets are also presented below. Purchased acquisitions are recognised at cost and donated acquisitions are recognised at valuation with reference to appropriate commercial markets. Acquisitions are made in line with the approved Acquisition and Disposal Policy. The collections of heritage assets are accounted for as follows: Art Collection The collection includes fine, contemporary and applied art works. The collection is included in the balance sheet at market value where this is available (from external valuations provided by suitably experienced and knowledgeable experts) or insurance valuations provided by the relevant collection curator. The assets within the collection are deemed to have indeterminate lives and a high residual value, and therefore no depreciation is charged. Shawl and textile design The museums hold a collection of approximately 1,000 Paisley-type shawls, and a considerable collection of original designs for shawl manufacture. The collection is included in the balance sheet at insurance valuation which is based on market values. The assets within the collection are deemed to have indeterminate lives and a high residual value, and therefore no depreciation is charged. Natural History The collection includes vertebrate and invertebrate zoology, botany, geology and microslide collections; in addition to a library of natural history books. The collection is included in the balance sheet at insurance valuation which is based on market values. The assets within the collection are deemed to have indeterminate lives and a high residual value, and therefore no depreciation is charged. Page 203 of 286
Page 204
89 Annual Accounts 2024/25 Human History The museums hold collections relating to social history, transport, science (including an important collection of astronomical apparatus in Coats Observatory), archaeology, arms, local archives, numismatics, photography, textiles, ethnography and Egyptology. The collection is included in the balance sheet at insurance valuation which is based on market values. However, where an external valuation or cost information is available, or a valuation may be secured at a cost which is not prohibitive relative to the value of the item, then the Council will recognise the asset in the balance sheet at this value. The assets within the collection are deemed to have indeterminate lives and a high residual value, and therefore, no depreciation is charged. In addition to the museum collections, there are a number of public space statues, monuments, memorials, fountains and outdoor artworks at various locations throughout Renfrewshire. These assets are not generally recognised in the balance sheet. The Council considers that obtaining valuations would involve disproportionate cost and that reliable cost or valuation information cannot be obtained for these items. This is because of the diverse nature of assets held, the number of assets and the lack of comparable data. However, where reliable cost information can be reasonably obtained, the asset will be included in the balance sheet. The carrying amounts of heritage assets are reviewed where there is evidence of impairment for heritage assets, eg 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. Heritage assets will occasionally be disposed of in accordance with the approved Acquisitions and Disposal Policy (a copy of which is available). Assets are only disposed of for curatorial reasons (eg the item has deteriorated to such an extent it is no longer suitable for public display) and not with the aim of generating funds. Any proceeds of such items are accounted for in accordance with the Council’s general provisions relating to the disposal of property, plant and equipment. Disposal proceeds are disclosed separately in the notes to the financial statements and are accounted for in accordance with statutory accounting requirements relating to capital expenditure and capital receipts. Expenditure incurred in preserving individual items is recognised in the CIES. L Intangible Assets The Council accounts for purchased software licences as Intangible Assets. Expenditure on intangible assets is capitalised when it is expected that future economic benefits or service potential will flow from the intangible asset to the Council. Items costing less than £10,000 are not treated as Intangible Assets. Intangible assets are measured initially at cost. Amounts are not revalued, as the fair value of the assets held by the Council cannot be determined by reference to an active market. The depreciable amount of an intangible asset is amortised over its useful life. An asset is tested for impairment whenever there is an indication that the asset might be impaired. Any gain or loss arising on the disposal or abandonment of an intangible asset is posted to the Other Operating Expenditure line in the CIES. Where expenditure on intangible assets qualifies as capital expenditure for statutory purposes, amortisation, impairment losses and disposal gains and losses are not permitted 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. M Interests in Companies and Other Entities The Council has material interests in two charitable companies, two limited liability partnership and Joint Boards and Committees that have the nature of Page 204 of 286
Page 205
90 Annual Accounts 2024/25 subsidiaries and associates under accounting conventions, requiring it to prepare group accounts. In the Council’s own single-entity accounts, these interests are not recorded as the Council has no shares in, or ownership of, any of these organisations. Reflected in the Council’s single-entity balance sheet is a 50% share in an Integration Joint Board, which is recorded as an investment. N Inventories Inventories (generally consumable stock) are included in the Balance Sheet at weighted average cost. The Code requires inventories to be held at lower of cost or Net Realisable Value. Weighted average cost is used as the measure of cost. O Investment Property Investment properties are those that are used solely to earn rentals and/or for capital appreciation. Investment properties are measured initially at cost and subsequently at fair value. 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 CIES. The same treatment is applied to gains and losses on disposal. 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. P Leases The Council adopted International Financial Reporting Standard 16 (IFRS 16: Leases) from 1 April 2024. The main Impact of which is that for arrangements previously accounted for as operating leases, a right of use asset and a lease liability were brought into the balance sheet at 1 April 2024. Leases for items of low value, under £10,000, and leases that expire on or before the 31 March 2025 are exempt from the new arrangements. IFRS 16 has been applied retrospectively but with the cumulative effect recognised at 1 April 2024. This means that right of use assets and lease liabilities have been calculated as if IFRS 16 had always applied but recognised in 2024/25 and not by adjusting prior year figures. The Council as Lessee Right of use assets As a lessee, The Council previously classified leases as operating or finance leases based on its assessment of whether the lease transferred significantly all of the risks and rewards incidental to ownership of the underlying asset to the Council. Under IFRS 16, the Council recognises right of use assets and corresponding lease liabilities for most lease arrangements. The Council has elected to apply recognition exemptions and will not recognise right of use assets and lease liabilities for short term leases that have a term of 12 months or less and leases of a low value, under £10,000. The Council will recognise the lease payments associated with these leases as an expense on a straight- line basis over the lease term. At transition, lease liabilities are measured at the present value of the remaining lease payments, discounted at the Council’s incremental borrowing rate as at 1 April 2024. Right of use assets are measured either at: • An amount equal to the lease liability; • Their carrying amount as if IFRS 16 had been applied since the commencement date; • For right of use assets for nominal lease payments right of use assets shall be recognised at fair value as at 1 April 2024. Any gain being the difference between that fair value and lease liability, recognised as a donated asset on the 1 April 2024. Page 205 of 286
Page 206
91 Annual Accounts 2024/25 The Council as Lessor The Council is not required to make any adjustment on transition to IFRS 16 for leases in which acts as a lessor. Finance Leases Where the Council grants a finance lease over a property or an item of plant or equipment, the relevant asset is written out of the Balance Sheet as a disposal. Lease rentals receivable are apportioned between: • a capital receipt for the disposal of the asset – applied to write down the Debtor (together with any premiums received); and • finance income (credited to the CIES). 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 CIES. Q Overheads and Central Support Costs Where internal costs are allocated to user departments, the basis of allocation varies by originating department, for example the cost of Payroll Services may be allocated on the number of payslips per service. In many instances the allocation is time-based. Internal transactions are no longer present in the income and expenditure figures reported in the CIES. R Service Concession Arrangements – School Buildings and Other Facilities The Council carries the assets used under PFI or Service Concession contracts on its Balance Sheet as part of Property, Plant and Equipment. The original recognition of these assets at fair value (based on the cost to purchase the property, plant and equipment) was balanced by the recognition of a liability for amounts due to the scheme operator to pay for the capital investment. The accounting treatment of the contractual arrangements are in accordance with IFRIC12 Service Concession Arrangements. S Property, Plant and Equipment Assets that have physical substance and are held for use in the production or supply of goods or services, for rental to others or for administrative purposes, and that are expected to be used during more than one financial year are classified as Property, Plant and Equipment. Recognition Expenditure on the acquisition, creation or enhancement of Property, Plant and Equipment is capitalised on an accruals basis. Expenditure that maintains but does not add to an asset’s potential to deliver future economic benefits or service potential is charged as an expense when it is incurred. Measurement Assets are initially measured at cost, comprising: • the purchase price; • any costs attributable to bringing the asset to the location and condition necessary for it to be capable of operating. The cost of assets acquired other than by purchase is deemed to be its fair value. The valuation of work-in- progress is based on cost plus an appropriate proportion of overheads, together with attributable profits and allowances for foreseeable losses. Plant, furniture and computer equipment costing less than £9,000 are not treated as fixed assets. This de- minimis level does not apply where certain categories of these assets are grouped together and form part of the approved capital programme. Donated assets are measured initially at fair value. The difference between fair value and any consideration paid is credited to the CIES. Where gains are credited to the CIES, they are reversed out of the General Fund Balance to the Capital Adjustment Account. Page 206 of 286
Page 207
92 Annual Accounts 2024/25 Assets are then carried in the Balance Sheet using the following measurement bases: • infrastructure, community assets and assets under construction – depreciated historical cost; • council dwellings – fair value, determined using the basis of existing use value for social housing (EUV- SH). Council dwellings are valued using a Beacon Principle (adjusted vacant possession) methodology in accordance with the Royal Institution of Chartered Surveyors (RICS) guidance; • Vehicles, plant, furniture and equipment – depreciated replacement cost; • Other land and buildings – fair value, determined as the market value amount that would be paid for the asset in its existing use (existing use value – EUV). Operational assets are shown at the lower of net current replacement cost or net realisable value in existing use. Non-operational assets are shown at the lower of net current replacement cost or net realisable value. Where there is no market-based evidence of fair value because of the specialist nature of an asset, depreciated replacement cost is used as an estimate of fair value. Assets included in the Balance Sheet at fair value are revalued sufficiently regularly to ensure that their carrying amount is not materially different from their fair value at the year-end, but as a minimum every five years. The effective date of any revaluation is 31 March. Valuations are undertaken by the Council Valuer who is MRICS qualified. Increases in valuations are matched by credits to the Revaluation Reserve to recognise unrealised gains. 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. Fair Value Measurement The authority measures some of its non-financial assets such as surplus assets and investment properties at fair value at each reporting date. Fair value is the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. The authority 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 for which fair value is measured are categorised within the fair value hierarchy as follows: • Level 1 - quoted prices in active markets for identical assets that the authority can access at the measurement date; • Level 2 - inputs other than quoted prices included within level 1 that are observable for the asset, either directly or indirectly; • Level 3 - unobservable inputs for the asset. 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 an impairment loss is recognised for the shortfall. Where impairment losses are identified, they are accounted for as follows: • where there is a balance of revaluation gains for the asset in the Revaluation Reserve, the carrying amount of the asset is written down against that balance (up to the amount of the accumulated gains); • where there is no balance in the Revaluation Reserve, the carrying amount of the asset is written down against the relevant service line(s) in the CIES. Where an impairment loss is reversed subsequently, the reversal is credited to the relevant service line(s) in the CIES, up to the amount of the original loss, adjusted for depreciation that would have been charged if the loss had not been recognised. Page 207 of 286
Page 208
93 Annual Accounts 2024/25 Disposals 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 CIES. Gains in fair value are recognised only up to the amount of any previously losses recognised in the Surplus or Deficit on Provision of Services. Depreciation is not charged on Assets Held for Sale. 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 CIES as part of the gain or loss on disposal. Receipts from disposals (if any) are credited to the CIES 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 and are credited to the Capital Receipts Reserve. Depreciation Depreciation is provided for on all Property, Plant and Equipment assets by the allocation of their depreciable amounts over their useful lives. An exception is made for assets without a determinable finite useful life, investment properties and assets that are not yet available for use (i.e., assets under construction). When surplus assets are revalued, the useful life of the asset is updated and depreciation recalculated on that basis. Deprecation is calculated on the following bases: • dwellings and other buildings – straight-line allocation over the useful life of the property of between 10 and 50 years as estimated by the Council Valuer • vehicles, plant and equipment – a percentage of the value of each class of assets in the Balance Sheet, as advised by a suitably qualified officer based on useful lives of between 3 and 30 years. • infrastructure – straight-line allocation based on useful lives of between 10 and 60 years. General Fund services are charged with depreciation where appropriate for the use of assets no matter how they are financed. Depreciation on the Council’s non- operational assets is not charged to service revenue accounts. It is however reflected in the CIES through non-distributable costs. 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. Significance is determined by comparing a component’s cost against the overall cost of an asset, and a component is deemed significant if its cost is 20% or more of the total asset cost. The de- minimis threshold for componentisation is £1m. 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. T 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 CIES. 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. Page 208 of 286
Page 209
94 Annual Accounts 2024/25 U Reserves The Council has various reserve funds. The two capital reserves arising from the system of capital accounting are the Revaluation Reserve and the Capital Adjustment Account. The former of these represents the store of gains on revaluation of fixed assets not yet realised through sales and the latter relates to amounts set aside from capital resources to meet past expenditure. The two accounting reserves arising from the restatement of financial instruments to “fair value” are the Financial Instruments Adjustment Account and the Financial Instruments Revaluation Reserve. The Financial Instruments Adjustment Account is a balancing account to allow for differences in statutory requirements and proper accounting practices for lending & borrowing by the Council. The Financial Instruments Revaluation Reserve is a store of gains or losses on revaluation of the investments of the Insurance Fund not yet realised through sales. The Pension Reserve arises from the IAS19 accounting disclosures for retirement benefits and recognises the Council's share of actuarial gains and losses in the Strathclyde Pension Fund and the change in the Council’s share of the Pension Fund net liability chargeable to the CIES. V Revenue Expenditure Funded from Capital under Statute Expenditure incurred during the year that may be capitalised under statutory provisions but does not result in the creation of a non-current asset has been charged as expenditure to the relevant service in the CIES in the year. Where the Council has determined to meet the cost of this expenditure from existing capital resources or by borrowing, a transfer in the Movement in Reserves Statement from the General Fund Balance to the Capital Adjustment Account then reverses out the amounts charged so that there is no impact on the level of Council Tax. W Value Added Tax Income and Expenditure excludes any amount relating to Value Added Tax (VAT), as all VAT is payable to HM Revenue & Customs and all VAT is recoverable from them. Page 209 of 286
Page 210
95 Annual Accounts 2024/25 Note 33: Judgements in Applying Accounting Policies In applying the accounting policies, the Council has had to make certain judgements about complex transactions or those involving uncertainty about future events. Where a judgement has been made, this is referred to in the relevant note to the core financial statements; however, a summary of those with the most significant effect is detailed below. Item Judgement Public Sector Funding The Council has assessed that anticipated levels of local government funding over the medium term do not provide sufficient indication that the assets of the Council might be impaired as a result of a need to close facilities and reduce levels of service provision. This is discussed further in the Management Commentary. Service Concession Arrangements The Council is deemed to control the services provided under the agreement for the provision of schools. The accounting policies for PFI schemes and similar arrangements have been applied and the assets under the contract are included within Property, Plant and Equipment on the Council’s Balance Sheet. Bargeddie Waste Facility is shared by a number of Scottish councils with North Lanarkshire Council taking the lead. The apportionment of costs and liabilities over the life of the facility, which was funded by a service concession agreement, has been agreed between the councils involved and the local external audit team. Note 15 provides further details. Impairment of financial assets In line with IFRS9: Financial Instruments, the approach to impairment of financial assets depends on the type of asset being assessed, either using a ‘historic loss rate’ approach, or a ‘probability of default’ approach, whereby historical experience of default rates across a similar class of instrument and credit rating is used to estimate 12-month expected credit losses. Further detail can be found at Note 22: Financial Instruments. Determination of Contingent Liabilities and Provisions A Provision is defined by the Code as a liability of uncertain timing or amount. A Contingent Liability is a possible obligation whose timing or value cannot be reliably measured and the Council makes a judgement on which is appropriate based on information available at the Balance Sheet date. Rolling Valuation Programme The Council employs professional valuers who are registered with the Royal Institution of Chartered Surveyors. These valuers carry out regular reviews of the value of assets reported in the Balance Sheet and any significant changes in value are processed as asset revaluations or impairments. These values are based on their professional opinion using available market information at the time of assessment. Due to the high number of assets, a rolling programme of asset valuation has been established for many years, with the aim of revaluing one fifth of the portfolio each financial year. This carries inherent risk that assets not valued in-year have been subject to material changes in value. The highest risk in this respect relates to assets valued using the Depreciated Replacement Cost (DRC) method, which for Renfrewshire Council, includes schools and leisure centres. To mitigate for this risk, a desktop exercise was undertaken for 2024/25 accounts to estimate the potential increase in value of all DRC assets not valued in-year and reflected any material adjustment required in these accounts. Page 210 of 286
Page 211
96 Annual Accounts 2024/25 Note 34: Assumptions made about the future The Annual Accounts contains estimated figures that are based on assumptions made by the Council about the future or that are otherwise uncertain. Estimates are made taking into account historical experience, current trends and other relevant factors. However, because balances cannot be determined with certainty, actual results could be materially different from the assumptions and estimates. The items in the Council’s Balance Sheet as at 31 March 2025 for which there is a significant risk of material adjustment in the forthcoming financial year are as follows: Item Uncertainty Effect if results differ from assumption Pensions Liability Estimation of the net liability 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 the Council with expert advice about the assumptions to be applied. The carrying value of the net pension asset was £689.5m, before the asset cap, as at 31 March 2025 (asset of £492.9m as at 31 March 2024). Further detail can be found in Note 28: Defined Benefit Pension Schemes. The effects on the net pension asset of changes in individual assumptions can be measured. For instance, a 0.1% decrease in the discount rate assumption would result in a decrease in the pension asset of £22.0m. However, the assumptions interact in complex ways. At 31 March 2025, the Council’s actuaries advised that (before the asset cap is applied) the net pensions asset had increased by £14.8m as a result of estimates being corrected as a result of experience; increased by £2.2m as a result of updating demographic assumptions; and increased by £196.5m as a result of updating financial assumptions. Debt Impairment At 31 March 2025, the Council had a balance for long and short term debtors (including council tax, rent arrears and trade debtors) of £64.5m. A review of significant balances suggested that an impairment of doubtful debts of £43.2m was appropriate. However, in the current economic climate it is not certain that such an allowance would be sufficient. Over 2024/25, the principal debt impairment increases related to Council Tax and Other Entities & Individuals, which increased by £2.7m. Based on experience, the bad debt provision is considered adequate; however, if collection rates were to deteriorate, a 10% increase in the amount of potential impairment losses would require an additional £4.3m to be set aside as an allowance. Page 211 of 286
Page 212
97 Annual Accounts 2024/25 Common Good Funds The Common Good Funds comprise land granted to a Burgh by the Crown; further grants of land and buildings, mainly in the late 19th and early 20th century by local industrialists and other landowners for the common good of the inhabitants of the Burgh; and rental income and sale proceeds from such land. The bulk of the Paisley Common Good was granted to the Burgh of Paisley by the King Charles II Charter, dated 27 and 28 July 1666, and has been administered by the Burgh and its successors since that date. The bulk of the Renfrew Common Good was granted to the Royal Burgh of Renfrew by the Queen Anne Charter, dated 7 August 1703, and again has been administered by the Burgh and its successors since that date. Income and expenditure statement Paisley Johnstone Renfrew Total £m £m £m £m Expenditure 0.247 0.000 0.853 1.100 Income (0.166) 0.000 (0.672) (0.838) (Surplus)/Deficit for the year 0.081 0.000 0.181 0.262 (Surplus)/Deficit Brought Forward (6.373) (0.052) (36.180) (42.605) Accumulated (Surplus)/Deficit at 31 March 2025 (6.292) (0.052) (35.999) (42.343) Income and Expenditure Statement for the Year Ending 31 March 2025 Paisley Johnstone Renfrew Total £m £m £m £m Expenditure 0.260 0.000 0.786 1.046 Income (0.534) 0.000 (3.261) (3.795) (Surplus)/Deficit for the year (0.274) 0.000 (2.475) (2.749) (Surplus)/Deficit Brought Forward (6.099) (0.052) (33.703) (39.854) Accumulated (Surplus)/Deficit at 31 March 2024 (6.373) (0.052) (36.178) (42.603) Income and Expenditure Statement for the Year Ending 31 March 2024 Balance Sheet Paisley Johnstone Renfrew Total £m £m £m £m Tangible Fixed Assets 1.049 0.000 13.915 14.964 Heritage Assets 0.063 0.046 0.109 0.218 Investments 5.019 0.000 19.194 24.213 Debtors 0.000 0.000 0.020 0.020 Short-term deposits 0.452 0.006 3.591 4.049 Total assets 6.583 0.052 36.829 43.464 Creditors: Amounts Falling Due Within One Year (0.005) 0.000 (0.026) (0.031) Net Assets 6.578 0.052 36.803 43.433 Income Funds (3.551) (0.036) (21.118) (24.705) Revaluation reserve: Investments (1.307) 0.000 (4.602) (5.909) Revaluation reserve: Fixed Assets (1.720) (0.016) (11.083) (12.819) Total Reserves (6.578) (0.052) (36.803) (43.433) Balance Sheet as at 31 March 2025 Page 212 of 286
Page 213
98 Annual Accounts 2024/25 Balance Sheet as at 31 March 2024 Paisley Johnstone Renfrew Total £m £m £m £m Tangible Fixed Assets 0.846 0.000 13.571 14.417 Heritage Assets 0.063 0.046 0.109 0.218 Investments 5.098 0.000 19.502 24.600 Debtors 0.000 0.000 0.133 0.133 Short term deposits 0.371 0.006 2.892 3.269 Total assets 6.378 0.052 36.207 42.637 Creditors: Amounts Falling Due Within One Year (0.005) 0.000 (0.027) (0.032) Net Assets 6.373 0.052 36.180 42.605 Income Funds (3.629) (0.036) (21.330) (24.995) Revaluation reserve: Investments (1.309) 0.000 (4.570) (5.879) Revaluation reserve: Other Fixed Assets (1.435) (0.016) (10.280) (11.731) Total Reserves (6.373) (0.052) (36.180) (42.605) Accounting Policies and Note Accounting Policies adopted for the Common Good are the same as those adopted for Renfrewshire Council except for the application of IAS 16. IAS 16 requires that assets be depreciated and that the charge for depreciation be set against and surplus in the Income and Expenditure account. In addition, IAS 16 requires any decreases in the value of assets to be recognized in the Income and Expenditure account, unless there is a previous increase in the value of the asset held in the Revaluation Reserve. Conversely, any increases in the value of assets are to be recognized in the surplus or deficit in the Income and Expenditure account, to the extent that it reverses a decrease of the same asset previously recognized in the Income and Expenditure account. The Council is required to make arrangements for the proper administration of its financial affairs and to ensure that one of its officers has the responsibility for the administration of those affairs. The Director of Finance and Resources has been designated as that officer in Renfrewshire Council. They manage the affairs of the Council to secure the economic, efficient, and effective use of resources and safeguard its assets and those of any charitable trust it controls. Given that the Common Good is owned by the Council, these specific provisions are supplemented by the general provisions relating to the administration of local authority monies, i.e., the duty to obtain best value. Income to the Common Good Funds is solely from investment returns (both financial investments and property rental income) and bank interest; no donations to the Funds are solicited. The only other source of income, which arises periodically, is from the sale of fixed assets. The investment performance of the Common Good Funds is monitored regularly by Council officers and is reported bi- annually to the Investment Review Board, which is comprised of five cross-party elected members. The minutes of the Investment Review Board are submitted to the Finance, Resources and Customer Services Policy Board, whose meetings are held in public. In turn, the minutes of this Board are submitted to the full Council for ratification. Therefore, all elected members are kept informed of both the performance of the funds and any decision regarding the operation of the Funds, which would be made by the Finance, Resources and Customer Services Policy Board. Revaluation adjustments related to investments are included in Income within the CIES and were £0.079m for Paisley Common Good and £0.307m for Renfrew Common Good. Page 213 of 286
Page 214
99 Annual Accounts 2024/25 Housing Revenue Account Income and expenditure statement The Housing Revenue Account (HRA) reflects a statutory obligation to maintain a revenue account for local authority housing provision in accordance with the Housing (Scotland) Act 1987. The Housing Revenue Account 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. Councils charge rents to cover expenditure in accordance with regulations; 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. 2023/24 2024/25 £m £m 22.753 Repairs and maintenance 22.179 13.560 Supervision and management 15.120 31.442 Depreciation and impairment of non-current assets 32.202 0.900 Increase/(Decrease) in the allowance for bad debts (0.058) 2.709 Other expenditure 3.810 71.364 Total Expenditure 73.253 (50.701) Dwelling rents (53.993) (1.141) Non-dwelling rents (1.120) (1.864) Other income (1.808) (53.706) Total Income (56.921) 17.658 Net Cost of HRA services as included in the CIES 16.332 HRA share of the operating income and expenditure included in the CIES: (0.157) (Gain)/Loss on sale of HRA non-current assets 0.018 3.406 Interest payable and similar charges 3.137 (2.787) Interest and investment income (1.850) (0.050) Pensions interest cost and expected return on pensions assets 1.353 (2.066) Taxation and non specific grant income (2.112) 16.004 Deficit for the year on HRA services 16.878 Movement on the Housing Revenue Account statement This statement shows the movement in the year on the Housing Revenue Account (HRA) Balance. The surplus or deficit for the year on the HRA income and expenditure statement represents the true economic cost of providing the Council’s HRA services, more details of which are shown in the HRA income and expenditure statement itself. The adjustments between accounting basis and funding basis under regulations detail the adjustments that are made to the HRA income and expenditure, as recognised by the Council in the year in accordance with proper accounting practice, to the statutory amounts required to be charged to the HRA Balance for dwellings rent setting purposes. An analysis of these adjustments can be found in Note 6: Adjustment between accounting basis and funding basis under regulation on page 47. Page 214 of 286
Page 215
100 Annual Accounts 2024/25 2023/24 2024/25 £m £m (6.497) Balance on the HRA at 1 April (6.164) 16.004 Deficit for the year on the HRA income and expenditure statement 16.878 (0.839) Adjustments between accounting basis and funding basis under statute (2.737) (14.832) Adjustments to Usable Reserves permitted by accounting standards (14.910) 0.333 Net (Increase)/Decrease before transfers to or from reserves (0.769) (6.164) Balance on the HRA at 31 March (6.933) Notes to the Housing Revenue Account income and expenditure statement The number and types of dwelling in the Council’s housing stock The Council was responsible for managing 12,078 dwellings during 2024/25 (12,305 in 2023/24). The following shows an analysis of these dwellings by type. The figures below exclude void initiative properties. Number Average weekly rent Type of dwelling Number Average weekly rent 418 £67.46 One-apartment 419 £70.22 3692 £78.62 Two-apartment 3,594 £84.83 5905 £91.75 Three-apartment 5,773 £99.00 2074 £105.12 Four-apartment 2,078 £111.22 216 £113.82 Five-apartment 214 £120.08 12,305 Total 12,078 As at 31 March 2024 As at 31 March 2025 Other information Dwellings Non-Dwellings Total as at 31 March 2025 Total as at 31 March 2024 £m £m £m £m Void Rent Loss 2.127 0.334 2.461 2.967 Rental Income Arrears 3.536 0.648 4.184 5.048 Provision for uncollectable rent arrears 2.962 0.606 3.568 3.818 Corporate and Democratic Core costs 0.033 0.038 Page 215 of 286
Page 216
101 Annual Accounts 2024/25 Council Tax Income Account The Council Tax income account shows the gross income raised from Council Taxes levied and deductions made under statute. Councils raise taxes from residents through Council Tax, which is a tax linked to property values. The Council Tax Reduction Scheme represents a discount introduced across Scotland following the abolition of Council Tax Benefits as part of the UK government’s Welfare Reform programme. The resultant net income is transferred to the Council’s CIES. 2023/24 2024/25 £m £m 131.897 Gross council tax levied 132.893 (18.072) Other discounts and reductions (17.658) (13.865) Council tax reduction scheme (13.666) (3.450) Write-off of uncollectable debts and allowance for impairment (3.387) (0.982) Adjustment to previous years’ community charge and council tax (0.481) 95.528 Transfer to the Comprehensive Income and Expenditure Statement 97.701 Calculation of the Council Tax Dwellings are valued by the Assessor and placed within valuation bands ranging from the lowest “A” to the highest “H”. The band D Council Tax charge is calculated using the Council Tax base, and this in turn fixes the charge for each of the other bands, which are based on pre-determined proportions relative to the band D charge. The band D charge for 2024/25 was £1,436.17 (£1,436.17 in 2023/24). 2023/24 2024/25 £ £ 957.45 A 957.45 1,117.02 B 1,117.02 1,276.60 C 1,276.60 1,436.17 D 1,436.17 1,886.97 E 1,886.97 2,333.78 F 2,333.78 2,812.50 G 2,812.50 3,518.62 H 3,518.62 Council Tax Band If a property is occupied by only one person over 18, a discount of 25% is applied. Since 15 July 2016, unoccupied and unfurnished properties have been exempted from Council Tax for the first six months. A discount of 10% is then available for the next six months and 100% additional Council Tax levy is then payable for as long as the property remains empty, although the 10% discount may be extended by a further 12 months if the property is being actively marketed for sale or let. Certain persons are disregarded for Council Tax purposes, including students, people who are in detention and those who are severely mentally impaired. Reductions in Council Tax are available for people with disabilities. Page 216 of 286
Page 217
102 Annual Accounts 2024/25 Charges for water and sewerage services are the responsibility of Scottish Water. Renfrewshire Council collects total monies and makes a precept payment to Scottish Water on the basis of collection levels based on a pre-determined formula. The figures below exclude the water and sewerage charges. Calculation of the Council Tax base The Council Tax base is the number of chargeable dwellings across all valuation bands (adjusted for dwellings where discounts apply), after providing for non-payment, expressed as an equivalent number of band D dwellings. Band Number of dwellings Number of exemptions Disabled relief Discounts Council Tax Reduction Total equivalent dwellings Ratio to Band D 2024/25 Band D equivalent 2023/24 Band D equivalent A 13,321 2,070 6 1,902 3,604 5,786 0.67 3,857 3,987 B 25,909 1,585 47 3,358 5,596 15,374 0.78 11,958 12,189 C 15,450 543 51 1,667 2,076 11,163 0.89 9,923 9,970 D 13,659 318 50 1,287 826 11,258 1.00 11,258 11,219 E 11,693 197 80 775 440 10,248 1.31 13,465 13,490 F 7,205 79 47 325 137 6,633 1.63 10,779 10,671 G 4,497 90 16 155 59 4,178 1.96 8,182 7,933 H 203 5 1 9 2 186 2.45 456 463 91,937 Band A dwellings subject to disabled relief 6 8 Class 17 and 24 dwellings 70 73 Sub-total 69,954 70,003 Less: Provision for non-payment and future award of discounts and reliefs (2,098) (3,780) Council Tax Base 67,856 66,223 Non-Domestic Rates Income Account This account is an agent’s statement that reflects the statutory obligation for those councils who issue bills to non- domestic rate payers to maintain a separate non-domestic rate account. The account shows the rates collected from non-domestic rate payers during the year. Any difference between the rates collected and the amount the Council is guaranteed to receive under the national pooling arrangements is adjusted via the Scottish Government's general revenue grant to the Council. Non-domestic rate income is redistributed from the national non-domestic rate pool in proportions based on the prior year mid-year income returns net of prior year adjustments. In 2012/13 the Scottish Government introduced the Business Rates Incentivisation Scheme (BRIS) which allows councils, where an agreed target income figure is exceeded, to retain 50% of the ‘above target’ income. 2023/24 2024/25 £m £m 143.620 Gross rates levied 146.060 (23.339) Reliefs and other deductions (26.998) (2.015) Write-off of uncollectable debts and allowance for impairment (1.840) 118.266 Net Non-Domestic Rates income 117.222 (9.550) Adjustment to previous years’ non-domestic rates (10.047) 22.606 Contribution (to)/from the National Non-Domestic Rate pool 0.330 131.322 Transfer to the Comprehensive Income and Expenditure Statement 107.505 Page 217 of 286
Page 218
103 Annual Accounts 2024/25 The nature and amount of each rate fixed The non-domestic rates charge for each subject is determined by the rateable value placed upon it by the Assessor, multiplied by the rate per pound (the “rate poundage”) set each year by the Scottish Government. For 2024/25 the charge was 49.8 pence in the pound, with a 4.7 pence supplement for properties with a rateable value over £51,000 and a 6.1 pence supplement for properties with a rateable value above £100,000. Under the Small Business Bonus Scheme (SBBS), the following has applied from 2023/24 onwards, relief is available to businesses where the combined rateable value of all business premises is £35,000 or less and the rateable value of individual premises is £20,000 or less. Properties with a total rateable value up to and including £12,000 are entitled to a 100% reduction in their business rates. For those properties with a rateable value between £12,001 and £20,000 relief will be tapered. Relief will taper from 100% to 25% for those properties with rateable values between £12,001 and £15,000 and from 25% to 0% for those properties with rateable values between £15,001 to £20,000. Analysis of Renfrewshire Council’s rateable values 2024/25 £m 104.357 47.472 31.476 1.593 102.347 287.245 (8.678) 278.567 (1.374) 277.193Net Rateable Value at 31 March Analysis of Rateable Values Commercial Industrial and freight transport Education and public service Communications Others Rateable Value at 1 April Adjustments (Full Year Rateable Value) Less: Wholly Exempt Subjects Rateable Value at 31 March Page 218 of 286
Page 219
104 Annual Accounts 2024/25 Group Accounts Group Comprehensive Income and Expenditure Statement This statement shows the accounting cost of providing services and managing operations during the year. It includes, on an accruals basis, all day-to-day expenses and related income. The statement shows the accounting cost in accordance with generally accepted accounting practices, rather than the cost according to the statutory regulations that specify the net expenditure that councils need to take into account when setting the annual Council Tax charge. The required adjustments between accounting basis and funding basis under regulations are shown in the group movement in reserves statement. Gross expenditure Gross income Net expenditure Note Gross expenditure Gross income Net expenditure £m £m £m £m £m £m 298.501 (39.097) 259.404 333.826 (19.481) 314.345 251.324 (142.398) 108.926 258.763 (145.277) 113.486 105.680 (59.449) 46.231 Finance and Resources 107.418 (58.981) 48.437 52.784 (18.136) 34.648 53.745 (17.330) 36.415 20.629 (14.947) 5.682 Miscellaneous Services 13.427 (12.896) 0.531 144.335 (44.290) 100.045 Adult Services 186.377 (73.758) 112.619 873.253 (318.317) 554.936 953.556 (327.723) 625.833 0.000 (0.302) (0.302) (Gain)/Loss on the disposal of non-current assets 0.000 (0.057) (0.057) 21.333 (17.771) 3.562 Financing and investment income and expenditure G6 25.807 (6.570) 19.237 0.000 (513.914) (513.914) Taxation and non-specific grant income 3 0.000 (562.381) (562.381) 894.586 (850.304) 44.282 979.363 (896.731) 82.632 0.801 G3 (1.731) 45.083 80.901 (34.155) (87.385) (1.993) G15 0.028 215.142 (29.371) 0.334 G3 (1.393) 179.328 Other comprehensive (income) and expenditure (118.121) 224.411 Total comprehensive (income) and expenditure (37.220) Share of other comprehensive (income) and expenditure of associates and joint ventures Actuarial (gain)/loss on pension assets and liabilities 2023/24 (restated) 2024/25 Children’s Services Chief Executive’s Service Cost of Services Deficit/(Surplus) on the Provision of Services Share of the (surplus) / deficit on the provision of services by associates and joint ventures Group Deficit/(Surplus) (Surplus)/Deficit on the revaluation of non- current assets (Surplus)/Deficit from investments in equity instruments designated as Fair Value through Other Comprehensive Income Environment, Housing and Infrastructure Figures shown in brackets represent income or gains and figures without brackets represent expenditure or losses. Page 219 of 286
Page 220
105 Annual Accounts 2024/25 Group Movement in Reserves Statement The group movement in reserves statement shows the movement in the year on the different reserves held by the Council's group, analysed into the Council's usable reserves, the Council's unusable reserves and the Council's share of the reserves of the subsidiaries, associates, and joint ventures within the group. 2024/25 Council’s Usable Reserves Council’s Unusable Reserves Council’s Total Reserves Council’s share of Reserves of Subsidiaries, Associates and Joint Ventures Total Reserves Note £m £m £m £m £m Balance at 1 April 2024 222.217 1,302.619 1,524.836 99.413 1,624.249 Movement in reserves during the year Total Comprehensive Income and Expenditure (68.497) 115.961 47.464 (10.244) 37.220 Adjustments between Group accounts and Council accounts G5 (15.959) 0.000 (15.959) 15.959 0.000 Adjustments to Usable Reserves permitted by accounting standards 7 39.114 (39.114) 0.000 0.000 0.000 Adjustment for Service Concession Arrangements 13.901 (13.901) 0.000 0.000 0.000 Adjustments between accounting basis and funding basis under regulations 6 44.419 (44.419) 0.000 0.000 0.000 Increase / (Decrease) in year 12.978 18.527 31.505 5.715 37.220 Balance at 31 March 2025 235.195 1,321.146 1,556.341 105.128 1,661.469 Comparative movements in 2023/24 (restated) Council’s Usable Reserves Council’s Unusable Reserves Council’s Total Reserves Council’s share of Reserves of Subsidiaries, Associates and Joint Ventures Total Reserves Note £m £m £m £m £m Balance at 1 April 2023 236.051 1,488.674 1,724.725 123.935 1,848.660 Movement in reserves during the year Total Comprehensive Income and Expenditure (31.156) (152.238) (183.394) (41.017) (224.411) Adjustments between Group accounts and Council accounts G5 (16.495) 0.000 (16.495) 16.495 0.000 Adjustments to Usable Reserves permitted by accounting standards 36.188 (36.188) 0.000 0.000 0.000 Adjustment for Service Concession Arrangements 1.597 (1.597) 0.000 0.000 0.000 Adjustments between accounting basis and funding basis under regulations 6 (3.968) 3.968 0.000 0.000 0.000 Increase / (Decrease) in year (13.834) (186.055) (199.889) (24.522) (224.411) Balance at 31 March 2024 222.217 1,302.619 1,524.836 99.413 1,624.249 Page 220 of 286
Page 221
106 Annual Accounts 2024/25 Group Balance Sheet The group balance sheet shows the value as at 31 March 2025 of the assets and liabilities recognised by the Council. The net assets of the Council’s group are matched by the reserves held by the group. Reserves are reported in two categories: usable reserves, which are those reserves that the group may use to provide services, subject to the need to maintain a prudent level of reserves and any statutory limitations; and unusable reserves, comprising those that the group is not able to use to provide services. This category includes reserves that hold unrealised gains/losses in the value of assets where amounts would only become available to provide services if the assets are sold, and reserves that hold timing differences shown as ‘adjustments between accounting basis and funding basis under regulations’ in the group movement in reserves statement. As at 31 March 2024 (restated) As at 31 March 2025 £m Note £m 1,873.970 Property, plant and equipment G10 1,972.689 44.404 Heritage assets G11 44.404 0.415 Investment property G9 0.409 1.724 Intangible assets 13 1.189 28.921 Long-term investments G15 28.604 54.209 Investments in associates and joint ventures G3 57.351 2.090 Long-term debtors G15 2.002 0.000 Other long-term assets 0.000 2,005.733 2,106.648 0.100 Assets held for sale 12 2.492 67.755 Short-term investments G15 17.534 1.352 Inventories 1.120 67.407 Short-term debtors G12 62.628 31.422 Cash and cash equivalents G15 7.515 168.036 91.289 (64.348) Short-term borrowing G15 (85.805) (82.552) Short-term creditors G13 (69.695) (0.721) Short-term provisions 21 (0.406) (147.621) (155.906) (63.352) Long-term creditors 20 (77.581) (4.630) Long-term provisions 21 (5.230) (258.931) Long-term borrowing G15 (232.050) (0.005) Liabilities in associates and joint ventures G3 (0.023) (74.981) Other long-term liabilities (65.678) (401.899) (380.562) 1,624.249 1,661.469 (252.201) Usable reserves G7 (264.668) (1,372.048) Unusable reserves G8 (1,396.801) (1,624.249) (1,661.469)Total reserves Long-term assets Current assets Current liabilities Long-term liabilities Net assets The unaudited accounts were issued on 26 June 2025 and the audited accounts were authorised for issue on 23 October 2025. Page 221 of 286
Page 222
107 Annual Accounts 2024/25 Group Cashflow Statement The group cash flow statement shows the changes in cash and cash equivalents of the Council’s group during the year. It 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 that 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 (that is, borrowing) to the Council. The Council’s share of the cash flows of its associates and joint ventures is disregarded for the purpose of this statement because the Council’s share of the associates’ and joint ventures’ reserves is unusable and cannot be used to fund services. 2023/24 (restated) 2024/25 £m £m (45.083) Group surplus/(deficit) (80.901) 88.382 Adjustment for non-cash movements 137.377 (30.658) Adjustments for items included in the group surplus/deficit that are investing and financing activities (25.010) 12.641 Net cash flows from operating activities 31.466 1.371 Net cash flows from investing activities (48.008) 3.899 Net cash flows from financing activities (7.365) 17.911 Net increase/(decrease) in cash and cash equivalents (23.907) 13.511 Cash and cash equivalents at the beginning of the reporting period 31.422 31.422 Cash and cash equivalents at the end of the reporting period 7.515 Notes to the Group Accounts The Council’s share of Group entities is reviewed on an annual basis and some prior year figures are adjusted as a result, when compared to the prior year audited accounts. There was also a Balance Sheet Prior Year Restatement during the audit, after application of the asset cap to the results of Renfrewshire Leisure Limited, trading as OneRen. In 2023/24 the impact was a decrease in net assets of £32.289m. Note G1: Details of the group’s combining entities Renfrewshire Council is represented on the board of a number of organisations. The extent of the Council’s controlling interest has been reviewed in determining those entities that should be consolidated and incorporated within the group accounts. Those organisations, which have a significant impact on the Council’s operations, are listed below. The accounting period for all of these bodies is the year to 31 March 2025. In addition to the information included in the group accounts on the preceding pages the accounting regulations require specific disclosures about the combining entities and the nature of their business. OneRen, the Paisley, Renfrew and Johnstone Common Good Funds, Paisley Museum Reimagined Limited, Park Lane Developments (Renfrewshire) LLP and the Coats Observatory Trust administered by Renfrewshire Council (as sole trustee) are treated as subsidiaries in the Council’s group accounts, with assets, liabilities, reserves, income and expenses being consolidated line-by-line. AMIDS (Renfrewshire) LLP is a joint venture arrangement. Page 222 of 286
Page 223
108 Annual Accounts 2024/25 Renfrewshire Leisure Limited, trading as OneRen, is a company limited by guarantee formed in 2014 and registered as a charity in Scotland. Its principal place of business is the Lagoon Leisure Centre, 11 Christie Street, Paisley PA1 1NB. The charity provides leisure and culture facilities within Renfrewshire Council’s area to the general public and operates ten leisure centres within Renfrewshire plus a range of cultural service buildings, libraries and community halls. The objectives of the charity are to provide facilities for recreation, sport, cultural and other leisure activities for the benefit of the community in Renfrewshire. Any surplus generated by the charity is applied solely to its continuation and development. The accounts of the charity are published separately and may be obtained from the Chief Executive, Lagoon Leisure Centre, 11 Christie Street, Paisley PA1 1NB. The group comprehensive income and expenditure statement (CIES) includes total net comprehensive income for the year of £11.240m (2023/24 £4.377m restated) for OneRen, total net comprehensive expenditure for the year of £0.262m (2023/24 net comprehensive income of £2.751m) for the Paisley, Renfrew and Johnstone Common Good Funds, total net comprehensive income for the year of £0.227m (2023/24 net comprehensive expenditure of £0.182m restated) for Park Lane Developments (Renfrewshire) LLP, total net comprehensive income for the year of £0.036m (2023/24 £1.501m) for Paisley Museum Reimagined Limited and total net comprehensive income for the year of £0.352m (2023/24 £0.455m restated) for the Coats Observatory Trust. The group balance sheet includes net assets of £43.582m (2023/24 £32.342m restated) for OneRen, net assets of £42.343m (2023/24 £42.605m) for the Common Good Funds, net assets of £0.121m (2023/24 net liabilities of £0.106m restated) for Park Lane Developments (Renfrewshire) LLP, net assets of £1.200m (2023/24 £1.164m) for Paisley Museum Reimagined Limited and net assets of £1.845m (2023/24 £1.493m restated) for the Coats Observatory Trust. Strathclyde Concessionary Travel Scheme Joint Committee . comprises the twelve councils in the west of Scotland and oversees the operation of the concessionary fares scheme for public transport within its area. The costs of the scheme are met by a combination of funding from the twelve constituent councils and by direct grant funding from the Scottish Government. Strathclyde Partnership for Transport administers the scheme on behalf of the committee. In 2024/25, Renfrewshire Council contributed £0.332m or 8.11% of the committee’s estimated running costs (2023/24 £0.332m or 8.02%) and its share of the year-end net asset was £0.303m (2023/24 £0.417m restated) and is included in the group balance sheet. Copies of its accounts may be obtained from the Treasurer to Strathclyde Concessionary Travel Scheme, Strathclyde Partnership for Transport, 131 St. Vincent Street, Glasgow G2 5JF. Strathclyde Partnership for Transport was formed on 1 April 2006 as the successor to the Strathclyde Passenger Transport Authority. It is a joint committee of the twelve councils in the west of Scotland. In association with the related strategic development committees, the partnership’s remit includes the promotion of joint working to set out the policy framework for achieving the most effective management, development and integration of the transport network across boundaries in the medium to longer term through the Regional Transport Strategy. Renfrewshire Council contributed £2.955m or 8.22% to the committee’s estimated running costs in 2024/25 (2023/24 £2.914m or 8.02%) and its share of the year-end net asset was £44.072m (2023/24 £40.184m restated) and is included in the group balance sheet. Copies of its accounts may be obtained from the Treasurer to Strathclyde Partnership for Transport, 131 St. Vincent Street, Glasgow G2 5JF. Page 223 of 286
Page 224
109 Annual Accounts 2024/25 Strathclyde Partnership for Transport Renfrewshire Council’s Share Strathclyde Partnership for Transport Renfrewshire Council’s Share £m £m £m £m Balance Sheet Summary 337.658 27.083 Long-term assets 367.769 30.227 194.061 15.565 Current assets 186.984 15.369 (27.947) (2.242) Current liabilities (16.326) (1.342) (2.769) (0.222) Long-term liabilities (2.213) (0.182) 501.003 40.184 Net assets 536.214 44.072 Income and Expenditure Summary 120.503 9.665 Income 115.145 9.464 84.497 6.777 less: Expenditure 83.326 6.849 36.006 2.888 Surplus for the year 31.819 2.615 As at 31 March 2024 (restated) As at 31 March 2025 2023/24 (restated) 2024/25 Renfrewshire Valuation Joint Board was formed in 1996 at local government re-organisation by Act of Parliament. Its principal place of business is Renfrewshire House, Cotton Street, Paisley PA1 1BF. The board maintains the electoral, council tax and non-domestic rates registers for the three councils of East Renfrewshire, Inverclyde and Renfrewshire. The board’s running costs are met by the three member councils. Surpluses or deficits on the board’s operations are shared between the councils. In 2024/25, Renfrewshire Council contributed £1.643m or 57.7% of the board’s estimated running costs (2023/24 £1.637m or 57.7%) and its share of the year-end net asset was £0.896m (2023/24 £0.570m restated) and is included in the group balance sheet. Copies of its accounts may be obtained from the Treasurer to the Renfrewshire Valuation Joint Board, Renfrewshire Council, Renfrewshire House, Paisley PA1 1JB. The following additional disclosures are required under accounting regulations for Renfrewshire Valuation Joint Board because it is a related party to the Council. Renfrewshire Valuation Joint Board Renfrewshire Council’s Share Renfrewshire Valuation Joint Board Renfrewshire Council’s Share £m £m £m £m Balance Sheet Summary 0.162 0.093 Long-term assets 0.161 0.093 0.994 0.574 Current assets 1.542 0.890 (0.115) (0.066) Current liabilities (0.104) (0.060) (0.053) (0.031) Pension asset / (liability) (0.046) (0.027) 0.988 0.570 Net assets 1.553 0.896 Income and Expenditure Summary 2.934 1.694 Income 3.205 1.848 2.760 1.594 less: Expenditure 2.838 1.637 0.174 0.100 Deficit for the year 0.367 0.211 As at 31 March 2024 (restated) As at 31 March 2025 2023/24 (restated) 2024/25 The Public Bodies (Joint Working) (Scotland) Act 2014 established the framework for the integration of health and adult social care in Scotland. On 27 June 2015, Scottish Ministers legally established the Renfrewshire Health and Social Care Integration Joint Board (IJB) as a formal legal partnership between Renfrewshire Council and NHS Greater Glasgow and Clyde. Page 224 of 286
Page 225
110 Annual Accounts 2024/25 The IJB is responsible for the strategic planning of the functions delegated to it and for ensuring the delivery of its functions through the locally agreed operational arrangements. Copies of the financial statements for the IJB may be obtained from Chief Officer, Renfrewshire Health and Social Care Integration Joint Board, Renfrewshire House, Cotton Street, Paisley, PA1 1WB. Renfrewshire Integration Joint Board Renfrewshire Council’s Share Renfrewshire Integration Joint Board Renfrewshire Council’s Share £m £m £m £m Balance Sheet Summary 26.076 13.038 Current assets 24.159 12.080 26.076 13.038 Net assets 24.159 12.080 Income and Expenditure Summary 395.015 197.507 Income 419.678 209.839 402.572 201.286 less: Expenditure 421.595 210.797 (7.557) (3.779) (Deficit)/Surplus for the year (1.917) (0.958) As at 31 March 2024 (restated) As at 31 March 2025 2023/24 (restated) 2024/25 Note G2: Non-material interest in other entities In addition to the combining entities detailed in note G1, the Council has a “significant interest” in a number of joint committees. The Council’s share of the net assets or liabilities of these joint committees is not material to the fair understanding of the financial position and transactions of the Council. Accordingly, the group accounts do not include these organisations. In the interest of transparency, the following disclosures are made concerning the business nature of each organisation. Scotland Excel is formed by agreement among local authorities throughout Scotland and is maintained through a joint committee comprising representatives from all of the member councils. Launched on 1 April 2008 as a centre of procurement expertise for the local government sector, it is the largest non-profit making purchasing agency in Scotland. Its aim is to help improve the efficiency and effectiveness of public sector procurement. Renfrewshire Council contributed £0.130m (3.3%) to the committee’s estimated running costs in 2024/25 (£0.130m in 2023/24). Glasgow and the Clyde Valley Strategic Development Planning Authority. The committee covers the eight councils within its area. Under the Town and Country Planning (Scotland) Act 1997, each member council not only has responsibilities for local planning matters in its area but also the strategic issues that cover the wider area of the Glasgow and Clyde valley. Accordingly, the committee prepares, monitors and reviews the Strategic Development Plan on behalf of member councils and liaises with central government, Scottish Enterprise and other bodies. Renfrewshire Council contributed £0.053m (12.5%) to the committee’s estimated running costs in 2023/24 (£0.068m in 2022/23). Glasgow City Region – City Deal Cabinet is a Joint Committee, the purpose of which is to determine the Strategic Development priorities for the Clyde Valley Region and to monitor and ensure the delivery of the City Deal programme as agreed between member authorities and the UK and Scottish Governments. The City Deal programme aims to deliver a £1.13 billion investment programme through 20 infrastructure projects and will drive innovation and growth through the support of the key sectors, including delivery of labour market and innovation programmes. The committee operates in an administrative / project management capacity and does not hold any assets or liabilities developed from the City Deal programme. Page 225 of 286
Page 226
111 Annual Accounts 2024/25 Note G3: Associates and joint ventures The aggregate value of the assets, liabilities, income and expenditure of the Council’s associates and joint ventures are shown in the two tables which follow. The net asset figure from these two tables combined (£12.057m + £45.271m = £57.328m) equates to the net of the two figures disclosed in the group balance sheet as ‘Investments in associates and joint ventures’ (£57.351m) and ‘Liabilities in associates and joint ventures’ (£0.023m). Aggregate of Joint Venture results Renfrewshire Council’s Share Aggregate of Joint Venture results Renfrewshire Council’s Share £m £m £m £m Balance Sheet Summary 26.138 13.069 Current assets 24.629 12.315 (0.003) (0.001) Current liabilities (0.032) (0.016) (0.070) (0.035) Long-term liabilities (0.484) (0.242) 26.065 13.033 Net assets 24.113 12.057 Income and Expenditure Summary 395.015 197.507 Income 419.786 209.893 402.583 201.291 less: Expenditure 421.738 210.869 (7.568) (3.784) (Deficit)/Surplus for the year (1.952) (0.976) Joint ventures As at 31 March 2024 (restated) As at 31 March 2025 2023/24 (restated) 2024/25 Aggregate of Associate results Renfrewshire Council’s Share Aggregate of Associate results Renfrewshire Council’s Share £m £m £m £m Balance Sheet Summary 337.820 27.176 Long-term assets 367.930 30.320 200.960 16.613 Current assets 193.512 16.663 (28.768) (2.365) Current liabilities (17.679) (1.503) (2.822) (0.253) Pension asset / (liability) (2.259) (0.209) 507.190 41.171 Net assets 541.504 45.271 Income and Expenditure Summary 127.855 11.714 Income 122.728 11.667 91.740 8.731 less: Expenditure 92.006 8.960 36.115 2.983 Surplus for the year 30.722 2.707 Associates As at 31 March 2024 (restated) As at 31 March 2025 2023/24 (restated) 2024/25 Note on contingent assets, contingent liabilities and capital commitments The Council is unaware of any material contingent asset or contingent liability as at 31 March 2025 in relation to any of its associates or joint ventures. The Council is unaware that any commitments have been entered into by any of its associates or joint ventures as at 31 March 2025, either with the Council itself or with other parties. Page 226 of 286
Page 227
112 Annual Accounts 2024/25 Note G4: Material items of group income and expenditure In order to assist the reader in a better understanding of the impact of the inclusion of the results of the associates and joint ventures, the following tables provide an analysis of the Council’s share of the material amounts of income and expenditure disclosed in the group CIES. 2023/24 (restated) 2024/25 £m £m Share of (surplus) or deficit: (3.369) Subsidiaries: (1.824) 0.180 Paisley, Renfrew and Johnstone Common Good Funds 0.292 (0.455) Coats Observatory Trust (0.352) (1.775) OneRen (1.501) 0.182 Park Lane Developments (Renfrewshire) LLP (0.227) (1.501) Paisley Museum Reimagined Limited (0.036) (2.983) Associates: (2.707) (2.888) Strathclyde Partnership for Transport (2.615) 0.005 Strathclyde Concessionary Travel Scheme Joint Committee 0.119 (0.100) Renfrewshire Valuation Joint Board (0.211) Joint Venture: 3.779 Renfrewshire Health and Social Care Integration Joint Board 0.958 0.005 AMIDS (Renfrewshire) LLP 0.018 (2.568) Aggregate share of (surplus) or deficit (3.555) Share of other comprehensive (income) and expenditure: 26.756 Subsidiaries: (0.767) (2.931) Paisley, Renfrew and Johnstone Common Good Funds (1.120) 29.687 OneRen 0.353 0.334 Associates: (1.393) 0.268 Strathclyde Partnership for Transport (1.273) (0.001) Strathclyde Concessionary Travel Scheme Joint Committee (0.005) 0.067 Renfrewshire Valuation Joint Board (0.115) 27.090 Aggregate share of other comprehensive (income) and expenditure (2.160) 24.522 Aggregate share of total comprehensive (income) and expenditure (5.715) Material items of group income and expenditure Note G5: Adjustments between group accounts and council accounts In the group movement in reserves statement, adjustments between group accounts and council accounts are required to bring the Council’s reserve balances back to the amount presented in the Council-only figures (before adjustments between accounting basis and funding basis under regulations). This is because intra-group transactions are eliminated when total comprehensive income and expenditure is calculated for the group. The adjustments between group accounts and council accounts can be analysed as follows: Page 227 of 286
Page 228
113 Annual Accounts 2024/25 2023/24 (restated) 2024/25 £m £m 0.158 Grants made by the Paisley, Renfrew and Johnstone Common Good Funds to Renfrewshire Council in contribution towards the funding of community events and projects 0.168 0.059 Governance costs charged to the Paisley, Renfrew and Johnstone Common Good Funds by Renfrewshire Council 0.059 (0.137) Interest income received from Renfrewshire Council by the Paisley, Renfrew and Johnstone Common Good Funds (0.186) (16.319) Service charge and other expenditure payable by Renfrewshire Council to OneRen (16.654) 0.512 Expenditure payable by OneRen to Renfrewshire Council 0.631 (0.768) Expenditure/(income) payable by/(to) Paisley Museum Reimagined Limited to/(by) Renfrewshire Council 0.023 (16.495) Total adjustments between Group accounts and Council accounts (15.959) Adjustments between Group accounts and Council accounts Note G6: Group financing and investment income and expenditure 2023/24 (restated) 2024/25 £m £m 21.196 Interest payable and similar charges 21.607 (8.360) Net interest on the net defined benefit liability 4.014 (8.545) Interest receivable and similar income (5.762) (0.315) Income and expenditure in relation to investment properties and changes in their fair values (0.315) (0.414) Other investment income (0.307) 3.562 Total financing and investment income and expenditure 19.237 Group financing and investment income and expenditure Note G7: Group Usable reserves 2023/24 (restated) 2024/25 £m £m (222.219) Council Usable Reserves - Note 7 (235.195) Group Usable Reserves: (24.995) Paisley, Renfrew and Johnstone Common Good Funds: unrestricted funds (24.705) (0.554) OneRen (1.641) (1.164) Paisley Museum Reimagined Limited (1.200) (3.269) Renfrewshire Health and Social Care Integration Joint Board (1.927) (252.201) Total Group Usable Reserves (264.668) Group Usable Reserves Page 228 of 286
Page 229
114 Annual Accounts 2024/25 Note G8: Group Unusable reserves Unusable reserves are those reserves that the Council is not able to utilise to provide services. Included within the total Group Unusable Reserves are the unusable reserves of the Council’s subsidiaries; also included is the Council’s share of the reserves of the associates and joint ventures within the group. 2023/24 (restated) 2024/25 £m £m (1,302.617) Council Unusable Reserves - Note 8 (1,321.146) Group Unusable Reserves: (5.879) Paisley, Renfrew and Johnstone Common Good Funds: financial instruments revaluation reserve (5.909) (11.731) Paisley, Renfrew and Johnstone Common Good Funds: revaluation reserve (12.819) (1.493) Coats Observatory Trust: revaluation reserve (1.845) 0.501 OneRen: pension reserve 0.440 0.106 Park Lane Developments (Renfrewshire) LLP (0.121) Council share of the Reserves of associates and joint ventures: (40.184) Strathclyde Partnership for Transport (44.072) (0.417) Strathclyde Concessionary Travel Scheme Joint Committee (0.303) (0.570) Renfrewshire Valuation Joint Board (0.896) (9.769) Renfrewshire Health and Social Care Integration Joint Board (10.153) 0.005 AMIDS (Renfrewshire) LLP 0.023 Group Unusable Reserves Note G9: Group investment properties The following items of income and expense have been accounted for in the ‘Financing and investment income and expenditure’ line in the group CIES: 2023/24 2024/25 £m £m (0.315) Rental income from investment property (0.315) (0.315) Net (gain) or loss (0.315) Group Investment Properties There are no restrictions on the Council’s ability to realise the value inherent in investment property, nor on the right to the remittance of income and the proceeds of disposal. With regards Common Good properties, the Council is obliged to observe the provisions of the Community Empowerment (Scotland) Act 2015 in terms of public consultation on disposal proposals; however, the right to the remittance of income and proceeds of disposal remains with the Common Good Funds. The following table summarises the movement in the fair value of investment properties during the year: 2023/24 2024/25 £m £m 2.014 Balance at 1 April 0.415 (1.593) Transfers from inventories and property, plant and equipment 0.000 (0.006) Other changes (0.006) 0.415 Balance at 31 March 0.409 Group Investment Properties Page 229 of 286
Page 230
115 Annual Accounts 2024/25 Note G10: Group Property, plant and equipment Council PPE (Note 9) Council share of Group PPE Total Group PPE £m £m £m Balance sheet net carrying amount at 31 March 2024 1,858.221 15.749 1,873.970 Assets reclassified (to) or from the “held for sale” category (2.492) 0.000 (2.492) Recognition of Right of Use Assets and Increase in PPP liability 20.795 0.000 20.795 Additions 119.440 0.352 119.792 Disposals (1.823) 0.000 (1.823) Depreciation (96.776) (0.593) (97.369) Impairment adjustments recognised in the CIES (2.934) 0.000 (2.934) Revaluation adjustments taken to the Revaluation Reserve 86.293 1.090 87.383 Revaluation adjustments recognised in the CIES (24.633) 0.000 (24.633) Balance sheet net carrying amount at 31 March 2025 1,956.091 16.598 1,972.689 Gross carrying amount at 31 March 2025 1,894.897 21.591 1,916.488 Accumulated depreciation at 31 March 2025 (174.282) (4.993) (179.275) Infrastructure assets 235.476 0.000 235.476 Balance sheet net carrying amount at 31 March 2025 1,956.091 16.598 1,972.689 Movements in 2024/25 Council PPE (Note 9) Council share of Group PPE Total Group PPE £m £m £m Balance sheet net carrying amount at 31 March 2023 1,797.350 14.909 1,812.259 Other asset reclassifications 1.593 0.000 1.593 Additions 124.625 0.455 125.080 Disposals (1.531) 0.000 (1.531) Depreciation (90.812) 0.087 (90.725) Revaluation adjustments taken to the Revaluation Reserve 33.185 0.298 33.483 Revaluation adjustments recognised in the CIES (6.189) 0.000 (6.189) Balance sheet net carrying amount at 31 March 2024 1,858.221 15.749 1,873.970 Gross carrying amount at 31 March 2024 1,787.087 20.149 1,807.236 Accumulated depreciation at 31 March 2024 (156.902) (4.400) (161.302) Infrastructure assets 228.036 0.000 228.036 Balance sheet net carrying amount at 31 March 2024 1,858.221 15.749 1,873.970 Movements in 2023/24 (restated) Page 230 of 286
Page 231
116 Annual Accounts 2024/25 Note G11: Group heritage assets A valuation of the fair value of the Council’s Heritage Assets was carried out by an external valuer between October 2021 and March 2022, resulting in an increase of £4.883m. The value at 31 March 2025 was £44.404m (£44.404m in 2023/24). Included in this value are the civic regalia and equipment of the Paisley, Renfrew and Johnstone Common Good Funds, which have been externally valued on a present value insurance basis at £0.219m as at 31 March 2025 (£0.219 at 31 March 2024). Note G12: Group short-term debtors The balances detailed below are composed mostly of the debtors of the Council, to which the debtors of OneRen, Park Lane Developments (Renfrewshire) LLP and the Paisley, Renfrew and Johnstone Common Good Funds have been added. As at 31 March 2024 (restated) As at 31 March 2025 £m £m 5.871 Trade receivables 6.790 6.009 Prepayments 6.471 55.527 Other receivables 49.367 67.407 Total 62.628 Group Short-term Debtors Note G13: Group short-term creditors The balances detailed below are composed mostly of the creditors of the Council, to which the creditors of OneRen, Park Lane Developments (Renfrewshire) LLP and the Paisley, Renfrew and Johnstone Common Good Funds have been added. As at 31 March 2024 (restated) As at 31 March 2025 £m £m (29.213) Trade payables (13.730) (53.339) Other payables (55.965) (82.552) Total (69.695) Group Short-term Creditors Note G14: Amounts due between Renfrewshire Council and its associates and joint ventures An analysis of the amounts owing and owed between the Council and its associates and joint ventures, analysed into amounts relating to loans and amounts relating to other balances, is shown in the table below. As at 31 March 2024 As at 31 March 2025 £m £m Amounts owing to Renfrewshire Council: 1.703 Other balances 0.309 1.703 Total 0.309 Amounts owed by Renfrewshire Council: (26.103) Liability for Renfrewshire Integration Joint Board’s retained underspend (24.186) (0.962) Other balances (1.801) (27.065) Total (25.987) Page 231 of 286
Page 232
117 Annual Accounts 2024/25 Note G15: Group financial instruments Balance sheet carrying amounts of group financial instruments The following categories of financial instrument are carried in the group balance sheet. Additional qualitative information on the various categories of financial instruments can be found in Note 22: Financial Instruments. Long-term Current Long-term Current £m £m £m £m (238.592) (5.000) (232.050) (5.000) 0.000 (2.815) 0.000 (2.694) (238.592) (7.815) (232.050) (7.694) (20.000) (26.766) 0.000 (46.766) 0.000 (0.864) 0.000 (0.858) (0.339) (0.262) 0.000 (0.588) (20.339) (27.892) 0.000 (48.212) 0.000 (28.641) 0.000 (29.899) (258.931) (64.348) (232.050) (85.805) 0.000 (48.903) 0.000 (32.195) (61.763) (3.210) (75.183) (4.775) 0.000 0.000 (0.395) 0.000 (61.763) (52.113) (75.578) (36.970) As at 31 March 2025As at 31 March 2024 (restated) Financial Liabilities At amortised cost: Trade payables Principal sum borrowed Accrued interest Total Public Works Loan Board (PWLB) borrowing Principal sum borrowed Accrued interest EIR adjustments Total non-PWLB borrowing (“market debt”) Borrowing from group entities Total Borrowing Service concession and finance lease liabilities Financial guarantees Financial Liabilities included in Creditors Long-term Current Long-term Current £m £m £m £m 0.000 66.000 0.000 17.521 0.000 1.755 0.000 0.017 0.000 0.000 0.000 (0.004) 28.921 0.000 28.604 0.000 28.921 67.755 28.604 17.534 0.000 7.578 0.000 (6.155) 0.000 0.048 0.000 0.029 0.000 (0.012) 0.000 (0.003) 0.000 23.808 0.000 13.644 0.000 31.422 0.000 7.515 0.755 76.040 5.959 70.592 4.826 0.054 1.014 0.044 1.208 0.000 0.000 0.000 (4.700) (21.739) (4.972) (23.847) 2.089 54.355 2.001 46.789 At amortised cost: Accrued interest As at 31 March 2024 (restated) Financial Assets As at 31 March 2025 At amortised cost: Principal At amortised cost: Accrued interest At amortised cost: Loss allowance At fair value through other comprehensive income - designated equity instruments Total Investments At amortised cost: Principal At amortised cost: Loss allowance At fair value through profit or loss Total Cash and cash equivalents At amortised cost: Trade receivables At amortised cost: Loans made for service purposes At amortised cost: Accrued interest At amortised cost: Loss allowance Financial Assets included in Debtors Note: the figures in this table include accrued interest where this is applicable Page 232 of 286
Page 233
118 Annual Accounts 2024/25 Fair value of group financial instruments The fair value through other comprehensive income financial assets carried on the group balance sheet comprise the Council’s insurance fund investments and the investments of the Paisley and Renfrew Common Good Funds. The fair value of these investments equates to the market value of the investments as provided by the Council’s investment manager, LGT Wealth Management. In terms of the fair value measurement hierarchy the financial instruments measured at fair value are considered to be Level 1 being quoted prices (unadjusted) in active markets for identical assets or liabilities that the authority can access at the measurement date, Level 2 being inputs other than quoted prices that can be accessed at the measurement date, or Level 3 being unobservable inputs e.g. cashflow forecasts or estimated creditworthiness (see table below). Carrying Amount Fair value Financial Liabilities Carrying Amount Fair value £m £m £m £m Financial liabilities measured at amortised cost: (246.407) (220.126) Public Works Loan Board borrowing 2 (239.743) (189.683) (48.231) (53.523) Non-PWLB borrowing (“market debt”) 2 (48.211) (53.523) Other liabilities: (64.973) (119.570) Service concession and finance lease liabilities 3 (79.958) (79.958) 0.000 0.000 Financial guarantees 3 (0.395) (0.395) (359.611) (393.219) (368.307) (323.559) Financial liabilities measured at amortised cost: (28.641) n/a Borrowing from group entities (29.899) n/a (48.903) n/a Trade payables: short-term (32.195) n/a (77.544) (62.094) As at 31 March 2024 (restated) As at 31 March 2025 Fair value level Total financial liabilities for which fair value is disclosed Total financial liabilities for which fair value is not disclosed Page 233 of 286
Page 234
119 Annual Accounts 2024/25 Carrying Amount Fair value Financial Assets Carrying Amount Fair value £m £m £m £m 20.101 20.101 Callable deposits in money market funds 1 13.128 13.128 3.707 3.707 Euro account balances with the Council’s banker 2 0.516 0.516 28.921 28.921 Investments in pooled funds 1 28.604 28.604 52.729 52.729 42.248 42.248 67.755 67.751 Fixed term deposits with UK local authorities 2 0.000 0.000 0.000 0.000 Fixed term deposits with UK building societies 2 17.534 17.534 7.571 7.571 Callable deposits with UK banks and building societies* 2 (6.168) (6.168) 0.043 0.043 Imprest accounts held at council establishments 2 0.040 0.040 1.387 1.543 Loans made for service purposes 3 1.023 1.037 76.756 76.908 12.429 12.443 129.485 129.637 54.677 54.691 Financial assets measured at amortised cost: 0.754 n/a Trade receivables and prepayments: long-term 1.020 n/a 54.303 n/a Receivables and prepayments: short-term 46.746 n/a 55.057 47.766 As at 31 March 2024 (restated) As at 31 March 2025 Fair value level Total Financial assets measured at fair value Total Financial assets measured at amortised cost Total financial assets for which fair value is disclosed Total financial assets for which fair value is not disclosed *includes current sterling account balances with the Council’s banker. The short-term nature of cash and cash equivalents means that their fair value equates to their balance sheet carrying amount. Further qualitative information on the fair value of financial instruments can be found in Note 22. Items of income, expense, gain and loss relating to group financial instruments The following items of income, expense, gain and loss relating to group financial instruments are included within the lines ‘Financing and Investment income and expenditure’ and ‘(Surplus) or deficit from investments in equity instruments designated as ‘Fair Value through Other Comprehensive Income (OCI*)’ in the group CIES. Page 234 of 286
Page 235
120 Annual Accounts 2024/25 2023/24 Amortised cost Elected to Fair Value through OCI* Fair Value through Profit or Loss 2024/25 £m £m £m £m £m £m 16.186 Interest expense 0.000 0.000 0.000 16.932 16.932 3.549 Impairment losses 2.197 0.000 0.000 0.000 2.197 0.007 Fee expense 0.000 0.000 0.000 0.000 0.000 0.007 Other expense 0.000 0.423 0.000 0.000 0.423 19.749 Total expense in the Surplus / Deficit on the Provision of Services 2.197 0.423 0.000 16.932 19.552 (8.130) Interest income (4.045) 0.000 (1.711) 0.000 (5.756) (0.787) Dividend income 0.000 (0.828) 0.000 0.000 (0.828) 0.209 Other income 0.000 0.000 0.000 0.000 0.000 (8.708) Total income in the Surplus/Deficit on the Provision of Services (4.045) (0.828) (1.711) 0.000 (6.584) (1.954) Net (gain) or loss on revaluation 0.000 0.029 0.011 0.000 0.040 (1.954) (Surplus)/Deficit on the revaluation of financial assets 0.000 0.029 0.011 0.000 0.040 9.087 Net (Gain)/Loss for the year (1.848) (0.376) (1.700) 16.932 13.008 Financial Assets Financial liabilities at amortised cost Group Accounting Policies Introduction The Code of Practice on Local Authority Accounting in the United Kingdom 2024/25 (“the Code”) requires local authorities to consider their interests in all types of entity. This includes other local authorities or similar bodies defined in section 106 of the Local Government (Scotland) Act 1973, for example statutory bodies such as valuation boards. Authorities are required to prepare a full set of group accounts in addition to their own Council’s accounts where they have a material interest in such entities. Combining entities Renfrewshire Council’s group accounts consolidate the results of the Council with the results of the Paisley, Renfrew and Johnstone Common Good Funds; the Coats Observatory Trust administered by Renfrewshire Council; and eight other entities: 1. Renfrewshire Leisure Limited, trading as OneRen; 2. Paisley Museum Reimagined Limited; 3. Park Lane Developments (Renfrewshire) LLP; 4. Strathclyde Partnership for Transport; 5. Strathclyde Concessionary Travel Scheme Joint Committee; 6. Renfrewshire Valuation Joint Board; 7. Renfrewshire Health and Social Care Integration Joint Board; 8. AMIDS (Renfrewshire) LLP. The Council has effective control over OneRen, Paisley Museum Reimagined Limited, the Paisley, Renfrew and Johnstone Common Good Funds and the Coats Observatory Trust administered by Renfrewshire Council (as sole trustee) and, as such, these are treated as subsidiaries in the Council’s group accounts, with assets, liabilities, reserves, income and expenses being consolidated line-by-line. The Council also holds 50% (£50) of the share capital of Park Lane Developments (Renfrewshire) LLP. Under the terms of the Partnership Agreement, the Council has enhanced voting rights and Park Lane Developments (Renfrewshire) LLP has no claim on the remaining assets Page 235 of 286
Page 236
121 Annual Accounts 2024/25 should the partnership be wound up; therefore, the entity is treated as a subsidiary. Strathclyde Partnership for Transport and Strathclyde Concessionary Travel Scheme Joint Committee are included within the group accounts under the definition of associate, even though the Council holds less than 20% or more of the voting (or potential voting) power (which is the criterion normally used to confer significant influence). However, the view has been taken that the nature of the funding arrangements between the constituent Councils and these entities is sufficient to confer significant influence. Renfrewshire Valuation Joint Board is included within the group accounts as an associate because the Council does not have a controlling interest in the body in terms of the voting rights. Renfrewshire Council’s share of each associate’s net assets or liabilities is calculated based on the Council’s proportionate contribution to each associate’s annual revenue costs. The Council has no shares in, or ownership of, any of these three organisations, which are entirely independent of the Council under law and for taxation. The Public Bodies (Joint Working) (Scotland) Act 2014 established the framework for the integration of health and adult social care in Scotland. Scottish Ministers legally established the Renfrewshire Health and Social Care Integration Joint Board on 27 June 2015 as a formal legal partnership between Renfrewshire Council and NHS Greater Glasgow and Clyde. This entity is included as a joint venture in the Council’s group accounts. Renfrewshire Council’s share of the joint venture’s net liabilities is calculated based on the Council’s proportionate ordinary shareholding in the joint venture. Basis of preparation of group statements and going concern For the associates and joint ventures detailed above, the combination has been accounted for under the accounting conventions of the acquisition basis using the equity method, with the Council’s share of the net assets or liabilities of each entity incorporated and adjusted each year by the Council’s share of that entity’s results and the Council’s share of other gains and losses (recognised in the group CIES). For four of the combining entities the Council has a share in a net liability. The net liability position of both the Renfrewshire Valuation Joint Board and OneRen arises from the inclusion of liabilities related to the defined benefit pension schemes as required by IAS19 (which requires that pension liabilities reflect the long- term cost of paying post-employment benefits). For Park Lane Developments (Renfrewshire) LLP the net liability arises from long-term borrowing to fund regeneration work within and around the site of the former Arnott’s store in Paisley. All of the organisations noted above prepare their annual accounts on a going concern basis. Arrangements with the Council and other funders for the longer-term funding of Park Lane Developments (Renfrewshire) LLP are considered sufficient to meet future funding requirements. The Council will continue to support Paisley Museum Reimagined Limited until their anticipated revenue generation materialises. Consideration for acquisition of associates’ net assets or liabilities The Council has acquired its share of the net assets of its associates for a nil consideration. There is no deferred or contingent purchase consideration. A fair value for its share of the net assets or liabilities of the three joint boards and committees at the point of acquisition and the post-acquisition results are unable to be accurately determined in view of the length of time since the transfer of these responsibilities at local government re- organisation in 1996 and the change in accounting for pensions under FRS17 in 2003/04. It is not possible to provide the fair value of the investment in the other combining entities of the Council as there are no published price quotations for Page 236 of 286
Page 237
122 Annual Accounts 2024/25 these entities. No goodwill has been included in the group balance sheet in view of the length of time since acquisition, that no consideration was involved and that a fair value at the date of acquisition cannot now be properly assessed. Group boundary: non-material interests in other entities The Council has a significant interest in three joint committees that have not been included in the group accounts. The Council’s share of their net assets or liabilities is not material to the fair understanding of the financial position and transactions of the Council. In the interest of transparency, details of the business nature of each organisation are shown in notes G1 and G2. Inventories Inventories (generally consumable stock) are included in the group balance sheet at weighted average cost and the lower of cost or net realisable value: weighted average cost – Council’s stock; lower of cost or net realisable value – OneRen’s stock. The difference in valuation methods does not have a material effect on the results of the group given the levels of stockholdings in these entities. Post-employment benefits In common with Renfrewshire Council, all combining entities, except Park Lane Developments (Renfrewshire) LLP, participate in the Local Government Pension Scheme, which is administered locally by Glasgow City Council through the Strathclyde Pension Fund. The associates have accounting policies for pensions accounting that are consistent with those of the Council. Property, plant and equipment The basis of valuation across the combining entities is in accordance with the Code. Operational property, plant and equipment assets are shown at the lower of net replacement cost or net realisable value in existing use with the following exceptions: i) The Concessionary Travel Scheme Joint Committee has no fixed assets. ii) Strathclyde Partnership for Transport holds exceptional types of fixed assets in its balance sheet. Within intangible assets, there are subsidised bus contracts that are recorded at amortised cost. There are also “third-party” assets that are rolling stock and other public assets used by other transport operators but which the partnership has the power to direct to the benefit of the travelling public within the partnership’s operating area – these are held at historic cost. iii) OneRen uses the historic cost convention for its recent leasehold improvements, but this is considered a suitable proxy for market value in existing use on a replacement cost basis. OneRen also uses depreciated historic cost for its computers, plant, furniture and fittings rather than the Council’s depreciated replacement cost basis, however this is not considered to be material given the small values involved. Restrictions on the transfer of funds The Council’s share of the reserves of its associates is unusable in that it cannot be used to fund the Council’s services nor to reduce taxation. All associates are entirely independent of the Council under law and for taxation. The Council is unable to access their reserves, whether classified as usable or otherwise in the associate’s own financial statements. Value Added Tax Value Added Tax in respect of the Council’s subsidiaries that are independent of the Council under law and for taxation, viz. OneRen, Park Lane Development (Renfrewshire) LLP and Paisley Museum Reimagined Limited, is accounted for within income and expenditure to the extent that it is irrecoverable from HM Revenue and Customs. Page 237 of 286
Page 238
Finance and Resources, Renfrewshire House, Cotton Street, Paisley PA1 1JB Telephone: 0300 300 0285 www.renfrewshire.gov.uk Page 238 of 286
Page 239
1 ___________________________________________________________________ To: Council On: 23 October 2025 ___________________________________________________________________ Report by: Director of Finance and Resources ___________________________________________________________________ Heading: Azets Report to those charged with governance - Coats Observatory Trust Annual Accounts 2024/25 ___________________________________________________________________ 1. Summary 1.1 Each year the Council’s appointed external auditors carry out an audit of the financial statements of the Coats Observatory Trust, controlled by Renfrewshire Council, and provide an opinion as to whether those statements provide a true and fair view of the financial position of the charity and its income and expenditure for the year; and also whether they have been prepared in accordance with the relevant regulations. 1.2 In accordance with International Auditing Standards (ISA260), the external auditor, Azets, is obliged to report to those charged with the governance of the organisation matters which have arisen in the course of the audit. 1.3 The attached ISA260 report from Azets outlines their findings from the audit of the 2024/25 Coats Observatory Trust accounts. 1.4 Under the Local Authority Accounts (Scotland) Regulations 2014, the Council must meet to consider the Annual Accounts and aim to approve those accounts for signature no later than 30 September. 1.5 Azets officers will attend the meeting to present their reports. ________________________________________________________________ 2. Recommendations 2.1 Members are requested to consider the attached report from Azets. ___________________________________________________________________ Item 3 Page 239 of 286
Page 240
2 Implications of the Report 1. Financial The 2024/25 Annual Accounts demonstrate that the Council continues to administer the trust in line with the relevant legislation. 2. HR & Organisational Development There are no direct implications arising from the recommendations in this report. 3. Community/Council Planning There are no direct implications arising from the recommendations in this report. 4. Legal An audit opinion free from qualification demonstrates the Council’s compliance with the statutory accounting requirements set out in the Local Government (Scotland) Act 1973 and the Local Government in Scotland Act 2003. 5. Property/Assets The Coats Observatory is currently undergoing refurbishment work as part of the Paisley Museum Reimagined project, however there are no direct property implications arising from the recommendations in this report. 6. Information Technology There are no direct implications arising from the recommendations in this report. 7. Equality & Human Rights There are no direct implications arising from the recommendations in this report. 8. Health & Safety There are no direct implications arising from the recommendations in this report. 9. Procurement There are no direct implications arising from the recommendations in this report. 10. Risk There are no direct implications arising from the recommendations in this report. Page 240 of 286
Page 241
3 11. Privacy Impact There are no direct implications arising from the recommendations in this report. 12. Cosla Policy Position There are no direct implications arising from the recommendations in this report. 13. Children’s Rights There are no direct implications arising from the recommendations in this report. 14. Climate Change There are no direct implications arising from the recommendations in this report. ___________________________________________________________________ Author: Christine McCourt, Head of Finance and Procurement Page 241 of 286
Page 242
Page 242 of 286
Page 243
azets.co.uk 2024/25 Annual Audit Report to the Audit, Risk and Scrutiny Board and the Accounts Commission October 2025 azets.co.uk Coats Observatory Trust Fund Page 243 of 286
Page 244
Coats Observatory Trust Fund: 2024/25 Annual Audit Report to the Audit, Risk and Scrutiny Board and the Accounts Commission| Azets Page 2 of 24 Table of Contents Key messages 3 Introduction 5 Annual Accounts Audit 7 Appendices 17 Page 244 of 286
Page 245
Coats Observatory Trust Fund: 2024/25 Annual Audit Report to the Audit, Risk and Scrutiny Board and the Accounts Commission| Azets | Azets Page 3 of 24 www.azets.co.uk Key messages Financial statements audit The Charities Accounts (Scotland) Regulations 2006 outline the accounting and auditing requirements for charitable bodies. The Regulations require an auditor to prepare a report to the charity trustees where an audit is required by any other enactment. The Trust is Renfrewshire Council’s charitable trust and is covered by the requirements of section 106 of the Local Government (Scotland) Act 1973 and consequently require a full audit. Each registered charitable trust has required a full audit since 2013/14. Coats Observatory Trust Fund is a registered charity preparing its accounts on an accruals basis. Audit opinion The annual accounts are due to be considered by the Audit, Risk and Scrutiny Board on 20 October 2025 and approved upon completion of the audit. We anticipate our independent auditor’s report to be unqualified subject to the following concluding procedures: • Engagement manager and engagement lead final quality reviews • Receipt and review of the management representation letter • Receipt and review of the final amended statement of accounts and trustees report • Response from management regarding subsequent events up to the date of the opinion Audit approach Our audit approach has been based on gaining a thorough understanding of the Trust Fund’s control environment and has been risk based. This included: • An evaluation of the Trust Fund’s internal control environment, including the IT systems and controls; and • Substantive testing on significant transactions and material account balances, including the procedures outlined in this report in relation to our key audit risks. We have not altered our audit plan. Page 245 of 286
Page 246
Coats Observatory Trust Fund: 2024/25 Annual Audit Report to the Audit, Risk and Scrutiny Board and the Accounts Commission| Azets | Azets Page 4 of 24 www.azets.co.uk Key audit findings The Trust Fund had reasonable administrative processes in place to prepare the annual accounts and the supporting working papers. We obtained adequate evidence in relation to the significant audit risks identified in our audit plan. The accounting policies used to prepare the financial statements are considered appropriate. We are satisfied with the appropriateness of the accounting estimates and judgements used in the preparation of the financial statements. All material disclosures required by relevant legislation and applicable accounting standards have been made appropriately. Audit adjustments No adjustments have been identified and made through the course of the audit. Internal controls The purpose of the audit was for us to express an opinion on the financial statements. The audit included consideration of internal controls relevant to the preparation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of internal control. Our audit is, therefore, not designed to identify all control weaknesses. No material weaknesses or significant deficiencies were noted. Page 246 of 286
Page 247
Coats Observatory Trust Fund: 2024/25 Annual Audit Report to the Audit, Risk and Scrutiny Board and the Accounts Commission| Azets | Azets Page 5 of 24 www.azets.co.uk Introduction Scope of audit The annual audit comprises the audit of the financial statements. We outlined the scope of our audit in our External Audit Plan for Renfrewshire Council (“the Council”), which we presented to the Audit, Risk and Scrutiny Board at the outset of our audit. We have not made any subsequent changes to the risks outlined in that plan. Responsibilities The Trustees are responsible for preparing its annual accounts, including financial statements which properly present the receipts and payments, and for implementing appropriate internal control systems. The weaknesses or risks identified in this report are only those that have come to our attention during our normal audit work and may not be all that exist. Communication in this report of matters arising from the audit or of risks or weaknesses does not absolve management from its responsibility to address the issues raised and to maintain an adequate system of control. We do not accept any responsibility for any loss occasioned to any third party acting, or refraining from acting on, the basis of the content of this report, as this report was not prepared for, nor intended for, any other purpose. We would like to thank all management and staff for their co-operation and assistance during our audit. Auditor independence International Standards on Auditing in the UK (ISAs (UK)) require us to communicate on a timely basis all facts and matters that may have a bearing on our independence. We confirm that we complied with the Financial Reporting Board’s (FRC) Ethical Standard. In our professional judgement, we remained independent, and our objectivity has not been compromised in any way. We set out in Appendix 1 our assessment and confirmation of independence. Adding value All of our clients quite rightly demand of us a positive contribution to meeting their ever- changing business needs. We add value by being constructive and forward looking, by identifying areas of improvement and by recommending and encouraging good practice. In this way we aim to promote improved standards of governance, better management and decision making and more effective use of public money. Page 247 of 286
Page 248
Coats Observatory Trust Fund: 2024/25 Annual Audit Report to the Audit, Risk and Scrutiny Board and the Accounts Commission| Azets | Azets Page 6 of 24 www.azets.co.uk Any comments you may have on the service we provide would be greatly appreciated. Comments can be reported directly to any member of your audit team or to Audit Scotland. Openness and transparency This report will be published on Audit Scotland’s website www.audit-scotland.gov.uk. Page 248 of 286
Page 249
Coats Observatory Trust Fund: 2024/25 Annual Audit Report to the Audit, Risk and Scrutiny Board and the Accounts Commission| Azets | Azets Page 7 of 24 www.azets.co.uk Annual Accounts audit Our audit opinion Opinion Basis for opinion Conclusions Financial statements We conduct our audit in accordance with applicable law and International Standards on Auditing. Our findings / conclusions to inform our opinion are set out in this section of our annual audit report. The annual accounts are due to be considered by the Audit, Risk and Scrutiny Board on 20 October 2025 and approved upon completion of the audit. We intend to issue unqualified opinions in our independent auditor’s report. We received the draft annual accounts and supporting papers in line with our audit timetable and those draft accounts were of good quality. Further information was provided promptly where required. Our thanks go to the Finance team for their assistance with our work. Going concern basis of accounting In preparing the financial statements, the trustees are responsible for assessing the charity's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees intend to discontinue the charity's operations, or have no realistic alternative but to do so. We have concluded that the use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Opinions prescribed by the We plan and perform audit procedures to gain assurance We have no matters to report. Page 249 of 286
Page 250
Coats Observatory Trust Fund: 2024/25 Annual Audit Report to the Audit, Risk and Scrutiny Board and the Accounts Commission| Azets | Azets Page 8 of 24 www.azets.co.uk Opinion Basis for opinion Conclusions Accounts Commission On the Trustees’ Annual Report that information given in the Trustees' Annual Report is consistent with the financial statements and that report has been prepared in accordance with The Charity Accounts (Scotland) Regulations 2006. Matters reported by exception We are required to report on whether: • adequate accounting records have not been kept; or • the financial statements are not in agreement with the accounting records; or • we have not received all the information and explanations we require for our audit. We have no matters to report. An overview of the scope of our audit The scope of our audit was detailed in our External Audit Plan for the Renfrewshire Council, which was presented to the the Audit, Risk and Scrutiny Board in March 2025. The plan explained that we follow a risk-based approach to audit planning that reflects our overall assessment of the relevant risks that apply to the Trust Fund. This ensures that our audit focuses on the areas of highest risk (the significant risk areas). Planning is a continuous process, and our audit plan is subject to review during the course of the audit to take account of developments that arise. In our audit, we test and examine information using sampling and other audit techniques, to the extent we consider necessary to provide a reasonable basis for us to draw conclusions. This includes: • An evaluation of the Trust Fund’s internal control environment, including the IT systems and controls; and Page 250 of 286
Page 251
Coats Observatory Trust Fund: 2024/25 Annual Audit Report to the Audit, Risk and Scrutiny Board and the Accounts Commission| Azets | Azets Page 9 of 24 www.azets.co.uk • Substantive testing on significant transactions and material account balances, including procedures outlined in this report in relation to our key audit risks. Page 251 of 286
Page 252
Coats Observatory Trust Fund: 2024/25 Annual Audit Report to the Audit, Risk and Scrutiny Board and the Accounts Commission| Azets | Azets Page 10 of 24 www.azets.co.uk Quality indicators We have applied a suite of quality indicators to assess the reliability of the Board’s financial reporting and response to the audit. Metric Grading (Mature / developing / significant improvement required) Commentary Quality and timeliness of draft financial statements Mature We received the unaudited financial statements of a good standard in line with our audit timetable. Quality of working papers provided and adherence to timetable Mature Working papers were provided on time, complete, of good quality, and the audit was able to start on time as planned and progressed at the pace required. Audit requests / inquiries were turned around promptly and accurately. Timing and quality of key accounting judgements Mature We did not identify any issues with the timing and quality of key accounting judgements. Access to finance team and other key personnel Mature We received full access to the finance team and other key personnel. All audit queries and requests were responded to in a timely manner. Quality and timeliness of the Annual Accounts As well as the quality and timeliness of supporting working papers for those statements. Mature We did not identify any issues with quality and timeliness of the audited part of the Annual Accounts. Page 252 of 286
Page 253
Coats Observatory Trust Fund: 2024/25 Annual Audit Report to the Audit, Risk and Scrutiny Board and the Accounts Commission| Azets | Azets Page 11 of 24 www.azets.co.uk Metric Grading (Mature / developing / significant improvement required) Commentary Volume and magnitude of identified errors Mature We did not identify any audit adjustments in year. Significant risk areas and key audit Significant risks are defined by auditing standards as risks that, in the judgement of the auditor, require special audit consideration. In identifying risks, we consider the nature of the risk, the potential magnitude of misstatement, and its likelihood. Significant risks are those risks that have a higher risk of material misstatement. Audit procedures are designed to mitigate these risks. As required by the Code of Audit Practice and the planning guidance issued by Audit Scotland, we considered the significant risks for the audit that had the greatest effect on our audit strategy, the allocation of resources in the audit and directing the efforts of the audit team (the ‘Key Audit Matters’), as detailed in the tables below. Our audit procedures relating to these matters were designed in the context of our audit of the annual report and accounts as a whole, and not to express an opinion on individual accounts or disclosures. Our opinion on the accounts is not modified with respect to any of the risks described below. The table below summarises each significant risk. Detail behind each risk and the work undertaken is set out on the following pages. Risk area Financial stateme nt / Assertio n level risk Frau d risk Planned approach to controls Level of judgement / estimation uncertainty Outcome of work Management override of controls Financial stateme nt Yes Assess design & Very High No indication of management Page 253 of 286
Page 254
Coats Observatory Trust Fund: 2024/25 Annual Audit Report to the Audit, Risk and Scrutiny Board and the Accounts Commission| Azets | Azets Page 12 of 24 www.azets.co.uk Risk area Financial stateme nt / Assertio n level risk Frau d risk Planned approach to controls Level of judgement / estimation uncertainty Outcome of work implementati on override of controls in the year Significant risks at the financial statement level These risks are considered to have a pervasive impact on the financial statements as a whole and potentially affect many assertions for classes of transaction, account balances and disclosures. Risk area Management override of controls Significant risk description Management of any entity is in a unique position to perpetrate fraud because of their ability to manipulate accounting records and prepare fraudulent financial statements by overriding controls that otherwise appear to be operating effectively. Although the level of risk will vary from entity to entity, this risk is nevertheless present in all entities. Due to the unpredictable way in which such override could occur, it is a risk of material misstatement due to fraud and thus a significant risk on all audits. This was considered to be a significant risk and Key Audit Matter for the audit. Risk of material misstatement: Very High How the scope of our audit responded to the significant risk Key judgement There is the potential for management to use their judgement to influence the financial statements as well as the potential to override controls for specific transactions. Audit procedures Page 254 of 286
Page 255
Coats Observatory Trust Fund: 2024/25 Annual Audit Report to the Audit, Risk and Scrutiny Board and the Accounts Commission| Azets | Azets Page 13 of 24 www.azets.co.uk Risk area Management override of controls • Documented our understanding of the journals posting process and evaluated the design effectiveness of management controls over journals. • Analysed the journals listing and determined criteria for selecting high risk and / or unusual journals. • Tested high risk and / or unusual journals posted during the year and after the unaudited annual accounts stage back to supporting documentation for appropriateness, corroboration and ensured approval has been undertaken in line with the Trust Fund’s journals policy. • Gained an understanding of the accounting estimates and critical judgements made by management. We challenged key assumptions and considered the reasonableness and indicators of management bias which could result in material misstatement due to fraud. • Evaluated the rationale for any changes in accounting policies, estimates or significant unusual transactions. Key observations We did not identify any indication of management override of controls in the year. We did not identify any areas of bias in key judgements made by management and judgements were consistent with prior years. Page 255 of 286
Page 256
Coats Observatory Trust Fund: 2024/25 Annual Audit Report to the Audit, Risk and Scrutiny Board and the Accounts Commission| Azets | Azets Page 14 of 24 www.azets.co.uk Materiality Materiality is an expression of the relative significance of a matter in the context of the financial statements as a whole. A matter is material if its omission or misstatement would reasonably influence the decisions of an addressee of the auditor’s report. The assessment of what is material is a matter of professional judgement and is affected by our assessment of the risk profile of the Board and the needs of users. We reviewed our assessment of materiality throughout the audit. Whilst our audit procedures are designed to identify misstatements which are material to our audit opinion, we also report any uncorrected misstatements of lower value errors to the extent that our audit identifies these. Our initial assessment of materiality was £45,000. On receipt of the 2024/25 unaudited financial statements, we reassessed materiality and updated it from our initial assessment to £55,000. We consider that our updated assessment has remained appropriate throughout our audit. Materiality £ Overall materiality for the financial statements £55,000 Performance materiality (75% of materiality) £41,000 Trivial threshold £3,000 Materiality Our assessment is made with reference to the Trust Fund’s gross expenditure. We consider this to be the principal consideration for users of the financial statements when assessing financial performance. Our assessment of materiality equates to approximately 3% of net assets as disclosed in the 2024/25 unaudited annual accounts. We perform audit procedures on all transactions, or groups of transactions, and balances that exceed our materiality levels set. We perform a greater level of testing on the areas deemed to be at significant risk of material misstatement. Page 256 of 286
Page 257
Coats Observatory Trust Fund: 2024/25 Annual Audit Report to the Audit, Risk and Scrutiny Board and the Accounts Commission| Azets | Azets Page 15 of 24 www.azets.co.uk Performance materiality Performance materiality is the working level of materiality used throughout the audit. We use performance materiality to determine the nature, timing and extent of audit procedures carried out. We perform audit procedures on all transactions, or groups of transactions, and balances that exceed our performance materiality. This means that we perform a greater level of testing on the areas deemed to be at significant risk of material misstatement. Performance materiality is set at a value less than overall materiality for the financial statements as a whole to reduce to an appropriately low level the probability that the aggregate of the uncorrected and undetected misstatements exceed overall materiality. Trivial misstatements Trivial misstatements are matters that are clearly inconsequential, whether taken individually or in aggregate and whether judged by any quantitative or qualitative criteria. Audit differences We did not identify any audit differences during the audit. Internal controls As part of our work we considered internal controls relevant to the preparation of the financial statements such that we were able to design appropriate audit procedures. Our audit is not designed to test all internal controls or identify all areas of control weakness. However, where, as part of our testing, we identify any control weaknesses, we report these to the Audit, Risk and Scrutiny Board. These matters are limited to those which we have concluded are of sufficient importance to merit being reported. We did not identify any significant control weaknesses during our audit. Other communications Other areas of focus Area of focus Audit findings and conclusion Significant matters on which there was disagreement with management There were no significant matters on which there was disagreement with management. Significant management judgements which required additional audit work and / or where there was disagreement over the There were no other significant management judgements which required additional audit work, where there was disagreement over Page 257 of 286
Page 258
Coats Observatory Trust Fund: 2024/25 Annual Audit Report to the Audit, Risk and Scrutiny Board and the Accounts Commission| Azets | Azets Page 16 of 24 www.azets.co.uk Area of focus Audit findings and conclusion judgement and / or where the judgement is significant enough that we are required to report it to those charged with governance before they consider their approval of the accounts the judgement or where the judgement is significant enough that requires reporting. Prior year adjustments identified There were no prior year adjustments identified. Concerns identified in the following: • Consultation by management with other accountants on accounting or auditing matters • Matters significant to the oversight of the financial reporting process • Adjustments / transactions identified as having been made to meet an agreed system position / target No concerns were identified in relation to these areas. Accounting policies Our work included a review of the adequacy of disclosures in the financial statements and consideration of the appropriateness of the accounting policies adopted by The Trust Fund. The accounting policies, which are disclosed in the financial statements are considered appropriate. The accounting policies used in preparing the financial statements are unchanged from the previous year. Overall, we found the disclosed accounting policies, and the overall disclosures and presentation to be appropriate. Presentation and disclosures There are no significant financial statements disclosures that we consider should be brought to your attention. All the disclosures required by relevant legislation and applicable accounting standards have been made appropriately. Key judgements and estimates We are satisfied with the appropriateness of material accounting estimates and judgements used in the preparation of the financial statements. Fraud and suspected fraud Page 258 of 286
Page 259
Coats Observatory Trust Fund: 2024/25 Annual Audit Report to the Audit, Risk and Scrutiny Board and the Accounts Commission| Azets | Azets Page 17 of 24 www.azets.co.uk We have previously discussed the risk of fraud with management and Audit, Risk and Scrutiny Board. We have not been made aware of any incidents in the period nor have any incidents come to our attention as a result of our audit testing. Our work as auditor is not intended to identify any instances of fraud of a non-material nature and should not be relied upon for this purpose. Non-compliance with laws and regulations As part of our standard audit testing, we have reviewed the laws and regulations impacting the Trust Fund. There are no indications from this work of any significant incidences of non- compliance or material breaches of laws and regulations. Written representations We will issue the final letter of representation to the Trust Fund to sign at the same time as the financial statements are approved. Related parties We are not aware of any related party transactions which have not been disclosed. Page 259 of 286
Page 260
Coats Observatory Trust Fund: 2024/25 Annual Audit Report to the Audit, Risk and Scrutiny Board and the Accounts Commission| Azets Coats Observatory Trust Fun Page 18 of 24 www.azets.co.uk Appendices Appendix 1: Responsibilities of the Trust and Auditors 18 Appendix 2: Audit adjustments 21 Page 260 of 286
Page 261
Appendix 1: Responsibilities of the Trust and Auditors The Trust’s responsibilities The Trust is required to make arrangements for the proper administration of its financial affairs and to secure that one of its officers has responsibility for the administration of those affairs. The Director of Finance and Resources has been designated as that officer at the Trust. They manage the affairs of the Trust Fund to secure the economic, efficient and effective use of resources and safeguard its assets. Area Trust’s responsibilities Corporate governance The Director of Finance and Resources has responsibility for ensuring that an effective system of internal financial control is maintained and operated. This system of internal financial control can only provide reasonable and not absolute assurance that assets are safeguarded, transactions are recorded and properly authorised, and that material errors or irregularities are either prevented, or detected within a timely period. The system of internal financial control is based on a framework of regular management information, financial regulations, administrative procedures and a system of delegation and accountability. The Director of Finance and Resources is responsible for keeping proper accounting records that are up to date and ensure that the financial statements comply with the Charities Accounts (Scotland) Regulations 2006 (as amended) and Accounting and Reporting by Charities: Statement of Recommended Practice (SoRP) applicable to charities preparing their accounts in accordance with the Financial Reporting Standard for Smaller Entities published on 16 July 2014. Decisions regarding the operation, assets, processes or policies of the Trust Fund are delegated by the Council to the Finance, Resources and Customer Services Policy Board (FRCSPB). Financial statements and related reports The Trust has responsibility for: • preparing financial statements which give a true and fair view of the financial position of the Trust and its expenditure and income, in accordance with the applicable financial reporting framework and relevant legislation; and • maintaining accounting records and working papers that have been prepared to an acceptable professional standard and support the balances and transactions in its financial statements and related disclosures. Page 261 of 286
Page 262
Area Trust’s responsibilities Management is responsible, with the oversight of those charged with governance, for communicating relevant information to users about the Trust and its financial performance, including providing adequate disclosures in accordance with the applicable financial reporting framework. The relevant information should be communicated clearly and concisely. Internal Control The Trustees have overall responsibility for the Trust Funds’ system of internal control. This system is designed by senior management to ensure effective and efficient operation, including financial reporting and compliance with laws and regulations. The Trustees acknowledge that such a system is designed to manage, rather than eliminate, the risk of failure to achieve business objectives, and can only provide reasonable and not absolute assurance against material misstatement or loss. Standards of conduct for prevention and detection of fraud and error The Trust is responsible for establishing arrangements to prevent and detect fraud, error and irregularities, bribery and corruption and also to ensure that its affairs are managed in accordance with proper standards of conduct. Page 262 of 286
Page 263
Auditor responsibilities Our responsibilities Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities outlined above to detect material misstatements in respect of irregularities, including fraud. Procedures include: • using our understanding of the local government sector and charity sector to identify that the Local Government (Scotland) Act 1973, Charities and Trustee Investment (Scotland) Act 2005 and The Charities Accounts (Scotland) Regulations 2006 are significant in the context of the charity; • inquiring of management and those charged with governance as to other laws or regulations that may be expected to have a fundamental effect on the operations of the charity/charities; • inquiring of management and those charged with governance concerning the charity’s policies and procedures regarding compliance with the applicable legal and regulatory framework; • discussions among our audit team on the susceptibility of the financial statements to material misstatement, including how fraud might occur; and • considering whether the audit team collectively has the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations. The extent to which our procedures are capable of detecting irregularities, including fraud, is affected by the inherent difficulty in detecting irregularities, the effectiveness of the charity’s controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud are inherently more difficult to detect than irregularities that result from error as fraud may involve collusion, intentional omissions, misrepresentations, or the override of internal control. The capability of the audit to detect fraud and other irregularities depends on factors such as the skillfulness of the perpetrator, the frequency and extent of manipulation, the degree of collusion involved, the relative size of individual amounts manipulated, and the seniority of those individuals involved. Page 263 of 286
Page 264
A further description of the auditor’s responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report. Audit quality The Auditor General and the Accounts Commission require assurance on the quality of public audit in Scotland through comprehensive audit quality arrangements that apply to all audit work and providers. These arrangements recognise the importance of audit quality to the Auditor General and the Accounts Commission and provide regular reporting on audit quality and performance. Audit Scotland maintains and delivers an Audit Quality Framework. The most recent audit quality report can be found at Quality of public audit in Scotland: Annual report 2025 Independence and ethics The Ethical Standards and ISA (UK) 260 require us to report full and fair disclosure of matters relating to our independence. In accordance with our profession’s ethical requirements and further to our external audit plan issued confirming audit arrangements we confirm that there are no further facts or matters that impact on our integrity, objectivity and independence as auditors that we are required or wish to draw attention to. We consider an objective, reasonable and informed third party would take the same view. Audit fees The total fees charged to the Trust Fund for the provision of services in 2024/25 were as follows. Prior year charges are also shown for comparative purposes: 2024/25 2023/24 Auditor remuneration (expected fee level) £6,480 £6,300 Total audit fee £6,480 £6,300 Page 264 of 286
Page 265
Appendix 2: Audit adjustments We are required to report all non-trivial misstatements to those charged with governance, whether or not the financial statements have been adjusted by management Adjusted misstatements We can confirm there were no adjusted misstatements. Unadjusted misstatements We can confirm there were no unadjusted misstatements Misclassification and disclosure changes Our work included a review of the adequacy of disclosures in the financial statements and consideration of the appropriateness of the accounting policies and estimation techniques adopted by the Trust. Overall, we found the disclosed accounting policies, significant accounting estimates and the overall disclosures and presentation to be appropriate Page 265 of 286
Page 266
info@azets.co.uk | azets.co.uk © Azets 2025. All rights reserved. Azets refers to Azets Audit Services Limited. Registered in England & Wales Registered No. 09652677. VAT Registration No. 219 0608 22. Registered to carry on audit work in the UK and regulated for a range of investment business activities by the Institute of Chartered Accountants in England and Wales. Moving forward with confidence Page 266 of 286
Page 267
Finance & Resources Director: Alastair MacArthur CPFA Renfrewshire House, Cotton Street, Paisley PA1 1JB www.renfrewshire.gov.uk My Ref: AM/CB Contact: Alastair MacArthur Telephone Number: 0300 300 0285 E Mail: alastair.macarthur@renfrewshire.gov.uk Azets Audit Services Quay 2 139 Fountainbridge EH3 9QG Dear Sirs Coats Observatory Trust Fund Financial Statements for the year ended 31 March 2025 This representation letter is provided for the purpose of expressing an opinion as to whether Coats Observatory Trust Fund’s financial statements present a true and fair view, in all material respects, in accordance with applicable law and UK adopted international accounting standards, as interpreted and adapted by the Charities Statement of Recommended Practice (SORP). I confirm to the best of my knowledge and belief and having made appropriate enquiries of the Coats Observatory Trust Fund’s trustees, the following representations given to you in connection with your audit of Coats Observatory Trust Fund’s annual accounts for the year ended 31 March 2025. All representations are made to the best of our knowledge and belief. Financial Statements i. We have fulfilled our responsibilities as trustees under the Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard 102, the Charities and Trustee Investment (Scotland) Act 2005, and the Charities Accounts (Scotland) Regulations 2006,for the preparation of Coats Observatory Trust Fund’s financial statements in accordance with applicable law and UK adopted international accounting standards, as interpreted and adapted by the Charities Statement of Recommended Practice (SORP), for being satisfied that they give a true and fair view and for making accurate representations to you. ii. All the transactions undertaken by Coats Observatory Trust Fund have been properly reflected and recorded in the accounting records. Page 267 of 286
Page 268
Finance & Resources Director: Alastair MacArthur CPFA Renfrewshire House, Cotton Street, Paisley PA1 1JB www.renfrewshire.gov.uk iii. All the accounting records have been made available to you for the purpose of your audit. I have provided you with unrestricted access to all appropriate persons within the charity, and with all other records and related information requested, including minutes of all management and trustee meetings and correspondence with the Office of the Scottish Charity Regulator. iv. The financial statements are free of material misstatements, including omissions. Internal control and fraud v. I acknowledge my responsibility for the design, implementation and maintenance of internal control to prevent and detect fraud and error, and I believe that I have appropriately fulfilled these responsibilities. vi. I have disclosed to you all instances of known or suspected fraud affecting the entity involving management, employees who have a significant role in internal control or others where fraud could have a material effect on the financial statements. vii. I have also disclosed to you all information in relation to allegations of fraud or suspected fraud affecting the entity’s financial statements communicated by current or former employees, analysts, regulators or others. Assets and liabilities viii. The Trust has satisfactory title to all assets and there are no liens or encumbrances on the charity’s assets. ix. All actual liabilities, contingent liabilities and guarantees given to third parties have been recorded or disclosed as appropriate. x. Where plans or intentions that may materially alter the carrying value and, where relevant, the fair value measurements or classification of assets and liabilities, these are fully reflected in the financial statements. xi. I confirm that the valuation of the Observatory asset has been assessed for impairment and I am comfortable that the valuation remains appropriate as at 31st March 2025. The assets are currently undergoing refurbishment and will be revalued once the work is complete. Accounting estimates xii. The methods, data and significant assumptions used by us in making accounting estimates, including those measured at fair value, are appropriate to achieve recognition, measurement and disclosure that is reasonable in the context of the applicable financial reporting framework. I am satisfied that the material judgements used in the preparation of the financial statements are soundly based, in accordance with the Code and adequately disclosed in the financial statements. Page 268 of 286
Page 269
Finance & Resources Director: Alastair MacArthur CPFA Renfrewshire House, Cotton Street, Paisley PA1 1JB www.renfrewshire.gov.uk Legal claims xiii. I have disclosed to you all claims in connection with litigation that have been, or are expected to be, received and such matters, as appropriate, have been properly accounted for and disclosed in the financial statements. Laws and regulations xiv. I have disclosed to you all known instances of non-compliance or suspected non- compliance with laws and regulations whose effects should be considered when preparing the financial statements. Related parties xv. Related party relationships and transactions have been appropriately accounted for and disclosed in the financial statements. I have disclosed to you all relevant information concerning such relationships and transactions and I am not aware of any other matters which require disclosure in order to comply with legislative and accounting standards requirements. Subsequent events xvi. All events subsequent to the date of the financial statements which require adjustment or disclosure have been properly accounted for and disclosed. Going concern xvii. I have assessed Coats Observatory Trust Fund’s ability to continue to use the going concern basis of accounting and have concluded that it is appropriate. I am not aware of any material uncertainties that may cast significant doubt on Coats Observatory Trust Fund’s ability to continue as a going concern. Grants and donations xviii. All grants, donations and other income, the receipt of which is subject to specific terms or conditions, have been notified to you. There have been no breaches of terms or conditions in the application of such income. Page 269 of 286
Page 270
Finance & Resources Director: Alastair MacArthur CPFA Renfrewshire House, Cotton Street, Paisley PA1 1JB www.renfrewshire.gov.uk Approval I acknowledge our legal responsibilities regarding disclosure of information to you as auditors and confirm that so far as I am aware, there is no relevant audit information needed by you in connection with preparing your audit report of which you are unaware. The approval of this letter of representation was minuted by the Audit, Risk and Scrutiny Board at its meeting on . Yours faithfully Alastair MacArthur Director of Finance and Resources Page 270 of 286
Page 271
1 ___________________________________________________________________ To: Council On: 23 October 2025 ___________________________________________________________________ Report by: Director of Finance and Resources ___________________________________________________________________ Heading: Audited Financial Statements 2024/25 – Coats Observatory Trust ___________________________________________________________________ 1. Summary 1.1 The 2024/25 unaudited financial statements were approved by Council on 26 June 2025. Each year the appointed external auditors carry out an audit of the financial statements of Coats Observatory Trust and provide an opinion as to whether those statements provide a true and fair view of the financial position of the charity and its income and expenditure for the year; and also whether they have been prepared in accordance with the relevant regulations. 1.2 The audited financial statements are now presented for Members’ noting and further recommendation to the Council that they be approved. 1.3 There were no adjustments identified during the course of the audit. ___________________________________________________________________ 2. 2.1 Recommendations The Council is requested to approve the attached 2024/25 audited financial statements for the Coats Observatory Trust. Item 4 Page 271 of 286
Page 272
2 Implications of the Report 1. Financial – The 2024/25 Annual Accounts demonstrate the Council continues to manage the charity it controls within the resources available and in line with relevant legislation. 2. HR & Organisational Development – none directly arising from this report. 3. Community/Council Planning – none directly arising from this report. 4. Legal – An audit opinion free from qualification demonstrates compliance with the relevant legislation and statutory accounting requirements. 5. Property/Assets – none directly arising from this report. 6. Information Technology – none directly arising from this report. 7. Equality & Human Rights – none directly arising from this report. 8. Health & Safety – none directly arising from this report. 9. Procurement – none directly arising from this report. 10. Risk – none directly arising from this report. 11. Privacy Impact – none directly arising from this report. 12. Cosla Policy Position – none directly arising from this report. 13. Children’s Rights – none directly arising from this report. 14. Climate Risk – none directly arising from this report. ___________________________________________________________________ Author: Christine McCourt, Head of Finance and Procurement Page 272 of 286
Page 273
Appendix 3 RENFREWSHIRE COUNCIL COATS OBSERVATORY TRUST FUND SC019454 AUDITED TRUSTEES’ REPORT AND FINANCIAL STATEMENTS 1 APRIL 2024 to 31 MARCH 2025 Page 273 of 286
Page 274
Contents TRUSTEES’ REPORT .........................................................................1 INDEPENDENT AUDITOR’S REPORT ........................................................4 TRUST ACCOUNTS FINANCIAL STATEMENTS OVERVIEW ................................8 STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 31 MARCH 2025 .....9 STATEMENT OF BALANCES AS AT 31 MARCH 2025 ................................... 10 NOTES TO THE FINANCIAL STATEMENTS ............................................... 11 Page 274 of 286
Page 275
Renfrewshire Council Coats Observatory Trust Fund Trustees’ Report P a g e | 1 Trustees’ Report 1. Introduction Renfrewshire Council acts as sole trustee for the Coats Observatory Trust Fund which has charitable status and is registered with the Office of the Scottish Charity Regulator (OSCR): The financial statements of the Trust are included in this report: The principal address of the Trust Fund is: Renfrewshire Council Finance and Resources Renfrewshire House Cotton Street Paisley PA1 1JB Renfrewshire Council administers the Trust Fund and separately accounts for it. Renfrewshire Council was established by the Local Government (Scotland) Act 1994 and came into being on 1 April 1996. The Council provides a wide range of public services such as education, children’s social services, environmental services, council housing and economic regeneration. The Trust Accounts do not form part of Renfrewshire Council’s single entity balance sheet, although under s222 of the Local Government (Scotland) Act 1973, the property of the Trust “vest[s] in” the relevant local authority. However, the Trust Fund accounts are included within the group accounts of the Council. A copy of the group accounts can be obtained from the address above, or on the Council’s website at www.renfrewshire.gov.uk. Independent Auditors: Azets Titanium 1 King's Inch Place Renfrew Glasgow PA4 8WF Trustees Guidance provided by OSCR indicates that those who have “general control and management” of the charity are the charity trustees. Decisions regarding the general control and management of the Trust Fund are made by the Finance, Resources and Customer Services Policy Board (FRCSPB), which has delegated authority from the Council in this regard; but ultimately control rests with the full Council of elected members. We have therefore interpreted the above guidance as meaning that all elected members of Renfrewshire Council are charity trustees. The following individuals were the Trustees of the Trust Fund in their capacity as elected members of Renfrewshire Council during the 2024/25 financial year: Page 275 of 286
Page 276
Renfrewshire Council Coats Observatory Trust Fund Trustees’ Report P a g e | 2 Jennifer Adam Neill Graham Jamie McGuire Fiona Airlie-Nicolson John Gray Marie McGurk Stephen Burns Anne Hannigan Iain McMillan Jacqueline Cameron John Hood John McNaughtan Lorraine Cameron Lisa-Marie Hughes Kevin Montgomery Michelle Campbell Robert Innes Sam Mullin Graeme Clark Alec Leishman Will Mylet Carolann Davidson Bruce MacFarlane Iain Nicolson Eddie Devine James MacLaren Jim Paterson Andy Doig Kenny MacLaren Emma Rodden Audrey Doig Mags MacLaren John Shaw Alison Ann-Dowling Colin McCulloch Ben Smith Chris Gilmour Janis McDonald Andy Steel Edward Grady Cathy McEwan Gillian Graham David McGonigle Day to day management of the Trust Fund is delegated to the Director of Finance and Resources of Renfrewshire Council. All of these trustees are normally elected or re-elected at local government elections. By-elections are held to elect new members in the event of existing members vacating their position. New members automatically become trustees of this fund. 2. Structure, Governance and Management The Coats Observatory Fund was inherited by the local authority in early 1963 from the Paisley Philosophical Society. The Council, as trustees, owns the buildings comprising the Coats Observatory. These buildings are leased to OneRen at nil consideration. History The original purpose of the Trust when it was set up was: “for the upkeep of Coats Observatory equipment”. This purpose was relevant while there were cash funds available; however these funds have been exhausted, and only the property assets remain. Governance and Management The Council is required to make arrangements for the proper administration of its financial affairs and to secure that one of its officers has the responsibility for the administration of those affairs. The Director of Finance and Resources has been designated as that officer in Renfrewshire Council. They manage the affairs of the Council to secure the economic, efficient and effective use of resources and safeguard its assets and those of any charitable trust it controls. Given the Trust Fund is controlled by the Council, these specific provisions are supplemented by general provisions relating to the administration of local authority monies, i.e. the duty to obtain best value. The Director of Finance and Resources has responsibility for ensuring an effective system of internal financial control is maintained and operated. This system of internal financial control can only provide reasonable and not absolute assurance that assets are safeguarded, transactions are recorded and properly authorised, and that material errors or irregularities are either prevented or would be detected within a timely period. The system of internal financial control is based on a framework of regular Page 276 of 286
Page 277
Renfrewshire Council Coats Observatory Trust Fund Trustees’ Report P a g e | 3 management information, financial regulations, administrative procedures and a system of delegation and accountability. The Director of Finance and Resources is responsible for keeping proper accounting records which are up to date and which ensure that the financial statements comply with the Charities Accounts (Scotland) Regulations 2006(as amended) and Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard for Smaller Entities published on 16th July 2014. Decisions regarding the operation, assets, processes or policies of the Trust Fund are delegated by the Council to the Finance, Resources and Customer Services Policy Board (FRCSPB). Risk The Trustees have overall responsibility for the Trust Funds’ system of internal control. This system is designed by senior management to ensure effective and efficient operation, including financial reporting and compliance with laws and regulations. The Trustees acknowledge that such a system is designed to manage rather than eliminate the risk of failure to achieve business objectives and can only provide reasonable and not absolute assurance against material misstatement or loss. 3. Financial Review The Trust Fund has no explicit reserves policy. The Trust Fund is not in deficit and no donations to the Fund are solicited. Since 2021, the assets of the Trust have been under refurbishment as part of the Paisley Museum Reimagined project, funded by Renfrewshire Council. This is disclosed within the Statement of Financial Activities. 4. Future Plans Given there are no cash funds remaining, nor are any anticipated, the Council will explore with OSCR the future of the charity, always considering the ongoing sustainability of the Observatory and ensuring appropriate governance arrangements remain in place. The £45m Paisley Museum Reimagined project will create a new, world-class museum space, shaped by and for the people of Paisley. As part of this project, expected to complete in 2025, the Observatory is currently under refurbishment and will open to the public with improved accessibility upon completion. A full revaluation of the Observatory will be carried out when it is reopened. The Trustees wish to thank the Renfrewshire Council officers involved in producing the Report and Financial Statements. Signed: Alastair MacArthur Director of Finance and Resources Renfrewshire Council Date: On behalf of the Trustees: Councillor John Shaw Convener – Finance, Resources and Customer Services Policy Board Renfrewshire Council Date: Page 277 of 286
Page 278
P a g e | 4 Independent auditor’s report to the trustees of Coats Observatory Trust Fund and the Accounts Commission Reporting on the audit of the financial statements Opinion on financial statements We certify that we have audited the financial statements in the statement of accounts of Coats Observatory Trust Fund for the year ended 31 March 2025 under Part VII of the Local Government (Scotland) Act 1973 and section 44(1)(c) of the Charities and Trustee Investment (Scotland) Act 2005. The financial statements comprise the Statement of Financial Activities, Statement of Balances and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and the United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice). In our opinion the accompanying financial statements: • give a true and fair view of the state of affairs of the charity as at 31 March 2025 and of its incoming resources and application of resources for the year then ended; • have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and • have been prepared in accordance with the requirements of the Charities and Trustee Investment (Scotland) Act 2005, and regulation 8 of The Charities Accounts (Scotland) Regulations 2006. Basis for opinion We conducted our audit in accordance with applicable law and International Standards on Auditing (UK) (ISAs (UK)), as required by the Code of Audit Practice approved by the Accounts Commission for Scotland. Our responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the charity in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK including the Financial Reporting Council’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Conclusions relating to going concern basis of accounting We have concluded that the use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charity’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from when the financial statements are authorised for issue. Page 278 of 286
Page 279
P a g e | 5 Responsibilities of the trustees for the financial statements The trustees are responsible for the preparation of financial statements that give a true and fair view in accordance with the financial reporting framework, and for such internal control as the trustees determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the trustees are responsible for assessing the charity's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees intend to discontinue the charity's operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities outlined above to detect material misstatements in respect of irregularities, including fraud. Procedures include: • using our understanding of the local government sector and charity sector to identify that the Local Government (Scotland) Act 1973, the Charities and Trustee Investment (Scotland) Act 2005, and The Charities Accounts (Scotland) Regulations 2006 are significant in the context of the charity; • inquiring of management and those charged with governance as to other laws or regulations that may be expected to have a fundamental effect on the operations of the charity; • inquiring of management and those charged with governance concerning the charity’s policies and procedures regarding compliance with the applicable legal and regulatory framework; • discussions among our audit team on the susceptibility of the financial statements to material misstatement, including how fraud might occur; and • considering whether the audit team collectively has the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations. The extent to which our procedures are capable of detecting irregularities, including fraud, is affected by the inherent difficulty in detecting irregularities, the effectiveness of the charity’s controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud are inherently more difficult to detect than irregularities that result from error as fraud may involve collusion, intentional omissions, misrepresentations, or the override of internal control. The capability of the audit to detect fraud and other irregularities depends on factors such as the skilfulness of the perpetrator, Page 279 of 286
Page 280
P a g e | 6 the frequency and extent of manipulation, the degree of collusion involved, the relative size of individual amounts manipulated, and the seniority of those individuals involved. A further description of the auditor’s responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report. Reporting on other requirements Other information The trustees are responsible for the other information in the statement of accounts. The other information comprises the Trustees’ Annual Report. Our responsibility is to read all the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon except on the Trustees’ Annual Report to the extent explicitly stated in the following opinion prescribed by the Accounts Commission. Opinions prescribed by the Accounts Commission on the Trustees’ Annual Report In our opinion, based on the work undertaken in the course of the audit, the information given in the Trustees' Annual Report for the financial year for which the financial statements are prepared is consistent with the financial statements and that report has been prepared in accordance with the Charities SORP (FRS 102). Matters on which we are required to report by exception We are required by The Charity Accounts (Scotland) Regulations 2006 to report to you if, in our opinion: • proper accounting records have not been kept; or • the financial statements are not in agreement with the accounting records; or • we have not received all the information and explanations we require for our audit. We have nothing to report in respect of these matters. Use of our report This report is made solely to the parties to whom it is addressed in accordance with Part VII of the Local Government (Scotland) Act 1973 and for no other purpose. In accordance with paragraph 108 of the Code of Audit Practice, we do not undertake to have responsibilities to members or officers, in their individual capacities, or to third parties. Page 280 of 286
Page 281
P a g e | 7 [Signature] Rebecca Lister, (for and on behalf of Azets Audit Services), Quay 2 139 Fountainbridge Edinburgh EH3 9QG [Full date] Azets Audit Services is eligible to act as an auditor in terms of section 1212 of the Companies Act 2006 Page 281 of 286
Page 282
Renfrewshire Council Coats Observatory Trust Fund Financial Statements P a g e | 8 Trust Accounts Financial Statements Overview 1. Introduction The following pages detail the Statement of Financial Activities, the Statement of Balances and relevant Notes to the Accounts, as required by the Charities Accounts (Scotland) Regulations 2006. A Cash Flow Statement is not required as the charity is classified as a small charity as defined in the Charities Statement of Recommended Practice (SORP) and therefore is exempt from producing a Cashflow Statement. 2. Statement of Financial Activities The Statement of Financial Activities provides an analysis of the income and expenditure for the period. If applicable, the Statement would also show any movements in relation to fixed assets 3. Statement of Balances The Statement of Balances reconciles the cash and bank balances at the beginning and end of the financial year with the surpluses or deposits shown in the Statement of Financial Activities. The Coats Observatory is classed as an Asset Under Construction, which means there is a pause in depreciation until the asset is back in use. 4. Notes to the Accounts Notes to the accounts expand on or explain the information contained in the Statement of Financial Activities and the Statement of Balances. Page 282 of 286
Page 283
Renfrewshire Council Coats Observatory Trust Fund Financial Statements P a g e | 9 Statement of Financial Activities for the year ended 31 March 2025 2023/24 2024/25 Total Note Unrestricted Restricted Total £ £ £ £ Income (455,269) Donation from Renfrewshire Council re refurbishment of Trust assets 2 0 (352,221) (352,221) Expenditure 0 Expenditure relating directly to charitable activities 0 0 0 455,269 Expenditure relating to Trust assets 2 0 352,221 352,221 0 Surplus / (deficit) for period 0 0 0 Page 283 of 286
Page 284
Renfrewshire Council Coats Observatory Trust Fund Financial Statements P a g e | 10 Statement of Balances as at 31 March 2025 As at 31 March 2024 As at 31 March 2025 Total Note Unrestricted Restricted Total £ £ £ £ Fixed Assets Assets Under Construction Buildings at Coats Observatory, Paisley 965,804 Opening balance 0 1,421,073 1,421,073 455,269 Additions 1 0 352,221 352,221 1,421,073 Closing balance 0 1,773,294 1,773,294 Other Assets Land at Coats Observatory, Paisley 72,200 Opening balance 0 72,200 72,200 0 Additions 1 0 0 0 72,200 Closing balance 0 72,200 72,200 1,493,273 0 1,845,494 1,845,494 Represented By 1,493,273 Restricted Funds 0 1,845,494 1,845,494 1,493,273 0 1,845,494 1,845,494 Signed Signed Alastair MacArthur Councillor John Shaw Director of Finance and Resources Convenor – Finance, Resources and Customer Services Policy Board Renfrewshire Council Renfrewshire Council Date Date Page 284 of 286
Page 285
Renfrewshire Council Coats Observatory Trust Fund Financial Statements P a g e | 11 Notes to the Financial Statements 1. Accounting Policies Introduction The Financial Statements for the year ended 31 March 2025 have been prepared in accordance with the Accounting and Reporting by Charities : Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard 102, the Charities and Trustee Investment (Scotland) Act 2005 and the Charities Accounts (Scotland) Regulations 2006 (as amended).They are designed to give a true and fair view of the financial performance and position of the Trust Fund and comparative figures for the previous financial year are provided. There are no significant departures from accounting standards other than that outlined specifically below. The accounting concepts of “materiality” and “going concern” have been considered in the application of accounting policies. In this regard the materiality concept means that information is included where the information is of such significance as to justify its inclusion. The accounts have been prepared on a going concern basis. The going concern concept assumes that the Trustees will not significantly curtail the scale of the charities’ operations, however it is anticipated that the Observatory Fund will not continue indefinitely. This has been no impact on the financial statements as the assets of the Fund comprise solely of the Observatory buildings which are independently valued. The accounts have been prepared using the accruals basis whereby total income and expenditure have been recorded when they were earned or incurred. The accounts have been prepared under the historic cost convention, other than changes resulting from the revaluation of certain categories of assets. The following accounting policies used in its preparation have been reviewed following the introduction of Financial Reporting Standard 18 “Accounting Policies” (FRS18). Fund Accounting Unrestricted funds can be used in accordance with the charitable objectives at the discretion of the trustees. Restricted funds can only be used for particular restricted purposes within the objects of the charity. Restrictions arise when specified by the donor or when funds are raised for particular restricted purposes. Incoming/Outgoing Resources Recognition of incoming resources All income is recognised once the charity has entitlement to the income, it is probable that the income will be received and the amount of income receivable can be measured reliably. Recognition of expenditure All expenditure is accounted for on an accruals basis. Page 285 of 286
Page 286
Renfrewshire Council Coats Observatory Trust Fund Financial Statements P a g e | 12 Charitable Activities Decisions regarding the way the Trust Funds’ income is spent are taken by the Finance, Resources and Customer Services Policy Board of Renfrewshire Council, whose membership comprises 15 of the trustees of the Trust Fund. Costs of Generating Funds The cost of administering the Trust Fund is borne entirely by Renfrewshire Council. Governance Costs Governance costs, where applicable, include the: • costs of the preparation and examination of statutory accounts; • cost of any legal advice to trustees on governance or constitutional matters; and • cost of administering grants. Assets The Fund includes the land and buildings of Coats Observatory, Paisley. The latest valuations were carried out in 2021/22 for the office and 2020/21 for the observatory. Depreciation is paused due to the asset being categorised as an Asset Under Construction during the period of refurbishment (commenced in June 2021) currently underway as part of the Paisley Museum Reimagined project. Refurbishment spend is disclosed as asset additions in the Statement of Balances. The assets will be revalued when the refurbishment is complete. 2. Analysis of income/expenditure The value of expenditure represents an estimate of in-year spend on the Paisley Museum Reimagined project that relates directly to the refurbishment of the Coats Observatory and associated buildings. The spend was directly incurred by Renfrewshire Council, but the property is owned by the Trust, so corresponding income has been disclosed as though donated to the Trust to fund the related spend. 3. Trustees’ remuneration and expenses Neither the trustees of the Trust Fund nor any associated person connected with them have received any remuneration for their services. Further, no directly incurred expenses were reimbursed to the trustees during the period (nil in 2024/25). 4. Related parties During the period, the Council also acted as the banker for the Trust Fund and all transactions, incoming and outgoing, are made via the Council’s bank accounts. There are no outstanding balances due to or from Renfrewshire Council nor were there any direct cash transactions during 2024/25. Page 286 of 286