Agenda Document Pack - Council - 30/06/2022
Renfrewshire Council · 30 June 2022
Back to Council — 30 June 2022 and its agenda
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23/06/2022 Notice of Meeting and Agenda Council Date Time Venue Thursday, 30 June 2022 09:30 Council Chambers (Renfrewshire), Council Headquarters, Renfrewshire House, Cotton Street, Paisley, PA1 1AN Membership Councillor Jennifer Adam: Councillor Fiona Airlie-Nicolson: Councillor Alison Ann-Dowling: Councillor Stephen Burns: Councillor Jacqueline Cameron: Provost Lorraine Cameron: 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 Cathy McEwan: 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 Iain Nicolson: Councillor Jim Paterson: Councillor Emma Rodden: Councillor John Shaw: Councillor Ben Smith: Councillor Andy Steel: 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 0141 618 7112. To find the webcast please navigate to http://renfrewshire.cmis.uk.com/renfrewshire/meetings.aspx and select the meeting from the calendar. MARK CONAGHAN Head of Corporate Governance
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23/06/2022 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. 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 either email democratic-services@renfrewshire.gov.uk or telephone 0141 618 7112. Apologies Apologies from members. Declarations of Interest Members are asked to declare an interest in any item(s) on the agenda and to provide a brief explanation of the nature of the interest.
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23/06/2022 Items of business 1 Minutes of Meetings of Council, Boards and Panels (attached separately) Council, 19 May 2022, pages 1-44 Communities and Housing Policy Board, 7 June 2022, pages 45-56 Placing Requests and Exclusions Appeals Panel, 8 June 2022, pages 57-60 Regulatory Functions Board, 8 June 2022, pages 61-68 Education and Children’s Services Policy Board, 9 June 2022, pages 69-74 Placing Requests and Exclusions Appeals Panel, 9 June 2022, pages 75-76 Audit, Risk and Scrutiny Board, 13 June 2022, pages 77-82 Economy and Regeneration Policy Board, 14 June 2022, pages 83-90 Planning and Climate Change Policy Board, 14 June 2022, pages 91- 102 Infrastructure Land and Environment Policy Board, 15 June 2022, pages 103-108 Finance, Resources and Customer Services Policy Board, 15 June 2022, pages 109-123 Leadership Board, 22 June 2022 (copy to follow) Appointments Board, 23 June 2022 (copy to follow) Local Review Body, 28 June 2022 (copy to follow) 2 Provost's Update Verbal update by Provost Cameron 3 Financial Sustainability and General Fund Financial Outlook Report by Director of Finance and Resources 1 - 20 4 Treasury Management Annual Report 2021/22 Report by Director of Finance and Resources 21 - 30 5 Unaudited Annual Accounts 2021/22 Report by Director of Finance and Resources 31 - 188 6 Governance Update Report by Director of Finance and Resources 189 - 212 7 Notice of Motion 1 by Councillors Ann-Dowling and G Graham "Threat to Renfrewshire Public Services
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23/06/2022 Renfrewshire is facing a real-time threat to its public services. In light of the Scottish Government Spending Review revealing a £3.5bn hole in the SNP’s spending plans, it’s clear that the people of Renfrewshire have been let down and could be facing years of SNP-led austerity. After more than a decade of real terms cuts, increasing pressure on core council services and the workforce who deliver the services, the SNP/Green Government has put our quality of life at risk with the potential of substantial job losses of vital workers and an eight percent cash cut across local government. Council notes that the Resource Spending Review covers the years 2023-24 to 2026-27. It is not a Budget and final spending plans will be presented to the Scottish Parliament in respective annual Budgets. Therefore, Council agrees to write to Kate Forbes, the Cabinet Secretary for Finance and the Economy to demand that non-essential Scottish government spending included in the Resource Spending Review forecast be re-allocated and made available to the council grant settlement fund. Examples include the £20m indyref2, and £370m recently allocated for Constitution, External Affairs and Culture portfolio." 8 Notice of Motion 2 by Councillors G Graham and Smith "Cuts to Renfrewshire Attainment Challenge Funding This Council is appalled by the Scottish Government’s planned cuts to the Council’s allocation of Scottish Attainment funding. The Scottish Attainment fund is a targeted fund which aims to support educational services to address the poverty-related attainment gap. As one of 9 targeted authorities for Scottish Attainment funding, Renfrewshire has made steady progress in improving the outcomes for learners and narrowing the gap, despite the exceptional circumstances of the last 2 years. In 21/22 Renfrewshire was allocated £4.5 million. However, the Scottish Government has decided to cut the funding by 71%. This means Renfrewshire will lose out on £3.2 million over the next four years. These SNP cuts are entirely unacceptable and will damage the learning outcomes for many of our school pupils, which our hard-working teachers and educational staff work so hard to improve. In its report of December 2021 Scottish Government published data on literacy and numeracy levels which confirmed that the attainment gap between primary pupils from the most and least deprived areas of Scotland has widened. While national Attainment figures have reduced overall, those pupils from the poorest areas of Scotland have seen the biggest decrease. The timing of these cuts is therefore astonishing, as the Council’s Educational Services strives to recover from the impact of covid. It is clear from performance statistics that more, not less, funding is required to sustain progress in narrowing the poverty related attainment gap.
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23/06/2022 The SNP Government states that tackling inequity in order that every child can succeed in school and gain life skills is at the heart of its agenda. These cuts to Renfrewshire’s Attainment funding fly in the face of this. Given the above, this Council rejects the proposed Scottish Attainment fund cuts and calls upon the Chief Executive, Leader of the Council and Leader of the Opposition to sign a joint letter to the Scottish Government to this affect, requesting a meeting with the relevant ministers to discuss the impact this reduction in funding will have on educational services in Renfrewshire." 9 Notice of Motion 3 by Councillors Andy Doig and Hannigan "Cyber connectivity for Renfrewshire’s Villages and Community Halls "Council appreciates the importance of cyber connectivity for all of Renfrewshire’s towns, villages, and housing schemes, both from a social inclusion, leisure, and business perspective. Thus allowing equal access to a wide range of social, leisure, and employment opportunities for our residents. Council accordingly advocates the installation of Wi-Fi for all Renfrewshire Council owned village and community halls, to be undertaken on a agreed rolling programme over a specified budgetary period”." 10 Notice of Motion 4 by Councillors Andy Doig and Hannigan "Lead Piping in Public and Private Housing in Renfrewshire “Council notes with concern the presence of lead piping in the fresh water supply to some council and private housing in the Braehead area of Lochwinnoch. Council resolves, given the known public health risks this poses to public health, to initiate an investigation into the risk of lead piping across Renfrewshire and to refer the matter to the Audit, Risk, and Scrutiny Board. Such an investigation to have a wide-ranging remit to consult public health authorities, all relevant utilities, and other interested parties, with a view to eradicating this risk to public health”." 11 Notice of Motion 5 by Councillors Andy Doig and Hannigan "Kilbarchan Pipe Band "Council sends its heartfelt congratulations to Kilbarchan Pipe Band for winning the Grade 4B Category in the recent UK Pipe Band Championships, their first major championship win since the Band reformed just over twenty years ago. Council further wishes them every success at the World Pipe Band Championships later this year.
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23/06/2022 Council recognises the local renaissance in recent years in traditional Scottish music, culture, and the arts, across Renfrewshire, and looks forward to this trend developing following the return of the National Mod to Paisley in 2023”." 12 Notice of Motion 6 by Councillors Innes and Steel “Active Travel For Linwood Community Between Linwood and Pheonix Retail Park Council notes that there is a lack of connectivity, active travel routes and accessibility for pedestrians walking or wheeling between Linwood and the Pheonix Retail Park. Further that council will explore options to implement safer access for people travelling between Linwood and the Pheonix Retail park.” 13 Notice of Motion 7 by Councillors Innes and Campbell “Scottish Independence Council recognises the results of the 2022 local government election delivered a majority of pro Scottish independence councillors in Renfrewshire. Further, that council welcomes a referendum on Scotland’s independence in the first half of the Scottish Parliament term 2021 - 2026.” 14 Notice of Motion 8 by Councillors Ann-Dowling and Audrey Doig “Renfrewshire Water Safety 'In memory of all those who have lost their lives in Renfrewshire waterways, Council commends the work of the Renfrewshire Water Safety Working Group in developing a comprehensive water safety strategy for Renfrewshire waterways. The Renfrewshire Water Safety Working Group was formed in response to the tragic loss of Linwood High School pupil William McNally. William passed away on June 5 last year after getting into trouble in the water at the Clay Pits, part of the River Gryffe, while swimming with friends. Water safety measures include new GPS signs at potentially dangerous areas along the River Gryffe, that make it easier for people to tell emergency services exactly where they are so they can respond as quickly as possible. The GPS signage also includes a life buoy, a throw- line rope and a reminder that people shouldn’t swim in the river. An educational safety video to raise awareness of the dangers of open water swimming has also been produced. Council pays tribute and sincere thanks to the family of William McNally for their participation in the safety video.'”
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23/06/2022 15 Notice of Motion 9 by Councillors N Graham and Leishman "Congratulations Motion That this Council congratulates Her Majesty The Queen on the occasion of her Platinum Jubilee; expresses its gratitude for Her Majesty's exceptional public service and dedication to duty over 70 years; affirms the deep respect that is held for Her Majesty in Scotland, and sends good wishes for her continued service." 16 Notice of Motion 10 by Councillors MacFarlane and Innes "Celebrating Renfrewshire Fund: Council recognises the effort and success in Renfrewshire in facilitating participatory budgeting for young people through the Celebrating Renfrewshire Fund. That council will continue to work with young people going forward to remove barriers to all of Renfrewshire’s young people participating in local initiatives and actively encourage and explore options for more youth engagement and collaboration with Renfrewshire Council and the democratic and decision making process."
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___________________________________________________________________ To: Council On: 30 June 2022 ___________________________________________________________________ Report by: Chief Executive and Director of Finance and Resources ___________________________________________________________________ Heading: Financial Sustainability and General Fund Financial Outlook ___________________________________________________________________ 1. Overview and Key Messages 1.1 The Council’s financial outlook is subject to increasing risk over the short and medium term as the Council continues to support both community and organisational recovery from the COVID19 pandemic; however the financial position in the current financial year remains stable. 1.2 The Scottish Government Resource Spending Review (RSR) outlines the priorities that the Scottish Government will support over the next 5 years of the current Parliament ie reform to improve outcomes for children living in poverty; achievement of the just transition to a net zero and climate resilient society; continued recovery from the Covid-19 pandemic and transformation of the economy to enable growth, opportunity and a sustainable outlook. The RSR is not a Budget - the annual budget process will remain. This will provide more detailed final data and will confirm annually revenue and capital financial settlements for local government which may ultimately differ from that outlined in the RSR. However, it should nevertheless be noted that the RSR does constitute the Scottish Government’s best estimate at this stage of what they forecast to be their medium term financial position and planned expenditure across the public sector in Scotland. 1.3 The RSR outlines a position of increasing financial constraint for the Scottish Government, with slowing economic growth, higher inflation and increasing spend in demand-led areas of the budget eg health and social security; leaving unprotected budgets being squeezed. It is estimated around 90% of the anticipated increase in income to the Scottish Government over the RSR period is allocated to health and social care and social security; resulting in practically all other areas planned to receive a flat cash settlement or a cash terms reduction. Item 3 Page 1 of 212
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1.4 The future local government settlement is forecast by the Scottish Government as flat cash, which based on forecast inflation rates would suggest an estimated 7-8% real terms reduction over the RSR period. The RSR also commits to build on a new deal for local government, with finalisation of work on a fiscal framework for local government and a new Partnership Agreement. The RSR suggests greater flexibility over financial arrangements being matched with increased accountability for the delivery of national priorities. 1.5 The Cabinet Secretary has stated that given the financial constraints being faced by the Scottish Government, there is a need to prioritise spending, and to reset growth in the public sector, with a focus on efficiency and innovation. The Cabinet Secretary also outlines a need for a sharp focus on structural change and collaboration. The RSR outlines a range of efficiency measures which will be taken by the Scottish Government including efforts to contain pay growth, public sector reform, income maximisation and improved public sector procurement. 1.6 While there is now relatively greater certainty with regards the overall forecast quantum of future local government settlements, the forecast allocation to individual councils will be subject to the updating of the distribution process and factors within that. Notwithstanding, the Council’s medium term outlook has been revised to reflect the flat cash projection outlined in the RSR; noting the downside risks should there be increased pressure in the Scottish Government budget to fund for example further increases to the NHS or social security. 1.7 Despite there being now relatively greater certainty in terms of future grant settlements, the prospects for pay and supplies spend are now much more volatile, linked to current exceptional levels of inflation. Therefore, the forecast financial gap as previously reported to members, while not significantly differing from previous forecasts in absolute terms, does have a different context in that the main drivers for the gap relate to spend pressures. Importantly, the profile of the gap is also more immediate – predominantly being related to near term pay considerations and high inflation levels. 1.8 It is therefore recommended the Council agree to develop at pace a portfolio of work aimed at ensuring future financial sustainability (and shorter term financial stability) is prioritised; and that savings of £35m are targeted over the next three years in order to close the forecast financial gap outlined above and allowing for a degree of flexibility to manage risks associated with challenges in delivery of savings at this scale and over this period. Proposed workstreams are outlined in Section 6 of the report. 1.9 The combined impact of financial savings arising from the application of accounting flexibilities and service transformation will not be sufficient to close the financial gap the Council is facing, meaning a range of other financial sustainability measures will require to be explored. It is recommended that the portfolio of measures be developed by Directors over the summer period. with appropriate future board reporting, and note that in line with practice in previous years regular financial update reports will be brought back to future Council cycles as appropriate to outline key changes in the Council’s financial outlook, confirmation of key announcements from the Scottish Government over the coming months and the impact of savings arising from progress achieved in relation to the financial sustainability and transformation programme. Page 2 of 212
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It is also considered that the project management and support arrangements for the transformation programme will require to be revised so they clearly align with the financial sustainability portfolio outlined above. 1.10 The shift in the scale and nature of the financial risks outlined above reinforce the need for the Council to be decisive in order to fully commit to the delivery of the significant change and transformation which will be required over the short to medium term. 1.11 In relation to the capital programme, significantly higher risk in relation to construction inflation has been emerging. Energy, supplies and labour shortages are being experienced which is driving inflation in the construction sector higher, along with increased demand as backlog maintenance is tackled and new projects commence as the public sector emerges from the worst of the pandemic. The Scottish Government have taken the opportunity to revise their capital spending in light of these pressures, but also in light of the reduced capital settlement compared to what had been expected from the UK Government. Revised spending allocations have been published by the Scottish Government alongside their Resource Spending Review (RSR). 1.12 The capital grant allocation for the portfolio containing local government in 23/24 is £60m less than in 22/23, dropping by a further £30m in 24/25 before recovering slightly in 25/26 but still to a level below that allocated in 22/23. This allocation exacerbates the pressures the Council will experience in its capital investment programme; in addition to supply and price pressures. In order to maintain current levels of contingencies and risk mitigation within the capital programme, and faced with extraordinary levels of price inflation, some revision to the capital plan is required. __________________________________________________________________ 2. Recommendations 2.1 It is recommended that members: Note the update provided in the report with regards the Scottish Government’s Resource Spending Review, including measures related to public service reform Note the update to the Council’s medium term financial strategy, the estimated financial gap the Council is facing over the medium term and the increasingly heightened financial risk environment the Council is facing in the shorter term Agree that officers progress a range of financial sustainability and transformation workstreams with appropriate future board reporting; and note that in line with practice in previous years regular financial update reports will be brought back to appropriate future Council cycles to outline key changes in the Council’s financial outlook, confirmation of key announcements from the Scottish Government over the coming months and the impact of savings arising from progress achieved in relation to the financial sustainability and transformation programme. Page 3 of 212
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Note the capital programme update; and agree the revisions to the capital plan as outlined in section 7 3. Revenue Update Current Financial Position 3.1 The outturn position for the 2021/22 financial year is reported within the annual accounts report elsewhere on the agenda for this meeting, with a broadly breakeven position being delivered, after the application of reserves of £16m. 3.2 As approved by Council, unallocated reserves have been maintained at a minimum of £10 million moving into 2022/23 - approximately 2.3% of the Council’s net revenue expenditure. This prudent step has increased the immediate financial resilience of the Council and is reflective of the heightened financial risks the Council will continue to face from the pandemic, in terms of its ongoing impact, legacy risks and the recovery period, but also from the wider impact on the Council’s financial strategy and additional financial risks caused by the disruption to the council transformation programme. 3.3 Council agreed the 2022/23 budget on 3 March, including the utilisation of non- recurring revenue grant funding of £3.982m and the use of reserve funding of £1.650m to generate an in year breakeven budget position. While still early in the financial year, owing to the current cost of living crisis and extraordinary levels of inflation being experienced, it is anticipated that the 2022/23 financial position will come under pressure as the year progresses. However, currently there is no firm data on which a forecast outturn position could be based with the exception of a forecast overspend related to childcare, where exceptional levels of demand driven by mental health crises amongst a significant number of young people is being experienced. Key risks will be in relation to the 2022/23 pay award which remains to be agreed, and as mentioned above, the cost of living crisis will be a significant factor in determining the level of pay award. National pay negotiations are ongoing and are anticipated to be challenging given affordability constraints facing local government. As was the case in 2021/22, the level of pay provision which has been incorporated into the 2022/23 base budget may require to be adjusted depending on the concluded outcome of the negotiations. 3.4 In summary in relation to the current year financial outlook, there is still expected to be some reliance placed on COVID19 non-recurring resource to meet exceptional costs still being incurred, particularly in relation to childcare, waste management and soft FM services. As the Council moves towards recovery and new ways of working are developed there is also the potential for some cost to be incurred in relation to the transitioning of both workplace accommodation and ICT provision to a post-Covid environment that remains suitable and appropriate to facilitate safe and efficient working practice. It is anticipated again these costs would be funded from Covid-related reserve balances. In addition, and as outlined in previous reports to members, increasing pressure is being experienced in the council’s capital investment programme owing to high levels of construction inflation. Further detail on this issue is provided later in this report. Page 4 of 212
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4 Scottish Government Resource Spending Review 4.1 The Scottish Government Resource Spending Review (RSR) was published on 31 May 2022, outlining its spending plans for the remainder of this term of Parliament. The Scottish Government also published an updated Medium Term Financial Strategy and updated Capital Spending Allocations. At the same time, the Scottish Fiscal Commission published updated economic and fiscal forecasts. 4.2 The RSR covers the period from 2022/23 to 2026/27 – providing forecasts for a period two years after the current UK spending review period which runs to 2024/25. Therefore, the final two year period of the RSR is based on projected block grant income figures as opposed to those confirmed by the UK government. 4.3 The RSR includes forecast spend at “level 2” in the Budget, which is a relatively aggregated level and does not provide detailed data for each public body, but rather for portfolios of spend. The RSR is not a Budget, and the annual budget process will remain which will provide more detailed data with regards revenue and capital spending, and tax decisions; however the RSR does provide an indication of the prioritisation of spend by the Scottish Government within an increasingly constrained financial envelop. In this regard, the RSR provides welcome financial planning context over an extended period and is the first multi-year review of this nature to be published in a decade. Scottish Government Resource and Spending 4.4 The total Scottish Government revenue budget is anticipated to increase from £41.8bn in 22/23 to £47.5bn in 26/27, based on both known and assumed levels of block grant increase from the UK government. The block grant is anticipated to increase marginally in real terms over the current UK spending review period to 24/25 as has been previously outlined to members, with a slight increase anticipated in the later 2 years of the RSR period. Funding from the Scottish Income Tax is projected to increase from £13.6bn to £17.5bn over the RSR period, likely based on SFC assumptions of no inflationary increases to higher rate thresholds over the full RSR period, and no decision on the current UK government commitment to reduce the basic rate to19p in 24/25. The RSR also makes an assumption that in 23/24 and 24/25 additional Barnett consequentials of £250m and £400m respectively will be received over and above the block grant figures confirmed by the UK government to date. 4.5 The pressures facing the Scottish Government budget over the current Parliament are detailed in the publication, with significant spending commitments from previous decisions flowing through the projections, particularly in relation to health and social care where a manifesto commitment to increase the NHS front line budget by 20% over the course of this Parliament is detailed. Even at this level of increase (equating to a 2.6% real terms increase over the RSR period), there is likely to be pressure to grow NHS resources beyond this planned level given the position with waiting times and the ongoing recovery from the pandemic. The commitment to create a new National Care Service is reaffirmed, with an increase of 25% in social care investment – some £840m – to strengthen self-directed support, improve prevention and increase community based support. Page 5 of 212
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4.6 The significantly increased level of spend on social security is also outlined, with spend anticipated to increase from £3.9bn in 22/23 to £6.4bn in 26/27, reflecting increased spend in relation to the Scottish Child Payment and adult disability payments. The level of funding from the UK government in relation social security increases over the RSR period, but not to the same extent as anticipated spend due to more generous allowances and eligibility in Scotland as opposed to rUK. 4.7 Broadly speaking, around 90% of the anticipated increase in income for the Scottish Government over the RSR period is allocated to health, social care and social security; resulting in practically all other areas planned to receive a flat cash settlement or a cash terms reduction. This impact is outlined in the table below which illustrates the degree of real terms movement from 2022/23 as the baseline index year: Local Government Settlement 4.8 The RSR outlines a planned flat cash position for the local government core settlement from 2022/23 to 2025/26, with a £100m increase in 2026/27. This includes baselining the £120m previously included in the 2022/23 settlement on a non-recurring basis. In the context of forecast inflation levels over this period, this suggests an estimated real terms reduction in future revenue funding for local government at 7-8% over the RSR period. The RSR also outlines a commitment to continue at existing levels transfers from other portfolios in relation to health and social care, early learning and childcare and additional teachers; but not other transfers. Page 6 of 212
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It should be noted however, while the quantum may not change, the application of updated indicators to the distribution of actual funding across the local government sector will still be applied, meaning the Council’s future financial settlement will be impacted by distributional effects and the Council is not therefore guaranteed to access its existing share of overall local government funding over this medium term period. By way of example, the Council is likely to receive a reducing share of early learning funding in the coming years as a revised distribution methodology is phased in. 4.9 The RSR also commits to build on a new deal for local government, with finalisation of work on the fiscal framework (which has been ongoing in discussion with COSLA for some time) and a new Partnership Agreement. The RSR suggests greater flexibility over financial arrangements being matched with “increased accountability for the delivery of national priorities”. Exploring discretionary revenue raising is mentioned (workplace parking and the visitor levy); as well as a commitment to explore digitising the administration of NDR. 4.10 COSLA, supported by Directors of Finance, have been exploring with the Scottish Government a range of financial flexibilities which would assist in addressing in particular Covid-related spend, but there has also been discussion with regards service concession accounting arrangements – in effect how local government accounts for long term contracts such as PPP or other long term leases. The local government proposed approach has been agreed to; however this is contingent on a full capital accounting review to be chaired independently. A substantial review was carried out in 2021, led by CIPFA Directors of Finance and COSLA so it is not clear what a further review will aim to achieve; although worryingly there is comment in the RSR about a “phased approach towards alignment with the CIPFA Code of practice” which potentially suggests a phased removal of statutory mitigation – this could have major financial implications for councils which could outweigh any benefit from the change to accounting treatment for service concessions. COSLA officers are clarifying the position with the Scottish Government. A letter from the Cabinet Secretary to the COSLA President has also confirmed that a previously suggested financial flexibility whereby capital receipts could be used to mitigate the impact of Covid costs has not been agreed by the UK Government and is therefore no longer permissible. The Council had no plans to utilise this flexibility. Budget constraint and cost reduction 4.11 The Cabinet Secretary has stated that given the financial constraints being faced by the Scottish Government, there is a need to prioritise spending, and to reset growth in the public sector, with a focus on efficiency and innovation. The Cabinet Secretary also outlines a need for a sharp focus on structural change and collaboration. The RSR outlines a range of measures which will be taken by the SG over the coming months and years: • Returning the size of the public sector workforce to pre-pandemic levels (a reduction of 6-8%) in order to hold pay bill costs at 22/23 levels • Continued hybrid working, linked to an estate rationalisation programme based on increased co-location and collaboration • Consideration of the range and number of public sector bodies, and an expectation that public bodies will deliver annual efficiency savings of at least 3% Page 7 of 212
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• An increased focus on income maximisation • Programme of digital reform and digital transformation of public services allied to inclusion and connectivity • A reformed approach to procurement building on increased collaboration and value for money (building on current sectoral centres of expertise to realise financial efficiencies) • Allowing public bodies to try approaches that may involve more risk but which could deliver greater reward ie increased innovation and commercialisation • Identifying ways to recover more costs through alternative charging regimes • Encouragement of shared services and common digital platforms • Improved management of grants, including additional conditionality and evaluation 4.12 With regards public sector pay, as mentioned above the RSR proposes to hold the public sector pay bill (as opposed to pay levels) at 22/23 levels whilst returning the overall size of the public sector workforce to broadly pre-Covid levels by 26/27. Discussion with trade unions (excluding local government given their separate responsibilities and negotiating arrangements) will include greater flexibility on rates of pay, terms and conditions, and reshaping and reprioritising public services. There is also suggested a greater focus on absence and an aim to reduce this across the public sector through a greater focus on employee wellbeing 4.13 In summary, the RSR outlines a forecast position of increasing financial constraint for the Scottish Government, with slowing economic growth, higher inflation and increasing spend in demand-led areas of the budget eg health and social security; leaving a continued squeeze on unprotected budgets such as local government over the medium term future. 5 Updated Financial Outlook 5.1 As outlined in previous reports to Council, the financial plan of the Council over the medium term suggested a financial gap in the range of £25m-£58m, with a central planning assumption of a gap of £41m over the three year period 2023/24 to 2025/26. This forecast is prior to any decision on council tax. Assuming a 3% uplift in council tax in each year, the cumulative gap would reduce to a range of £18m-£50m. These forecasts were based on projections of revenue grant, which can now be updated to reflect the forecast flat cash settlement outlined in the RSR. However, there remain a number of key risks to the medium term financial position which are further detailed below. Government Grant 5.2 The section above outlines the forecast position for the local government settlement ie a flat cash position, with a marginal uplift in the final year of the RSR. Based on estimated inflation levels this would be equivalent to a forecast 7-8% reduction over the RSR period, and this projection may be at the lower end of the scale given the very high levels of inflation currently being experienced. Page 8 of 212
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The information in the RSR outlines the core local government settlement, however there is an added complexity in that in recent years there has been transfers from other portfolios (notably health & social care and education) for specific priorities which local government is mandated to deliver eg increased teacher numbers. In 2022/23 these transfers amounted to 15% of the total funding available to local government – circa £1.5bn. Therefore while there is welcome clarity in relation to planned core revenue settlement, this is not the case for all these other elements, with only transfers in relation to health and social care, early learning and additional teachers being confirmed. 5.3 In addition, while there is now relatively greater certainty with regards the overall quantum of the local government settlement, the allocation to individual councils is subject to the updating of the distribution process and factors within that. The Council is already aware of future pressure on the early learning funding as the agreed distribution is embedded within the overall settlement. 5.4 In general terms however, the medium term outlook has been revised to reflect the flat cash projection outlined in the RSR; noting some downside risk should there be increased pressure in the Scottish Government budget to fund for example further demand led funding increases to the NHS or social security. Pay 5.5 The pay settlement for 2021/22 was agreed at a level which exceeded the budget provision made in setting the 2021/22 by £2.2m. This position was addressed in setting the 22/23 budget, with further provision for 2022/23 being incorporated based broadly on the parameters set out in the Scottish Government public sector pay policy. The very high levels of inflation being experienced and the associated impact on household finances has resulted in an environment where agreeing the 2022/23 pay award is going to be extremely challenging. This is clearly demonstrated in the current balloting by Trade Unions of members with regards industrial action following their outright rejection of a 2% pay offer from COSLA. 5.6 Current forecasts for inflation suggest further rises may be possible, (peaking at up to 11% by the end of 2022) this should be followed by a relatively steady decline over the next 18-24 months (the Bank of England forecast a fall to 2.1% by Summer 2024). In this context, the outlook for pay settlements is increasingly challenging in terms of affordability; and in terms of a history of relatively low increases over the past decade. This is clearly demonstrated by the information within the SFC publication which suggests a significant fall in real household disposable income – an effect which is disproportionately experienced by low income households. 5.7 The impact on the council budget strategy however, is higher forecast cost pressures in the immediate term which the Council has limited flexibility to address without the utilisation of reserve balances. The financial strategy response to this altered outlook is explored later in this report. COVID19 longer term impact 5.8 It is expected that there will be longer term costs incurred in relation to the pandemic or from decisions the Council has taken in order to respond and to support communities and the organisation recover. Page 9 of 212
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These costs continue to evolve but it is expected that there will be permanent behavioural and societal changes which will demand a service response and which may manifest themselves in terms of both increased cost and/or reduced income. Examples of this include increased levels of household waste, longer term hybrid or remote working, increased cleaning requirements and ongoing support to communities – in particular children and families where demand for mental health support is increasing. The longer term impact on council tax collection levels will also require to be closely monitored with there still being some uncertainty as to how collection levels will be affected. Collection rates have encouragingly held up well over the course of 2021/22 although the impact of the developing cost of living crisis in 2022 may yet have a negative impact on future collection rates. Other medium term financial issues 5.9 There are a range of other considerations for the financial strategy which are likely to impact over the medium term and which are summarised below: HSCP – the National Care Service proposals which are being considered for implementation over the course of the current Parliament will potentially impact on the Council’s financial arrangements, but more significantly on the HSCP. The practice of requiring ring-fenced elements of the local government revenue grant to be passed through to the HSCP is anticipated to continue, with the Council’s budget assumption being that no further contribution from Council resources will be made. Education recovery – the Council has received specific resource from the Scottish Government to support education recovery, with costs being incurred on additional teaching staff and pupil support; and also on devices which enable remote learning. It is expected that this funding will continue to be utilised over a number of academic years to ensure ongoing recovery and additionality of teaching resource; however there are likely to be recurring costs which arise and endure after the current funding has been utilised which the Council will require to fund. Council Commitments – as previously reported to Council, the financial plan includes provision for the recurring impact of existing commitments including City Deal investments and schools investment; and will require to reflect longer term impacts which may emerge from service changes required to support current initiatives in regard to Tackling Poverty, Social Renewal, Alcohol and Drugs and Climate Change. The updated Council Plan currently being developed will be a key determinant of these potential costs. The current high levels of inflation will also manifest themselves in unavoidable cost pressures in some long term contracts where annual contractual uplifts are linked to inflation indices eg the schools PPP contract and some ICT contracts. 5.10 The Council’s medium term financial plan is continually updated in light of new information as outlined above and in response to evolving views on uncertainties linked particularly to grant and pay. While there is now relatively more certainty in terms of grant, the prospects for pay and supplies spend are now much more volatile, linked to current exceptional levels of inflation. Page 10 of 212
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The updated outlook continues to consider a range of scenarios which suggest that over the next three year period, the Council will without doubt require to deliver significant budget savings to achieve a balanced budget. Since the previous update in March, the scale of these has remained broadly consistent and likely to fall within a range of £29 million - £61 million, with a central forecast of a deficit of £44m over the three year period. These estimates are prior to the impact of any decision with regards council tax increases in each year. Members will recall that council tax provides a critical but limited avenue to increase resources. For illustrative purposes these lower and upper forecasts would reduce to circa £16 million - £49 million after adjusting for an exemplar 3% per annum increase in Council Tax levels each year, with a central forecast gap of £31m. 5.11 This three year forecast continues to represent a wide variation in potential optimistic and pessimistic planning scenarios and it is probable that over the three year period the actual outcome has a greater likelihood of falling closer to the central scenario of a financial gap of circa £44 million (circa £31 million after adjusting for the illustrative Council tax increase). 5.12 This updated position, while not significantly differing from previous forecasts in terms of total gap, does have a different context in that the main drivers for the gap relate to spend issues – grant income now being relatively more certain. The profile of the gap is also now more immediate – predominantly being related to near term pay considerations as have been outlined above. The Council will therefore need to act decisively at the required pace to secure the future financial stability and sustainability of the Council moving forward. In this context it is recommended the Council agree to develop at pace a portfolio of work aimed at ensuring financial sustainability (and short term financial stability) is prioritised; and that savings of £35m are targeted over the next three years in order to close the projected financial gap outlined above and allow for a degree of flexibility to manage the risks associated with the challenge to deliver this scale of savings over a relatively short period. 6 Financial Strategy Response 6.1 The Council has a history of sound financial management as evidenced in annual audit reports from Audit Scotland. This position has in the past been underpinned by the Council prioritising key financial decision making, whereby the financial sustainability of the Council was protected by adopting a medium term perspective and taking savings decisions early and in good time relative to the forecast requirements outlined in the medium financial plan. As well as ensuring continued financial stability, this strategy has also in many years provided the financial capacity to support investment decisions – usually on a non-recurring basis – which support Council agreed priorities such as Tackling Poverty and addressing climate change. 6.2 The Council’s main route to delivering recurring savings has been through its long term transformation programme, branded Right for Renfrewshire in its latest incarnation. The three year financial strategy 2020 – 2023 was underpinned by a requirement for the transformation programme to support the delivery of £25 million of recurring revenue savings over the medium term period to 2023. Page 11 of 212
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An initial phasing assumption of savings of £7 million, £13 million and £5 million was made for each financial year through to 2023. Members will however be aware that, at the onset of the coronavirus pandemic, a decision was taken to formally pause the programme, recognising the capacity of the Council was required to be fully diverted to support the emergency response. As has been outlined in previous update reports, the longer term impact of this decision is that the Council’s pipeline of associated savings has now fallen behind the requirements to secure overall financial sustainability – a position which needs appropriately addressed at sufficient pace. 6.3 The approved Council budgets over the 2020/21 to 2022/23 financial years have included £6.5m of recurring savings agreed from Right for Renfrewshire service redesigns. In line with the original savings objective, there would remain approximately £18.5m of associated savings yet to be delivered through the Council’s transformation programme as a contribution to the £35m target outlined above. However, the approach to target setting within the programme has previously been based on an assumed level of saving being deliverable from “influencable spend” ie those council budgets for which there is a reasonable degree of management influence over how those budgets could be deployed – with the target saving being in the region of 15%-20% of current spend. In reviewing the programme and associated council budgets in light of the experience and demands of the past two years, it is now considered that the original £25m target will need to be revised, and it is suggested that a balance of savings from transformation activity be realigned to £15m. It is also considered that the project management and support arrangements for the programme will also require to be revised so they clearly align with the financial sustainability portfolio outlined above. 6.4 Council has been previously advised that there remains a significant risk that even once fully remobilised and restarted, the pace at which transformation work can progress may continue to be hampered and constrained by the capacity of the organisation, and therefore the use of capital financing flexibilities would be required in order to balance the financial position in the short term. Council agreed in setting the 2022/23 budget to use these flexibilities to bridge the savings gap over the medium term. This approach will result in higher borrowing costs in the longer term, and this will require to be met through appropriate base budget adjustments in the coming years and the release of long-term flexibility resources. The required support to the Council’s 2022/23 budget from this approach was significant at £7.5 million, and this position will require to be unwound over the medium to longer term. Any further potential for efficiencies from this approach will continue to be explored, as will any potential for savings from the revised accounting arrangements for service concession arrangements agreed by the Cabinet Secretary and announced as part of the RSR outlined above. 6.5 However, the combined measures from accounting flexibilities and transformation are together not going to be sufficient to close the forecast financial gap the Council is facing, meaning a range of other financial sustainability measures will require to be explored. It is recommended that Council agree a portfolio of additional measures be explored and developed by Directors over the summer period with appropriate future board reporting as to the savings potential from each of these. It is proposed the portfolio would comprise the following programmes (many of which mirror the approach being taken by the Scottish Government): Page 12 of 212
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a. Strategic Property Review and new ways of working o Review of all property assets being utilised by the Council (owned or leased) with the aim to assess and identify rationalisation options and an overall reduction in the Council’s property holdings increasing utilisation rates and focusing activities in better quality assets; development of core principles for property management; consider opportunities from new ways of working in a post-pandemic environment eg hybrid working and the subsequent impact on property demand, particularly office accommodation and utilisation; develop simplified arrangements for the management of property assets, including those related to management, maintenance, and associated charging; consider any commercial opportunities in terms of property holdings b. Charging, fees and commercialisation o Assess and benchmark the current level of fees and charges relative to peer councils and cost of service delivery, considering the potential impact on service users and demand; review the corporate concession policy (last agreed by the General Management and Finance Policy Board March 2011) to ensure it remains fit for purpose; review the current level of internal charging and assess both whether charging levels are appropriate; explore any further opportunities for increasing income or increasing the council’s commercial approach to service delivery eg EV charging, advertising or other options as may be permitted by the Scottish Government c. Review of council risk tolerance o An assessment of the position council services practice with regards risk mitigation and tolerance; and where this potentially may be adjusted to secure cashable efficiencies eg insurance premiums; consider where an alternative position on risk may allow the council to change the way it delivers services or operates as an organisation d. Strategic review of procurement o Assessment of the Council’s purchasing patterns, processes and areas for improvement (potentially with support from Scotland Excel based on their knowledge of carrying out similar reviews in other local authorities); Consideration for reduced scope of purchased items/standardised options for purchases; reduced volumes of purchases/stockholding (always considering the management of supply risks for key services); consideration of increased use of national contracts across both revenue and capital areas; and other contract optimisation opportunities Page 13 of 212
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e. Review of local policy position o Review of current policy position in terms of service delivery, including an understanding of service delivery standards or obligations, to assess where the council delivers a standard/quantity/quality of service which is above comparative benchmarks or national minimums; develop an understanding of costs involved in service provision due to local policy position across services and potential saving options which may be generated from an alternative approach; including current costs and potential inflationary forecasts from current service provision standards f. Review of management grades and structures o Review of management structures across the council to understand the current structures and grades of staff, spans of control etc; consider the impact of specialist skills on grades and structures and whether these require to be reflected in alternative standards for spans of control/structures etc; develop standard principles for management structures and suggestions for implementation recognising the current/recent reviews of service undertaken under the transformation programme which have resulted in revised management structures in some services. g. Connected communities o Consider potential areas where continued development and expansion of community participation/ownership of council- delivered services or council operated assets may release service efficiencies in line with community empowerment objectives; assess potential for increased levels of participatory budgeting which may inform future service delivery decisions; assess overall levels of grant support to community groups from across council services; and council procured services from the third sector h. Digital strategy o Review the council digital strategy for areas of investment or redesign which will focus on generating longer term efficiencies and/or improved customer service or internal process improvement; develop a prioritisation framework for digital proposals which bases investment decisions on a clear business case i. Council tax and tax policy o Review the current council tax base for any potential scope to increase the level of budgeted income through increased housebuilding and a risk based review of prospective collection rates; develop options for consideration of other local taxes in line with Scottish Government proposals Page 14 of 212
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6.6 Indicative potential savings for each workstream will also be developed, based on the work to be undertaken over the summer period, and these will be reflected in future reports. The proposed workstreams are likely to be accompanied by tactical reviews of discretionary spend across departments; with a view to an overall savings programme being developed totalling an estimated £20m over the next three years, which is in addition to the £15m targeted from service transformation and will culminate in a total financial sustainability portfolio savings of circa £35m as recommended above. 6.7 In addition, the Council will need to consider how it can flexibly utilise reserves to assist managing the financial risks associated with the challenge of delivering future savings at this scale on over a relatively short period of time, or from spending pressures which manifest themselves at a level above that anticipated; always considering the overall levels of financial risk and longer term financial sustainability. 6.8 Members should remain aware that securing £35m of financial savings represents a very significant challenge for the organisation, not just reflecting the scale of savings but in the context of the Council being required to do so after such a long preceding period of similar financial challenge having been in existence. The Council has been delivering financial savings at significant scale since 2011/12 following the onset of the austerity agenda across the public sector (with savings predominantly secured from non-protected areas of service such as corporate functions, community based services and financial flexibilities) and reflecting the cumulative impact of long term cost pressures over the past decade or so. It was long expected that the scale of required medium term savings would gradually soften with an eventual return to growth in local government spending capacity as we progressed into 2020 and the new decade. However, following the economic impact of major global events such as the pandemic and current Ukrainian crisis the outlook for the public expenditure landscape has shifted very materially in a short period of time. In this context, it should be recognised that following the recent Resource Spending Review announcement by the Scottish Government, local government in Scotland and the Council is expected to be moving into a distinctly new phase of heightened financial challenge and risks where delivering high levels of financial savings is likely to have greater implications for the delivery of future services and outcomes than it has over the past decade. 6.9 The financial risks outlined above reinforce the need for the Council to be decisive, and to make substantial decisions at a greater scale than over recent years in order to fully commit to the delivery of the material change and transformation which will be required over the medium term. This is likely to require the lower level of resources at the Council’s disposal to be focused on those areas of greatest need and priority. 7 Capital Investment Programme 7.1 Previous reports to Council have outlined the impact that COVID19 has been having on the capital programme, with initial lockdown measures severely delaying progress with investment projects since 2019; and subsequent supply constraints continuing to impact progress with projects since then. Page 15 of 212
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7.2 In addition to delays however, a significantly higher risk in relation to construction inflation has been emerging. Energy, supplies and labour shortages are being experienced which is driving inflation in the construction sector higher, along with increased demand as backlog maintenance is tackled and new projects commence as we emerge from the worst of the pandemic. The war in Ukraine is exacerbating these constraints. Key materials such as steel, timber, roof tiles and copper are experiencing both significantly increased costs and supply shortages. The Office for National Statistics is tracking construction inflation generally at 8%; with the UK Government Department for Business, Energy and Industrial Strategy index for material prices tracking at 21% in March 2022. 7.3 The Scottish Government have taken the opportunity to revise their capital spending in light of these pressures, but also in light of the reduced capital settlement compared to what had been expected from the UK Government. Revised spending allocations have been published by the Scottish Government alongside their Resource Spending Review (RSR), which also updates allocations to reflect the priorities set out in the RSR, particularly in terms of investment in infrastructure to support the transition to net zero carbon emissions. 7.4 The detail published in the review is at budget level 2 portfolio which includes social justice, housing and local government together, so it is not possible to ascertain exactly what the impact is for the local government capital settlement alone, however, the allocation in 23/24 is £60m less than in 22/23, dropping by a further £30m in 24/25 before recovering slightly in 25/26 but still to a level below that allocated in 22/23. This allocation exacerbates the spending pressures the Council will experience in its capital investment programme, potentially requiring an increased level of borrowing which simply translates into further revenue pressures. This is a particular concern in terms of schools investment under the LEIP programme, where the Scottish Futures Trust have confirmed there is unlikely to be any expansion to the overall funding available, so any increase in allocation for Phase 2 projects (which includes the new Paisley Grammar Community Campus) would simply reduce funding available for Phase 3 (which the Council plans to bid for in relation to Thorn Primary School). 7.5 Members will recall that the current level of capital grant funding is able only to support a limited rolling lifecycle maintenance programme across all asset classes. The Council will therefore be required to continue to seek out and pursue alternative capital grant opportunities from government funds and other grant providing bodies as well as recognising that prudential borrowing now represents the most significant tool at the Council’s disposal to support major investment. However, prudential borrowing requires to be financially sustainable and underpinned by recurring revenue resources to ensure this is the case. As the Council moves forward and major financial challenges persist for the revenue budget, the capacity to sustainably support prudential borrowing will become an increasing challenge. 7.6 The impact of inflationary price rises is now being increasingly experienced in both live Council projects and as Council projects are coming to the market. Council has previously been advised that it will need to keep under careful and detailed review the cumulative impact on both individual projects and the overall approved capital plan as set against available resources and contingencies; and remain alert to the prospect of capital projects requiring additional funding to maintain the deliverability of the overall programme. Page 16 of 212
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Council has previously agreed to earmark £5 million of COVID19 resources for this purpose in the first instance, however is increasingly apparent that this sum is insufficient given increasing prices of two commodities in particular – steel and bitumen. European steel prices have increased from an average £500 per tonne in early 2021, peaking at nearly £1,200 per tonne in late summer 2021, before falling back slightly to around £950 per tonne currently. In particular, the high energy usage required to produce steel is a factor, as is the overall production capacity as many European plants are based in Ukraine. A separate report to this Council meeting seeks approval to ringfence £10m of reserve balances in order to address anticipated pressures which continue to emerge across the live capital programme. 7.7 In assessing the impact of these inflationary pressures on the overall capital programme, and with regards in particular to those projects which have a significant exposure to steel commodity price increases, an emerging risk in relation to the Council funded element of City Deal projects has become evident – in particular with the live Clyde Waterfront and Renfrew Riverside (CWRR) project. The Council’s long-term financial commitment in relation to the delivery of these projects extends to the element of investment that requires to be funded outwith the national government grant contributions. This is funded by the Council via prudential borrowing which ultimately results in a long term annual debt servicing cost charged to the revenue budget. In this regard, a level of provision has been built into the Council’s revenue planning arrangements for some time to ensure this financial requirement is appropriately accommodated. Council agreed in December 2020 that the borrowing required deliver the projects be set at £37 million. This requirement could be comfortably accommodated within the existing revenue provision that has already been built into the Council’s financial plans through matching the Council’s borrowing to those elements of the projects with the longest asset life coupled with a low interest rate environment that currently exists. 7.8 In order to maintain current levels of contingencies and risk mitigation within these projects, and faced with the extraordinary levels of price inflation as outlined above, a revised level of provision is required, estimated at £49m. A reassessment of the level of borrowing which could be accommodated within the existing revenue provisions incorporated into current financial plans; again based on the principles outlined above, confirms capacity to deliver a further £8m of borrowing. In addition, it is proposed that £4m of funding from within the Covid construction ringfenced provision set aside in closing the 2021/22 financial year be allocated to the CWRR project; with appropriate revision being made to the capital plan. Page 17 of 212
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_______________________________________________________________ Implications of the Report 1. Financial – the report highlights the scale and shape of the short and medium term financial challenge facing the Council. The early recommencement and delivery of the transformation programme and other financial sustainability workstreams as outlined in the report are critical to ultimately supporting the Council secure a financially sustainable position. 2. HR & Organisational Development – the medium term financial position and associated plans require to align with workforce and service plans to ensure the size and composition of the Council workforce remains appropriate and affordable. 3. Community/Council Planning – the Council requires to remain financially sustainable in order to deliver on its priorities as outlined in the Council and Community Plans; and these revised Plans will in turn require to inform the financial strategy. 4. Legal - none 5. Property/Assets – the report outlines a proposal to undertake a strategic review of property which will aim to ensure the Council’s asset base remain effective and efficient 6. Information Technology – the report outlines the need to ensure the Council Digital strategy support ongoing financial sustainability; with any digital developments being underpinned by a robust business case 7. Equality & Human Rights – The recommendations contained within this report have been assessed in relation to their impact on equalities and human rights. No negative impacts on equality groups or potential for infringement of individuals’ human rights have been identified arising from the recommendations contained in the report. If required following implementation, the actual impact of the recommendations and the mitigating actions will be reviewed and monitored, and the results of the assessment will be published on the Council’s website. 8. Health & Safety - none 9. Procurement – the report outlines a proposal for a strategic review of procurement practice in order to support the Council’s ongoing financial sustainability. 10. Risk – as outlined in the report, the Council’s financial risk exposure both in the immediate term and over the medium term remains high. Page 18 of 212
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The report outlines ongoing uncertainty as well as a range of key measures to be implemented as part of the medium term financial planning arrangements to protect the Council’s immediate financial stability and resilience but also continue to progress toward medium term financial sustainability. 11. Privacy Impact - none 12. Cosla Policy Position – COSLA are undertaking active engagement with the Scottish Government in relation to the outcome of the Resource Spending Review in order to protect as far as possible the interests of local government. 13. Climate Risk - none __________________________________________________________________ Author: Alastair MacArthur, Director of Finance & Resources Page 19 of 212
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1 ___________________________________________________________________ To: Council On: 30 June 2022 ___________________________________________________________________ Report by: Director of Finance and Resources ___________________________________________________________________ Heading: Treasury Management Annual Report for 2021/22 ___________________________________________________________________ 1. Summary 1.1 It is a requirement of the Local Government Investments (Scotland) Regulations 2010 that a report outlining the treasury management activity undertaken during the year is presented to Council at the end of each financial year. 1.2 This report meets the requirements of these regulations, as well as the CIPFA Code of Practice on Treasury Management (the Code) and the CIPFA Prudential Code for Capital Finance in Local Authorities (the Prudential Code). 1.3 All aspects of the Treasury Policy Statement were complied with in 2021/22. ___________________________________________________________________ 2. Recommendations 2.1 It is recommended that the Council approves the Treasury Management Annual Report for 2021/22. _________________________________________________________ 3. Review of 2021/22 Treasury Activities 3.1 Treasury Portfolio Position at 31 March 2022 The Council's external borrowing position at the beginning and end of the last financial year was as follows: Item 4 Page 21 of 212
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2 Borrowing Position as at 31 March 22 Borrowing Position as at 31 March 21 Change £ m (a) Average Interest Rate £ m (b) Average Interest Rate (a) - (b) Long-term Borrowings Public Work Loans Board (PWLB) Fixed Interest 201.30 3.97% 202.13 3.99% (0.83) Market Loans 52.92 4.69% 52.92 4.69% - Total Long-term 254.21 4.12% 255.05 4.13% (0.83) Short-term Borrowings Common Good Funds 2.35 0.11% 5.43 0.38% (3.08) Agencies, Joint Boards 50.82 0.11% 27.27 0.38% 23.55 Total Short-term 53.17 0.11% 32.70 0.38% 20.47 Total Borrowings 307.38 3.43% 287.75 3.71% 19.64 Temporary Investments 215.36 0.18% 187.72 0.18% 27.64 4. Review of Borrowing and Investment Outturn for 2021/22 4.1 Overall, the Council’s total external borrowings increased by £19.64m. The main reason for the increase is a result of a higher inter-company balance between the Council and Renfrewshire HSCP which reflects their approved medium-term financial plan and reserves strategy. The balances held by the Council on behalf of the Common Good Funds have reduced by £3.08m. This was due to the transfer in the year of funds (£3.6m) to abrdn plc, who manage investments on behalf of the Common Good Funds. 4.2 Temporary investments held by the Council increased by £27.64 million. The increase in investments is attributable to a number of issues including the re- profiling of substantial elements of the capital programme (where capital expenditure was delayed due to COVID19 lockdowns and social distancing measures); and a number of cash-backed provisions and reserves that the Council has made for specific purposes in closing the 2021/22 accounts. 5. Review of Borrowing Strategy during 2021/22 5.1 The agreed strategy for 2021/22 was approved by Council on 4 March 2021. 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. Page 22 of 212
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3 5.2 This strategy was prudent, as investment returns were very low and minimised the risk of placing investments with counterparties. The strategy also avoided a “cost of carry” on any new long-term borrowing that was not immediately used to finance capital expenditure, as it would have caused a temporary increase in cash balances; this would have incurred a revenue cost, being the difference between (higher) borrowing costs and (lower) investment returns. 5.3 The policy of avoiding new borrowing by running down excess cash balances has been successful. However, this has been kept under review to avoid incurring higher borrowing costs in the future when the Council may not be able to avoid new borrowing to finance capital expenditure and/or the refinancing of maturing debt. 6. Review of Investment Strategy and Investment Outturn for 2020/21 6.1 In carrying out investment activities, the Council will have regard to The Local Government Investment (Scotland) Regulations 2010, the accompanying Scottish Government Finance Circular 5/2010 and the CIPFA Treasury Management in the Public Services Code of Practice and Cross-Sectoral Guidance Notes (“the Treasury Management Code”). The Council’s investment priorities are: the security of capital; and liquidity of its investments. The Council’s investment policy was outlined in the Council’s Annual Investment Strategy Report 2021/22 which was approved by Council on 4 March 2021. This policy set out the Council’s approach for choosing investment categories and counterparties, and is based on credit ratings provided by the three main credit rating agencies, supplemented by additional market data (such as rating outlooks, credit default swaps, bank share prices etc.). 6.2 The expectation for interest rates within the treasury management strategy for 2021/22 was that Bank Rate would remain at 0.1% until it was clear to the Bank of England that the emergency level of rates introduced at the start of the COVID-19 pandemic were no longer necessary. 6.3 The Bank of England and the Government also maintained various monetary and fiscal measures to support businesses through the worst effects of the pandemic, in many cases via local government. Page 23 of 212
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4 This meant that for most of the year there was much more liquidity in financial markets than there was demand to borrow, with the consequent effect that investment earnings rates remained low until the turn of the year when inflation concerns indicated that the Bank of England would need to lift interest rates to combat the effects of growing levels of inflation (CPI was 6.2% in February). 6.4 During 2021/22, the Council only invested with institutions listed in the Council’s approved Counterparty list and in the permitted investment categories. The investment activity during the year conformed to the approved strategy and the Council had no liquidity difficulties. 6.5 The table below shows interest rates achieved by the Council on its temporary investments during the year and, for comparison, the benchmark rate. The benchmark was changed in 2021/22 and is now the 7-day compounded SONIA rate, as the previous measure is now obsolete following the withdrawal of LIBID. Temporary investments - internally managed 2021/22 2020/21 Average Investment £236.30m £160.39m Actual rate of return 0.11% 0.38% Benchmark return 0.13% 0.06% 6.6 The graph below shows the trend of interest rates on investments over the course of the year. The Council out-performed the benchmark for much of the year; however, in the current rising investment rate environment the new measure presents higher investment rates than those available to the Council, as many of the Council’s current investments commenced earlier in the year. Throughout the year the Council made use of opportunities where appropriate to invest for longer periods with appropriate counterparties up to one year when better rates were available. These rates offered some value over the year however, deposit rates remained depressed during the year due to the reasons outlined above. 6.7 The current treasury strategy remains appropriate to the Council’s ongoing financial, investment and treasury requirements, but is continually reviewed to ensure it remains supportive to the Council’s overall financial position, investment priorities and medium-term financial forecasts. Page 24 of 212
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5 While the strategy was recently approved in March 2022, it is continually being reviewed to ensure as the economic and political landscape changes, and as the Council’s financial strategy develops, that borrowing and investments are managed to accommodate both short to medium-term treasury requirements and also to ensure that best value is secured from longer term investment in instruments appropriate for this purpose and consistent with the Council’s risk profile. 7. Debt Rescheduling 7.1 No debt rescheduling was undertaken during the year, as the average 1% differential between PWLB new borrowing rates and premature repayment rates made rescheduling uneconomical. 8. Compliance with Treasury Limits 8.1 The Prudential Code for Capital Finance in Local Authorities came into force on 1 April 2004 and replaced the previous system of Section 94 Government controls over capital investment and borrowing. The Prudential Code allows greater local flexibility for investment decisions that are informed and supported by a basket of performance indicators. The 2021/22 indicators were approved by Council on 4 March 2021, and refreshed on 10 November 2021. 0.00% 0.50% 1.00% 1.50% 2.00% Interest Rates Temporary Investment Rates Renfrewshire Vs Comparator (Backward looking 7 day SONIA rate) 7 day SONIA Renfrewshire Page 25 of 212
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6 8.2 The Council’s overall performance against the basket of these indicators provides a firm basis for the monitoring and control of capital investment and borrowing and for determining that it is affordable. Certain headline indicators are sub-divided per recommended best practice into two programmes: housing and non-housing. 8.3 The key performance indicators for Treasury are: An “Operational Boundary” for the Council’s external borrowing (the upper limit for the aggregate external borrowing needed) plus an “Authorised Limit” for the Council’s external borrowing (the upper limit of aggregate external borrowing that is affordable and prudent). A ratio of financing costs to net revenue stream (an affordability measure for debt repayments). An upper limit for fixed rate borrowing maturing within the short, medium and long-term (to ensure that the Council is not exposed to a significant re- financing requirement in the short to medium term). In addition, it is a requirement of the Council's Treasury Policy Statement that the maximum amount of long-term borrowings maturing in any one year will be no more than 15% and the maximum amount of long-term borrowings maturing in any five year period will be no more than 50%. The objective of these limits is to ensure that the Council is not exposed to a significant re- financing requirement over a short period when interest rates could be relatively high. 8.4 The main source of the Council’s borrowing is from the Public Works Loan Board (PWLB). The borrowing rates are based on, and are determined by, the yield on UK Government bonds (gilts). The main influences on gilt yields are Bank Rate, inflation expectations and movements in US treasury yields. The overall level of interest rates and bond yields has fallen over the last 30 years as central banks have been successful in lowering inflation also the high level of borrowing by consumers has meant that central banks do not need to raise rates by much to have a major impact on consumer spending/inflation. 8.5 Gilt yields fell sharply from May 2021 to September and then spiked up again before falling through December. However, by January 2022 views changed as markets began to focus on increasing inflation caused by the opening of economies following the pandemic and the rising energy and food prices connected to the Russian invasion of Ukraine. 8.6 At 31 March 2022, all gilt yields from 1 to 5 years were between 1.11%-1.45% while the 10-year and 25-year yields were at 1.63% and 1.84% respectively. For PWLB rates, the various margins for borrowing are as follows: - Page 26 of 212
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7 PWLB Standard Rate is gilt plus 100 basis points (G+100bps) PWLB Certainty Rate is gilt plus 80 basis points (G+80bps) PWLB HRA Standard Rate is gilt plus 100 basis points (G+100bps) PWLB HRA Certainty Rate is gilt plus 80bps (G+80bps) Local Infrastructure Rate is gilt plus 60bps (G+60bps) 8.7 There is likely to be a further rise in short-dated gilt yields and PWLB rates over the next three years as the Bank Rate is forecast to rise from 0.75% in March 2022 to 1.25% later this year. This will be more likely if the economy proves resilient in the light of the cost of living crisis. 8.8 External Borrowing at the Year-end The Council’s aggregate external debt was contained within both the Operational Boundary and the Authorised Limit. The outturn compared to the prudential limits is as follows: 2020/21 Outturn 2021/22 Borrowing Limits 2021/22 Outturn £m £m £m 323.94 Aggregate external debt of the Council at 31 March 2022 320.51 393 Operational Boundary 375 409 Authorised Limit 390 8.9 Ratio of Financing Costs to Net Revenue Stream This indicator is expressed as a proportion. Both the Housing and Non- housing programme were within estimate. 2020/21 Outturn 2021/22 Estimated Ratio 2021/22 Outturn % % % 51.4 Housing 39.91 43.13 4.7 Non-Housing 3.92 3.11 The higher than forecast outturn on the Housing Revenue Account was due to voluntary accelerated repayment of loans fund debt of £2.3m. Non-Housing borrowing costs were lower than estimated due to less borrowing taking place than originally forecast. Page 27 of 212
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8 8.10 Fixed Rate Borrowing Maturing within the Short, Medium and Long-term This indicator is expressed as a proportion of the total debt of the Council. The maturity profile of the Council’s external debt is well within the approved limits. The outturn compared to the estimate is as follows: 2020/21 Outturn 2021/22 Approved Upper Limits 2021/22 Outturn % % % Short-term 0.33 Under 12 months 15 0.73 Medium term 0.73 12 months and within 24 months 15 0.33 4.26 24 months and within 5 years 15 3.95 0.01 5 years and within 10 years 50 0.01 Long-term 94.67 10 years and above 100 94.98 8.11 Long-Term Borrowing Maturity Profile During the financial year, the Council operated within the treasury limits set out in the Council’s Treasury Policy Statement and Treasury Strategy Statement. The Council's debt maturity profile at 31 March 2022 was within these limits, with the exception of the debt maturing in the year 2048/49. The debt maturing in the year 2048/49 is 16.23% of the portfolio as compared to a target of 15%. This marginal breach on the 15% target emerged as a consequence of a change implemented in 2007/08, in the way Lender Option/Borrower Option (LOBO) loans are treated in calculating the Council’s maturity profile. Previously the next option date was used as a “potential” maturity date for each loan and this has been changed to the actual maturity end date for each loan. This better reflects the maturity risk in relation to these loans and although it does marginally breach our 15% target in 2048/49, it is expected that the debt will be subject to re-profiling well in advance of the 2048/49 maturity date. The table below shows the “maturity profile” of the Council’s long-term borrowing. The heavy black line shows the debt maturing, and therefore requiring to be replaced, during each year up to 2071. The lighter broken line shows the debt maturing in the five-year period for each year up to 2064. All years are below 40% and well within our policy limit of 50%. Page 28 of 212
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9 ___________________________________________________________________ Implications of the Report 1. Financial - As described in this report 2. HR & Organisational Development - None 3. Community Planning – None 4. Legal - None 5. Property/Assets None 6. Information Technology – None 7. Equality & Human Rights – The Recommendations contained within this report have been assessed in relation to their impact on equalities and human rights. No negative impacts on equality groups or potential for infringement of individuals’ human rights have been identified arising from the recommendations contained in the report because it is for noting only. If required following implementation, the actual impact of the recommendations and the mitigating actions will be reviewed and monitored, and the results of the assessment will be published on the Council’s website. 8. Health & Safety None 9. Procurement – None 0% 10% 20% 30% 40% 50% 2022/2… 2024/2… 2026/2… 2028/2… 2030/2… 2032/2… 2034/2… 2036/2… 2038/2… 2040/2… 2042/2… 2044/2… 2046/2… 2048/2… 2050/2… 2052/2… 2054/2… 2056/2… 2058/2… 2060/2… 2062/2… 2064/2… 2066/2… 2068/2… 2070/2… Maturity Profile ‐ Spread of Debt From 2022/23 through to 2070/71 1 Year % of total limit 5 Year % of total limit Page 29 of 212
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10 10. Risk – the report outlines a range of measures taken during the course of 2021/22 to manage treasury risks and the risk issues associated with the investment regulations in respect to borrowing and investment activity of the Council and the proposals for managing these risks. 11. Privacy Impact – None 12. COSLA implications - None 13. Climate risk - None _________________________________________________________ List of Background Papers: Non Housing Capital Investment Programme, Prudential Framework and Treasury Management Strategy, and Capital Strategy 2021/22 – 2025/26, Council 4 March 2021 ___________________________________________________________________ Author: Christine McCourt, Head of Finance and Business Services Page 30 of 212
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___________________________________________________________________ To: Council On: 30 June 2022 ___________________________________________________________________ Report by: Director of Finance and Resources ___________________________________________________________________ Heading: Unaudited Annual Accounts 2021/22 ___________________________________________________________________ 1. Summary 1.1. The Council’s Accounts and Group Accounts for 2021/22 will be submitted for audit by the statutory deadline of 30 June 2022 and a copy is attached for members’ approval, along with the accounts of the charities that the Council controls. 1.2. Once approved the unaudited accounts and associated working papers will be passed to the external auditor (Audit Scotland) for their review. Their report on the Accounts will be submitted to a future meeting of the Audit, Risk & Scrutiny Board for consideration prior to the audited accounts being presented to Council for approval. 1.3. Owing to the ongoing Coronavirus pandemic, flexibility in terms of the timescales for approval of the audited annual accounts has been provided under the Coronavirus (Scotland) Act 2020; however Scottish Ministers have indicated their expectation that audited annual accounts are approved by 30 November 2022. ___________________________________________________________________ 2. Recommendations 2.1 Consider, subject to audit, the Renfrewshire Council Annual Accounts for 2021/22; and delegate authority to the Director of Finance and Resources to submit the accounts to external audit within the relevant timescales. Item 5 Page 31 of 212
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2.2 Approve the annual governance statement for 2021/22. 2.3 Note the revenue outturn position for the Council and approve the sums earmarked within the General Fund reserves and HRA reserves as outlined in 3.5 below and Appendix 1. 2.4 Approve the transfer of resources outlined in Table 1 and Appendix 1. 2.5 Approve, subject to audit, the annual accounts attached for the Renfrew, Paisley and Johnstone Common Good Funds and the Coats Observatory Trust Fund which under accounting regulations require to be separately prepared and audited from the Council’s accounts. _________________________________________________________ 3. Background 3.1 The Council’s Accounts and Group Accounts for 2021/22 will be submitted for audit by the statutory deadline of 30 June and a copy is attached for members’ consideration. The accounts have been produced to comply with International Financial Reporting Standards (IFRS) and relevant government accounting regulations. 3.2 In order to comply with charity accounting requirements, the Council’s Accounts do not incorporate statements relating to the Common Good Funds and the Coats’ Observatory Trust Fund which the Council controls. In both these instances, separate accounts have been prepared in accordance with registered charities accounting requirements and are also included for members’ approval. 3.3 The Annual Governance Statement has been incorporated into the annual accounts document and this also requires specific approval by Council. 3.4 Owing to the Coronavirus pandemic and the impact associated restrictions may have in terms of allowing the audit of the accounts to progress, additional flexibility in terms of the approval process for the audited accounts has been provided under the Coronavirus (Scotland) Act 2020. Scottish Ministers have indicated that they consider audited accounts should be approved by Council no later than 30 November 2022 and published by 15 December 2022. The external auditor (Audit Scotland) will endeavour to complete the audit process in line with these timescales; however it is possible that in order to meet Scottish Minister’s expectations the Council may be required to consider options to support the approval of the audited accounts outwith the normal Council meeting cycles. The external audit report on the Accounts will be made available to all members and will be submitted to a meeting of the Audit, Page 32 of 212
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Risk & Scrutiny Board for consideration prior to the Council meeting where the audited accounts are considered. 3.5 The Management Commentary prefacing the Accounts provides an overview of the Council’s financial performance and the key features are: (a) As reported to the Council over the course of the year, significant additional spend and income were recorded in relation to the COVID-19 pandemic. Early in the financial year, significant pressures were forecast which throughout the year were mitigated through additional government support to local authorities. General Fund revenue spending has been contained within overall budget limits, and owing to the advanced distribution of COVID-19 funding from the Scottish Government, a net overspend of £0.079m (0.02% of turnover) was incurred after adjusting for planned carry forwards and committed resources. (b) This outturn position reported to members at Period 10 was a small underspend against a budgeted break-even position. Unallocated balances have reduced to £10.788m moving into 2022/23, consistent with the recommended level agreed by Council in September 2020. It is forecast that there will continue to be significant costs that the Council will incur over the course of 2022/23 and beyond in relation to both the response to the COVID-19 recovery period and the increasing inflation climate, which remain a risk to the Council’s medium-term financial position. In this context both COVID-19 and other specific ringfenced reserves linked to inflation and construction costs have been set aside to be carefully utilised and monitored in order to best support the Council’s financial position over the medium term. (c) Of the overall General Fund reserves, a significant majority is earmarked as detailed at Appendix 1. This represents funding set aside by the Council to support a wide range of key priorities, investments and long- term funding arrangements; some of which are directly related to ongoing costs of the COVID-19 pandemic and for which funding was allocated in 2021/22. The Council will continue to assess the adequacy and use of ringfenced balances and to ensure that any grant funding carried forward is utilised in accordance with its conditions. (d) Unallocated HRA reserves as at 31 March 2022 have been maintained at £6.497m as a result of its break-even position. This balance is still viewed as prudent in terms of risks to the HRA revenue position over the medium term. Page 33 of 212
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(e) As detailed in Table 1 below, specific reserves now total £95.699m, an increase in year of £5.199m, which relates primarily to resources committed to the Council’s capital investment programme and resources related to the provision of schools ICT. Table 1 Opening balance £m Contributions to Reserves £m Reserves Used / Transferred £m Closing balance £m Insurance Fund 2.543 - 0.110 2.653 Reservoir Repair Fund 0.321 - - 0.321 Education Capital Items 1.400 (0.224) 1.093 2.269 Investment Capital Fund 86.236 (0.680) 4.900 90.456 Total 90.500 (0.904) 6.103 95.699 (f) Capital spending of £61.465m on non-housing projects was managed within the overall expenditure control limits approved by Council. As reported over the course of the year, planned spend was significantly impacted by the restrictions on movement and construction. The 2022/23 capital plan has been adjusted accordingly. (g) The Council’s in-year council tax collection performance for 2021/22 was 95.5%, returning an over-recovery compared to budget due to prior years arrears being collected over a longer period following pandemic- related delays. It is however anticipated that as a result of the emerging cost of living crisis that council tax income yield and collection performance may be adversely impacted in 2022/23. Page 34 of 212
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4. FINANCIAL PERFORMANCE 2021/22 4.1 An overview of the revenue budget performance in Policy Board format is outlined at Appendix 2 to this report, including explanatory narrative in respect of the main budget variances. In summary, the position across operational departments, after adjusting for planned carry forwards and committed resources, is as follows: Service Year-end outturn £000s Under/(over)spend Chief Executives 2 Children’s Services (1) Adult Services (HSCP) 0 Environment & Infrastructure (182) Communities, Housing and Planning 49 Finance and Resources 5 Miscellaneous Services (including council tax) 48 Renfrewshire Council General Fund (79) Housing Revenue Account 0 4.2 Housing Revenue Account (HRA) – break-even The final year-end position is in line with the projection previously reported and reflects the net effect of an underspends in employee costs and repairs costs. In line with the debt smoothing strategy of prior years, £2.3m of increased capital contributions were made as part of the HRA Business Plan Strategy to utilise in year underspends to help mitigate the impact of future capital borrowing costs arising from investment in council housing. Unallocated HRA reserves have therefore been maintained at £6.497m. This still represents a prudent level of unallocated reserves for the HRA, which remain available to mitigate any continuing impact of COVID-19 recovery, inflationary pressure and any other unforeseen risks. 5. BUDGET PERFORMANCE - CAPITAL 5.1 Non-Housing Capital Budget Performance Non-Housing capital expenditure totalled £61.465m during 2021/22. Capital receipts of £0.779m were generated from asset sales. These receipts are Page 35 of 212
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added to £8.638m of receipts from prior years, which are available within the Useable Capital Receipts Reserve to provide total receipts of £9.417m. From this, £1.823m was utilised to support current year investment leaving a balance of £7.594m that has been committed to support the ongoing investment programme in future years. The capital investment performance was delivered within the approved prudential expenditure and borrowing limits set by the Council. 5.2 Housing Capital Budget Performance Housing capital expenditure totalled £20.612m during 2021/22. Capital receipts of £0.006m were realised from asset sales during the year. These receipts were fully utilised in 2021/22 to support the agreed investment programme. 6 PRUDENTIAL FRAMEWORK 6.1 The Prudential Framework approved by the Council is supported by a number of indicators and the Council’s performance against these indicators is reported in the Management Commentary in the Accounts. A further report outlining the treasury management activity undertaken during 2021/22 is also on the agenda for this meeting. 7. GROUP ACCOUNTS 7.1 The Code of Practice on Local Authority Accounting in the United Kingdom 2021/22 (“the Code”), requires local authorities to consider accounting for their interests in all types of entity e.g. Joint Boards and Committees, Leisure Trusts, companies etc. This includes other local authorities or similar bodies as defined in section 106 of the Local Government (Scotland) Act 1973 e.g. statutory bodies such as Valuation Joint Boards plus all Joint Committees. Under the Code, 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. 7.2 To comply with the mandatory requirement for such disclosures we have once again reviewed over the last year a number of organisations with which the Council is involved against the accounting guidelines as detailed in the code. We have concluded that the Council is required to prepare Group Accounts and to consolidate the results of the Council with a share of a number of other entities. Page 36 of 212
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7.3 The entities that are deemed to fall within the Council’s group boundary are: • Joint Boards encompassing the Strathclyde Concessionary Travel Scheme Joint Committee, Strathclyde Partnership for Transport, the Renfrewshire Valuation Joint Board and the Renfrewshire Integration Joint Board, • Paisley, Renfrew and Johnstone Common Good Funds and the Observatory Trust administered by the Council, • OneRen Limited, • Park Lane Developments (Renfrewshire) LLP, • Paisley Museum Reimagined Limited. 7.4 Both the Council’s own Accounts and the Group Accounts will be submitted by 30 June to external audit in accordance with the statutory deadline. 8. Common Good Funds and Coats Observatory Trust Fund Accounts 8.1 Under accounting requirements introduced in 2010/11, the Council is required to present the annual accounts of both the Common Good Funds and the Observatory Trust separately from the Council’s main accounts. In addition, the Council is also required to put in place audit arrangements which are separated from the audit of the Council and its own financial statements. 8.2 Enclosed therefore for members approval for submission for audit are the annual accounts for both the Common Good Funds and the Coats’ Observatory Trust which have been prepared in line the Charities Statement of Recommended Accounting Practice (Charities SORP). ___________________________________________________________________ Page 37 of 212
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Implications of the Report 1. Financial – the report provides an overview of the Council’s financial performance over the course of 2021/22 and as at 31 March 2022. The annual accounts will be presented for audit with the audit findings being reported to the Audit, Risk and Scrutiny Board. The report outlines continued sound budgetary control and management of Council expenditure within available resources, but also indicates the likelihood of ongoing pressures on Council finances driven by the response to and recovery from the Coronavirus pandemic. 2. HR & Organisational Development – none arising from this report. 3. Community/Council Planning – the report outlines continued sound financial management, which supports the Council to deliver on its key community and council plan objectives. 4. Legal – subject to approval by Council, the annual accounts will be released to external audit within the statutory timescales. 5. Property/Assets - none 6. Information Technology - none 7. Equality & Human Rights - The recommendations contained within this report have been assessed in relation to their impact on equalities and human rights. No negative impacts on equality groups or potential for infringement of individuals’ human rights have been identified arising from the recommendations contained in the report. If required following implementation, the actual impact of the recommendations and the mitigating actions will be reviewed and monitored, and the results of the assessment will be published on the Council’s website. 8. Health & Safety - none arising from this report. 9. Procurement – none arising from this report. 10. Risk - none arising from this report. 11. Privacy Impact - none arising from this report. 12. Cosla Policy Position – none arising from this report. 13. Climate Risk – none arising from this report. _______________________________________________________ Author: Alastair MacArthur, Director of Finance & Resources Page 38 of 212
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Appendix 1 Balance at 1 April 2020 Transfers out Transfers in Balance at 31 March 2021 Transfers out Transfers in Balance at 31 March 2022 £m £m £m £m £m £m £m Alcohol and Drugs Commission 1.000 0.000 1.000 2.000 (0.196) 0.000 1.804 British Sign Language 0.095 (0.014) 0.000 0.081 (0.080) 0.000 0.001 City Deal 1.181 (0.522) 0.000 0.659 (1.094) 2.185 1.750 Climate Change Action Fund 0.000 0.000 0.742 0.742 (0.131) 0.000 0.611 Community Empowerment Fund 0.432 (0.057) 0.000 0.375 (0.036) 0.000 0.339 Community Safety 0.031 (0.031) 0.000 0.000 0.000 0.000 0.000 COVID-19 Construction Recovery Fund 0.000 0.000 0.000 0.000 0.000 10.000 10.000 COVID-19 Education Recovery 0.000 0.000 6.149 6.149 (3.534) 3.713 6.328 COVID-19 General Recovery Fund 0.000 0.000 11.390 11.390 (16.412) 14.182 9.160 Culture Bid Legacy 2.920 0.000 0.612 3.532 (0.225) 0.260 3.567 Development Contribution – Paisley Town Centre 1.057 0.000 0.000 1.057 0.000 0.000 1.057 Digital Infrastructure 0.410 (0.035) 0.000 0.375 0.000 2.014 2.389 Discretionary business grants 0.000 0.000 2.303 2.303 (1.911) 0.000 0.392 Early Years Change Fund 1.900 0.000 0.000 1.900 0.000 0.000 1.900 Employability 4.704 0.000 3.391 8.095 (1.704) 3.090 9.481 Environment & Infrastructure 2.000 (0.500) 0.000 1.500 (0.500) 0.015 1.015 Inflation Mitigation 0.000 0.000 0.000 0.000 0.000 4.990 4.990 Invest in Renfrewshire 1.829 (3.237) 1.984 0.576 (0.576) 0.000 0.000 Leisure: Inclusive Play Facility 0.050 0.000 0.000 0.050 0.000 0.000 0.050 Memorial Headstone Safety 0.000 0.000 0.987 0.987 (0.362) 0.000 0.625 Paisley Town Centre Heritage Asset Strategy 1.895 0.000 1.100 2.995 (1.895) 0.154 1.254 PPP Schools Replacement Fund 12.670 0.000 0.000 12.670 0.000 0.000 12.670 Private Sector Housing Grant 2.573 0.000 0.059 2.632 (0.851) 0.425 2.206 Pupil Equity Fund 1.470 (0.245) 0.000 1.225 0.000 0.034 1.259 Response to Commission on Tackling Poverty 3.004 (0.773) 0.190 2.421 (1.019) 0.000 1.402 School Music Participation Funding 0.375 0.000 0.000 0.375 (0.125) 0.035 0.285 Service Modernisation and Reform Fund 6.828 0.000 0.153 6.981 (0.124) 4.202 11.059 Social Renewal Plan 0.000 0.000 2.706 2.706 (0.911) 0.000 1.795 Town Centre Public WiFi 0.202 (0.109) 0.000 0.093 (0.060) 0.000 0.033 Villages Improvement Fund 0.370 (0.078) 0.000 0.292 (0.159) 0.000 0.133 Welfare Reform 0.198 (0.010) 0.424 0.612 (0.291) 0.712 1.033 Year end flexibility: Children's Services 1.018 0.000 1.780 2.798 (0.220) 2.713 5.291 General Fund Ring-fenced Total 48.212 (5.611) 34.970 77.571 (32.416) 48.724 93.879 Unallocated element of the General Fund Balance 6.599 0.000 4.288 10.887 (0.099) 0.000 10.788 Total General Fund Balance 54.811 (5.611) 39.258 88.458 (32.515) 48.724 104.667 Housing Revenue Account 6.807 (0.310) 0.000 6.497 0.000 0.000 6.497 Page 39 of 212
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Policy Board Revised Annual Budget Outturn Core Business Outturn COVID‐ 19 Total Outturn Projected Outturn Variance at P10 Movement £000 £000 £000 £000 £000 % £000 £000 Leadership Board: Adult Services 79,974 79,974 0 79,974 0 0.0% 944 (944) Leadership Board: Chief Executive's 27,721 25,567 2,133 27,700 21 0.1% (256) 277 Communities and Housing Policy Board 13,024 12,885 169 13,054 (30) (0.2%) (76) 46 Education and Children's Services Policy Board 214,801 213,642 1,140 214,782 19 0.0% (238) 257 Finance, Resources and Customer Services Policy Board 89,443 89,186 280 89,466 (23) 0.0% 3,587 (3,610) Infrastructure, Land and Environment Policy Board 36,207 32,349 3,920 36,269 (62) (0.2%) (3,505) 3,443 GENERAL SERVICES NET EXPENDITURE 461,170 453,603 7,642 461,245 (75) 0.0% 456 (531) Council Tax (86,467) (86,464) 0 (86,464) (3) 0.0% (400) 397 GENERAL SERVICES NET OUTTURN 374,703 367,139 7,642 374,781 (78) 0.0% 56 (134) Policy Board Key Reasons for Significant Outturn Variance Leadership Board: Chief Executive's Communities and Housing Policy Board RENFREWSHIRE COUNCIL REVENUE BUDGET MONITORING STATEMENT 2021/22 Budget Variance (Adverse) or Favourable COUNCIL OVERVIEW The outturn position of a £21k underspend reflects the net position of a reduction in employee costs due to staff turnover and staff on parenting leave, offset by costs of £249k for supporting OneRen with a revised level of requisition resulting from the continued limitations on service delivery over the year (in following the Scottish Government route map out of the pandemic). That support was funded from the Council's COVID‐19 General Reserve and this drawdown of funds was the principal reason for the movement between the Period 10 projection and the final position. The final year‐end overspend of £30k is after incurring £159k of COVID‐19 related costs. Communities and Public Protection underspent by £136k after absorbing £150k of COVID‐19 related costs, owing to staff being diverted to COVID‐funded activity, such as Mobile Testing Units. Non‐HRA Housing was overspent by £125k, after incurring £9k of additional COVID‐19 related overtime. The overspend arose from an increase in void rent loss, bed & breakfast costs and Supporting People contract payments. The Criminal Justice Service overspent by £18k, mainly due to reactive building repairs. The Economy and Development Service overspent by £23k. An under‐recovery in planning application fee income was partly offset by underspends in contractor payments and transport costs. There is a positive movement of £46k from the projected outturn at Period 10. This is largely due to Building Standards recharges being higher than forecast. Appendix 2 Page 41 of 212
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Policy Board Key Reasons for Significant Outturn Variance Education and Children's Services Policy Board Finance, Resources and Customer Services Policy Board Infrastructure, Land and Environment Policy Board The outturn position of a £19k underspend reflects the net position across a number of divisions, after accounting for £1.140m of COVID‐19 related costs. Underspends in employee costs are offset by overspends in premises costs and third party payments. The underspend in employee costs arises mainly within Early Years from delays in recruitment due to the impacts of COVID‐19. The overspend in premises costs arises across a number of lines, including janitorial supplies in relation to COVID‐19 related additional PPE requirements in schools. The overspend in third party payments relates to residential placements for Childcare, again following the impact of the pandemic. The outturn position of £62k overspend reflects the net position after taking into account £4m of COVID‐19 related funding. The projected year‐end overspend was £3.5m at Period 10 (before this funding drawdown), mainly due to overspends in Refuse Collection and Disposal. The pandemic continued to result in increased costs of absence and holiday cover, and additional employee and vehicle costs for adherence to social distancing measures. There was also an overspend on the supply of household waste bins, partly due to increased prices, and an under‐recovery of commercial waste income. During 2021/22, there continued to be a significant increase in household waste for both residual and recycling tonnages, resulting in increased costs of disposal compared to pre‐pandemic years. In addition, there was a loss of income from both scrap metal and textile contracts. There was an under‐recovery of income relating to parking; however, despite off‐street parking charges being reintroduced during the year, on‐ and off‐street parking and fine recovery income remained significantly lower for 2021/22. These overspends were partially offset by underspends in Social Care Transport with increased income recovery, and in Sustainability and Place, due to vacancy management. The year‐end overspend is £83k within Facilities Management, partially offset by a £12k underspend in Finance and Resource Directorate and £48k underspend in Miscellaneous, resulting in a net outturn for services reporting to the FRCS Policy Board of £23k overspend. Within Finance and Resource Directorate, there were one‐off underspends on software costs, however these were largely offset by telephony overspends and reduced income in Property Services. After the use of COVID reserves, there was a small underspend within Soft FM as a result of vacancies being partially offset by overspends in COVID‐19 related costs, such as cleaning materials, loss of income from the Atrium and car parking. Further overspends in the repair and maintenance of street lighting columns arise from the increased cost of materials. Within Building Services an increase to the previously reported level of overspend was incurred due to additional overtime related to housing void repairs, in addition to significantly increased building materials costs and vehicle maintenance costs. As in previous years, the deficit at the end of the year (£1.066m) was reallocated in proportion to works completed to both the HRA (72%) and Public Building Repairs (28%). At Period 10 the forecast underspend of £3.5m related to uncommitted COVID funding that was subsequently transferred to earmarked balances. Page 42 of 212
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Subjective Summary Revised Annual Budget Outturn Core Business Outturn COVID‐ 19 Total Outturn Projected Outturn Variance at P10 Movement £000 £000 £000 £000 £000 % £000 £000 Employees 318,182 310,181 4,530 314,711 3,471 1.1% (1,107) 4,578 Premises Related 21,685 21,212 0 21,212 473 2.2% (2,806) 3,279 Transport Related 13,658 14,250 384 14,634 (976) (7.1%) (1,292) 316 Supplies and Services 68,569 75,330 949 76,279 (7,710) (11.2%) (1,230) (6,480) Third Party Payments 94,453 79,338 1,140 80,478 13,975 14.8% (3,027) 17,002 Transfer Payments 83,123 114,619 1,911 116,530 (33,407) (40.2%) (1,393) (32,014) Support Services 6,964 4,416 0 4,416 2,548 36.6% 26 2,522 Depreciation and Impairment Losses 22,875 39,684 0 39,684 (16,809) (73.5%) 1,069 (17,878) GROSS EXPENDITURE 629,509 659,030 8,914 667,944 (38,435) (6.1%) (9,760) (28,675) Income (168,339) (205,427) (1,272) (206,699) 38,360 22.8% 10,216 28,144 NET EXPENDITURE (excluding Council Tax) 461,170 453,603 7,642 461,245 (75) 0.0% 456 (531) Budget Variance (Adverse) or Favourable RENFREWSHIRE COUNCIL REVENUE BUDGET MONITORING STATEMENT 2021/22 COUNCIL OVERVIEW Page 43 of 212
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Contents Management Commentary ............................................. 1 Statement of Responsibilities ....................................... 15 Annual Governance Statement ..................................... 16 Remuneration Report ................................................... 23 Comprehensive Income and Expenditure Statement ... 30 Movement in Reserves Statement ............................... 31 Balance Sheet ................................................................ 32 Cashflow Statement ...................................................... 33 Note 1: Expenditure and Funding Analysis ................... 34 Note 2: Prior Year Restatement .................................... 36 Note 3: Financing and investment income and expenditure ................................................................... 36 Note 4: Taxation and non-specific grant income .......... 36 Note 5: Expenditure and income analysed by nature .. 37 Note 6: Grant income ................................................... 37 Note 7: Adjustment between accounting basis and funding basis under regulations.................................... 38 Note 8: Usable reserves ................................................ 39 Note 9: Unusable reserves ............................................ 42 Note 10: Property, Plant and Equipment ...................... 47 Note 11: Heritage Assets .............................................. 49 Note 12: Investment properties ................................... 49 Note 13: Assets held for sale ........................................ 50 Note 14: Intangible assets ............................................. 50 Note 15: Capital expenditure and capital financing ..... 51 Note 16: Service Concession Arrangements ................. 52 Note 17: Leases ............................................................. 53 Note 18: Inventories ..................................................... 54 Note 19: Cash and cash equivalents ............................. 54 Note 20: Debtors ........................................................... 55 Note 21: Creditors ......................................................... 55 Note 22: Provisions ....................................................... 56 Note 23: Financial Instruments ..................................... 56 Note 24: Nature and extent of risks arising from Financial Instruments .................................................... 60 Note 25: External audit costs ........................................ 63 Note 26: Agency services .............................................. 63 Note 27: Related parties ............................................... 64 Note 28: Pension schemes accounted for as defined contribution schemes ................................................... 65 Note 29: Defined benefit pension schemes .................. 66 Note 30: Contingent liabilities ...................................... 71 Note 31: Events after the balance sheet date .............. 71 Note 32: Accounting Standards Issued not Adopted .... 72 Note 33: Accounting Policies – Renfrewshire Council .. 72 Note 34: Judgements in Applying Accounting Policies . 84 Note 35: Assumptions made about the future ............. 85 Housing Revenue Account ............................................ 86 Council Tax Income Account ......................................... 88 Non-Domestic Rates Income Account .......................... 90 Group Accounts ............................................................. 91 Notes to the Group Accounts ........................................ 94 Group Accounting Policies .......................................... 107 Page 46 of 212
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1 Annual Accounts 2021/22 Management Commentary The purpose of the Management Commentary is to present an overview of Renfrewshire Council’s performance during the 2021/22 financial year and to help readers understand its financial position at 31 March 2022. In addition, it outlines the main issues and risks that may impact the performance of the Council in the future. The Council also works closely with the Renfrewshire Health and Social Care Partnership, which delivers care services across the region; and with OneRen, which delivers leisure and cultural services. Renfrewshire Council is organised into five directorate services, as follows: 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 around 179,000 residents in the entire Renfrewshire area, which has a mixed geography, with many villages complementing its three main towns of Johnstone, Paisley and Renfrew. Local Government elections take place every five years. Polling for the most recent local government election took place on Thursday 5 May 2022, resulting in 43 councillors being elected to Renfrewshire Council across 12 electoral wards, comprised as follows: The kind of services that the Council provides includes housing; nursery, primary and secondary education; social services; regeneration and waste services. The Council is also part of a wider Group, with partnerships spanning a number of organisations to varying degrees. Page 47 of 212
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2 Annual Accounts 2021/22 Our Aims and Objectives The Council and its community partners aim to achieve the objectives agreed in the ‘Our Renfrewshire Community Plan 2017-2027’ (http://www.renfrewshire.gov.uk/communityplan), with the overriding vision of: Performance against the Plan outcomes and objectives is monitored by the Community Planning Partnership Board, chaired by the Leader of the Council. The specific responsibilities and actions the Council will undertake to support the delivery of the Community Plan are detailed in the Council Plan 2017- 2022, which can be found on the Council’s website at: http://www.renfrewshire.gov.uk>Your Council>Our key priorities>Council Plan. The Community and Council Plans will be updated over the course of 2022. COVID-19 The COVID19 pandemic has had a continued impact on the Council over the course of 2021/22, as with every individual, community and business across Renfrewshire. In terms of service delivery, governance, financial management and outlook, the pandemic fundamentally affected how the Council operates and is likely to operate in the coming years. The Annual Governance Statement outlines the key issues faced by the Council from a governance perspective during 2021/22. Many of the measures taken in March 2020 to support the Council’s workforce and residents were still in force during 2021/22, including home-working for office-based staff; and additional protective measures in place for frontline staff. Support was also provided to staff who tested positive or who were self-isolating. The Council continued to support businesses, communities and vulnerable individuals with measures such as free school meal payments during school holidays, self-isolation support and discretionary grants. The Council budget agreed for 2021/22 continued to be affected by additional costs and income losses; though as the year progressed the impact was mitigated by sound financial management and further financial support provided by the Scottish Government. Regular reporting of the financial position was provided to each Policy Board; including specific reporting of COVID-19 related pressures. In order to manage the financial risks as they unfolded, the Council agreed a range of measures including the use of financial flexibilities agreed by the Scottish Government and COSLA, and the use of reserve balances as required. Substantial additional funding was provided in 2020/21 and 2021/22 by the Scottish Government to support councils and the communities they serve. The funding provided was largely one-off and in many The Council Plan “Thriving People, Connected Communities” was agreed in September 2017. The Plan outlines five strategic outcomes for the Council over the period to 2022: Reshaping our place, our economy and our future Building strong, safe and resilient communities Tackling inequality, ensuring opportunities for all Creating a sustainable Renfrewshire for all to enjoy Working together to improve outcomes Page 48 of 212
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3 Annual Accounts 2021/22 cases was allocated for specific purposes. The ad-hoc nature of funding announcements and associated grant conditions increased the complexity of monitoring the in-year financial position. Additional funding of £40m was received from the Scottish Government to address service pressures and support communities over the past two years and, where appropriate and to continue to support services and communities, funding has been carried forward to 2022/23 through the use of ringfenced reserves. The Council supported the administration of a large number of business support grants, low income pandemic payments and self-isolation support grants on behalf of the Scottish Government, further adding to the complexity of financial monitoring and the associated cash management. While adding to the administrative burden for councils, the funding was vital in supporting local businesses to remain viable. The Council administered such funding of £24m to families and businesses, as detailed in Note 26: Agency services. Capital investment plans were also significantly affected, owing to ongoing social distancing on construction sites over the year, as well as the availability and increasing cost of commodities, particularly in the latter half of the year. Capital investment of £141.2m was agreed across both housing and non-housing programmes for 2021/22; however, a total of only £82.1m was spent. Future years’ capital programmes will continue to be adjusted to reflect the rephasing of projects as required. Financial Strategy The financial strategy and plans of the Council support the delivery of the Council’s priorities as outlined in the 2017-2022 Council Plan. In order to achieve this, the financial strategy must ensure 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 2022-25 was reported to the Council on 30 September 2021, with updates in December 2021 and March 2022, and the following range of financial planning principles from previous financial strategies persist: i) The Council has an ongoing commitment to efficiency, modernisation of service delivery and prioritisation of resources on the delivery of key strategic outcomes; ii) The Council strives to maximise income, grow its tax base and attract external funding; iii) Investment in service transformation and early intervention / prevention, including lifecycle maintenance to protect existing investments in our assets, is given appropriate priority; iv) Any new borrowing decisions taken by the Council are capable of repayment on a sustainable basis and overall debt levels are contained within affordable long-term parameters; v) The Council’s core budget is not underwritten by the use of general reserves or speculative capital receipts; vi) Council reserves are maintained at a level which provides appropriate financial resilience to the Council and the core services it provides and should be subject to ongoing annual review in the context of the risk profile faced by the Council. The Financial Outlook 2022-25 highlighted that the Council was in a financially stable position in 2021/22, due mainly to additional and carried forward COVID- 19 funding to support service delivery and recovery from the pandemic. However, it also highlighted the fact that the 2021/22 budget was approved with a recurring budget deficit of £1.7m and an estimate of pay inflation that has subsequently been exceeded by the pay settlement. The Council continues to monitor the impact of the pandemic on its services and residents. Page 49 of 212
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4 Annual Accounts 2021/22 Our Performance Progress in delivering the Council Plan is reported biannually to the Council’s Leadership Board; the latest report will be considered on 22 June 2022 and will be available on the Council Committee Management Information System at: https://renfrewshire.cmis.uk.com/renfrewshire/Coun cilandBoards.aspx. The report details progress against actions under the five Council Plan outcomes as well as providing the latest data for a suite of 49 performance indicators. The current Council Plan covers the period 2017-2022 and therefore is nearing the end of its term. Of the 55 actions within it, 48 have been completed. The remaining actions will be carried forward into the new Council Plan and are linked to longer-term strategic priorities. Of the 49 performance indicators reported in June 2022, 36 have a target set and, of those, 64% (23 indicators) met or exceeded their target for 2021/22. A summary of activity against the five outcomes is given below: Outcome 1: Reshaping our place, our economy and our future Good progress continues to be made on the Advanced Manufacturing Innovation District Scotland (AMIDS) at Inchinnan. The two anchor facilities will open in 2022 and £38.7m of Levelling Up funding has been secured to support the AMIDS South project. The Cultural Infrastructure programme is also making good progress, with contractors on site at Paisley Town Hall, the new Paisley Learning and Cultural Hub and Paisley Museum. All three facilities are scheduled to open in 2023. The Employability Service has delivered on ambitious targets. Renfrewshire has the second highest youth employment rate in Scotland, and the Kickstart Gateway placed just over 400 young people into roles across Renfrewshire. Following an easing of restrictions, work on new build council housing has restarted with new homes being completed in Johnstone and Bishopton and works commencing in Ferguslie Park and at another site in Johnstone. Work on the new Paisley Grammar campus is also underway, with the design team and main contractor being recently appointed. The major events programme was disrupted by the pandemic and a hybrid programme was delivered in 2021. In 2022, a number of successful in-person events, including Unboxed 2022 and the Paisley Food Festival, have already taken place. Outcome 2: Building strong, safe and resilient communities During 2021/22, local authorities continued to provide a COVID-19 response as well as focusing on recovery. This response included assisting Public Health Scotland with contact tracing in educational settings, delivering community testing sites, supporting vaccination programmes, providing support to local businesses on compliance, and running the Local Assistance Team (which handled more than 26,000 calls in 18 months). The Neighbourhood Hub model operated in partnership with other public sector and third sector organisations, supported by a network of local volunteers, and provided a wide range of support to residents having to shield or self-isolate during the pandemic. A participatory budgeting process ran in autumn 2021 and awarded funding to groups for activities for 12-25 year olds. This has been followed by the #youdecide programme, which generated almost 3,000 ideas from local residents, and a pilot in schools. A framework for mainstreaming participatory budgeting is in development. A new multi-agency service, Ren10, has launched and is designed to improve families’ access to health and wellbeing support. It is intended to bridge the gap between universal and highly specialist services. To Page 50 of 212
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5 Annual Accounts 2021/22 date, over 1,000 children and young people have been directly supported. Early intervention work on health improvement has continued in schools and covered areas such as emotional literacy, substance misuse, relationships, harmful language, alcohol, consent and coercive control, tailored as appropriate to age. Outcome 3: Tackling inequality, ensuring opportunities for all Actions identified in the Social Renewal Plan have been progressed, with particular focus on food and fuel insecurity. Activity includes the allocation of Community Food Funding through the third sector, the establishment of a Fair Work service to provide employment advice, running affordable credit sessions, and agreeing funding for a Digital Champions programme. Renfrewshire Council has continued to support the Connecting Scotland programme, with services across the council applying on behalf of individuals and organisations resulting in 999 devices secured for service users and 1,602 devices for public sector and community-based organisations, to help them access the benefits of getting online. Although the pandemic has been shown to have an effect on attainment across the whole country, Renfrewshire continues to perform well in comparison with the national average and areas with a similar demographic profile. We continue to deliver successful outcomes in literacy, numeracy and health and wellbeing. There has been a continued drive towards meeting the aims of The Promise for care experienced young people and their families. Engagement has taken place with a wide range of staff teams and partners, and a dedicated Promise Manager is being recruited to lead and co-ordinate the council’s work in this area. The Alcohol and Drugs Change Programme is making good progress and current activity is focused on recognising and responding to trauma, and on tackling stigma. Outcome 4: Creating a sustainable Renfrewshire for all to enjoy The climate emergency remains a key priority for the Council and work is continuing on the Plan for Net Zero. Alongside this, the Climate Change Action Fund has allocated £978,000 to 14 projects, each of them aiming to reduce or mitigate the impact of climate change. The Council’s climate goals are also evident in broader policies and initiatives, such as the creation of a district heating network, the development and delivery of zero energy social housing, and switching part of the Council’s fleet to electric vehicles. The Team Up to Clean Up programme grew considerably during the pandemic and remains highly successful. Almost 9,000 volunteers took part during 2021, collecting over 18,000 bags of litter. Outcome 5: Working together to improve outcomes Supporting staff wellbeing has been a key priority during the course of the pandemic, and during 2021/22 there were a number of enhancements to this support. This included additional mental health training, the launch of an Employee Benefits portal, and a renewed focus on health promotion. Service redesigns identified in Phase 1 of the Right for Renfrewshire transformation programme were progressed during the pandemic. The remainder of the programme is currently being reviewed to ensure that planned work remains appropriate in a post- pandemic context and aligns with the Council’s approach to financial sustainability. Council Services Key Performance Indicators As well as reporting against measures in the Council Plan, each service also reports on a suite of actions and performance indicators highlighted in its Service Improvement Plan. These are three year plans outlining upcoming improvement activity and detailing how progress will be assessed through action Page 51 of 212
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6 Annual Accounts 2021/22 planning and performance targets. The latest Service Improvement Plans cover the period 2022/23 to 2024/25 and will be approved by the relevant Policy Boards during June 2022. Each service will report on progress in the autumn and again at the end of the financial year. The mid-year reports will also reflect on any changed priorities identified in the new Council and Community Plans. Local Government Benchmarking Framework Each year the Audit, Risk and Scrutiny Board considers the latest data available through the Local Government Benchmarking Framework (LGBF). The latest report was approved in March 2022 and provided updated data on 75 of the 101 indicators that make up the LGBF. Detailed commentary is provided for those indicators where Renfrewshire’s performance against other local authorities is ranked in the bottom 25% or where there has been a significant shift in the ranking. The 2020/21 LGBF data showed that Renfrewshire Council had: • 24 indicators in the top 25% of councils in terms of performance; • 11 indicators in the bottom 35% of councils in terms of performance; • 8 indicators where the ranked position was static; • 35 indicators that had improved their ranked position since the previous year; and • 32 indicators where the ranked position had declined since the previous year. Public Performance Reports One of the Council’s approaches to Public Performance Reporting is the ‘It’s all about you’ story map, which provides an overview of performance for the LGBF indicators and the key priority areas for the Council. It includes case studies, infographics, and performance indicators. Performance information can be found on the Council’s website at the following path: Your Council>Information, performance and statistics>Council Performance. 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/Coun cilandBoards.aspx LGBF data can be found at: https://www.improvementservice.org.uk/benchmarki ng/explore-the-data Page 52 of 212
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7 Annual Accounts 2021/22 Key Financial Ratios The following tables provide information regarding the financial performance of the Council in 2021/22 and the affordability of its ongoing commitments: 2020/21 Estimate Actual Actual Reserves Uncommitted General Fund reserves as a % of budgeted net expenditure 2.2% 2.3% 2.5% Reflects the level of funding available to meet unplanned expenditure and manage financial risk. Movement in uncommitted General Fund balance n/a -0.9% 65.0% Reflects maintenance of the 20/21 commitment to increase uncommitted reserves to £10m per the Financial Strategy. Council Tax In-year collection rate 95.9% 95.5% 95.0% Reflects the Council’s effectiveness in collecting Council Tax debt Council Tax income as a proportion of total taxation and non-specific grant income 19.3% 19.5% 19.1% 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) £375.0m £361.3m £347.1m External debt £375.0m £320.5m £329.1m Ratio of financing costs to net revenue stream (General Fund) 3.9% 3.1% 4.7% Financial Indicator 2021/22 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 Council on 30 June 2022. Financial Performance Primary Financial Statements The annual accounts summarise the Council’s transactions for the year, its financial position at 31 March 2022 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. The Comprehensive Income and Expenditure Statement (CIES) presents the total cost of providing Council services in 2021/22 along with the income available to fund those services. Page 53 of 212
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8 Annual Accounts 2021/22 The outturn explained in the following section differs from the accounting deficit of £31.3m 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. 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. After adjusting for planned carry forwards, the General Fund had a surplus of income over expenditure in 2021/22 of £15.9m. The budgeted position was a surplus of £16.0m, which results in an overspend of £0.1m compared to budget. The main reasons for the variance against the approved budget were unsurprisingly related to the response and subsequent recovery actions for COVID- 19, as well as the increasing cost of materials. The Right for Renfrewshire transformation programme recommenced in 2021/22, predominantly continuing earlier reviews that were paused during 2020/21. Over the course of the year significant additional revenue support totalling £40m was provided to the Council by the Scottish Government. This support was generally targeted to address specific cost pressures; however this support was crucial in allowing the Council to deliver the financial outturn reported. Further detail on budget variances can be found in the Unaudited Annual Accounts 2021/22 report to Council on 30 June 2022. The Council fell just short of its target in-year council tax collection rate of 95.9% in 2021/22, instead returning a creditable 95.5% in light of the pandemic impact and emerging cost of living crisis on household finances. Income from Council Tax actually over- recovered owing to prior years arrears being collected over a longer period following delayed collection during 2020. The result was almost £3m being earmarked to provide for future cost of living impacts on collection and debt. Revised Budget Actual Variance £m £m £m Chief Executive's Service 28.011 28.009 0.002 Children's Services 217.870 217.871 (0.001) Communities and Housing 11.158 11.109 0.049 Environment and Infrastructure 55.698 55.880 (0.182) Finance and Resources 40.050 40.045 0.005 Miscellaneous Services 28.145 28.094 0.051 Adult Services 79.974 79.974 0.000 Net Expenditure 460.906 460.982 (0.076) Revenue Support Grant (309.064) (309.064) 0.000 Council Tax Income (86.467) (86.464) (0.003) Non-Domestic Rates Income* (81.663) (81.663) 0.000 Funding (477.194) (477.191) (0.003) Use of General Fund Balances (16.288) (16.209) (0.079) 2021/22 *The Council was originally due £102.8m of Non- Domestic Rate Income from the Scottish Government as its share of the national pool; however, this figure was reduced to £81.7m (with a corresponding uplift in general revenue grant) to mitigate the impact of the COVID-19 pandemic on businesses. The Council collected £84.9m directly from local businesses with £3.2m due back to the Scottish Government’s National Non-Domestic Rates Pool. Page 54 of 212
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9 Annual Accounts 2021/22 The Council’s Reserves The Council holds the following balances in reserve. Further details can be found in Note 8: Usable reserves. As at 31 March 2021 Usable Reserves As at 31 March 2022 £m £m 88.458 General Fund Balance 104.667 6.497 Housing Revenue Account 6.497 8.638 Capital Receipts Reserve 7.594 90.500 Other Statutory Funds 95.699 194.093 Total 214.457 The General Fund balance of £104.7m will be carried forward to 2022/23. Of this balance, £93.9m has been earmarked for a particular purpose, as outlined in Note 7: Usable Reserves. This leaves unallocated reserves of £10.8m (2.3% 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 ongoing response and 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 2022 has been maintained at £6.5m. 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 Coronavirus. The year-end deficit position is in line with projections reported during 2021/22 and reflects the net effect of underspends in employee and transport costs that have been used to fund an overspend related to COVID-19 driven response and recovery costs and increased debt repayment as part of the overall housing debt smoothing strategy. Capital and Borrowing Renfrewshire Council continues to make significant capital investment in council housing, schools, culture, roads and the town centre estate. On 4 March 2021, the Council approved the housing capital investment programme for 2021/22 of £25.6m; and the General Fund capital investment programme of £115.7m. The capital investment programmes were still affected by the pandemic in 2021/22, mainly related to requirements to maintain social distancing on building sites. There was also significant delay due to global supply chain issues, as well as increasing cost pressures arising from the price of materials. Programmes have therefore been re-profiled during the year to reflect the planned expenditure timescales of individual projects or where project completion dates have been delayed, resulting in actual capital spend for the year of £20.6m for housing capital investment and £61.5m for the General Fund. Further detail is provided in Note 15: Capital expenditure and capital financing. The following charts show the actual expenditure incurred and income received in relation to the 2021/22 capital programme. Page 55 of 212
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10 Annual Accounts 2021/22 During the course of 2021/22 there was no new external borrowing (excluding Group transactions). The level of cash balances available to the Council remains consistent with daily cash requirements, treasury and capital investment plans. The increase in cash balances compared to 31 March 2021 is attributable to COVID-19 specific funding received from the Scottish Government, some of which will be carried forward for use in 2022/23. 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 23: Financial Instruments. For a number of years an important element of the Council’s medium-term financial planning has been the strategy of debt smoothing, which ensures the Council’s debt profile remains appropriate and sustainable over the medium term. This process involves the planned repayment of debt over the medium term as part of the Council’s planned budget, capital investment and treasury management strategies. During 2021/22 debt repayments of £2.3m were accelerated within Housing. There was no General Fund debt smoothing in 2021/22. The Council will continue to explore options to deliver short-term financial capacity, including employing the financial flexibilities permitted by the Scottish Government specifically in relation to COVID-19. The Council did not utilise these flexibilities in 2021/22 given the additional funding secured and the limited additional benefit these flexibilities would derive. 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 4 March 2021 and revised on 16 December 2021. The TMSS for 2021/22 can be found on the Council Committee Management Information System at: http://renfrewshire.cmis.uk.com/renfrewshire/Home. aspx. The CFR is a prudent assessment of the aggregate external borrowings for capital investment purposes that are affordable and sustainable over the longer- Page 56 of 212
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11 Annual Accounts 2021/22 term. The actual CFR at 31 March 2022 was £361.3m, which is within the approved limit of £375.0m. The Council’s external borrowings have only been applied for capital investment purposes, with the Council’s net external debt being £320.5m at 31 March 2022 compared to the operational boundary of £375.0m. The Council’s costs of borrowing remain consistently one of the lowest of all Scottish local authorities; are affordable and match the Council’s medium to long-term financial strategy. The Council’s non-housing financing costs were 3.1% as a proportion of the Council’s non-housing net revenue stream, including an element of additional debt repayment. Housing related financing costs as at 31 March 2022 were 43.1% of net housing revenues, higher than the forecast of 39.9% again due to additional debt repaid in the year. Excluding these repayments, the actual position was 38.2%. Net Pension Position The disclosure requirements for pension benefits under IAS19 are detailed in Notes 28 and 29. The appointed actuaries, have confirmed a decrease of £170.5m in their assessment of the Council’s share of the actuarial deficit position of the local government pension fund as at 31 March 2022. This can be attributed to a higher level of investment returns and a higher discount rate of inflation, which serves to reduce the value placed on pension obligations. The assessment provides only a snapshot as at 31 March 2022 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. 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 22: 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 £2.6m for uninsured claims. While the Council has financial monitoring arrangements in place with regards costs being incurred in response to and recovery from the Coronavirus pandemic, the Council cannot know with certainty the full costs and income loss which may arise over the medium term. The Council has been made aware of an issue relating to Guaranteed Minimum Pension that could increase the future value of pension liability recognised in the balance sheet by around £4.1m. Further detail is provided at Note 30. 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, a registered charity and company limited by guarantee formed to provide facilities for recreation, sport, cultural and other leisure activities for the benefit of the community in Renfrewshire; • 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 four other entities treated as associates or joint ventures: • Strathclyde Partnership for Transport; • Strathclyde Concessionary Travel Scheme Joint Committee; • Renfrewshire Valuation Joint Board; and Page 57 of 212
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12 Annual Accounts 2021/22 • Renfrewshire Health and Social Care Integration Joint Board. 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 The Financial update report to Council in September 2021 outlined continued and considerable 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 2021/22. The impact to the Scottish and UK economies of the COVID-19 pandemic is still being felt, with continued support to businesses, communities and individuals resulting in government borrowing levels which have reached a peacetime high. The impact of this level of debt on public finances will take many years to unwind. However, borrowing has been undertaken at historically low interest rates, mitigating some of the impact of the borrowing required. On the cost of materials and particularly construction costs following the height of the pandemic, what is now unfolding is a level of demand that the construction industry is struggling to keep pace with and where labour and skill shortages within the industry are now impacting on overall capacity. Coupled with this, supply chain issues initially linked to the UK’s exit from the EU have now escalated globally following Russia’s invasion of Ukraine. The Scottish Government published its Resource Spending Review on 31 May 2022, which outlines at a high level its revenue spending programme over the next five years to 2026/27. It indicates a flat cash position for the local government core settlement from 2022/23 to 2025/26, with a £100m increase in 2026/27. Given current heightened levels of inflation, this is forecast to amount to a real-terms reduction in revenue funding for local government, estimated at 7- 8% over the review period. The Resource Spending Review also emphasised key priority areas for the Scottish Government spending programme, such as the commitment to increase the NHS front line budget by 20% over the course of this Parliament; and to create a new National Care Service, with an increase of 25% in social care investment. A significantly increased level of spend on social security is also outlined, with spend anticipated to increase from £3.9bn in 22/23 to £6.4bn in 26/27, reflecting increased spend in relation to the Scottish Child Payment and adult disability payments. In addition and as has been highlighted in previous commentaries, as the transition of powers moves the Scottish budget towards almost 50% of spending being supported by devolved tax raising powers, the economic performance of the Scottish economy relative to that of the UK becomes a key determinant in the overall level of resources that will be available to the Scottish Government’s budget each year. It is expected that growth in the Scottish economy will mirror, but lag slightly, that of the UK. Decisions by the Scottish Government to provide continuing support to some areas of the economy eg through business rates relief over the course of 2022/23 will continue to put pressure on Scottish Government finances. The local government grant settlement for 2022/23 (a single year settlement) reflects a 0.4% decrease on a like-for-like basis in the general revenue grant received in 2022/23 compared to 2021/22. The Council decided to increase Council Tax by 3% in 2022/23. A balanced budget position moving into 2022/23 was agreed by the Council on 4 March 2021, reflecting well on the previous budget decisions taken by the Council towards addressing the medium-term savings requirement it is facing. Minimal savings decisions were included in the agreed budget for 2022/23, Page 58 of 212
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13 Annual Accounts 2021/22 reflecting the temporary pause of the Council’s Right for Renfrewshire programme in 2021/22. 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 in the short term will be fully understanding and assessing the financial impact of pandemic recovery, cost pressures arising from Brexit, the war in Ukraine and other global supply issues, as well as the emerging cost of living crisis, also expected to drive increased levels of pay claims. This is expected to manifest itself in additional costs of supplies and contracts, as well as the cost of services adapting to pandemic recovery models and related behavioural changes, such as homeworking for both staff and residents. While reduced levels of council tax income were anticipated, actual income levels in 2021/22 were healthier than expected. This is likely, however, to become more challenging to maintain as the cost of living crisis unfolds. In the face of these challenges, it remains critical that the Council continues to proactively invest in a range of measures to stimulate the local economy and improve the lives of residents. The Council has agreed a capital programme including spend of £160m in 2022/23 across public infrastructure, schools, nurseries, public buildings and council housing. These will run alongside the Glasgow and Clyde Valley City Deal programme that is planned to be delivered during the course of this decade, generating 29,000 new jobs. 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. The Council’s most recent Financial Outlook, reported to Council on 30 June 2022, indicates increased levels of cost and uncertainty driven by pandemic recovery, high levels of inflation and a forecast real-terms reduction in local government funding as outlined in the Scottish Government’ Resource Spending Review. Additional earmarked balances have been set aside to support inflation and construction cost pressures, and new measures to improve the Council’s financial sustainability will be investigated during 2022/23 to help mitigate these risks. Charitable Funds The Council administers the Common Good Funds for the areas of Paisley, Renfrew and Johnstone. Each of these Funds is a registered charity. In addition, the Council controls the Coats Observatory Charitable Trust. In order to comply with the Code, Audit Scotland and OSCR requirements, the Council separately prepares the financial statements of the three Common Good Funds and the Coats Observatory Trust, with the balances included in the Group Accounts. Audit Scotland is the appointed auditor for the Council’s charitable funds. Overall, the Common Good Funds incurred a combined in-year surplus of £0.4m which is added to the previous surplus brought forward. The total net asset value increased by £1.7m, with investments increasing by £4.5m. Both the market values of investments and income generated from dividends are likely to be subject to ongoing volatility as the economy recovers from the pandemic and is subject to increased inflationary risk. Page 59 of 212
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14 Annual Accounts 2021/22 The total net asset value of the Observatory Trust decreased by £0.073m owing to depreciation and the revaluation of one of the assets at Oakshaw Street. There were no other transactions in the year. The unaudited annual accounts of the Common Good Funds and Observatory Trust are reported to the Council on 30 June 2022 and can be accessed on the Committee Management Information System at: https://renfrewshire.cmis.uk.com/renfrewshire/Coun cilandBoards.aspx. Conclusion and Acknowledgements We would like to acknowledge the tremendous effort by the whole finance team in both producing the annual accounts and successfully managing the finances of the Council over an unprecedented year in difficult circumstances; and to record our thanks to both the Finance and Resources team and 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 0141 618 7363. Cllr Iain Nicolson Alan Russell Alastair MacArthur Leader of the Council Chief Executive Director of Finance and Resources Page 60 of 212
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15 Annual Accounts 2021/22 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 30 June 2022. 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 2022. Alastair MacArthur Director of Finance and Resources Page 61 of 212
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16 Annual Accounts 2021/22 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 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 2017-2022 and the Renfrewshire Community Plan 2017-2027. The Council Plan is aligned to the Community Plan 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. 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. • 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; • The Council facilitates policy and decision making through a policy board structure; Page 62 of 212
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17 Annual Accounts 2021/22 • Services are able to 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; • •Prior to COVID-19, the Corporate Management Team monitored a quarterly scorecard of performance information which is now being refreshed to ensure this is fit for purpose. The Council regularly publishes information about its performance, e.g. “It’s all about you”, a publication outlining the performance of the Council published annually. An annual benchmarking report on the performance of the Council is submitted to the Audit, Risk and Scrutiny Board; • 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; • The Council’s approach to risk management is set out in the risk management strategy and is well embedded. Risks are reported regularly to the Audit, Risk and Scrutiny Board; • 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, Information Governance is the statutory Data Protection Officer; • 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 approach to ‘whistleblowing’ is outlined in the policy for expressing concerns outwith line management; • A range of multi layered Cyber Security controls are in place and are tested annually to check standards in line with Government guidance. Industry cyber security standards are followed and explicitly those belonging to Public Sector Network (PSN), National Cyber Security Centre (NCSC) guidance, Scottish Government Public Sector Cyber Resilience Plan and Payment Card Industry (PCI) data security standards. 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 monitored monthly through our cyber security partner. These are all monitored and managed through the Cyber Security team which is headed up by a CISM qualified Cyber Security Architect (Cyber Information Security Manager); • 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 (Council’s Designated Monitoring Officer) 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. This governance framework has been in place at Renfrewshire Council for the year ended 31 March 2022, subject to the impact of the COVID-19 pandemic, as disclosed in the section on review of effectiveness and continuous improvement below. Within the 2020/21 report, Audit Scotland concluded that “The Council has appropriate governance Page 63 of 212
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18 Annual Accounts 2021/22 arrangements in place. We recognise that in responding to the COVID-19 pandemic the Council revised its governance arrangements. The new arrangements are appropriate and support good governance and accountability. There is effective scrutiny, challenge and informed decision making.” 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; • The preparation of regular financial reports that indicate actual expenditure against the forecasts; • 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. 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; • monitor the performance of internal audit; • to consider the annual review of the Local Code of Corporate Governance. 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. 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 Committee 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. Page 64 of 212
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19 Annual Accounts 2021/22 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 is reviewed annually by the Corporate Management Team, including the use of an annually updated self- assessment tool covering six key areas of governance (including the impact on governance of the coronavirus pandemic), as follows: • Business Planning and Performance Management • Internal Control Environment • Budgeting, Accounting and Financial Control • Risk Management and Business Continuity • Conflicts of Interest, Whistleblowing and Gifts and Hospitality • Impact of Coronavirus (COVID-19). This self-assessment indicated the governance framework is being complied with in all material respects. 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 has a well embedded approach to continuous improvement through self-assessment. Registered services within education, social care and housing undertake regular self-assessment as part of the delivery of their services, including aspects such as multi agency file reading and practice and improvement groups in place. Staff from across services are also invited to participate in improvement sessions linked to the service improvement plans on an annual basis, or in relation to specific exercises such as the “Our Values” staff engagement process in 2019. The Council previously utilised the Public Services Improvement Framework and is considering options for a future self -assessment activity. 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 adopted in June 2021 and work is underway to disseminate the results and establish an action plan to address any required improvements. Throughout this year, there continued to be unprecedented challenges facing the Council in responding to the ongoing COVID-19 pandemic which significantly altered the way in which the organisation operates and significantly changed the delivery of services. Reduced capacity and competing priorities as well as an upturn in demand in some areas due to the easing of restrictions continue to be actively managed on a daily basis. The following should be specifically noted: • emergency governance arrangements remained in operation throughout 2021/22 and amended regularly to take account of the prevailing COVID- 19 regulations. These amendments were approved by Council. A protocol was established during the year to facilitate the conduct of hybrid meetings which were broadcast live with the option available to the Convenor of each Board to hold the meeting remotely by teams if they wish and this protocol continues to be in operation; • the Council is progressing with its economic and social renewal and recovery plans in recent months, along with partners in response to the COVID-19 pandemic over the short to medium term. The Corporate Management Team continue to have a specific focus on recovery from the COVID-19 pandemic; • regular performance reports have been prepared for policy boards throughout the period of the pandemic in the form of service update reports. Page 65 of 212
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20 Annual Accounts 2021/22 Each service has developed a Service Delivery Plan for 2021/22 in place of the usual service improvement plans, in order to focus on activities linked to recovery over this year in particular. Services are currently preparing 3 year Service Improvement Plans for approval by policy boards prior to Summer 2022; • tranche 2 of the Right for Renfrewshire programme was commenced over the second half of 2021. This was on a smaller scale than originally planned and the service redesigns progressed were in those areas where it was anticipated that there would be potentially less direct impact from the pandemic recovery process and where the greatest opportunity exists for appropriate management and service capacity to be directed towards the Right for Renfrewshire agenda; • financial management across the Council has remained strong, with continued additional reporting in place to clearly distinguish COVID-19 related costs and income losses from core operating costs. Over the course of the year significant amounts of additional non-recurring income has been secured from the Scottish Government in order to ensure local government continues to provide support to local communities and businesses. Funding has been provided both to support Council expenditure, but also on an “agency” basis whereby the Council administers grant schemes designed by the Scottish Government. Ensuring compliance with the various grant conditions has entailed considerable work by Council officers throughout 2021/22. Any potential fraudulent grant applications were referred to the Council’s Corporate Fraud Team for investigation and referral on to the Procurator Fiscal or Police, as appropriate; • all essential services have continued to be delivered throughout the pandemic and business continuity arrangements are in place and operating highly effectively. Some areas of service activity were stopped or deferred; others were delivered through different processes. There have been no significant changes to internal controls although significant numbers of new and amended processes and services have been put in place to allow the Council to appropriately respond to the impact of the pandemic and to support local communities and businesses. The Council has now developed service recovery programmes to reopen services and catch up on deferred work, moving towards more normal levels of service activity and service priority. This is a process and programme of work that is likely to continue into 2022/23 and beyond; • although the Council’s cyber security arrangements are considered to be robust and are regularly tested, recognition of the ever increasing criminal cyber activity and the recognition that cyber- attacks are becoming more and more frequent and sophisticated and that there is an increased reliance on electronic systems resulted in a focused review of the Council’s cyber environment being undertaken. This led to the decision that the cyber -related elements within the Organisation Resilience risk would benefit from being a separate corporate risk for a period of time, with the further scrutiny that this affords; • the Council commenced planning for Brexit during 2019/20 and identified risks have been incorporated into the Strategic and Corporate Risk Registers. A number of significant areas of risk remain for the organisation and for communities that have been deferred due to a combination of COVID-19 impacts, particularly in relation to employment constraints related to closure of hospitality and retail establishments masking the impact of the end of freedom of movement and the deferral of the introduction of required import checks and restrictions which when introduced will lead to increased restrictions, delays and cost increases on products and services from the European Union and a significant and ongoing regulatory burden for Environmental Health Officers and Trading Standards Officers. Some of these risks will be further exacerbated by the ongoing conflict in Ukraine and the associated sanctions on Russia which will place additional cost and supply pressures on some products and materials that are likely to increase and continue into 2022/23. Page 66 of 212
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21 Annual Accounts 2021/22 Regular reviews of the Council’s arrangements are undertaken by internal audit and overall, the Council’s internal financial control arrangements are considered to be sound. As part of the ongoing relationship which is in place under the new best value methodology, Audit Scotland continuously engage with the Council in relation to the improvement plan, regularly attending Council and board meetings and reviewing information provided. Each year Audit Scotland provide an assessment of the ongoing position in relation to best value, within the Annual Audit Report. The Annual Audit Report for 2020/21 was published in November 2021 noted that the Council continues to make positive progress addressing the recommendations contained in our 2016/17 Best Value Assurance Report. Audit Scotland provided an unqualified and unmodified audit opinion on the 2020/21 annual accounts. The programme of work undertaken by internal audit identified 2 occasions where a limited assurance level was given in relation to the internal control, risk management and governance objectives for the specific areas of each audit review. The following areas are those identified as requiring improvement: • A review of the procedures in place for identifying and dealing with unsafe memorials in cemeteries was undertaken and it was identified that insufficient progress had been made in this area due to capacity issues, mainly as a result of the service having other priorities arising from the pandemic. Management agreed to allocate additional resource to this area and progress will be monitored through the internal audit follow-up process. Although this area requires to be addressed there is no significant impact on the Council’s overall system of internal control. • The operation of Purchase Cards was reviewed to ensure that the correct procedures were being followed during the pandemic and whilst there were adequate procedures in place covering the purchase of goods with Purchase Cards, issues were identified regarding compliance and the timeliness of approval of transactions. Management agreed to implement the improvement actions required and progress will be monitored through the internal audit follow-up process. 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 (ARSB). This work highlighted that 82% of recommendations were implemented by the due date. 17% had passed their original due date and revised implementation dates have now been set and 1% were superseded. Of the 21 recommendations followed up that were deemed to be critical, 18 have been fully implemented and 3 have been partially implemented. Revised implementation dates have been agreed for each of these recommendations. It is our view that the Council has in place a sound system of 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 Assurance Statement prepared by the Council’s Chief Auditor stating that reasonable assurance can be placed upon the adequacy and effectiveness of the Council’s governance, risk management and internal control framework. 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. Page 67 of 212
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22 Annual Accounts 2021/22 Agreed action Responsible person Date Prepare 3-year Improvement Plans for each service Service Director August 2022 Review and refresh quarterly scorecard of performance information Head of Policy and Commissioning September 2022 Establish an action plan arising from the CIPFA FM Code Head of Finance and Business Services 31 December 2022 The agreed actions will be subject to review to identify the progress being made in implementing them. Update on the 2020/21 Action Plan The 2020/21 Governance Statement identified areas of continuous improvement activities to be taken forward to improve the overall governance, risk management and internal control environment. Progress over the last 12 months against the agreed action plan is detailed below. Agreed action Progress Update Responsible person Date Revised Date Ongoing Actions Review and update where necessary the policy for expressing concerns outwith line management ‘whistleblowing’ for approval by Board. The update was delayed due to other priorities, but the policy is now in its final draft and has been submitted for consultation to senior management and other appropriate parties, prior to being submitted to Board for approval Chief Auditor September 2021 August 2022 Review and refresh the Council Plan. The work on the new Council Plan has commenced Head of Policy and Commissioning September 2022 N/A Assurance Subject to the above, and on the basis of the assurances provided, we consider the governance and internal control environment operating during 2021/22 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 68 of 212
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23 Annual Accounts 2021/22 Remuneration Report The Local Authority Accounts (Scotland) Amendment Regulations 2011 (SSI No. 2011/64) amend the Local Authority Accounts (Scotland) Regulations 1985 (SI No 1985/267) and requires local authorities in Scotland to prepare a Remuneration Report as part of the annual statutory accounts. All information disclosed in sections three to eight in this Remuneration Report has been audited by the Council’s appointed auditor, Audit Scotland. The other sections of the Remuneration Report will be reviewed by Audit Scotland 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 flat £800 pay award in 2021/22 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 2021/22 was £37,111 per annum (£35,617 in 2020/21) and the salary for the Provost was £27,834 per annum (£26,713 in 2020/21). 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 2021/22 being £325,593 per annum; and whose salaries individually must be on a specified scale, in 2021/22 £18,604 to £27,910. In May 2017, the Council approved that Renfrewshire would have 12 senior councillors: four Policy Board Conveners (salary of £27,512 per annum in 2021/22); four Regulatory Board Conveners (salary of £22,690 in 2021/22); Chair of Renfrewshire Leisure Board; Chair/Vice-Chair of Integration Joint Board and two Leaders of the Opposition (salary of £22,690 in 2021/22). 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 2022, 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 2021/22. Page 69 of 212
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24 Annual Accounts 2021/22 2020/21 Total Remuneration Annual Salary Election Allowances Total Remuneration £ £ £ £ 150,438 Sandra Black Chief Executive until 15 December 107,317 13,613 120,930 122,540 Alan Russell Director of Finance and Resources until 15 December 2021; Chief Executive from 16 December 2021; (full year equivalent : £151,328) 131,520 5,445 136,965 122,540 Mary Crearie Director of Communities and Housing Services 123,340 0 123,340 n/a Alastair MacArthur Acting Director of Finance and Resources from 16 December 2021 to 15 February 2022; Director of Finance and Resources from 16 February 2022: (full year equivalent : £116,870) 40,985 0 40,985 122,540 Gordon McNeil Director of Environment and Infrastructure Services 123,340 380 123,720 122,540 Steven Quinn Director of Children's Services 123,340 0 123,340 640,598 Total 649,842 19,438 669,280 Senior employees Name Post held 2021/22 2020/21 2021/22 Total Remuneration Total Remuneration £ £ 103,235 Victoria Hollows 104,035 103,235 104,035 Name Senior Employees of Subsidiary Bodies Post held Chief Executive, OneRen Total In 2021/22, some Senior Employees received remuneration connected to election activities; this was nil in 2020/21. There were no non-consolidated bonuses or performance-related payments made to any senior officer in 2021/22. 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 2022, whether or not those amounts were actually paid or received within that period and relate only to the Senior Councillor posts indicated. Page 70 of 212
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25 Annual Accounts 2021/22 2020/21 Total Remuneration Name Position held Total Remuneration £ £ 35,617 Iain Nicolson Leader Of the Council 37,111 26,713 Lorraine Cameron Provost 27,834 26,405 Cathy McEwan Policy Board Convener 27,512 26,405 Marie McGurk Policy Board Convener 27,512 26,405 Jim Paterson Policy Board Convener 27,512 26,405 John Shaw Policy Board Convener 27,512 21,776 John McNaughtan Regulatory Board Convener 22,690 21,776 Bill Binks Regulatory Board Convener 22,690 21,776 Jennifer Adam-McGregor Regulatory Board Convener 22,690 21,776 Andy Steel Regulatory Board Convener 22,690 26,405 Lisa-Marie Hughes Chair Renfrewshire Leisure 27,512 26,405 Jacqueline Cameron Chair/Vice Chair IJB 27,512 21,776 Eddie Devine Leader of largest opposition group 22,690 10,588 Neill Graham Leader of 2nd largest opposition group from 6 Oct 22,690 11,188 James MacLaren Leader of 2nd largest opposition group until 5 Oct 0 351,416 366,157 Senior Councillors 2021/22 Total 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. 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 2020/21 Up to £22,300 5.5% Up to £22,200 £22,301 to £27,300 7.25% £22,201 to £27,100 £27,301 to £37,400 8.5% £27,101 to £37,200 £37,401 to £49,900 9.5% £37,201 to £49,600 Over £49,901 12% Over £49,601 Tiered contribution rates on whole time pay 2021/22 If a person works part-time their contribution rate will be based on their part-time pay. Page 71 of 212
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26 Annual Accounts 2021/22 There is no automatic entitlement to a lump sum. Members may opt to give up (commute) pension for 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 2022 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 and councillors omitted from the following tables are not members of the Local Government Pension Scheme (LGPS). 2021/22 2020/21 Pension Lump Sum Pension Lump Sum £ £ £000 £000 £000 £000 Sandra Black Chief Executive until 15 20,750 28,955 86 159 3 11 Alan Russell Director of Finance and Resources until 15 December 2021; Chief Executive from 16 December 2021 25,784 23,586 64 91 12 17 Mary Crearie Director of Communities and Housing Services 23,778 23,586 70 82 16 1 Alastair MacArthur Acting Director of Finance and Resources from 16 December 2021 to 15 February 2022; Director of Finance and Resources from 16 February 2022 19,893 n/a 48 66 n/a n/a Gordon McNeil Director of Environment and Infrastructure Services 23,778 23,586 38 32 3 0 Steven Quinn Director of Children's Services 23,778 23,586 20 0 3 0 137,761 123,299 326 430 37 29 Senior Employees Name Post held In-year pension contributions by Renfrewshire Council Accrued pension benefits as at 31 March 2022 Change in accrued pension benefits since 31 March 2021 Total Victoria Hollows Chief Executive, OneRen 20,062 19,870 37 46 2 1 20,062 19,870 37 46 2 1Total Senior Employees of Subsidiary Bodies Page 72 of 212
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27 Annual Accounts 2021/22 2021/22 2020/21 Pension Lump Sum Pension Lump Sum £ £ £000 £000 £000 £000 Iain Nicolson Leader Of the Council 7,162 6,874 9 3 1 1 Cathy McEwan Policy Board Convener 5,310 5,096 5 0 1 0 Marie McGurk Policy Board Convener 5,310 5,096 3 0 0 0 Jim Paterson Policy Board Convener 5,310 5,096 3 0 1 0 John Shaw Policy Board Convener 5,310 5,096 3 0 1 0 Lisa-Marie Hughes Chair Renfrewshire Leisure 5,310 5,096 3 0 1 0 Jacqueline Cameron Chair/Vice Chair Integration Joint Board 5,310 5,096 3 0 1 0 John McNaughtan Regulatory Board Convener 4,379 4,203 2 0 0 0 Jennifer Adam- McGregor Regulatory Board Convener 4,379 4,203 2 0 0 0 Andy Steel Regulatory Board Convener 4,379 4,203 2 0 0 0 Eddie Devine Leader of largest opposition group 4,379 4,203 7 1 1 0 Neill Graham Leader of 2nd largest opposition group from 6 Oct 4,379 3,809 2 0 0 0 James MacLaren Leader of 2nd largest opposition group until 5 Oct n/a 3,830 0 0 n/a n/a 60,917 61,901 44 4 7 1Total Leader of the Council, Provost, Senior Councillors Name Post held In-year pension contributions by Renfrewshire Council Accrued pension benefits as at 31 March 2022 Change in accrued pension benefits since 31 March 2021 6. Councillors’ remuneration The Council paid the following amounts to its elected members (councillors) during the year. 2020/21 2021/22 £ £ 872,251 Salaries 892,271 970 Travel costs – reimbursed 1,187 0 Travel costs – paid directly by the Council 1,420 174 Subsistence expenses - accommodation 0 0 Training and Conferences 230 167 Telephone and information technology expenses – reimbursed 0 5,351 Telephone and information technology expenses – paid directly by the Council 6,030 878,913 Total 901,138 The public record of members' salaries, allowances and expenses for 2021/22 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. Page 73 of 212
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28 Annual Accounts 2021/22 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 2021/22, in bands of £5,000; and also details of the number of those employees highlighted who left the employment of the Council during 2021/22. 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 151 64 215 £50,000 to £54,999 146 73 219 84 63 147 £55,000 to £59,999 97 55 152 58 20 78 £60,000 to £64,999 56 22 78 16 24 40 £65,000 to £69,999 17 32 49 3 15 18 £70,000 to £74,999 2 8 10 4 2 6 £75,000 to £79,999 3 4 7 4 6 10 £80,000 to £84,999 1 3 4 1 3 4 £85,000 to £89,999 1 1 2 2 11 13 £90,000 to £94,999 1 8 9 0 2 2 £95,000 to £99,999 0 2 2 0 3 3 £100,000 to £104,999 0 4 4 0 1 1 £105,000 to £109,999 0 1 1 0 4 4 £120,000 to £124,999 0 3 3 0 0 0 £130,000 to £134,999 0 1 1 0 0 0 £140,000 to £144,999 0 1 1 0 1 1 £150,000 to £154,999 0 0 0 323 219 542 324 218 542 2020/21 2021/22 Of the staff noted above, five left during the year and their termination payments are included in the above analysis; however, they would have been included as an over-£50k earner in a normal year. In 2020/21, eight people were only included because they left, and their termination payments pushed their remuneration over the £50k threshold. 8. Exit Packages The Council has agreed a number of exit packages in 2021/22 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: 2021/22 2020/21 Future Life expectancy at age 65 – males 21.0 years 21.2 years Future Life expectancy at age 65 – females 24.5 years 24.7 years Pension increase rate 3.2% 2.9% Discount Rate 2.7% 2.0% Page 74 of 212
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29 Annual Accounts 2021/22 Value Value £m £m £0 - £20,000 10 0.120 8 0.089 £20,001 - £40,000 3 0.093 2 0.050 £40,001 - £60,000 6 0.285 0 0.000 £60,001 - £80,000 4 0.270 0 0.000 £80,001 - £100,000 1 0.092 1 0.083 £100,001 - £150,000 4 0.479 5 0.578 £150,001 - £200,000 3 0.668 0 0.000 £200,001 - £250,000 6 1.140 0 0.000 £250,001 - £300,000 3 0.815 1 0.258 £300,001 - £350,000 2 0.632 0 0.000 Total 42 4.594 17 1.058 Exit Package Cost 2021/22 2020/21 Number of Employees Number of Employees 9. 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. 42 Total cost of facility time £279,517 Total pay bill £306,592,048 FTE employee number 41.3 Percentage of the total pay bill spent on facility time 0.09% Number of representatives % time 7.00 0% 28.00 1% - 50% 4.00 51% - 99% 3.00 100% 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 41.47% Cllr Iain Nicolson Alan Russell Leader of the Council Chief Executive Page 75 of 212
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30 Annual Accounts 2021/22 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 246.606 (38.531) 208.075 266.039 (41.446) 224.593 56.764 (53.414) 3.350 57.024 (54.169) 2.855 90.889 (14.265) 76.624 Environment and Infrastructure 104.227 (12.804) 91.423 105.499 (53.203) 52.296 Finance and Resources 106.841 (48.250) 58.590 34.624 (8.808) 25.816 27.312 6.323 33.635 15.103 (14.887) 0.216 Miscellaneous Services 8.529 (13.850) (5.321) 222.661 (148.864) 73.797 Adult Services 233.939 (147.843) 86.097 772.146 (331.972) 440.174 803.910 (312.038) 491.872 0.136 0.000 0.136 (Gain)/Loss on the disposal of non-current assets (0.175) 0.000 (0.175) 24.027 (0.565) 23.462 Financing and investment income and expenditure 3 25.222 (0.631) 24.591 0.000 (481.232) (481.232) Taxation and non-specific grant income 4 0.000 (486.210) (486.210) 796.309 (813.769) (17.460) 828.957 (798.879) 30.078 (47.608) 9 (109.158) (0.452) 9 (0.058) 37.341 29 (214.582) (10.719) Other comprehensive (income) and expenditure (323.798) (28.179) Total comprehensive (income) and expenditure (293.720) (Surplus)/Deficit from investments in equity instruments designated as Fair Value through Other Comprehensive Income Actuarial (gain)/loss on pension assets and liabilities 2020/21 (restated) 2021/22 Children's Services Chief Executive's Service Deficit/(Surplus) on the Provision of Services Cost of Services Communities and Housing 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. For details of the 2020/21 restatement, please refer to Note 2: Prior Year Restatement. Page 76 of 212
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31 Annual Accounts 2021/22 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. 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 2021 88.458 6.497 2.864 96.274 194.093 940.631 1,134.724 Movement in reserves during the year (24.484) (5.594) 0.000 0.000 (30.078) 323.798 293.720 Transfers to / (from) other statutory reserves 8 (0.110) 0.000 0.110 0.000 0.000 0.000 0.000 Adjustments between accounting basis and funding basis under regulations 7 40.803 5.594 0.000 4.045 50.442 (50.442) 0.000 16.209 0.000 0.110 4.045 20.364 273.356 293.720 Balance at 31 March 2022 104.667 6.497 2.974 100.319 214.457 1,213.987 1,428.444 Comparative movements in 2020/21 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 2020 54.811 6.807 2.858 95.145 159.621 946.924 1,106.545 Movement in reserves during the year 24.618 (7.158) 0.000 0.000 17.460 10.719 28.179 Transfers to / (from) other statutory reserves 8 (0.006) 0.000 0.006 0.000 0.000 0.000 0.000 Adjustments between accounting basis and funding basis under regulations 7 9.035 6.848 0.000 1.129 17.012 (17.012) 0.000 33.647 (0.310) 0.006 1.129 34.472 (6.293) 28.179 Balance at 31 March 2021 88.458 6.497 2.864 96.274 194.093 940.631 1,134.724 Increase / (Decrease) in year Increase / (Decrease) in year Total Comprehensive Income and Expenditure Total Comprehensive Income and Expenditure Page 77 of 212
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32 Annual Accounts 2021/22 Balance Sheet The balance sheet shows the value as at 31 March 2022 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 2021 As at 31 March 2022 £m Note £m 1,484.243 Property, plant and equipment 10 1,594.482 39.303 Heritage assets 11 44.186 1.467 Investment property 12 1.479 4.177 Intangible assets 14 3.349 4.344 Long-term investments 23 9.513 2.682 Long-term debtors 19 2.622 1,536.216 1,655.631 0.625 Assets held for sale 13 0.922 135.881 Short-term investments 23 183.583 0.879 Inventories 18 1.032 81.940 Short-term debtors 19 81.669 46.271 Cash and cash equivalents 20 18.817 265.596 286.023 (91.021) Short-term borrowing 23 (92.034) (74.685) Short-term creditors 21 (75.843) (0.212) Short-term provisions 22 (0.240) (165.918) (168.117) (73.261) Long-term creditors 21 (69.152) (5.078) Long-term provisions 22 (5.117) (201.297) Long-term borrowing 23 (219.781) (221.534) Other long-term liabilities 29 (51.043) (501.170) (345.093) 1,134.724 1,428.444 Alastair MacArthur (194.093) Usable reserves 8 (214.457) (940.631) Unusable reserves 9 (1,213.987) (1,134.724) (1,428.444)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 30 June 2022. Page 78 of 212
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33 Annual Accounts 2021/22 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. 2020/21 2021/22 £m £m 17.460 Net surplus/(deficit) on the provision of services (30.078) Adjustment for non-cash movements: 76.736 Depreciation, amortisation, impairment and revaluations 76.023 12.448 Increase/(decrease) in creditors 15.164 (32.848) (Increase)/decrease in debtors 0.331 0.110 (Increase)/decrease in inventories (0.153) 21.670 Pension (liability)/asset 44.091 0.594 Carrying amount of non-current assets sold 0.610 0.826 Other non-cash items charged to the net surplus or deficit on the provision of services 0.233 (46.299) Adjustments for items included in the net surplus or deficit on the provision of services that are investing and financing activities (42.875) 50.697 Net cash flows from operating activities 63.346 Net cash flows from investing activities : (69.125) Purchase of property, plant and equipment, investment property and intangible assets (97.453) (0.458) Proceeds from the sale of property, plant and equipment, investment property and intangible assets (0.785) (43.095) Proceeds from short-term and long-term investments (52.871) 46.757 Other receipts from investing activities 43.660 Net cash flows from financing activities (2.795) Cash payments for the reduction of the outstanding liability relating to finance leases and on-balance sheet PFI /PPP contracts (2.847) 51.594 Repayment of short-term and long-term borrowing 19.497 33.575 Net increase/(decrease) in cash and cash equivalents (27.453) 12.696 Cash and cash equivalents at the beginning of the reporting period 46.271 46.271 Cash and cash equivalents at the end of the reporting period 18.818 The Net cash flow from operating activities above includes the following elements of interest paid and received: 2020/21 2021/22 £m £m (0.565) Interest received (0.631) 10.588 Interest paid 10.895 5.525 Interest element of finance lease and PPP payments 5.525 15.548 15.789 Interest Paid and Received Page 79 of 212
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34 Annual Accounts 2021/22 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. 2021/22 Net Expenditure chargeable to the General Fund and HRA Adjustments between Funding and Accounting basis Net Expenditure in the CIES £m £m £m Children's Services 217.871 6.722 224.593 Communities and Housing Services 11.109 (8.254) 2.855 Environment & Infrastructure 55.880 35.543 91.423 Finance & Resources 40.045 18.545 58.590 Chief Executive's Service 28.009 5.626 33.635 Miscellaneous Services 28.094 (33.415) (5.321) Adult Services 79.974 6.123 86.097 Net cost of services 460.982 30.890 491.872 Other income and expenditure (477.191) 15.507 (461.794) (Surplus) / Deficit (16.209) 46.397 30.078 Opening General Fund and HRA balance (94.955) Less (Surplus) / Deficit in the year (16.209) Closing General Fund and HRA at 31 March* (111.164) * For a split of this balance between the General Fund and the HRA, see the Movement in Reserves Statement. 2021/22 Adjustments for capital purposes Net change for the pensions adjustments Other differences Total Adjustments £m £m £m £m Children's Services 25.118 12.728 (31.125) 6.721 Communities and Housing Services 11.544 3.497 (23.295) (8.254) Environment & Infrastructure 10.505 9.319 15.719 35.543 Finance & Resources 4.232 7.771 6.542 18.545 Chief Executive's Service 3.743 2.677 (0.794) 5.626 Miscellaneous Services (8.121) (3.701) (21.592) (33.414) Adult Services 0.000 6.893 (0.770) 6.123 Net cost of services 47.021 39.184 (55.315) 30.890 Other income and expenditure (43.835) 4.907 54.435 15.507 Total adjustments between accounting basis and funding basis 3.186 44.091 (0.880) 46.397 • 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 80 of 212
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35 Annual Accounts 2021/22 • 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. 2020/21 Net Expenditure chargeable to the General Fund and HRA Adjustments between Funding and Accounting basis Net Expenditure in the CIES £m £m £m Children's Services 203.835 4.240 208.075 Communities, Housing & Planning 11.615 (8.265) 3.350 Environment & Infrastructure 52.053 20.972 76.624 Finance & Resources 39.198 13.098 52.296 Chief Executive's Service 21.640 4.176 25.816 Miscellaneous Services 28.598 (28.382) 0.216 Adult Services 72.251 1.546 73.797 Net cost of services 429.190 7.385 440.174 Other income and expenditure (462.533) 8.498 (454.035) (Surplus) / Deficit (33.343) 15.883 (13.861) Opening General Fund and HRA balance (61.618) Less (Surplus) / Deficit in the year (33.343) Add other items not charged to the Surplus / (Deficit) 0.006 Closing General Fund and HRA at 31 March* (94.955) * For a split of this balance between the General Fund and the HRA, see the Movement in Reserves Statement. 2020/21 Adjustments for capital purposes Net change for the pensions adjustments Other differences Total Adjustments £m £m £m £m Children's Services 26.465 5.247 (27.472) 4.240 Communities, Housing & Planning Services 8.072 1.684 (18.021) (8.265) Environment & Infrastructure 11.469 3.550 5.953 20.972 Finance & Resources 3.984 3.491 5.623 13.098 Chief Executive's Service 3.340 1.069 (0.233) 4.176 Miscellaneous Services (12.493) (0.629) (15.260) (28.382) Adult Services 0.000 2.985 (1.439) 1.546 Net cost of services 40.837 17.397 (50.849) 7.385 Other income and expenditure (46.615) 4.273 50.840 8.498 Total adjustments between accounting basis and funding basis (5.778) 21.670 (0.009) 15.883 Page 81 of 212
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36 Annual Accounts 2021/22 Note 2: Prior Year Restatement The Council overstated interest payable in 2020/21 and understated the Net Cost of Services in the CIES by £3.599m. This occurred due to a miscoded contingent rental that forms part of the Service Concession Agreement for the Bargeddie waste facility. The result is that the charge to the Net Cost of Services has increased by £3.599m and the charge to Financing and Investment Income and Expenditure has reduced by £3.599m. There has been no change to the overall total Deficit/(Surplus) on the Provision of Services. The following table shows the relevant extracted lines from the CIES that have been affected by the restatement. No other primary statements are affected by the restatement. Note 3 is also restated on the interest payable line. Effect on the CIES Originally Stated 2020/21 Restated 2020/21 Amount of Restatement £m £m £m Environment and Infrastructure 73.025 76.624 3.599 Net Cost of Services 436.575 440.174 3.599 Financing and investment income and expenditure 27.061 23.462 (3.599) Deficit/(Surplus) on the Provision of Services (17.460) (17.460) (0.000) Note 3: Financing and investment income and expenditure 2020/21 (restated) 2021/22 £m £m 19.754 Interest payable and similar charges 20.315 4.273 Net interest on the net defined benefit liability 4.907 (0.565) Interest receivable and similar income (0.631) 23.462 Total 24.591 Note 4: Taxation and non-specific grant income 2020/21 2021/22 £m £m (83.037) Income from Council Tax and community charge (86.464) (73.841) Distribution from the national non-domestic rate pool (81.663) (277.597) General Revenue Grant from the Scottish Government (274.423) (46.757) Capital grants and contributions (43.660) (481.232) Total (486.210) Page 82 of 212
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37 Annual Accounts 2021/22 Note 5: Expenditure and income analysed by nature This note presents the subjective analysis of expenditure and income shown by operational service area in the CIES. 2020/21 (restated) 2021/22 £m Note £m Expenditure 321.450 Employee benefits expenses 356.167 373.960 Other service expenses 371.720 76.736 Depreciation, amortisation, impairment 76.023 24.027 Interest Payments 3 25.222 0.136 Loss on the disposal of assets 9 (0.175) 796.309 Total expenditure 828.957 Income (331.972) Fees, charges and other service income (312.038) (0.565) Interest and investment income 3 (0.631) (156.878) Income from council tax and non-domestic rates 4 (168.127) (324.354) Government grants and contributions 4 (318.083) (813.769) Total income (798.879) (17.460) (Surplus) or deficit on the provision of services 30.078 Note 6: Grant income The Council credited the following grants, contributions and donations direct to services in the CIES during 2021/22. 2020/21 2021/22 £m £m 48.162 Housing benefit 43.434 0.700 Housing benefit and Council Tax administration 0.549 0.215 Discretionary Housing Payment 1.203 0.500 Private sector housing grant 0.200 0.685 Education Maintenance Allowance 0.579 0.017 Gaelic Education 0.016 0.000 School Milk 0.015 4.360 Pupil Equity Fund 4.276 19.528 Early Years Expansion 21.860 8.681 Other Education 9.265 3.078 Children's Services 3.163 12.254 Adult Services 12.322 3.173 Employability 1.436 3.105 Other grants 8.011 104.458 Total 106.329 Page 83 of 212
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38 Annual Accounts 2021/22 Note 7: 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 (48.811) (26.336) 0.000 0.000 75.147 Amortisation of intangible assets (0.876) 0.000 0.000 0.000 0.876 Capital grants and contributions applied 36.513 7.147 0.000 0.000 (43.660) Amounts of non-current assets written off on disposal or sale as part of the gain or loss on disposal to the CIES 0.169 0.006 0.000 0.000 (0.175) Insertion of items not charged to the CIES: Statutory provision for the repayment of Loans Fund & Finance Lease principal 3.009 15.529 0.000 0.000 (18.538) Capital expenditure charged against the General Fund and HRA Balances 10.464 0.000 (5.089) 0.000 (5.375) Transfer of cash sale proceeds credited as part of the gain or loss on disposal to the CIES 0.000 0.000 0.000 (0.785) 0.785 Use of the Capital Receipts Reserve to finance new capital expenditure 0.000 0.000 0.000 1.829 (1.829) Amount by which finance costs charged to the CIES are different from finance costs chargeable in the year in accordance with statutory requirements 0.289 0.203 0.000 0.000 (0.492) Reversal of items relating to retirement benefits debited or credited to the CIES (76.134) (0.215) 0.000 0.000 76.349 Employer’s pension contributions and direct payments to pensioners payable in the year 34.168 (1.910) 0.000 0.000 (32.258) 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 0.406 (0.018) 0.000 0.000 (0.388) Total adjustments (40.803) (5.594) (5.089) 1.044 50.442 Usable reserves Unusable reserves2021/22 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 84 of 212
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39 Annual Accounts 2021/22 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 (49.290) (26.540) 0.000 0.000 75.830 Amortisation of intangible assets (0.906) 0.000 0.000 0.000 0.906 Capital grants and contributions applied 45.332 1.425 0.000 0.000 (46.757) Amounts of non-current assets written off on disposal or sale as part of the gain or loss on disposal to the CIES (0.150) 0.014 0.000 0.000 0.136 Insertion of items not charged to the CIES: 0.000 Statutory provision for the repayment of Loans Fund & Finance Lease principal 10.933 19.217 0.000 0.000 (30.150) Capital expenditure charged against the General Fund and HRA Balances 5.743 0.000 (1.944) 0.000 (3.799) Transfer of cash sale proceeds credited as part of the gain or loss on disposal to the CIES 0.000 0.000 0.000 (0.458) 0.458 Use of the Capital Receipts Reserve to finance new capital expenditure 0.000 0.000 0.000 1.273 (1.273) Amount by which finance costs charged to the CIES are different from finance costs chargeable in the year in accordance with statutory requirements 0.271 0.222 0.000 0.000 (0.493) Reversal of items relating to retirement benefits debited or credited to the CIES (55.368) (0.188) 0.000 0.000 55.556 Employer’s pension contributions and direct payments to pensioners payable in the year 34.856 (0.970) 0.000 0.000 (33.886) 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 (0.456) (0.028) 0.000 0.000 0.484 Total adjustments (9.035) (6.848) (1.944) 0.815 17.012 Adjustment primarily involving the Employee Statutory Adjustment Account: Usable reserves Unusable reserves2020/21 Adjustments primarily involving the Capital Adjustment Account: Adjustments primarily involving the Capital Receipts Reserve: Adjustment primarily involving the Financial Instruments Adjustment Account: Adjustments primarily involving the Pension Reserve: Note 8: 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 86. Page 85 of 212
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40 Annual Accounts 2021/22 As at 31 March 2021 As at 31 March 2022 £m £m (88.458) General Fund Balance (104.667) (6.497) Housing Revenue Account Balance (6.497) (8.638) Capital Receipts Reserve (7.594) (90.500) Other Statutory Funds (95.699) (194.093) Total (214.457) 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 2021/22. Balance at 1 April 2020 Transfers out Transfers in Balance at 31 March 2021 Transfers out Transfers in Balance at 31 March 2022 £m £m £m £m £m £m £m Insurance Fund 2.543 0.000 0.000 2.543 0.000 0.110 2.653 Reservoir Repair Fund 0.315 0.000 0.006 0.321 0.000 0.000 0.321 Revenue statutory funds 2.858 0.000 0.006 2.864 0.000 0.110 2.974 Education Capital Items Fund 1.057 (0.213) 0.556 1.400 (0.224) 1.093 2.269 Investment Capital Fund 84.635 (0.987) 2.588 86.236 (0.680) 4.900 90.456 Capital statutory funds 85.692 (1.200) 3.144 87.636 (0.904) 5.993 92.725 Total 88.550 (1.200) 3.150 90.500 (0.904) 6.103 95.699 • 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 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 2020 Sale proceeds Capital exp funded Balance at 31 March 2021 Sale proceeds Capital exp funded Balance at 31 March 2022 £m £m £m £m £m £m £m Capital Receipts Reserve 9.453 0.458 (1.273) 8.638 (1.829) 0.785 7.594 Ring-fenced elements of the General Fund Balance 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 £10.788m represents 2.3% of the Council’s net annual running costs. Page 86 of 212
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41 Annual Accounts 2021/22 Balance at 1 April 2020 Transfers out Transfers in Balance at 31 March 2021 Transfers out Transfers in Balance at 31 March 2022 £m £m £m £m £m £m £m Alcohol and Drugs Commission 1.000 0.000 1.000 2.000 (0.196) 0.000 1.804 British Sign Language 0.095 (0.014) 0.000 0.081 (0.080) 0.000 0.001 City Deal 1.181 (0.522) 0.000 0.659 (1.094) 2.185 1.750 Climate Change Action Fund 0.000 0.000 0.742 0.742 (0.131) 0.000 0.611 Community Empowerment Fund 0.432 (0.057) 0.000 0.375 (0.036) 0.000 0.339 Community Safety 0.031 (0.031) 0.000 0.000 0.000 0.000 0.000 COVID-19 Construction Recovery Fund 0.000 0.000 0.000 0.000 0.000 10.000 10.000 COVID-19 Education Recovery 0.000 0.000 6.149 6.149 (3.534) 3.713 6.328 COVID-19 General Recovery Fund 0.000 0.000 11.390 11.390 (16.412) 14.182 9.160 Culture Bid Legacy 2.920 0.000 0.612 3.532 (0.225) 0.260 3.567 Development Contribution – Paisley Town Centre 1.057 0.000 0.000 1.057 0.000 0.000 1.057 Digital Infrastructure 0.410 (0.035) 0.000 0.375 0.000 2.014 2.389 Discretionary business grants 0.000 0.000 2.303 2.303 (1.911) 0.000 0.392 Early Years Change Fund 1.900 0.000 0.000 1.900 0.000 0.000 1.900 Employability 4.704 0.000 3.391 8.095 (1.704) 3.090 9.481 Environment & Infrastructure 2.000 (0.500) 0.000 1.500 (0.500) 0.015 1.015 Inflation Mitigation 0.000 0.000 0.000 0.000 0.000 4.990 4.990 Invest in Renfrewshire 1.829 (3.237) 1.984 0.576 (0.576) 0.000 0.000 Leisure: Inclusive Play Facility 0.050 0.000 0.000 0.050 0.000 0.000 0.050 Memorial Headstone Safety 0.000 0.000 0.987 0.987 (0.362) 0.000 0.625 Paisley Town Centre Heritage Asset Strategy 1.895 0.000 1.100 2.995 (1.895) 0.154 1.254 PPP Schools Replacement Fund 12.670 0.000 0.000 12.670 0.000 0.000 12.670 Private Sector Housing Grant 2.573 0.000 0.059 2.632 (0.851) 0.425 2.206 Pupil Equity Fund 1.470 (0.245) 0.000 1.225 0.000 0.034 1.259 Response to Commission on Tackling Poverty 3.004 (0.773) 0.190 2.421 (1.019) 0.000 1.402 School Music Participation Funding 0.375 0.000 0.000 0.375 (0.125) 0.035 0.285 Service Modernisation and Reform Fund 6.828 0.000 0.153 6.981 (0.124) 4.202 11.059 Social Renewal Plan 0.000 0.000 2.706 2.706 (0.911) 0.000 1.795 Town Centre Public WiFi 0.202 (0.109) 0.000 0.093 (0.060) 0.000 0.033 Villages Improvement Fund 0.370 (0.078) 0.000 0.292 (0.159) 0.000 0.133 Welfare Reform 0.198 (0.010) 0.424 0.612 (0.291) 0.712 1.033 Year end flexibility: Children's Services 1.018 0.000 1.780 2.798 (0.220) 2.713 5.291 General Fund Ring-fenced Total 48.212 (5.611) 34.970 77.571 (32.416) 48.724 93.879 Unallocated element of the General Fund Balance 6.599 0.000 4.288 10.887 (0.099) 0.000 10.788 Total General Fund Balance 54.811 (5.611) 39.258 88.458 (32.515) 48.724 104.667 Page 87 of 212
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42 Annual Accounts 2021/22 Note 9: 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 2021 (restated) As at 31 March 2022 £m £m (565.557) Revaluation Reserve (648.877) 221.533 Pension Reserve 51.042 (615.667) Capital Adjustment Account (634.274) 11.929 Financial Instruments Adjustment Account 11.437 (0.939) Financial Instruments Revaluation Reserve (0.997) 8.070 Employee Statutory Adjustment Account 7.682 (940.631) Total Unusable Reserves (1,213.987) 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 88 of 212
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43 Annual Accounts 2021/22 As at 31 March 2021 (restated) As at 31 March 2022 £m £m (540.348) Balance at 1 April (565.557) (47.608) Upward revaluation of non-current assets (109.158) 22.299 Difference between fair value depreciation and historic cost depreciation written off to the Capital Adjustment Account 25.473 0.100 Accumulated (gains) / losses on disposal of non-current assets transferred to the Capital Adjustment Account 0.365 (25.209) Amount posted to the Capital Adjustment Account (83.320) (565.557) Balance at 31 March (648.877) 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 2021 As at 31 March 2022 £m £m 162.522 Balance at 1 April 221.533 37.341 Actuarial (gains) / losses on pension assets and liabilities (214.582) 55.556 Reversal of items relating to retirement benefits debited or credited to the surplus or deficit on the provision of services in the CIES 76.349 (33.886) Employer’s pension contributions payable in the year (32.258) 221.533 Balance at 31 March 51.042 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 89 of 212
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44 Annual Accounts 2021/22 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 2021 As at 31 March 2022 £m £m (588.619) Balance at 1 April (615.667) Reversal of items relating to capital expenditure charged to the CIES: 75.830 Charges for depreciation, impairment and revaluation losses of non-current assets 75.147 0.906 Amortisation of intangible assets 0.876 0.458 Non-current assets sale proceeds 0.785 0.136 (Gain)/Loss on disposal of non-current assets charged to the CIES (0.175) (22.399) Adjusting amounts written out of the Revaluation Reserve (25.838) 54.931 Net written out amount of non-current assets consumed in the year 50.795 Capital financing applied in the year: (1.273) Use of the Capital Receipts Reserve to finance new capital expenditure (1.829) (46.757) Capital grants and contributions credited to the CIES that have been applied to capital financing (43.660) (30.150) Loans Fund and Finance Lease principal repayments (18.538) (3.799) Capital expenditure charged against the General Fund and Housing Revenue Account balances (5.375) (81.979) (69.402) (615.667) Balance at 31 March (634.274) 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. Page 90 of 212
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45 Annual Accounts 2021/22 • 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 five ‘lender option borrower option’ (LOBO) loans for which the interest rate 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 2021 11.022 0.883 0.024 11.929 Premiums incurred in previous financial years to be charged against the General Fund Balance in accordance with statutory requirements (0.472) 0.000 0.000 (0.472) 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 (0.017) (0.003) (0.020) Balance at 31 March 2022 10.550 0.866 0.021 11.437 Page 91 of 212
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46 Annual Accounts 2021/22 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 2021 As at 31 March 2022 £m £m (0.487) Balance at 1 April (0.939) (0.452) Downward/(Upward) revaluation of investments (0.058) (0.939) Balance at 31 March (0.997) Financial Instruments Revaluation Reserve 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 2021 As at 31 March 2022 £m £m 7.586 Balance at 1 April 8.070 (7.586) Settlement or cancellation of accrual made at the end of the prior year (8.070) 8.070 Amounts accrued at the end of the current year 7.682 8.070 Balance at 31 March 7.682 Employee Statutory Adjustment Account Page 92 of 212
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47 Annual Accounts 2021/22 Note 10: Property, Plant and Equipment 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 Gross carrying amount at 1 April 2021 579.608 315.396 588.965 327.975 63.152 26.746 1,901.842 120.580 Assets reclassified (to)/ from the “held for sale” category 0.000 0.000 0.000 0.000 0.000 (0.822) (0.822) 0.000 Other asset reclassifications 2.018 2.938 7.964 35.218 (48.797) 0.659 0.000 0.064 Additions 5.168 4.485 14.953 12.933 44.490 0.000 82.029 2.122 Disposals 0.000 0.000 (2.050) 0.000 0.000 0.000 (2.050) 0.000 Revaluation increases/(decreases) taken to the Revaluation Reserve 32.010 16.677 12.821 0.000 0.000 0.856 62.364 10.156 Revaluation increases/(decreases) recognised in the surplus or deficit on the provision of services 0.000 4.954 (14.539) 0.000 0.000 (0.149) (9.734) 0.404 Gross carrying amount at 31 March 2022 618.804 344.450 608.114 376.126 58.845 27.290 2,033.629 133.326 Accumulated depreciation and impairment at 1 April 2021 0.000 18.726 238.584 154.963 0.278 5.048 417.599 13.528 Depreciation on other reclassifications 0.000 (0.128) 0.089 0.000 0.000 0.039 0.000 0.014 Depreciation charge for the year 19.320 8.137 37.627 6.995 0.000 0.099 72.178 4.723 Depreciation and impairment on disposals 0.000 0.000 (1.965) 0.000 0.000 0.000 (1.965) 0.000 Depreciation written out to the Revaluation Reserve (19.320) (4.991) (17.436) 0.000 0.000 (0.118) (41.865) (8.303) Depreciation written out to the surplus or deficit on the provision of services 0.000 (1.181) (5.583) 0.000 0.000 (0.036) (6.800) (2.055) Accumulated depreciation and impairment at 31 March 2022 0.000 20.563 251.316 161.958 0.278 5.032 439.147 7.907 Balance sheet net carrying amount at 31 March 2022 618.804 323.887 356.798 214.168 58.567 22.258 1,594.482 125.419 Balance sheet net carrying amount at 1 April 2021 579.608 296.670 350.381 173.012 62.874 21.698 1,484.243 107.052 2021/22 Page 93 of 212
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48 Annual Accounts 2021/22 Note 10: 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 PFI £m £m £m £m £m £m £m £m Gross carrying amount at 1 April 2020 570.519 306.663 572.577 317.986 57.153 27.227 1,852.125 118.671 Assets reclassified (to)/from the “held for sale” category 0.000 0.000 0.000 0.000 0.000 0.075 0.075 0.000 Other asset reclassifications 14.600 2.211 2.389 0.000 (19.488) 0.288 0.000 0.000 Additions 4.300 4.102 9.823 9.989 25.487 0.000 53.701 1.909 Disposals (0.189) (0.317) (0.255) 0.000 0.000 (0.093) (0.854) 0.000 Revaluation increases/(decreases) taken to the Revaluation Reserve (9.622) 5.767 8.560 0.000 0.000 0.242 4.947 0.000 Revaluation increases/(decreases) recognised in the surplus or deficit on the provision of services 0.000 (3.030) (4.129) 0.000 0.000 (0.993) (8.152) 0.000 Gross carrying amount at 31 March 2021 579.608 315.396 588.965 327.975 63.152 26.746 1,901.842 120.580 Accumulated depreciation and impairment at 1 April 2020 0.000 17.993 221.199 148.243 0.278 5.169 392.882 9.020 Depreciation on other reclassifications 0.000 (0.141) 0.092 0.000 0.000 0.049 0.000 0.000 Depreciation charge for the year 19.017 7.753 37.291 6.720 0.000 0.087 70.868 4.508 Depreciation and impairment on disposals (0.006) 0.000 (0.254) 0.000 0.000 0.000 (0.260) 0.000 Depreciation written out to the Revaluation Reserve (19.011) (6.469) (17.060) 0.000 0.000 (0.121) (42.661) 0.000 Depreciation written out to the surplus or deficit on the provision of services 0.000 (0.410) (2.684) 0.000 0.000 (0.136) (3.230) 0.000 Accumulated depreciation and impairment at 31 March 2021 0.000 18.726 238.584 154.963 0.278 5.048 417.599 13.528 Balance sheet net carrying amount at 31 March 2021 579.608 296.670 350.381 173.012 62.874 21.698 1,484.243 107.052 Balance sheet net carrying amount at 1 April 2020 570.519 288.670 351.378 169.743 56.875 22.058 1,459.243 109.651 2020/21 Page 94 of 212
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49 Annual Accounts 2021/22 Note 11: Heritage Assets 2020/21 2021/22 £m £m 39.303 Balance at 1 April 39.303 0.000 Revaluations to CIES (0.046) 0.000 Revaluations to Revaluation Reserve 4.929 39.303 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 between October 2021 and March 2022, resulting in the revaluations shown above. In the four years prior to 2021/22, there were no acquisitions, donations, or disposals of Heritage Assets. The only revaluations over this period (in 2017/18) amounted to £0.326m. 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. 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 12: Investment properties The following items of income and expense have been accounted for in the ‘Financing and Investment income and expenditure’ line in the CIES. 2020/21 2021/22 £m £m (0.141) Rental income from investment property (0.118) (0.141) Net Loss / (Gain) (0.118) 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: 2020/21 2021/22 £m £m 1.502 Opening balance at 1 April 1.467 (0.035) Net gains or (losses) from fair value adjustments 0.012 0.000 Transfers from inventories and property, plant and equipment 0.000 1.467 Closing balance at 31 March 1.479 Fair Value of Investment Properties Page 95 of 212
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50 Annual Accounts 2021/22 Fair Value Hierarchy Detail of the authority's investment properties and information about the fair value hierarchy as at 31 March 2022 are as follows: Quoted Prices in active markets for identical assets (level 1) Other significant observable inputs (level 2) Other significant unobservable inputs (level 3) Fair Value as at 31 March 2022 £m £m £m £m Commercial Units 0.000 0.400 0.000 0.400 Office Units 0.000 0.085 0.000 0.085 Commercial Sites 0.000 0.866 0.000 0.866 Other 0.000 0.128 0.000 0.128 Total 0.000 1.479 0.000 1.479 Valuation Techniques used to Determine Level 2 and 3 Fair Values for Investment Properties Sufficient title and lease information is available in the respect of Investment Properties. This, coupled with knowledge of the rent being achieved, or likely to be achieved, has enabled the market approach to be used in respect of the fair value measurement of Investment Properties. Market knowledge, through sales evidence of surplus development sites within Renfrewshire has also been factored into the fair value measurement. Therefore, the level of observable inputs is significant, leading to the properties being categorised at level 2 in the fair value hierarchy. Note 13: Assets held for sale The following table summarises the movement in the fair value of assets held for sale during the year: 2020/21 2021/22 £m £m 0.700 Opening balance at 1 April 0.625 Assets reclassified as held for sale: (0.075) Surplus Assets 0.822 0.000 Assets sold (0.525) 0.625 Closing balance at 31 March 0.922 Assets Held for Sale Note 14: 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. The movement on intangible asset balances during the year is shown in the following table. 2020/21 2021/22 £m £m Balance at 1 April 6.082 Gross carrying amount 6.124 (1.045) Accumulated amortisation (1.947) 5.037 Net carrying amount at 1 April 4.177 0.048 Additions: purchases 0.048 (0.006) Disposals (0.111) 0.004 Disposal amortisation 0.111 (0.906) Amortisation for the year (0.876) 4.177 Net carrying amount at 31 March 3.349 Comprising: 6.124 Gross carrying amount 6.061 (1.947) Accumulated amortisation (2.712) 4.177 Balance at 31 March 3.349 Purchased Software Licences Page 96 of 212
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51 Annual Accounts 2021/22 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 15: 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 2021/22 total spending on capital projects was £82.077m (£53.749m in 2020/21) and was within the overall prudential limits approved by Council. Capital receipts of £1.829m (£1.273m in 2020/21) were used to fund spending on capital projects. The net capital expenditure for the year of £31.213m (£12.730m in 2020/21) 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. As at 31 March 2021 As at 31 March 2022 £m £m 375.262 Opening Capital Financing Requirement 347.082 Capital investment: 0.000 Opening Balance adjustment 1.509 53.694 Property, plant and equipment 82.029 0.007 Credit Arrangements (Finance Lease/PPP) 0.000 0.048 Intangible assets 0.048 Sources of finance: (0.197) Capital receipts – sale of council houses 0.000 (1.076) Capital receipts – sale of other council assets (1.829) (46.757) Government grants and other contributions (43.660) (3.799) Sums set aside from revenue – direct revenue contributions (5.375) (30.100) Loans Fund/Finance Lease principal repayments (18.538) 347.082 Closing Capital Financing Requirement 361.266 Explanation of movements in year: (25.307) Increase/(decrease) in underlying need to borrow (unsupported by government financial assistance) 17.035 (0.108) Reduction in finance leases obligations (0.111) (2.765) Increase/(decrease) in PPP finance lease creditor (2.740) (28.180) Increase/(Decrease) in Capital Financing Requirement 14.184 Page 97 of 212
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52 Annual Accounts 2021/22 At 31 March 2022 the Council had commitments on capital contracts for non-housing projects of £58.987m (£140.251m in 2020/21) and for housing projects of £25.933m (£35.263m in 2020/21). This expenditure will be funded from a combination of government grants, external borrowing, income from selling assets and contributions from revenue budgets. Note 16: 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 10. 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%. Future Repayment Periods - Schools Service Charges Liability Repayment Interest Repayment Contingent Rentals Total £m £m £m £m £m Payable within 1 year 6.044 2.947 4.924 4.227 18.142 Payable within 2-5 years 27.204 12.224 17.420 18.791 75.639 Payable within 6-10 years 35.101 20.447 16.046 30.267 101.861 Payable within 11-15 years 41.903 26.215 7.109 35.410 110.637 Payable within 16-20 years 6.473 4.464 0.228 5.753 16.918 Total 116.725 66.297 45.727 94.448 323.197 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%. Page 98 of 212
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53 Annual Accounts 2021/22 Service Charges Liability Repayment Interest Repayment Total £m £m £m £m 3.650 0.158 0.285 4.093 15.645 0.601 1.055 17.301 22.061 0.777 1.101 23.939 25.082 0.893 0.921 26.896 28.201 1.570 0.567 30.338 16.677 1.018 0.113 17.808 111.316 5.017 4.042 120.375 Future Repayment Periods - Waste Facility Total Payable within 1 year Payable within 2-5 years Payable within 6-10 years Payable within 11-15 years Payable within 16-20 years Payable within 21-25 years Although the payments made to the contractors under these arrangements are described as unitary payments, they have been calculated to compensate the contractor for the fair value of the services they provide, the capital expenditure incurred and interest payable whilst the capital expenditure remains to be reimbursed. The liability outstanding to pay for capital expenditure (the outstanding finance lease obligation) is as follows: Outstanding Service Concession Arrangements Schools Waste Facility Total £m £m £m Balance at 1 April 2020 (71.438) (5.294) (76.732) Additions during the year 0.000 (0.007) (0.007) Payments during the year 2.543 0.144 2.687 Balance at 31 March 2021 (68.895) (5.157) (74.052) Additions during the year 0.000 0.000 0.000 Payments during the year 2.598 0.141 2.739 Balance at 31 March 2022 (66.297) (5.016) (71.313) Note 17: Leases Renfrewshire Council as Lessee Operating Leases The Council has 32 properties and 6 vehicles classed as operating leases, with average lives of 13 years. The future minimum lease payments due under non- cancellable leases in future years are: As at 31 March 2021 As at 31 March 2022 £m £m 0.862 Not later than one year 0.897 2.341 Between one and five years 1.873 3.620 Later than five years 3.146 6.823 5.916 During 2021/22, there was £0.975m expenditure charged to the CIES in relation to these leases (£1.023m in 2020/21). 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. The lease rentals comprise capital and interest elements; the capital element is applied to reduce the outstanding obligation and the interest element is charged to revenue over the terms of the lease. The Council has 44 electric vehicles under a finance lease agreement over a period of 5 years Page 99 of 212
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54 Annual Accounts 2021/22 beginning during 2019/20. As at 31 March 2022, outstanding obligations to make payments under finance leases are as follows: As at 31 March 2021 As at 31 March 2022 £m £m 0.111 Not later than one year 0.115 0.270 Between one and five years 0.155 0.381 0.270 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 2021 As at 31 March 2022 £m £m 0.178 Not later than one year 0.169 0.655 Between one and five years 0.611 6.464 Later than five years 6.339 7.297 7.119 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. Note 18: Inventories 2020/21 2021/22 £m £m 0.989 Balance at 1 April 0.879 6.341 Additions during the year 7.454 (6.443) Recognised as an expense during the year: inventories sold, exchanged or distributed (7.294) (0.028) Recognised as an expense during the year: inventories written down (0.025) 0.020 Reversals during the year of previous inventory write-downs 0.018 0.879 Balance at 31 March 1.032 Inventories Note 19: 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. 2020/21 2021/22 £m £m (5.781) Current account balances with the council's banker (11.049) 0.000 Euro account balances with the council's banker - sterling equivalent 2.954 12.998 Callable deposits with UK banks and building societies 1.561 39.000 Callable deposits in money market funds and ultra-short bond funds 25.299 0.054 Imprest accounts held at council establishments 0.052 46.271 Total cash and cash equivalents 18.817 Page 100 of 212
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55 Annual Accounts 2021/22 Note 20: 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 33.033 0.000 Central government bodies (non-NHS) 20.790 0.000 21.580 1.170 Central government bodies (NHS) 30.832 1.080 1.865 0.000 Other local authorities 2.939 0.000 3.546 0.000 HM Revenue and Customs 4.564 0.000 0.002 0.034 Employees 0.061 0.032 17.102 0.000 Council Tax arrears 18.056 0.000 (10.353) 0.000 less impairment (10.973) 0.000 3.773 0.000 Rent arrears 4.757 0.000 (1.964) 0.000 less impairment (2.214) 0.000 32.659 5.830 Other entities and individuals 30.383 5.921 (19.303) (4.352) less impairment (17.526) (4.411) 81.940 2.682 Total Debtors 81.669 2.622 As at 31 March 2021 As at 31 March 2022 Note 21: 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 (15.786) (1.169) Central government bodies (non-NHS) (8.943) (0.157) (0.439) 0.000 Central government bodies (NHS) (0.430) 0.000 (0.955) 0.000 Other local authorities (2.629) 0.000 (5.738) 0.000 HM Revenue and Customs (6.231) 0.000 (5.889) 0.000 Strathclyde Pension Fund and Scottish Public Pensions Agency (5.677) 0.000 (11.156) 0.000 Employees (12.150) 0.000 (2.598) (66.297) Service concession arrangements: schools (2.947) (63.350) (0.141) (5.016) Service concession arrangements: waste facility (0.158) (4.859) (0.111) (0.270) Finance lease liabilities (0.115) (0.155) (4.206) 0.000 Council Tax refundable to taxpayers (4.182) 0.000 (0.877) 0.000 Council Tax receipts in advance (0.795) 0.000 0.000 (0.008) Financial guarantees 0.000 (0.005) (26.789) (0.501) Other entities and individuals (31.586) (0.626) (74.685) (73.261) Total Creditors (75.843) (69.152) As at 31 March 2021 As at 31 March 2022 Page 101 of 212
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56 Annual Accounts 2021/22 Note 22: 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 Balance at 1 April 2021 (0.112) (0.100) (0.212) Additional provisions made during the year (0.120) (0.120) (0.240) Reversal of existing provisions 0.112 0.100 0.212 As at 31 March 2022 (0.120) (0.120) (0.240) 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: Long-term Provisions Holiday pay compensation Insurance claims Total £m £m £m Balance at 1 April 2021 (0.445) (4.633) (5.078) Additional provisions made during the year 0.000 (1.307) (1.307) Amounts used during the year 0.000 1.268 1.268 As at 31 March 2022 (0.445) (4.672) (5.117) 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 30 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 £1.307m 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 23: 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 102 of 212
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57 Annual Accounts 2021/22 Long-term Current Long-term Current £m £m £m £m (201.297) (0.834) (199.427) (1.869) 0.000 (2.708) 0.000 (2.698) (201.297) (3.542) (199.427) (4.567) 0.000 (52.916) (20.000) (32.916) 0.000 (0.884) 0.000 (0.871) 0.000 (0.883) (0.354) (0.512) 0.000 (54.683) (20.354) (34.299) 0.000 (32.796) 0.000 (53.168) (201.297) (91.021) (219.781) (92.034) 0.000 (43.969) 0.000 (43.590) (71.581) (2.851) (68.362) (3.219) (0.008) 0.000 (0.005) 0.000 (71.589) (46.820) (68.367) (46.809) At amortised cost trade payables Service Concession and Finance Lease 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 2022 Financial Liabilities Total Public Works Loan Board (PWLB) borrowing As at 31 March 2021 Long-term Current Long-term Current £m £m £m £m 0.000 135.720 5.001 183.499 0.000 0.161 0.000 0.084 4.344 0.000 4.512 0.000 4.344 135.881 9.513 183.583 0.000 7.273 0.000 (9.437) 0.000 0.001 0.000 0.002 0.000 (0.003) 0.000 (0.001) 0.000 39.000 0.000 28.253 0.000 46.271 0.000 18.817 1.184 92.825 1.093 89.640 4.996 0.087 5.027 0.065 0.854 0.000 0.913 0.000 (4.352) (21.267) (4.411) (19.740) 2.682 71.645 2.622 69.965 Loss allowance Financial Assets included in Debtors Accrued interest As at 31 March 2022 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 2021 Financial Assets At amortised cost: Principal Accrued interest Loans to other entities and individuals comprise a loan to Park Lane Developments (Renfrewshire) LLP of £0.275m (2020/21 £0.275m), a loan to Kilbarchan Amateur Athletic Club of £0.076m (2020/21 £0.077), home loans of £0.413m (2020/21 £0.551m), soft loans to service users of £0.030m (2020/21 £0.030m), soft loans to employees of £0.022m (2020/21 £0.023m), social care charging order debtors of £0.749m (2020/21 £0.587m) and property charging order debtors of £0.027m (2020/21 £0.040m). Note that these balances are not principle amounts owed, rather valued at amortised cost based on a notional (effective) interest rate. Page 103 of 212
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58 Annual Accounts 2021/22 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 abrdn Capital Limited. 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 £4.512m at 31 March 2022 (£4.344m as at 31 March 2021). 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 2022. 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, abrdn Capital Limited. 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 2022, 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. • The fair values of finance lease assets and liabilities and of service concession (PFI) scheme liabilities have been calculated by discounting the contractual cash flows (excluding service charge elements) at the appropriate AA-rated corporate bond yield. • 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 104 of 212
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59 Annual Accounts 2021/22 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 (restated) Financial Liabilities Carrying Amount Fair value £m £m £m £m Financial liabilities measured at amortised cost: (204.839) (280.699) Public Works Loan Board borrowing 2 (203.994) (254.715) (54.683) (80.525) Non-PWLB borrowing (“market debt”) 2 (54.653) (73.852) Other liabilities: (74.432) (121.485) Service Concession and Finance Lease liabilities 3 (71.581) (102.940) (0.008) (0.008) Financial guarantees 3 (0.005) (0.005) (333.962) (482.717) (330.233) (431.512) Financial liabilities measured at amortised cost: (32.796) n/a Borrowing from group entities (53.168) n/a (43.969) n/a Trade payables: short-term (43.590) n/a (76.765) (96.758) Total financial liabilities for which fair value is disclosed Total financial liabilities for which fair value is not disclosed As at 31 March 2021 As at 31 March 2022 Fair value level Fair Values for 2020/21 have been restated for Service Concessions (specifically the Bargeddie waste facility), as this information is only now available. This is a presentational change only and does not affect the carrying values in the Balance Sheet. Carrying Amount Fair value Financial Assets Carrying Amount Fair value £m £m £m £m 39.000 39.000 Callable deposits in money market funds and ultra-short bond funds 1 25.299 25.299 0.000 0.000 Euro current account balances with the council’s banker 2 2.954 2.954 4.344 4.344 Investments in pooled funds (insurance fund) 1 4.512 4.512 43.344 43.344 32.765 32.765 135.881 135.989 Fixed term deposits with UK local authorities 2 188.584 187.713 7.217 7.217 Callable deposits with UK banks and building societies (including sterling current account balances with the Council’s banker) 2 (9.488) (9.488) 0.054 0.054 Imprest accounts held at council establishments 2 0.052 0.052 1.583 1.687 Loans made for service purposes 3 1.592 1.707 144.735 144.947 180.740 179.984 188.079 188.291 213.505 212.749 Financial assets measured at amortised cost: 1.183 n/a Trade receivables: long-term 1.093 n/a 71.561 n/a Receivables and prepayments: short-term 69.902 n/a 72.744 70.995 Fair value level Total Financial assets measured at fair value Total Financial assets measured at amortised cost As at 31 March 2021 As at 31 March 2022 Total financial assets for which fair value is disclosed Total financial assets for which fair value is not disclosed Page 105 of 212
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60 Annual Accounts 2021/22 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. 2020/21 Amortised cost Elected to Fair Value through Other Comprehensive Income Fair Value through Profit or Loss 2021/22 £m £m £m £m £m £m 15.897 Interest expense 0.000 0.000 0.000 16.420 16.420 2.565 Impairment losses 0.000 0.000 0.000 0.000 0.000 0.012 Fee expense 0.000 0.000 0.000 0.000 0.000 18.474 Total expense in the Surplus / Deficit on the Provision of Services 0.000 0.000 0.000 16.420 16.420 (0.691) Interest income (0.337) 0.000 (0.016) 0.000 (0.353) (0.103) Dividend income 0.000 (0.110) 0.000 0.000 (0.110) (0.003) Other income (0.260) 0.000 0.000 0.000 (0.260) (0.797) Total income in the Surplus/Deficit on the Provision of Services (0.597) (0.110) (0.016) 0.000 (0.723) (0.452) Net (gain) or loss on revaluation 0.000 (0.057) 0.048 0.000 (0.009) (0.452) (Surplus)/Deficit on the revaluation of financial assets 0.000 (0.057) 0.048 0.000 (0.009) 17.225 Net (Gain)/Loss for the year (0.597) (0.167) 0.032 16.420 15.688 Financial Assets Financial liabilities at amortised cost Note 24: 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. Page 106 of 212
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61 Annual Accounts 2021/22 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. The table below summarises the credit risk exposures of the Council’s treasury investment portfolio (including accrued interest) by credit rating. 2020/21 2021/22 £m £m 39.000 AAA (money market funds and and ultra-short bond funds) 25.299 5.001 A+ 0.000 8.000 A 0.500 0.000 A– 1.062 135.881 UK local authorities 188.584 187.882 Total 215.445 Total Investment Portfolio by Credit Rating The Council does not generally allow credit for customers such that, at 31 March 2022, £8.131m of sundry income debt is past its due date for payment (£21.249m as at 31 March 2021). The past due amount can be analysed by age as follows: 2020/21 2021/22 £m £m 14.999 Less than three months 2.125 0.500 Three to six months 1.019 0.660 Six months to one year 0.429 5.090 More than one year 4.558 21.249 Total 8.131 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 2022 the outstanding value of home loans advanced by the Council was £0.413m (£0.551m as at 31 March 2021). 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 107 of 212
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62 Annual Accounts 2021/22 The maturity analysis of the principal element of borrowing is as follows: £m % £m % 53.750 21.08% Less than one year* 34.785 13.68% 1.869 0.73% Between one and two years 20.835 8.20% 10.851 4.25% Between two and five years 10.023 3.94% 188.577 73.94% More than five years 188.569 74.18% 255.047 100.00% Total 254.212 100.00% As at 31 March 2021 Principal Borrowing Maturity Analysis As at 31 March 2022 *The principal maturing in less than one year exceeded the 15% target in 2020/21 due to the technical possibility that the call option on LOBO loans could have been called by the lender. 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 2021/22, with all other variables held constant. As at 31 March 2022 £m Interest rate risk Decrease in the fair value of fixed rate loans and deposits Decrease in the fair value of fixed rate borrowing (2.879) (2.879) (1.195) 0.739 62.952 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 108 of 212
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63 Annual Accounts 2021/22 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 abrdn Capital Limited 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 2021/22 the book cost of investments increased by £0.110m (£0.103m increase during 2020/21). 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 2022 would have resulted in a £0.070m gain or loss being recognised in Other Comprehensive Income and Expenditure for 2021/22. Market risk: foreign exchange risk As at 31 March 2022 the Council had a foreign currency deposit of €3.500m with the Council’s banker (nil as at 31 March 2021). 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 2022, based on the euro to sterling exchange rate at that time, was £2.953m. 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 2022 would have resulted in a £0.030m gain or loss being recognised in Other Comprehensive Income and Expenditure for 2021/22. Note 25: External audit costs 2020/21 2021/22 £m £m 0.362 Fees payable with regard to external audit services carried out by the appointed auditor for the year 0.369 0.362 Total 0.369 Audit Fees Note 26: 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. In addition, the Council received a number of funding streams from the Scottish Government in 2021/22 to support third parties (individuals and businesses) impacted by the COVID-19 pandemic. The Council had no discretion over the terms of the funding and could not use it for service delivery. This means the Council acted as agent only and the grant funding received and paid out are not included in the Council's reserves, CIES or Balance Sheet. In some cases, an administration grant was awarded to the Council to facilitate these payments. This is accounted for as operational income and expenditure and not disclosed here. Page 109 of 212
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64 Annual Accounts 2021/22 2020/21 2021/22 £m £m 73.841 Scottish Government - Contributions (to)/from the non-domestic rates pool 81.663 5.008 Non-domestic rates collected: East Renfrewshire 10.434 0.061 Service income from East Renfrewshire Council for collection of non-domestic rates 0.063 (5.069) Cost of collection of Non-domestic rates from East Renfrewshire (10.497) 30.472 Domestic water and sewerage charges collected 32.136 (30.472) Domestic water and sewerage charges paid over to Scottish Water (32.136) 0.637 Service income from Scottish Water for collection of domestic water and sewerage 0.637 1.674 COVID-19 PPE and Testing kits issued to external providers 3.318 (1.674) COVID-19 PPE and Testing kits received from Scottish Government (3.318) 1.069 Financial Hardship and Self-Isolation grants paid out 8.437 0.000 Financial Hardship and Self-Isolation funding received from Scottish Government as part of Revenue Support Grant (4.372) 0.000 Financial Hardship and Self-Isolation funding received from Scottish Government (specific funding) (4.065) 0.000 Additional payments to Health and Social Care staff (£500) 0.933 0.000 Additional payments to Secondary Teachers (£400) 0.375 (1.069) Additional payments to Health and Social Care staff and Teachers funding received from Scottish Government (1.308) 27.227 Business Grant Scheme paid out 0.000 (27.227) Business Grant Scheme funding received from Scottish Government 0.000 14.861 Strategic Framework grants paid out 8.122 (14.861) Strategic Framework funding received from Scottish Government (8.122) 3.646 Other support for businesses (including furlough support) paid out 5.984 (3.646) Other support for businesses (including furlough support) funding received from Scottish Government (5.984) Agency Services Note 27: 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. Scottish Government The Scottish Government has the potential to influence the general operations of the Council, being responsible for providing the statutory framework within which the Council operates. The Scottish Government provides the majority of the Council’s 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 billing. Grants received from the Scottish Government are set out in the analysis in Note 4: Taxation and non- specific grant income. Page 110 of 212
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65 Annual Accounts 2021/22 Elected Members Elected Members have direct control over the Council’s financial and operating policies. The total of Members’ allowances paid is shown in the Remuneration Report. Details of Elected Members’ interests can be accessed from each councillor’s page on the Council website, at: www.renfrewshire.gov.uk/ councillors. Services totalling £0.496m (£0.416m* at 31 March 2021) were commissioned from organisations in which three elected members had a financial interest. The relevant members played no role in the decision relating to services commissioned and contracts were entered into in full compliance with contract standing orders. Payments for services and grants totalling £0.512m (£0.740m* at 31 March 2021) were paid to organisations in which five elected members had a non-financial interest. The relevant members did not take part in discussions regarding grant awards or commissioning of services. * Both of these totals include £0.347m relating to an organisation in which one elected member had a financial interest and another elected member had a non-financial interest. Officers The Chief Executive holds a position of director of Park Lane Developments (Renfrewshire) LLP. There is no remuneration associated with this post. Details of the Council’s interests in Park Lane Developments (Renfrewshire) LLP are outlined in the Notes to the Group Accounts from page 94. For further details of Officers’ interests, please check the register of interests on the Council website at: www.renfrewshire.gov.uk > Your Council > Information, performance and statistics > Council structure. Entities controlled or significantly influenced by the Council The Council also has interests in several Joint Boards and Committees as outlined in the Group Accounts Notes G1 and G2. Note 28: 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 2020, which set the contribution rate payable from 1 April 2020 to 31 March 2023. 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 9.6% 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 September 2019, of 23%. Based on the proportion of employer contributions paid in 2020/21, Renfrewshire Council’s level of participation in the scheme is 2.8%. The Council paid £18.487m (£17.546m in 2020/21) for employer's contributions to the Scottish Public Pensions Agency. £0.349m of expenditure (£0.404m in 2020/21) was charged to service revenue accounts in respect of “added years” pension enhancement termination benefits, representing 0.4% of teachers’ pensionable Page 111 of 212
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66 Annual Accounts 2021/22 pay (0.5% in 2020/21). The estimated contribution for 2022/23 is £17.385m. Note 29: Defined benefit pension schemes 29a: 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. 29b: 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. Page 112 of 212
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67 Annual Accounts 2021/22 The following transactions have been made in the CIES and the General Fund Balance via the movement in reserves statement during the year: 2020/21 2021/22 £m £m Included within net cost of services: 47.102 Current service cost 70.497 4.182 Past service cost/(gain) 0.945 Included within Financing and Investment income and expenditure: 33.052 Interest cost 35.942 (28.779) Expected return on scheme assets (31.035) 55.557 Total of Post-employment benefits charged to the Surplus/Deficit on the Provision of Services 76.349 Included within Other Comprehensive Income and Expenditure: (284.985) Return on Assets excluding amounts included in net interest (88.246) (37.247) Actuarial gains and losses arising on changes in Demographic Assumptions (10.729) 361.101 Actuarial gains and losses arising on changes in Financial Assumptions (122.672) (1.528) Actuarial gains and losses arising on changes in Other Assumptions 7.065 92.898 Total of LGPS post-employment benefits charged to the CIES (138.233) Movement in reserves statement: 37.341 Actuarial losses or (gains) (214.582) 0.000 Effect of business combinations and disposals 0.264 55.557 Reversal of items relating to post-employment benefits debited or credited to the Surplus/Deficit on the Provision of Services 76.349 (33.886) Employer contributions and direct payments to pensioners payable in the year (32.522) 59.012 Movement in the year on the Pension Reserve (170.491) The cumulative amount of actuarial gains and losses recognised in the CIES as at 31 March 2022 is a gain of £124.849m (£89.733m loss as at 31 March 2021). 29c: 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 2022, the defined benefit obligation exceeded scheme assets by £51.034m (£221.534m as at 31 March 2021). 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 2022 was 2.7% 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 2020. The common position for employers participating in the Strathclyde Pension Fund is that, based on a snapshot valuation as at 31 March 2022, a net pension liability is disclosed as a result of prevailing market conditions at that date. The net pension position of £51.043m represents a decrease in liability of £170.491m between 31 March 2021 and 31 March 2022. The net pension liability has a substantial impact on the net worth of the Council as recorded in the balance sheet. However, statutory arrangements for funding the deficit mean that the financial position Page 113 of 212
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68 Annual Accounts 2021/22 of the Council remains assured. The deficit on the Strathclyde Pension Fund will be made good by contributions over the remaining working life of employees, as assessed by the Fund’s actuaries. 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. 29d: Movement in defined benefit obligation (scheme liabilities) The following is a reconciliation of the 2021/22 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). 2020/21 2021/22 £m £m 1,414.424 Balance at 1 April 1,767.336 47.102 Current service cost 70.497 4.182 Past service cost (including curtailments) 0.945 33.052 Interest cost 35.942 8.234 Member contributions 8.426 0.000 Effect of business combinations and disposals 6.649 303.739 Actuarial losses or (gains) (126.336) Losses or (gains) on curtailment (4.627) Estimated benefits paid: unfunded (4.605) (38.770) Estimated benefits paid: other (37.171) 1,767.336 Balance at 31 March 1,721.683 29e: Movement in scheme assets The following is a reconciliation of the 2021/22 opening and closing balances of the fair value of Renfrewshire Council’s share of the Strathclyde Pension Fund’s scheme assets. 2020/21 2021/22 £m £m 1,251.902 Balance at 1 April 1,545.802 28.779 Expected return on scheme assets 31.035 8.234 Member contributions 8.426 29.259 Employer contributions 27.917 4.627 Contributions in respect of unfunded benefits 4.605 0.000 Effect of business combinations and disposals 6.385 266.398 Actuarial (losses) or gains 88.246 (4.627) Estimated benefits paid: unfunded (4.605) (38.770) Estimated benefits paid: other (37.171) 1,545.802 Balance at 31 March 1,670.640 Page 114 of 212
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69 Annual Accounts 2021/22 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 2021 to 31 March 2022 was 7.7%. 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 361.033 1.662 362.695 Equity instruments 367.318 0.794 368.112 0.000 276.483 276.483 Private Equity 0.000 327.050 327.050 0.000 125.243 125.243 Real Estate 0.000 140.891 140.891 14.548 740.603 755.151 Investment Funds 9.268 782.810 792.078 0.279 0.000 0.279 Derivatives 0.000 0.000 0.000 24.903 1.048 25.951 Cash and cash equivalents 41.946 0.563 42.509 400.763 1,145.039 1,545.802 Fair value of scheme assets 418.532 1,252.108 1,670.640 As at 31 March 2021 As at 31 March 2022 29f: 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: As at 31 March 2021 As at 31 March 2022 £m £m (884.966) Current employee members (893.051) (75.644) Pre-local government reorganisation (1996) liabilities (68.897) (194.861) Deferred pensioners (182.087) (517.516) Pensioners (486.883) (1,672.987) Total Present Value of the Defined Benefit Obligation - Funded liabilities (1,630.917) (84.227) Retirals from Renfrewshire Council (82.127) (10.122) Retirals pre-local government reorganisation (1996) (8.639) (94.349) Total Present Value of the Defined Benefit Obligation - Unfunded liabilities (90.766) (1,767.336) Present value of defined benefit obligation (1,721.683) 1,545.802 Fair value of scheme assets 1,670.640 (221.534) Net liability arising from defined benefit obligation (51.043) Page 115 of 212
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70 Annual Accounts 2021/22 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 2021/22, and the Council’s share of the Strathclyde Pension Fund’s defined benefit obligation (scheme liabilities) and scheme assets as at 31 March 2022: 2020/21 2021/22 2.0% Discount rate for defined benefit obligation 2.7% 2.0% Long-term expected rate of return on scheme assets* 2.7% 3.6% Rate of increase in salaries 3.9% 2.9% Rate of increase in pensions 3.2% 2.9% Rate of inflation 3.2% Mortality assumptions (years): Longevity at age 65 for current pensioners: 19.8 Men 19.6 22.6 Women 22.4 Longevity at age 65 for future pensioners: 21.2 Men 21.0 24.7 Women 24.5 Take up of option to convert annual pension into retirement lump sum 50% For Pre-April 2009 service 50% 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 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. Impact on the Defined Benefit Obligation on the Scheme % £m 0.1% decrease in the Real Discount Rate 2% 33.013 1 year increase in the member life expectancy 4% 69.034 0.1% increase in the Salary Increase Rate 0% 4.408 0.1% increase in the Pension Increase Rate 2% 28.322 In addition, a one-year increase in life expectancy is estimated to increase the Defined Benefit Obligation by 3-5%. 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 19.3% for 2021/22 to 2022/23. The total contribution expected to be made by the Council to the Strathclyde Pension Fund in the forthcoming year to 31 March 2023 is £26.678m. The weighted average duration of the defined benefit obligation is 19 years. Page 116 of 212
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71 Annual Accounts 2021/22 Note 30: Contingent liabilities i) The Coronavirus pandemic has had a global impact in health, economic and financial terms. The Council has incurred significant costs in relation to the initial response to the pandemic and is likely to incur considerable further costs as the full implications of the pandemic become clear. The Council recognises a contingent liability in terms of the costs of ongoing additional services which have been put in place to support individuals, communities and businesses; the reconfiguration of services to enable new and emerging delivery models. It is amplified by resulting global supply chain issues and very high inflation levels and is likely to result in continued loss of income to both the Council and its subsidiaries, and the increased costs of capital projects. It is not considered practicable at this stage to estimate the financial effect. ii) 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. iii) The Limitation (Childhood Abuse) (Scotland) Act is intended to remove the limitation period for actions of damages in respect of personal injuries resulting from childhood abuse. The Council recognises a contingent liability for possible obligations which may arise from past events whose existence will be confirmed only by the occurrence of one or more uncertain future events not wholly within the control of the authority. It is not considered practicable at this stage to estimate the financial effect. iv) Guaranteed Minimum Pension (GMP) was accrued by members of the Local Government Pension Scheme between 6 April 1978 and 5 April 1997. The value of GMP is inherently unequal between males and females for a number or reasons, including a higher retirement age for men and GMP accruing at a faster rate for women; however overall equality of benefits was achieved for public service schemes through the interaction between scheme pensions and the Second State Pension. The introduction of the new Single State Pension in April 2016 disrupted this arrangement and brought uncertainty over the ongoing indexation of GMPs, which could lead to inequalities between men’s and women’s benefits. Strathclyde Pension Fund’s actuary has carried out calculations and estimates that the potential impact of GMP indexation would be an increase in the pension liability of approximately £4.178m for Renfrewshire Council. This estimate is not reflected in the Primary Financial Statements because the trigger event that would require recognition has not yet occurred. v) 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 in the range of 0.1%-0.2% of gross obligations, which equates to between £1.767m and £3.535m 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 31: 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 2022, the figures in the financial statements and notes have been adjusted in all material respects to reflect the impact of this information Page 117 of 212
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72 Annual Accounts 2021/22 Note 32: 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. The following new or amended standards are adopted within the 2022/23 Code: • IFRS 16 Leases • Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16) • Annual Improvements to IFRS Standards 2018– 2020. The annual IFRS improvement programme notes the following relevant standards: o IFRS 1 (First-time adoption) – amendment relates to foreign operations of acquired subsidiaries transitioning to IFRS o IAS 37 (Onerous contracts) – clarifies the intention of the standard o IFRS 16 (Leases) – amendment removes a misleading example that is not referenced in the Code material. None of the matters covered in the annual improvements are dealt with in detail in the 2022/23 Code; however during the Code consultation process, CIPFA/LASAAC did not envisage a significant effect on local authority financial statements. The Code allows implementation from 1 April 2022 and there is therefore no impact on the 2021/22 accounts. There is no material impact anticipated in future years from the implementation of these standards, other than IFRS 16 Leases. The impact of this standard is that many long-term rented assets will now be disclosed in the Balance Sheet along with their associated liability, and be subject to depreciation. Note 33: Accounting Policies – Renfrewshire Council The Financial Statements for the year ended 31 March 2022 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. Page 118 of 212
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73 Annual Accounts 2021/22 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) Suppliers 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 2022 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. 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 2022 are included in the Accounts irrespective of when payment was made. An accrual is made for the cost of holiday and flexi-leave 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 Page 119 of 212
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74 Annual Accounts 2021/22 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. 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 Page 120 of 212
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75 Annual Accounts 2021/22 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 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 Page 121 of 212
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76 Annual Accounts 2021/22 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. 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 Page 122 of 212
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77 Annual Accounts 2021/22 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: • 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: Page 123 of 212
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78 Annual Accounts 2021/22 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. 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. Page 124 of 212
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79 Annual Accounts 2021/22 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. 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, a limited liability partnership and Joint Boards and Committees that have the nature of 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. 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 Leases are classified as finance leases where the terms of the lease transfer substantially all the risks and rewards incidental to ownership of the property from the lessor to the lessee. All other leases are classified as operating leases. Where a lease covers both land and buildings, the land and buildings elements are considered separately for classification. The Council as Lessee Finance Leases Property, plant and equipment held under a finance lease is recognised on the Balance Sheet at the commencement of the lease at its fair value measured Page 125 of 212
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80 Annual Accounts 2021/22 at the lease’s inception (or the present value of the minimum lease payments, if lower). The asset recognised is matched by a liability for the obligation to pay the lessor. Initial direct costs of the Council are added to the carrying amount of the asset. Premiums paid on entry into a lease are applied to writing down the lease liability. Lease payments are apportioned between: • a charge for the acquisition of the interest in the property – applied to write down the lease liability, and • a finance charge (debited to the CIES). Property, Plant and Equipment recognised under finance leases is accounted for using the policies applied generally to such assets, subject to depreciation being charged over the lease term if this is shorter than the assets estimated useful life. Operating Leases Rentals paid under operating leases are charged to the CIES. Title to the property, plant or equipment remains with the lessor. The Council as 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. Page 126 of 212
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81 Annual Accounts 2021/22 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. 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. Page 127 of 212
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82 Annual Accounts 2021/22 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. 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). 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 over 40 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 Page 128 of 212
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83 Annual Accounts 2021/22 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. 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 129 of 212
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84 Annual Accounts 2021/22 Note 34: 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 16 provides further details. 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. Council acting as Agent, not Principal 'Agent' is where the Council is acting as an intermediary and 'Principal' is where the Council is acting on its own behalf. In 2020/21 and 2021/22, the Council received funding from the Scottish Government relating to grants and subsidies in support of hardship experienced by third parties from the impact COVID-19. In many cases, the Council had no discretion over the terms of the grants awarded and any unspent grant was repaid to the Scottish Government; these have been treated as Agent transactions and excluded from the CIES, Balance Sheet and related Notes. Cashflows have, however, been included in the Cashflow Statement. CIPFA and the Local Authority (Scotland) Accounts Advisory Committee issued guidance in relation to the funding streams administered by Scottish local authorities in terms of their treatment as Agent or Principal activities and this guidance has been followed. Further detail on the sums involved can be found in Note 26. 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 23: Financial Instruments. Page 130 of 212
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85 Annual Accounts 2021/22 Note 35: 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 2022 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 pension liability was £51.0m as at 31 March 2022.Further detail can be found in Note 29: Defined Benefit Pension Schemes. The effects on the net pension liability of changes in individual assumptions can be measured. For instance, a 0.1% decrease in the discount rate assumption would result in an increase in the pension liability of £33.0m. However, the assumptions interact in complex ways. At 31 March 2022, the Council’s actuaries advised that the net pensions liability had increased by £7.1m as a result of estimates being corrected as a result of experience; decreased by £10.7m as a result of updating demographic assumptions; and decreased by £122.7m as a result of updating financial assumptions. Debt Impairment At 31 March 2022, the Council had a balance for long and short term debtors (including council tax, rent arrears and trade debtors) of £84.3m. A review of significant balances suggested that an impairment of doubtful debts of £30.7m was appropriate. However, in the current economic climate it is not certain that such an allowance would be sufficient. Over 2021/22, the principal debt impairment increase has been related to Council Tax arrears, which increased by £0.6m. 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 £3.1m to be set aside as an allowance. Page 131 of 212
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86 Annual Accounts 2021/22 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. 2020/21 2021/22 £m £m 13.743 Repairs and maintenance 16.244 14.318 Supervision and management 17.618 26.540 Depreciation and impairment of non-current assets 26.336 (0.460) Increase/(Decrease) in the allowance for bad debts (0.229) 0.829 Other expenditure 1.300 54.970 Total Expenditure 61.269 (47.945) Dwelling rents (48.622) (1.448) Non-dwelling rents (1.438) (1.520) Other income (2.996) (50.913) Total Income (53.056) 4.057 Net Cost of HRA services as included in the CIES 8.213 HRA share of the operating income and expenditure included in the CIES: (0.014) (Gain)/Loss on sale of HRA non-current assets (0.006) 4.435 Interest payable and similar charges 4.478 (0.083) Interest and investment income (0.159) 0.188 Pensions interest cost and expected return on pensions assets 0.215 (1.425) Taxation and non specific grant income (7.147) 7.158 Deficit for the year on HRA services 5.594 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 7: Adjustment between accounting basis and funding basis under regulations on page 38. Page 132 of 212
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87 Annual Accounts 2021/22 2020/21 2021/22 £m £m (6.807) Balance on the HRA at 1 April (6.497) 7.158 Deficit for the year on the HRA income and expenditure statement 5.594 (6.848) Adjustments between accounting basis and funding basis under statute (5.594) 0.310 Net (Increase)/Decrease before transfers to or from reserves (0.000) (6.497) Balance on the HRA at 31 March (6.497) Notes to the Housing Revenue Account income and expenditure statement 1. The number and types of dwelling in the Council’s housing stock The Council was responsible for managing 12,216 dwellings during 2021/22 (12,212 in 2020/21). 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 416 £63.46 One-apartment 416 £64.48 3,684 £71.73 Two-apartment 3,685 £72.84 5,863 £81.12 Three-apartment 5,864 £82.37 2,038 £90.65 Four-apartment 2,040 £92.06 211 £97.50 Five-apartment 211 £98.94 12,212 Total 12,216 As at 31 March 2021 As at 31 March 2022 2. Gross rent income This is the total rental income chargeable for the year and includes a deduction for voids (£1.142m in 2021/22 and £0.895m in 2020/21), but excludes irrecoverable and bad debts. Average rents were £81.01 per week in 2021/22 (£79.72 in 2020/21).The total rent income for 2021/22 reflects the decision of the Council to charge only a nominal rent in respect of initiative voids. 3. Amount of rent arrears At 31 March 2022 total rent arrears amounted to £4.367m (£3.604m at 31 March 2022). This is 8.84% of the total value of rents due at 31 March 2022. 4. Provision for uncollectable rent arrears In 2021/22 the rents bad debt provision was increased by £0.250m (£0.460m in 2020/21). The provision to cover the potential loss of income stands at £2.214m at 31 March 2022 (£1.964m at 31 March 2022). This is 4.48% of the total value of annual rents due. 5. Share of corporate costs In the financial year 2021/22 the HRA share of Corporate and Democratic Core costs amounted to £0.056m (£0.035m in 2020/21). Page 133 of 212
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88 Annual Accounts 2021/22 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. 2020/21 2021/22 £m £m 116.525 Gross council tax levied 118.049 (16.382) Other discounts and reductions (16.199) (14.404) Council tax reduction scheme (13.433) (2.783) Write-off of uncollectable debts and allowance for impairment (2.476) 0.081 Adjustment to previous years’ community charge and council tax 0.523 83.037 Transfer to the Comprehensive Income and Expenditure Statement 86.464 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 2021/22 was £1,354.88 (£1,315.42 in 2020/21). 2020/21 2021/22 £ £ 876.95 A 903.25 1,023.11 B 1,053.80 1,169.27 C 1,204.34 1,315.42 D 1,354.88 1,728.32 E 1,780.16 2,137.55 F 2,201.68 2,576.04 G 2,653.31 3,222.79 H 3,319.46 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. 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. Page 134 of 212
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89 Annual Accounts 2021/22 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 2021/22 Band D equivalent 2020/21 Band D equivalent A 13,503 2,122 8 1,966 3,638 5,849 0.67 3,899 3,690 B 25,880 1,604 80 3,330 5,551 15,375 0.78 11,958 11,548 C 15,123 486 60 1,599 1,961 11,063 0.89 9,834 9,640 D 12,972 309 46 1,172 694 10,820 1.00 10,820 10,528 E 11,472 185 69 712 417 10,137 1.31 13,319 13,061 F 6,826 75 48 289 123 6,309 1.63 10,252 9,888 G 4,108 80 18 133 52 3,825 1.96 7,491 7,231 H 216 11 0 9 2 194 2.45 475 483 90,100 Band A dwellings subject to disabled relief 8 7 Class 17 and 24 dwellings 79 77 Sub-total 68,135 66,153 Less: Provision for non-payment and future award of discounts and reliefs (4,675) (2,836) Council Tax Base 63,460 63,317 Page 135 of 212
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90 Annual Accounts 2021/22 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. 2020/21 2021/22 £m £m 145.690 Gross rates levied 145.727 (65.753) Reliefs and other deductions (55.765) (5.226) Write-off of uncollectable debts and allowance for impairment (4.306) 74.711 Net Non-Domestic Rates income 85.656 (8.029) Adjustment to previous years’ non-domestic rates (0.759) 7.159 Contribution (to)/from the National Non-Domestic Rate pool (3.234) 0.000 Non-domestic rate income retained by authority (BRIS) 0.000 73.841 Transfer to the Comprehensive Income and Expenditure Statement 81.663 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 2021/22 the charge was 49.0 pence in the pound, with a 1.3 pence supplement for properties with a rateable value over £51,000 and a 2.6 pence supplement for properties with a rateable value above £95,000. Under the Small Business Bonus Scheme (SBBS) 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 £18,000 or less. Properties with a total rateable value up to and including £15,000 are entitled to a 100% reduction in their business rates on each individual property and properties with a rateable value of between £15,001 to £35,000 receive a 25% reduction on each individual property with a rateable value of £18,000 or less. Analysis of Renfrewshire Council’s rateable values 2021/22 £m 109.720 48.804 32.314 0.010 111.110 301.958 (16.153) 285.805 (1.375) 284.430Net 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 136 of 212
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91 Annual Accounts 2021/22 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 246.606 (38.531) 208.075 266.414 (41.821) 224.593 56.764 (53.414) 3.350 57.024 (54.169) 2.855 90.889 (14.265) 76.624 Environment and Infrastructure 104.227 (12.804) 91.423 105.499 (53.203) 52.296 Finance and Resources 106.841 (48.250) 58.591 38.794 (11.518) 27.276 49.619 (12.458) 37.161 15.965 (14.616) 1.349 Miscellaneous Services 17.393 (17.588) (0.195) 222.661 (148.864) 73.797 Adult Services 238.190 (152.094) 86.096 777.178 (334.411) 442.767 839.708 (339.184) 500.524 0.136 0.000 0.136 (Gain)/Loss on the disposal of non-current assets (0.175) 0.000 (0.175) 24.007 (1.888) 22.119 Financing and investment income and expenditure G6 25.219 (1.612) 23.607 0.000 (481.232) (481.232) Taxation and non-specific grant income 4 0.000 (490.582) (490.582) 801.321 (817.531) (16.210) 864.752 (831.378) 33.374 (9.723) G3 (12.454) (25.933) 20.920 (48.460) (109.545) (3.584) G15 (0.873) 44.983 (226.812) (0.393) G4 (4.215) (7.454) Other comprehensive (income) and expenditure (341.445) (33.387) Total comprehensive (income) and expenditure (320.525) Share of other comprehensive (income) and expenditure of associates and joint ventures Actuarial (gain)/loss on pension assets and liabilities 2020/21 (restated) 2021/22 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 Communities and Housing For details of the 2020/21 restatement, please refer to Note 2: Prior Year Restatement. Page 137 of 212
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92 Annual Accounts 2021/22 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. 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 2021 194.093 940.631 1,134.724 77.589 1,212.313 Movement in reserves during the year Total Comprehensive Income and Expenditure (17.181) 323.798 306.617 13.908 320.525 Adjustments between Group accounts and Council accounts G5 (12.897) 0.000 (12.897) 12.897 0.000 Adjustments between accounting basis and funding basis under regulations 7 50.454 (50.454) 0.000 0.000 0.000 Increase / (Decrease) in year 20.376 273.344 293.720 26.805 320.525 Balance at 31 March 2022 214.469 1,213.975 1,428.444 104.394 1,532.838 Comparative movements in 2020/21 (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 2020 159.621 946.924 901.805 72.381 974.186 Movement in reserves during the year Total Comprehensive Income and Expenditure 31.117 10.719 41.836 (8.449) 33.387 Adjustments between Group accounts and Council accounts G5 (13.657) 0.000 (13.657) 13.657 0.000 Adjustments between accounting basis and funding basis under regulations 7 17.012 (17.012) 0.000 0.000 0.000 Increase / (Decrease) in year 34.472 (6.293) 28.179 5.208 33.387 Balance at 31 March 2021 194.093 940.631 1,134.724 77.589 1,212.313 Page 138 of 212
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93 Annual Accounts 2021/22 Group Balance Sheet The group balance sheet shows the value as at 31 March 2022 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 2021 (restated) As at 31 March 2022 £m Note £m 1,498.582 Property, plant and equipment G11 1,608.885 39.522 Heritage assets G10 44.405 1.993 Investment property G9 1.906 4.177 Intangible assets 14 3.349 25.180 Long-term investments G15 34.848 49.034 Investments in associates and joint ventures G3 64.835 2.407 Long-term debtors 19 2.347 1,620.895 1,760.575 0.625 Assets held for sale 13 0.922 135.881 Short-term investments G15 183.583 0.953 Inventories 1.106 81.707 Short-term debtors G12 80.885 47.163 Cash and cash equivalents G15 19.819 266.329 286.315 (87.793) Short-term borrowing G15 (92.005) (73.628) Short-term creditors G13 (74.206) (0.212) Short-term provisions 22 (0.240) (161.633) (166.451) (73.261) Long-term creditors 21 (69.152) (5.078) Long-term provisions 22 (5.117) (201.297) Long-term borrowing G15 (219.781) (0.868) Liabilities in associates and joint ventures G3 0.000 (232.774) Other long-term liabilities (53.551) (513.278) (347.601) Alastair MacArthur 1,212.313 1,532.838 (221.219) Usable reserves G7 (241.905) (991.094) Unusable reserves G8 (1,290.933) (1,212.313) (1,532.838) Director of Finance and Resources Total reserves Long-term assets Current assets Current liabilities Long-term liabilities Net assets The unaudited accounts were issued on 30 June 2022. Page 139 of 212
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94 Annual Accounts 2021/22 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. 2020/21 (restated) 2021/22 £m £m 25.933 Group surplus/(deficit) (20.920) 71.510 Adjustment for non-cash movements 127.250 (46.299) Adjustments for items included in the group surplus/deficit that are investing and financing activities (42.875) 51.144 Net cash flows from operating activities 63.455 (65.921) Net cash flows from investing activities (107.449) 48.799 Net cash flows from financing activities 16.650 34.022 Net increase/(decrease) in cash and cash equivalents (27.344) 13.141 Cash and cash equivalents at the beginning of the reporting period 47.163 47.163 Cash and cash equivalents at the end of the reporting period 19.819 Notes to the Group Accounts 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 2022. 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. 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. During 2021/22 Page 140 of 212
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95 Annual Accounts 2021/22 Renfrewshire Council provided additional funding of £0.249m to OneRen to mitigate the financial impact of reduced revenue arising from national and local restrictions implemented by the Scottish Government in response to the COVID-19 crisis. 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. Paisley Museum Reimagined Limited was formed in 2019 by Renfrewshire Council, with the objective of managing the development and delivery of the fundraising strategy for Paisley Museum and to drive the capital appeal for the redevelopment of Paisley Museum and furthering Paisley's cultural regeneration. The company is treated as a subsidiary within the Group Accounts. Copies of the financial statements may be obtained from its registered office at 5a High Street, Paisley PA1 2AE. Park Lane Developments (Renfrewshire) LLP was formed in 2010 by Renfrewshire Council and Park Lane Real Estate LLP in order to facilitate the regeneration of Paisley town centre through the transformation of the town’s former Arnotts store into a mixed-use retail, office and residential development. The Partnership is treated as a subsidiary within the Group Accounts. Copies of the financial statements for the partnership may be obtained from its registered office at 87 Port Dundas Road, Cowcaddens, Glasgow G4 0HF. The group comprehensive income and expenditure statement (CIES) includes total net comprehensive income for the year of £8.732m (2020/21 net comprehensive expenditure of £9.081m) for OneRen, total net comprehensive income for the year of £1.681m (2020/21 £4.158m) for the Paisley, Renfrew and Johnstone Common Good Funds, total net comprehensive expenditure for the year of £0.052m (2020/21 £0.016m restated) for Park Lane Developments (Renfrewshire) LLP, total net comprehensive expenditure for the year of £0.152m (2020/21 £0.149m) for Paisley Museum Reimagined Limited and total net comprehensive expenditure for the year of £0.073m (2020/21 net comprehensive income of £0.180m) for the Coats Observatory Trust. The group balance sheet includes net liabilities of £2.140m (2020/21 £10.872m) for OneRen, net assets of £41.461m (2020/21 £39.780m) for the Common Good Funds, net assets of £0.114m (2020/21 £0.166m restated) for Park Lane Developments (Renfrewshire) LLP, net liabilities of £0.573m (2020/21 £0.421m) for Paisley Museum Reimagined Limited and net assets of £0.697m (2020/21 £0.770m) 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 2021/22, Renfrewshire Council contributed £0.325m or 7.99% of the committee’s estimated running costs (2020/21 £0.322m or 7.96%) and its share of the year-end net asset was £0.367m (2020/21 £0.276m) 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 £2.861m or 8.00% to the committee’s estimated running costs in 2021/22 (2020/21 £2.828m or 7.97%) and its share of the year-end net asset was £38.643m (2020/21 £35.255m) 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 141 of 212
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96 Annual Accounts 2021/22 Strathclyde Partnership for Transport Renfrewshire Council’s Share Strathclyde Partnership for Transport Renfrewshire Council’s Share £m £m £m £m Balance Sheet Summary 283.824 22.633 Long-term assets 321.591 25.713 180.712 14.410 Current assets 181.166 14.485 (22.420) (1.788) Current liabilities (19.454) (1.555) 0.000 0.000 Long-term liabilities 0.000 0.000 442.116 35.255 Net assets 483.303 38.643 Income and Expenditure Summary 74.012 5.902 Income 76.706 6.133 65.328 5.210 Expenditure 69.538 5.560 8.684 0.692 Surplus for the year 7.168 0.573 As at 31 March 2021 As at 31 March 2022 2020/21 2021/22 Renfrewshire Valuation Joint Board was formed in 1996 at local government re-organisation by Act of Parliament. Its principal place of business is The Robertson Centre, 16 Glasgow Road, Paisley PA1 3QF. 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 2021/22, Renfrewshire Council contributed £1.561m or 56.3% of the board’s estimated running costs (2020/21 £1.467m restated, 56.4%) and its share of the year-end net asset was £0.300m (2020/21 net liability of £0.868m 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 (restated) Renfrewshire Council’s Share Renfrewshire Valuation Joint Board Renfrewshire Council’s Share £m £m £m £m Balance Sheet Summary 0.214 0.121 Long-term assets 0.182 0.102 0.881 0.497 Current assets 0.693 0.390 (0.285) (0.161) Current liabilities (0.087) (0.049) (2.349) (1.325) Long-term liabilities (0.255) (0.143) (1.539) (0.868) Net assets/(liabilities) 0.533 0.300 Income and Expenditure Summary 2.972 1.677 Income 2.802 1.577 2.849 1.608 Expenditure 3.215 1.809 0.123 0.069 Surplus/(deficit) for the year (0.413) (0.232) As at 31 March 2021 As at 31 March 2022 2020/21 2021/22 Page 142 of 212
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97 Annual Accounts 2021/22 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. 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 (restated) Renfrewshire Council’s Share Renfrewshire Integration Joint Board Renfrewshire Council’s Share £m £m £m £m Balance Sheet Summary 27.006 13.503 Current assets 51.049 25.525 27.006 13.503 Net assets 51.049 25.525 Income and Expenditure Summary 350.078 175.039 Income 367.251 183.626 332.589 166.295 Expenditure 343.208 171.604 17.489 8.744 Surplus for the year 24.043 12.022 As at 31 March 2021 As at 31 March 2022 2020/21 2021/22 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 £0.122m (3.2%) to the committee’s estimated running costs in 2021/22 (£0.118m in 2020/21). 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 £0.052m (12.5%) to the committee’s estimated running costs in 2021/22 (£0.072m in 2020/21). 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 Page 143 of 212
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98 Annual Accounts 2021/22 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. 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 (£25.525m + £39.310m = £64.835m) equates to the figure disclosed in the group balance sheet as ‘Investments in associates and joint ventures. Aggregate of Joint Venture results (restated) Renfrewshire Council’s Share Aggregate of Joint Venture results Renfrewshire Council’s Share £m £m £m £m Balance Sheet Summary 27.006 13.503 Current assets 51.049 25.525 27.006 13.503 Net assets 51.049 25.525 Income and Expenditure Summary 350.078 175.039 Income 367.251 183.626 332.589 166.295 Expenditure 343.208 171.604 17.489 8.744 Surplus for the year 24.043 12.022 Joint ventures As at 31 March 2021 As at 31 March 2022 2020/21 2021/22 Aggregate of Associate results (restated) Renfrewshire Council’s Share Aggregate of Associate results Renfrewshire Council’s Share £m £m £m £m Balance Sheet Summary 284.038 22.754 Long-term assets 321.773 25.815 185.252 15.199 Current assets 186.993 15.285 (22.904) (1.965) Current liabilities (20.079) (1.647) (2.349) (1.325) Long-term liabilities (0.255) (0.143) 444.037 34.663 Net assets 488.432 39.310 Income and Expenditure Summary 81.030 7.902 Income 83.591 8.036 69.490 6.923 Expenditure 75.700 7.604 11.540 0.979 Surplus for the year 7.891 0.432 Associates As at 31 March 2021 As at 31 March 2022 2020/21 2021/22 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 2022 in relation to any of its associates or joint ventures. The Council is unaware that any capital commitments have been entered into by any of its associates or joint ventures as at 31 March 2022, either with the Council itself or with other parties. Page 144 of 212
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99 Annual Accounts 2021/22 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. 2020/21 (restated) 2021/22 £m £m Share of (surplus) or deficit: Subsidiaries: (0.375) Paisley, Renfrew and Johnstone Common Good Funds (0.434) 0.021 Coats Observatory Trust 0.028 1.439 OneRen 3.498 0.016 Park Lane Developments (Renfrewshire) LLP 0.052 0.149 Paisley Museum Reimagined Limited 0.152 Associates: (0.692) Strathclyde Partnership for Transport (0.573) (0.218) Strathclyde Concessionary Travel Scheme Joint Committee (0.091) (0.069) Renfrewshire Valuation Joint Board 0.232 Joint Ventures: (8.744) Renfrewshire Health and Social Care Integration Joint Board (12.022) (8.473) Aggregate share of (surplus) or deficit (9.158) Share of other comprehensive (income) and expenditure: 3.658 Subsidiaries: (13.432) (3.783) Paisley, Renfrew and Johnstone Common Good Funds (1.247) (0.201) Coats Observatory Trust 0.045 7.642 OneRen (12.230) (0.393) Associates: (4.215) (0.608) Strathclyde Partnership for Transport (2.815) 0.000 Strathclyde Concessionary Travel Scheme Joint Committee 0.000 0.215 Renfrewshire Valuation Joint Board (1.400) 3.265 Aggregate share of other comprehensive (income) and expenditure (17.647) (5.208) Aggregate share of total comprehensive (income) and expenditure (26.805) 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. Page 145 of 212
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100 Annual Accounts 2021/22 The adjustments between group accounts and council accounts can be analysed as follows: 2020/21 2021/22 £m £m 0.120 Grants made by the Paisley, Renfrew and Johnstone Common Good Funds to Renfrewshire Council in contribution towards the funding of community events and projects 0.148 0.059 Governance costs charged to the Paisley, Renfrew and Johnstone Common Good Funds by Renfrewshire Council 0.059 (0.020) Interest income received from Renfrewshire Council by the Paisley, Renfrew and Johnstone Common Good Funds (0.003) (14.279) Service charge and other expenditure payable by Renfrewshire Council to OneRen (13.542) 0.292 Expenditure payable by OneRen to Renfrewshire Council 0.297 0.171 Expenditure payable by Paisley Museum Reimagined Limited to Renfrewshire Council 0.144 (13.657) Total adjustments between Group accounts and Council accounts (12.897) Adjustments between Group accounts and Council accounts Note G6: Group financing and investment income and expenditure 2021/22 (restated) 2021/22 £m £m 19.734 Interest payable and similar charges 20.312 4.273 Net interest on the net defined benefit liability 4.907 (0.565) Interest receivable and similar income (0.631) (0.329) Income and expenditure in relation to investment properties and changes in their fair values (0.208) (0.994) Other investment income (0.773) 22.119 Total financing and investment income and expenditure 23.607 Group financing and investment income and expenditure Note G7: Group Usable reserves 2020/21 2021/22 £m £m (194.093) Council Usable Reserves - Note 7 (214.457) Group Usable Reserves: (23.996) Paisley, Renfrew and Johnstone Common Good Funds: unrestricted funds (24.524) (0.292) Coats Observatory Trust: usable balances (0.238) (0.368) OneRen (0.368) 0.421 Paisley Museum Reimagined Limited 0.573 (2.891) Renfrewshire Health and Social Care Integration Joint Board (2.891) (221.219) Total Group Usable Reserves (241.905) Group Usable Reserves Page 146 of 212
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101 Annual Accounts 2021/22 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. 2020/21 (restated) 2021/22 £m £m (940.631) Council Unusable Reserves - Note 8 (1,213.987) Group Unusable Reserves: (6.146) Paisley, Renfrew and Johnstone Common Good Funds: financial instruments revaluation reserve (6.960) (9.638) Paisley, Renfrew and Johnstone Common Good Funds: revaluation reserve (9.977) (0.478) Coats Observatory Trust: revaluation reserve (0.459) 11.240 OneRen: pension reserve 2.508 (0.166) Park Lane Developments (Renfrewshire) LLP (0.114) Council share of the Reserves of associates and joint ventures: (35.255) Strathclyde Partnership for Transport (38.643) (0.276) Strathclyde Concessionary Travel Scheme Joint Committee (0.367) 0.868 Renfrewshire Valuation Joint Board (0.300) (10.612) Renfrewshire Health and Social Care Integration Joint Board (22.634) (991.094) Total Group Unusable Reserves (1,290.933) 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: 2020/21 2021/22 £m £m (0.456) Rental income from investment property (0.419) (0.456) Net (gain) or loss (0.419) 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: 2020/21 2021/22 £m £m 2.020 Balance at 1 April 1.993 (0.021) Net losses from fair value adjustments (0.081) (0.006) Other changes (0.006) 1.993 Balance at 31 March 1.906 Group Investment Properties Page 147 of 212
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102 Annual Accounts 2021/22 Note G10: Group Property, plant and equipment Council PPE (Note 9) Council share of Group PPE Total Group PPE £m £m £m Gross carrying amount at 1 April 2021 1,901.842 18.809 1,920.651 Assets reclassified (to) or from the “held for sale” category (0.822) 0.000 (0.822) Additions 82.029 0.000 82.029 Disposals (2.050) 0.000 (2.050) Revaluation increases/(decreases) taken to the Revaluation Reserve 62.364 0.208 62.572 Revaluation increases/(decreases) recognised in the surplus or deficit on the provision of services (9.734) 0.000 (9.734) Gross carrying amount at 31 March 2022 2,033.629 19.017 2,052.646 Accumulated depreciation and impairment at 1 April 2021 417.599 4.470 422.069 Depreciation charge for the year 72.178 0.750 72.928 Depreciation and impairment on disposals (1.965) 0.000 (1.965) Depreciation written out to the Revaluation Reserve (41.865) (0.606) (42.471) Depreciation written out to the surplus or deficit on the provision of services (6.800) 0.000 (6.800) Accumulated depreciation and impairment at 31 March 2022 439.147 4.614 443.761 Balance sheet net carrying amount at 31 March 2022 1,594.482 14.403 1,608.885 Balance sheet net carrying amount at 1 April 2021 1,484.243 14.339 1,498.582 2021/22 Council PPE (Note 9) Council share of Group PPE Total Group PPE £m £m £m Gross carrying amount at 1 April 2020 1,852.125 18.509 1,870.634 Assets reclassified (to) or from the “held for sale” category 0.075 0.000 0.075 Additions 53.701 0.000 53.701 Disposals (0.854) 0.000 (0.854) Revaluation increases/(decreases) taken to the Revaluation Reserve 4.947 0.300 5.247 Revaluation increases/(decreases) recognised in the surplus or deficit on the provision of services (8.152) 0.000 (8.152) Gross carrying amount at 31 March 2021 1,901.842 18.809 1,920.651 Accumulated depreciation and impairment at 1 April 2020 392.882 4.281 397.163 Depreciation charge for the year 70.868 0.741 71.609 Depreciation and impairment on disposals (0.260) 0.000 (0.260) Depreciation written out to the Revaluation Reserve (42.661) (0.552) (43.213) Depreciation written out to the surplus or deficit on the provision of services (3.230) 0.000 (3.230) Accumulated depreciation and impairment at 31 March 2021 417.599 4.470 422.069 Balance sheet net carrying amount at 31 March 2021 1,484.243 14.339 1,498.582 Balance sheet net carrying amount at 1 April 2020 1,459.243 14.228 1,473.471 2020/21 (restated) Page 148 of 212
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103 Annual Accounts 2021/22 Note G11: Group heritage assets There were no movements in the fair value of the Group’s Heritage Assets during 2021/22 or 2020/21. The value at 31 March 2022 was £39.522m. 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 2022 (£0.219 at 31 March 2021). 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 2021 As at 31 March 2022 £m £m 6.244 Trade receivables 5.532 4.480 Prepayments 4.861 70.983 Other receivables 70.492 81.707 Total 80.885 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 2021 (restated) As at 31 March 2022 £m £m (15.269) Trade payables (14.909) (58.359) Other payables (59.297) (73.628) Total (74.206) 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 2021 As at 31 March 2022 £m £m Amounts owing to Renfrewshire Council: 0.737 Other balances 0.737 0.737 Total 0.737 Amounts owed by Renfrewshire Council: (27.032) Liability for Renfrewshire Integration Joint Board’s retained underspend (51.076) (0.841) Other balances (0.655) (27.873) Total (51.731) Page 149 of 212
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104 Annual Accounts 2021/22 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 23: Financial Instruments. Long-term Current Long-term Current £m £m £m £m 0.000 135.720 5.001 183.499 0.000 0.161 0.000 0.084 25.180 0.000 29.847 0.000 25.180 135.881 34.848 183.583 0.000 8.165 0.000 (8.435) 0.000 0.001 0.000 0.002 0.000 (0.003) 0.000 (0.001) 0.000 39.000 0.000 28.253 0.000 47.163 0.000 19.819 0.909 92.592 0.818 88.856 4.996 0.087 5.027 0.065 0.854 0.000 0.913 0.000 (4.352) (21.267) (4.411) (19.740) 2.407 71.412 2.347 69.181 At amortised cost: Accrued interest As at 31 March 2021 Financial Assets As at 31 March 2022 At amortised cost: Principal At amortised cost: Accrued interest 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 Long-term Current Long-term Current £m £m £m £m (201.297) (0.834) (199.427) (1.869) 0.000 (2.708) 0.000 (2.698) (201.297) (3.542) (199.427) (4.567) 0.000 (52.916) (20.000) (32.916) 0.000 (0.884) 0.000 (0.871) 0.000 (0.883) (0.354) (0.512) 0.000 (54.683) (20.354) (34.299) 0.000 (29.568) 0.000 (53.139) (201.297) (87.793) (219.781) (92.005) 0.000 (42.838) 0.000 (41.849) (71.581) (2.851) (68.362) (3.219) (0.008) 0.000 (0.005) 0.000 (71.589) (45.689) (68.367) (45.068) As at 31 March 2022As at 31 March 2021 (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 Note: the figures in this table include accrued interest where this is applicable Page 150 of 212
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105 Annual Accounts 2021/22 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, abrdn Capital Limited. 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: (204.839) (280.699) Public Works Loan Board borrowing 2 (203.994) (254.715) (54.683) (80.525) Non-PWLB borrowing (“market debt”) 2 (54.653) (73.852) Other liabilities: (74.432) (121.485) Service concession and finance lease liabilities 3 (71.581) (102.940) (0.008) (0.008) Financial guarantees 3 (0.005) (0.005) (333.962) (482.717) (330.233) (431.512) Financial liabilities measured at amortised cost: (29.568) n/a Borrowing from group entities (53.139) n/a (42.838) n/a Trade payables: short-term (41.849) n/a (72.406) (94.988) As at 31 March 2021 (restated) As at 31 March 2022 Fair value level Total financial liabilities for which fair value is disclosed Total financial liabilities for which fair value is not disclose Carrying Amount Fair value Financial Assets Carrying Amount Fair value £m £m £m £m 39.000 39.000 Callable deposits in money market funds 1 25.299 25.299 0.000 0.000 Euro account balances with the Council’s banker 2 2.954 2.954 25.180 25.180 Investments in pooled funds 1 29.847 29.847 64.180 64.180 58.100 58.100 135.881 135.989 Fixed term deposits with UK local authorities 2 188.584 187.713 8.109 8.109 Callable deposits with UK banks & building societies* 2 (8.486) (8.486) 0.054 0.054 Imprest accounts held at council establishments 2 0.052 0.052 1.583 1.687 Loans made for service purposes 3 1.592 1.707 145.627 145.839 181.742 180.986 209.807 210.019 239.842 239.086 Financial assets measured at amortised cost: 0.908 n/a Trade receivables: long-term 0.818 n/a 71.328 n/a Receivables and prepayments: short-term 69.118 n/a 72.236 69.936 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 As at 31 March 2021 As at 31 March 2022 Fair value level *includes current account balances with the Council’s banker. Page 151 of 212
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106 Annual Accounts 2021/22 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 23. 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. 2020/21 Amortised cost Elected to Fair Value through OCI* Fair Value through Profit or Loss 2021/22 £m £m £m £m £m £m 15.877 Interest expense 0.000 0.000 0.000 16.417 16.417 2.505 Impairment losses 0.000 0.000 0.000 0.000 0.000 0.012 Fee expense 0.000 0.000 0.000 0.000 0.000 18.394 Total expense in the Surplus / Deficit on the Provision of Services 0.000 0.000 0.000 16.417 16.417 (0.631) Interest income (0.278) 0.000 (0.016) 0.000 (0.294) (0.655) Dividend income 0.000 (0.794) 0.000 0.000 (0.794) (0.446) Other income (0.319) (0.090) 0.000 0.000 (0.409) (1.732) Total income in the Surplus/Deficit on the Provision of Services (0.597) (0.884) (0.016) 0.000 (1.497) (3.584) Net (gain) or loss on revaluation 0.000 (0.872) 0.048 0.000 (0.824) (3.584) (Surplus)/Deficit on the revaluation of financial assets 0.000 (0.872) 0.048 0.000 (0.824) 13.078 Net (Gain)/Loss for the year (0.597) (1.756) 0.032 16.417 14.096 Financial Assets Financial liabilities at amortised cost Page 152 of 212
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107 Annual Accounts 2021/22 Group Accounting Policies Introduction The Code of Practice on Local Authority Accounting in the United Kingdom 2021/22 (“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 seven 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. 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 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. Page 153 of 212
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108 Annual Accounts 2021/22 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. For Paisley Museum Reimagined Limited the net liability relates to sums due by the company to Renfrewshire Council for the provision of ongoing administrative support. 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 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 Page 154 of 212
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109 Annual Accounts 2021/22 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 paid by OneRen is accounted for within income and expenditure to the extent that it is irrecoverable from HM Revenue and Customs. Page 155 of 212
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Finance and Resources, Renfrewshire House, Cotton Street, Paisley PA1 1JB Telephone: 0141 618 7364 www.renfrewshire.gov.uk Page 156 of 212
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RENFREWSHIRE COUNCIL COMMON GOOD FUNDS PAISLEY SC019478 RENFREW SC019479 JOHNSTONE SC019480 TRUSTEES’ UNAUDITED ANNUAL REPORT AND FINANCIAL STATEMENTS 1 APRIL 2021 to 31 MARCH 2022 Page 157 of 212
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TABLE OF CONTENTS TRUSTEES’ ANNUAL REPORT ....................................................................................................... 1 STATEMENT OF TRUSTEES’ RESPONSIBILITIES IN RESPECT OF THE ANNUAL REPORT AND ACCOUNTS 7 STATEMENT OF FINANCIAL ACTIVITIES FOR YEAR ENDED 31 MARCH 2022 ...................................... 8 BALANCE SHEET AS AT 31 MARCH 2022 .................................................................................... 10 CASH FLOW STATEMENT FOR YEAR ENDED 31 MARCH 2022 ...................................................... 11 NOTES TO THE FINANCIAL STATEMENTS ..................................................................................... 12 1: ACCOUNTING POLICIES ......................................................................................................... 12 2: INCOME AND ENDOWMENTS ................................................................................................... 14 3: EXPENDITURE ...................................................................................................................... 15 4: TANGIBLE FIXED ASSETS ....................................................................................................... 15 5: FIXED ASSET INVESTMENTS ................................................................................................... 17 6: RESERVES COVER ................................................................................................................ 18 7: CASH FLOW STATEMENT ....................................................................................................... 18 8: TRUSTEES’ REMUNERATION AND EXPENSES ............................................................................ 19 9: RELATED PARTIES ................................................................................................................ 19 10: COMMITMENTS ................................................................................................................... 19 11: STAFF COSTS AND EMOLUMENTS ........................................................................................ 19 12: AUDIT COSTS ..................................................................................................................... 19 13: SHORT-TERM DEPOSITS ..................................................................................................... 19 14: DEBTORS ........................................................................................................................... 20 15: CREDITORS ........................................................................................................................ 20 16: EVENTS AFTER THE BALANCE SHEET DATE ........................................................................... 20 Page 158 of 212
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Renfrewshire Council Common Good Funds Trustees’ Annual Report 1 | P a g e Trustees’ Annual Report INTRODUCTION Renfrewshire Council acts as sole trustee for the Common Good Funds listed below, which currently have charitable status and are registered with the Office of the Scottish Charity Regulator (OSCR): SC019478 Paisley Common Good Fund SC019479 Renfrew Common Good Fund SC019480 Johnstone Common Good Fund The principal address of the Common Good Funds is: Renfrewshire Council Finance and Resources Service Renfrewshire House Cotton Street Paisley PA1 1JB Renfrewshire Council administers the Common Good Funds and separately accounts for them. 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, social services, environmental services and housing and economic regeneration. The Common Good Fund accounts do not form part of the Council’s single entity balance sheet, although under s222 of the Local Government (Scotland) Act 1973, the property of the Common Good “vest[s]” in the relevant local authority. However they 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.renfreshire.gov.uk. Auditors: Audit Scotland 4th Floor, South Suite The Athenaeum Building 8 Nelson Mandela Place Glasgow G2 1BT Investment Managers: Investment Advisors: abrdn plc Hymans Robertson LLP 1 George Street 20 Waterloo Street Edinburgh Glasgow EH2 2LL G2 6DB Page 159 of 212
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Renfrewshire Council Common Good Funds Trustees’ Annual Report 2 | P a g e TRUSTEES The Common Good is not a Trust, and is not governed by trust law. Guidance provided by OSCR advises that those who have general control and management of the charity are the charity’s Trustees. Decisions regarding the general control and management of the Common Good Funds are made by the Finance, Resources and Customer Services Policy Board, which has delegated authority from the Council in this regard; but ultimately control rests with the full Council of elected members. The guidance is therefore interpreted as all elected members of Renfrewshire Council being charity Trustees. The following individuals were the Trustees of the Common Good Funds in their capacity as elected members of Renfrewshire Council during the 2021/22 financial year: Alison Ann-Dowling John Hood Alistair Mackay John McIntyre Andrew Doig John McNaughtan Andrew Steel John Shaw Audrey Doig Karen Devine-Kennedy Carolann Davidson Kenneth MacLaren Catherine McEwan Kevin Montgomery Colin McCulloch Lisa-Marie Hughes Derek Bibby Lorraine Cameron Edward Devine Margaret MacLaren Edward Grady Marie McGurk Eileen McCartin Michelle Campbell Emma Rodden Natalie Don Iain Nicolson Neill Graham Jacqueline Cameron Paul Mack (until 9 May 2021) James MacLaren Scott Kerr James Sheridan Stephen Burns Jane Strang Tom Begg Jennifer Marion Adam-McGregor William Binks Jim Harte William Brown Jim Paterson William Mylet Jim Sharkey Day-to-day management of the Common Good Funds is delegated to the Director of Finance and Resources of Renfrewshire Council. All 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. The list above does not reflect any changes following the most recent local government election on 5 May 2022. Page 160 of 212
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Renfrewshire Council Common Good Funds Trustees’ Annual Report 3 | P a g e STRUCTURE, GOVERNANCE AND MANAGEMENT Each Common Good Fund is a fund of money and assets for which the Council has a statutory obligation (under Section 15(4) of the Local Government etc (Scotland) Act 1994) to administer ‘having regard to the interests of the inhabitants of the area to which the Common Good formerly related’ (i.e. the former burghs of Paisley, Renfrew and Johnstone). Although the Common Good Funds are administered separately from mainstream local authority funding, they are owned outright by the Council (s222 of the Local Government (Scotland) Act 1973) and do not have an identity separate from the Council, nor a constitutional form distinct from the Council. The charity test, set out in Section 7 of the Charities and Trustee Investment (Scotland) Act 2005 provides that “a body meets the charity test if: (a) its purposes consist of only one or more charitable purposes, and (b) it provides...public benefit in Scotland or elsewhere.” The Common Good Funds are not bodies separate from the Council, and the Council’s purposes consist of much more than the charitable purposes listed in the Act. In March 2022, OSCR advised that, following enquiry, the Common Good Funds do not meet the charity test and agreed that they should be removed from the OSCR charitable register. Further information is provided under ‘Future Plans’. HISTORY 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. 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 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. 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 Page 161 of 212
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Renfrewshire Council Common Good Funds Trustees’ Annual Report 4 | P a g e 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. Decisions regarding the operation, assets, processes or policies of the Common Good Funds are delegated by the Council to the Finance, Resources and Customer Services Policy Board. 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. Regular training is offered to members of the Investment Review Board through the information sessions at each meeting. RISK The Trustees have overall responsibility for the Common Good Funds’ system of internal control. The 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. The main risk for the Common Good Funds relates to investment income available for disbursement through grants. As mentioned above, investment performance is monitored quarterly by officers of the Council and they receive specialist advice in this regard from Hymans Robertson LLP, appointed investment advisors. It is acknowledged that this particular risk has been heightened because of the coronavirus pandemic; however, the potential impact on income levels is closely monitored in discussion with the investment manager and advisors, and tactical changes in investment holdings are actioned as required. An Investment Policy Statement was agreed by the Investment Review Board on 9 June 2021, incorporating strengthened restrictions with regards climate change risks. The policy is regularly reviewed to ensure the benchmark, against which performance is monitored, remains relevant and appropriate. Page 162 of 212
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Renfrewshire Council Common Good Funds Trustees’ Annual Report 5 | P a g e OBJECTIVES AND ACTIVITIES There is no governing document for the Common Good. The assets were gifted for the common good of the inhabitants of the burghs. The most concise statement of the administration of the Common Good is contained in a judgement by Lord Kyllachy: “The Common Good is corporate property and falls as such to be administered by the Council – and applied by them for the benefit of the community in such a manner as, and using such reasonable judgement as, they think proper”. Therefore, the aims of the Common Good cannot be narrowed down from that detailed above, i.e. that the funds are used for the benefit of the inhabitants of the burgh to which they are related. GRANT MAKING There are two types of grant awarded from Common Good Funds: recurring grants (i.e. those awarded for a period of some years) or large grant awards that are agreed by the Finance, Resources and Customer Service Policy Board. The Finance, Resources and Customer Service Policy Board also agrees the budget available to Local Partnerships for awards to community groups. Local Partnerships were set up in an effort to involve communities more directly in the decision-making of the Council, and they are comprised of elected members of the relevant wards, along with representatives from local community groups e.g. Community Councils, Elderly Forums, Youth Groups, etc. Each Local Partnership is allocated an annual budget, and considers at public meetings the grant requests they have received. Only eligible grants may be considered; further information on the eligibility criteria can be obtained from the Council’s website at www.renfrewshire.gov.uk/localpartnershipfunding. ACHIEVEMENTS AND PERFORMANCE In 2021/22 grants totalling £135,175 (£185,655 in 2020/21) were awarded by Local Partnerships to a wide variety of community organisations. Other grant expenditure totalling £147,510 (£119,435 in 2020/21) was made throughout the year. Despite the ongoing restrictions in place due to the COVID19 pandemic, the operation of the charities continued with minimal impact. Funds continued to be disbursed and investment performance was monitored through regular reporting and remote meetings as required. INVESTMENT PERFORMANCE The Common Good Funds have adopted a total return policy for investment income and have agreed income targets, which the Investment Manager exceeded in the year. During the year the total return on investments was 7.7% (23.9% in 2020/21). The average return on cash balances held within Renfrewshire Council’s Loans Fund was 0.11% (0.37% in 2020/21). Overall, the Common Good Funds reported a combined net increase in funds of £1.681m (£4.158m in 2020/21), which will increase the previous fund balance brought forward. The total funds held by Paisley Common Good increased by £0.173m and the funds held by Renfrew Common Good increased by £1.508m. Page 163 of 212
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Renfrewshire Council Common Good Funds Trustees’ Annual Report 6 | P a g e FINANCIAL REVIEW The Common Good Funds have no explicit reserves policy, but as a general principle the “capital” of the funds is held effectively as a permanent endowment, with only the annual income available for disbursement in the year. No individual Common Good Fund is in deficit. The main funding sources for the Common Good Funds are dividend and investment income (69.5%) [64.5% in 2020/21] and property rental income (30.5%) [35.5% in 2020/21]. The Investment Review Board has agreed an Investment Policy Statement, which regulates the relationship between the Council and the Investment Manager. It details benchmark asset class holdings and also the restrictions that the Council has agreed, e.g. no direct holdings in tobacco or fossil fuel stocks, or companies involved in the manufacture of armaments; and a minimum holding of 15% of the total funds to be held in fixed interest stocks. FUTURE PLANS On 5 September 2018 the Finance, Resources and Customer Service Policy Board of Renfrewshire Council agreed that a formal application be submitted to the Office of the Scottish Charity Regulator (OSCR) requesting the de-registration of all three Common Good Funds. The Council has contacted OSCR to start the process of de-registration, and progress will be reported to the Finance, Resources and Customer Service Policy Board. This is expected to be concluded within the next 12 months. Regardless of their charitable registration status, the Common Good Funds will continue to make grants available to local organisations through Local Partnerships and will also continue to fund recurring commitments, such as Christmas lights displays. The Council will also continue to review the funding provided by the Common Good Funds to ensure it remains appropriate and in line with the objectives of the Funds and to the benefit of the inhabitants of the relevant burghs. The Community Empowerment (Scotland) Act 2015 places new obligations on Councils with regards the recording and use of Common Good assets. As required by the Act, the Council has published a register of all Common Good properties and will assess any responses received. The Act also requires local authorities to publish any proposals and consult with community bodies before disposing of or changing the use of Common Good assets. The asset register can be found by searching for ‘Common Good Property’ on the Council’s website, at: www.renfrewshire.gov.uk. The Trustees wish to thank Renfrewshire Council officers involved in producing the Annual Report and Financial Statements. Signed: On behalf of the Trustees: Date: Date: Alastair MacArthur Councillor John Shaw Director of Finance and Resources, Renfrewshire Council Convener, Finance, Resources and Customer Services Policy Board, Renfrewshire Council Page 164 of 212
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Renfrewshire Council Common Good Funds Trustees’ Annual Report 7 | P a g e Statement of Trustees’ Responsibilities in respect of the Annual Report and Accounts STATEMENT OF RESPONSIBILITIES IN RESPECT OF THE ANNUAL REPORT AND ACCOUNTS The Trustees are responsible for preparing the annual report and financial statements for each financial year in accordance with the accounting policies set out in Note 1 to the accounts and the Charities and Trustee Investment (Scotland) Act 2005, the Charities Accounts (Scotland) Regulations 2006 (as amended) and the Accounting and Reporting by Charities: Statement of Recommended Practice (SoRP) applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland, published on 16 July 2014. The financial statements give a true and fair view of the incoming resources and application of the resources of the charity during the year and of the charity’s state of affairs at the end of the financial year. In preparing those financial statements, the Trustees are required to: • select suitable accounting policies and then apply them consistently; • make judgments and estimates that are reasonable and prudent; • state whether applicable accounting standards and statements of recommended practice have been followed, subject to any material departures disclosed and explained in the financial statements; and • prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charity will continue in operation. The Trustees are responsible for keeping proper accounting records that disclose, with reasonable accuracy at any time, the financial position of the charity, and to enable them to ensure that the financial statements comply with the Charities and Trustees Investment (Scotland) Act 2005 and the Charities Accounts (Scotland) Regulations 2006. They are also responsible for safeguarding the assets of the charity and group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. STATEMENT OF DISCLOSURE OF INFORMATION TO AUDITORS The Trustees who held office at the date of approval of this annual report and accounts confirm that, so far as they are each aware, there is no relevant audit information of which the auditors are unaware; and that each Trustee has taken all the steps that they ought to have taken as a Trustee to make themselves aware of any relevant audit information and to establish that the auditors are aware of this information. Signed: Date: Councillor John Shaw Convener – Finance, Resources and Customer Services Policy Board, Renfrewshire Council Page 165 of 212
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Renfrewshire Council Common Good Funds Financial Statements 8 | P a g e Statement of Financial Activities for Year Ended 31 March 2022 The Financial Statements summarise the resources that have been generated and consumed in providing services and managing the Common Good Funds during the year. It includes all day-to-day expenses and related income on an accruals basis, as well as transactions measuring the value of fixed assets actually consumed. It also includes the Statement of Total Recognised Gains and Losses, which brings together all of the gains and losses of the Funds for the year and shows the aggregate movement in their net worth. All Common Good Funds have unrestricted funds only; there were no restricted or endowment funds during 2021/22 or in 2020/21. Year to 31 March 2022 Year to 31 March 2021 Paisley Johnstone Renfrew Total Paisley Johnstone Renfrew Total SC019478 SC019480 SC019479 SC019478 SC019480 SC019479 £m £m £m £m £m £m £m £m Income and Endowments from: Grants, Interest & Dividend Income (Note 2A) 0.146 0.000 0.541 0.687 0.128 0.000 0.443 0.571 Rental and Other Income (Note 2B) 0.042 0.000 0.259 0.301 0.049 0.000 0.266 0.315 Total Income and Endowments 0.188 0.000 0.800 0.988 0.177 0.000 0.709 0.886 Expenditure on: Raising Funds Fundraising Trading 0.000 0.000 0.009 0.009 0.000 0.000 0.014 0.014 Investment Management Costs 0.021 0.000 0.082 0.103 0.019 0.000 0.062 0.081 Total Raising Funds 0.021 0.000 0.091 0.112 0.019 0.000 0.076 0.095 Charitable Activities Charitable Activities (Note 3A)Total 0.101 0.000 0.181 0.282 0.121 0.000 0.184 0.305 Governance Costs (Note 3B) 0.015 0.000 0.049 0.064 0.015 0.000 0.049 0.064 Depreciation and Impairment 0.082 0.000 0.010 0.092 0.071 0.000 0.433 0.504 Total Charitable Activities 0.198 0.000 0.240 0.438 0.207 0.000 0.666 0.873 Total Expenditure 0.219 0.000 0.331 0.550 0.226 0.000 0.742 0.968 Net Income / (Expenditure) and net movement in funds before gains and losses on investments (0.031) 0.000 0.469 0.438 (0.049) 0.000 (0.033) (0.082) Gains/(losses) on Investment Assets (Note 5) 0.204 0.000 0.700 0.904 0.816 0.000 2.759 3.575 Net Income/(Expenditure) 0.173 0.000 1.169 1.342 0.767 0.000 2.726 3.493 Page 166 of 212
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Renfrewshire Council Common Good Funds Financial Statements 9 | P a g e STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 31 MARCH 2022 (CONTINUED) Year to 31 March 2022 Year to 31 March 2021 Paisley Johnstone Renfrew Total Paisley Johnstone Renfrew Total SC019478 SC019480 SC019479 SC019478 SC019480 SC019479 £m £m £m £m £m £m £m £m Transfer between Funds 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Total after funds transfer 0.173 0.000 1.169 1.342 0.767 0.000 2.726 3.493 Other Gains or Losses Gains/(Losses) on Revaluation of Fixed Assets 0.000 0.000 0.339 0.339 0.459 0.000 0.206 0.665 Total Other Recognised Gains or Losses 0.000 0.000 0.339 0.339 0.459 0.000 0.206 0.665 Net Movement in Funds 0.173 0.000 1.508 1.681 1.226 0.000 2.932 4.158 Total Funds Brought Forward 6.473 0.052 33.255 39.780 5.247 0.052 30.323 35.622 Total Funds Carried Forward 6.646 0.052 34.763 41.461 6.473 0.052 33.255 39.780 The notes on pages 12 onward form part of these Financial Statements. Page 167 of 212
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Renfrewshire Council Common Good Funds Financial Statements 10 | P a g e Balance Sheet as at 31 March 2022 The Balance Sheet summarises all of the assets that the Common Good Funds own and the liabilities that they owe to others at the top of the statement. The bottom section sets out how the net assets of the Funds are allocated between usable resources and statutory reserves needed to comply with accounting rules. At 31 March 2022 At 31 March 2021 Paisley Johnstone Renfrew Total Paisley Johnstone Renfrew Total SC019478 SC019480 SC019479 SC019478 SC019480 SC019479 Note £m £m £m £m £m £m £m £m Fixed Assets Tangible Fixed Assets 4 1.009 0.000 12.611 13.620 1.090 0.000 12.283 13.373 Heritage Assets 4 0.063 0.047 0.109 0.219 0.063 0.047 0.109 0.219 Investments 5 5.260 0.000 20.075 25.335 4.757 0.000 16.079 20.836 6.332 0.047 32.795 39.174 5.910 0.047 28.471 34.428 Current Assets Debtors 14 0.000 0.000 0.026 0.026 0.000 0.000 0.040 0.040 Short term deposits 13 0.320 0.005 2.021 2.346 0.568 0.005 4.852 5.425 0.320 0.005 2.047 2.372 0.568 0.005 4.892 5.465 Less: Current Liabilities Creditors: Amounts Falling Due Within One Year 15 (0.005) 0.000 (0.080) (0.085) (0.005) 0.000 (0.108) (0.113) (0.005) 0.000 (0.080) (0.085) (0.005) 0.000 (0.108) (0.113) Net Current Assets 0.315 0.005 1.967 2.287 0.563 0.005 4.784 5.352 Net Assets 6.647 0.052 34.762 41.461 6.473 0.052 33.255 39.780 Funds of the Charities: Unrestricted Funds Income Funds 3.629 0.036 20.859 24.524 3.622 0.036 20.338 23.996 Revaluation reserve:Investments 1.581 0.000 5.379 6.960 1.415 0.000 4.731 6.146 Revaluation reserve: Other Fixed Assets 1.437 0.016 8.524 9.977 1.436 0.016 8.186 9.638 6.647 0.052 34.762 41.461 6.473 0.052 33.255 39.780 Signed: Signed: Date: Date: Alastair MacArthur Councillor John Shaw Director of Finance and Resources, Renfrewshire Council Convener, Finance, Resources and Customer Services Policy Board, Renfrewshire Council Page 168 of 212
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Renfrewshire Council Common Good Funds Financial Statements 11 | P a g e Cash Flow Statement for Year Ended 31 March 2022 This statement summarises the inflows and outflows of cash arising from the transactions with third parties on both day-to-day revenue transactions and expenditure on capital activities. For the purposes of this statement, cash is defined as Cash in Hand, and deposits repayable on demand. Year ended 31 March 2022 Year ended 31 March 2021 Paisley Johnstone Renfrew Total Paisley Johnstone Renfrew Total £m £m £m £m £m £m £m £m Net Cash Inflow from Operating Activities (Note 7) 0.051 0.000 0.465 0.516 (0.007) 0.000 0.400 0.393 Capital Expenditure and Financial Investment Cash paid for fixed asset investment (1.425) 0.000 (7.477) (8.902) (0.641) 0.000 (2.168) (2.809) Receipts from sales of fixed asset: investments 1.212 0.000 4.557 5.769 0.606 0.000 2.073 2.679 Receipts from sales of fixed asset: property 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Payments to acquire tangible fixed assets 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Net cash flow from capital expenditure and financial investments (0.213) 0.000 (2.920) (3.133) (0.035) 0.000 (0.095) (0.130) (Increase) / decrease in cash held for investments (0.086) 0.000 (0.376) (0.462) 0.037 0.000 0.100 0.137 Increase / (decrease) in cash held in the year (0.248) 0.000 (2.831) (3.079) (0.005) 0.000 0.405 0.400 Reconciliation of net cash flow to movement in net funds (Decrease) / increase in cash in year (0.248) 0.000 (2.831) (3.079) (0.005) 0.000 0.405 0.400 Net funds at 1 April 0.568 0.005 4.852 5.425 0.573 0.005 4.447 5.025 Net funds at 31 March 0.320 0.005 2.021 2.346 0.568 0.005 4.852 5.425 Page 169 of 212
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Renfrewshire Council Common Good Funds Financial Statements 12 | P a g e Notes to the Financial Statements 1: ACCOUNTING POLICIES INTRODUCTION The Financial Statements for the year ended 31 March 2022 have been compiled in accordance with the Charities and Trustee Investment (Scotland) Act 2005, 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 applicable in the UK and Republic of Ireland (FRS 102) published on 16 July 2014. They are designed to give a true and fair view of the financial performance and position of the Common Good Funds, 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 Charities will not significantly curtail the scale of their operations. This is not affected by the charitable status of the Funds, as the activities that benefit the inhabitants of the three burghs will continue. 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 reported have been reviewed following the introduction of Financial Reporting Standard 18: Accounting Policies (FRS18). INCOME AND ENDOWMENTS Recognition of income and endowments These are included in the Statement of Financial Activities when: • The charity becomes entitled to the resources; • The trustees are virtually certain they will receive the resources; and • The monetary value can be measured with sufficient reliability. Grants and Donations Grants and donations are only included in the Statement of Financial Activities when the charity has unconditional entitlement to the resources. Gifts in Kind Gifts in kind are not reflected in the Statement of Receipts and Payments, but are referred to when necessary in the Trustees Annual Report. Investment Income This is included in the Financial Statements when receivable. Investment Gains and Losses This includes any gain or loss on the sale of investments, and any gain or loss resulting from revaluing investments to market value at the end of the year. Page 170 of 212
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Renfrewshire Council Common Good Funds Financial Statements 13 | P a g e EXPENDITURE Liability Recognition Liabilities are recognised as soon as there is a legal or constructive obligation committing the charity to pay out resources. Charitable Activities Decisions regarding the way the Common Good Funds’ income is spent are taken by the Finance, Resources and Customer Services Policy Board, whose membership comprises of 15 of the Trustees of the Common Good Funds. Voluntary groups are encouraged to apply for funding from the available funds allocated to Renfrewshire Council Local Partnerships. Governance Costs Governance costs include the: • costs of the preparation and examination of statutory accounts; • cost of any legal advice to trustees on governance or constitutional matters; • cost of administering grants; and • property maintenance. Grants Payable without Performance Conditions These are recognised in the accounts when the grant has been paid. ASSETS Valuation Land and buildings have been valued on the basis of market value in relation to existing use, assessed either on a comparative basis or on a depreciated replacement cost basis. The valuations have been compiled by the Council valuer, who is qualified as a Member of the Royal Institute of Chartered Surveyors (MRICS). Assets under construction are shown at historic cost. Land and buildings are revalued every five years, with increases in valuation matched by credits to the Revaluation Reserve. A de minimis level of £9,000 is applied for the capitalisation of expenditure. The civic regalia and equipment (Heritage Assets) have been valued on a present value insurance basis. Investments are valued at market value. Depreciation Depreciation is charged on a straight-line basis on all assets other than land, heritage assets and assets under construction. The Council valuer determines the useful life of property assets. Depreciation is based on expected life of costs capitalised. Impairment The value of each category of asset is reviewed at the end of each financial year for evidence of reductions in value. Where impairment is identified as part of this review or as a result of a revaluation exercise, the loss is charged to the Statement of Financial Activities. Page 171 of 212
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Renfrewshire Council Common Good Funds Financial Statements 14 | P a g e DEPARTURES FROM THE CHARITIES SORP Operational land and buildings have been valued on a depreciated replacement costs basis, not a historic basis as per the Charities SoRP. The main reason for this is the obligation under the Code of Practice on Local Authority Accounting to apply a depreciated replacement cost valuation basis, and it is under this Code that the Common Good Fund Accounts have been audited. EVENTS AFTER THE BALANCE SHEET DATE Events after the Balance Sheet date are those events, both favourable and unfavourable, that occur between the end of the reporting period and the date when the Financial Statements are authorised for issue. 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 Financial Statements are adjusted to reflect such events; and • Non-adjusting events: those that are indicative of conditions that arose after the reporting period, and for which the Financial Statements are not adjusted. Where a category of events would have a material effect, disclosure is made in the notes of the nature of the event and its estimated financial effect. Events taking place after the date of authorisation for issue are not reflected in the Statements. Note 16 provides further information. 2: INCOME AND ENDOWMENTS A INVESTMENTS 2021/22 2020/21 Paisley Johnstone Renfrew Total Paisley Johnstone Renfrew Total £m £m £m £m £m £m £m £m Grant income 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Dividend income 0.146 0.000 0.538 0.684 0.126 0.000 0.426 0.552 Interest income 0.000 0.000 0.003 0.003 0.002 0.000 0.017 0.019 Total grant and investment income 0.146 0.000 0.541 0.687 0.128 0.000 0.443 0.571 B RENTAL AND OTHER INCOME 2021/22 2020/21 Paisley Johnstone Renfrew Total Paisley Johnstone Renfrew Total £m £m £m £m £m £m £m £m Rental income from properties 0.042 0.000 0.259 0.301 0.049 0.000 0.266 0.315 Other Income 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Total rental and other income 0.042 0.000 0.259 0.301 0.049 0.000 0.266 0.315 Page 172 of 212
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Renfrewshire Council Common Good Funds Financial Statements 15 | P a g e 3: EXPENDITURE A CHARITABLE ACTIVITIES 2021/22 2020/21 Paisley Johnstone Renfrew Total Paisley Johnstone Renfrew Total £m £m £m £m £m £m £m £m Voluntary organisation grants total 0.030 0.000 0.105 0.135 0.050 0.000 0.136 0.186 Civic related grants total 0.071 0.000 0.076 0.147 0.071 0.000 0.048 0.119 Total charitable activities grants 0.101 0.000 0.181 0.282 0.121 0.000 0.184 0.305 B GOVERNANCE COSTS 2021/22 2020/21 Paisley Johnstone Renfrew Total Paisley Johnstone Renfrew Total £m £m £m £m £m £m £m £m Accountancy and Administrative Services 0.011 0.000 0.034 0.045 0.011 0.000 0.034 0.045 Property Services 0.004 0.000 0.015 0.019 0.004 0.000 0.015 0.019 Total Governance Costs 0.015 0.000 0.049 0.064 0.015 0.000 0.049 0.064 4: TANGIBLE FIXED ASSETS A PAISLEY COMMON GOOD FUND Operational Land and Buildings Non-Operational Assets: Surplus Assets Total Tangible Fixed Assets Heritage Assets Gross Book Value £m £m £m £m At 1 April 2021 0.816 0.275 1.091 0.063 Additions 0.000 0.000 0.000 0.000 Disposals 0.000 0.000 0.000 0.000 Revaluations 0.000 0.000 0.000 0.000 At 31 March 2022 0.816 0.275 1.091 0.063 Depreciation At 1 April 2021 0.001 0.000 0.001 0.000 Depreciation for Year 0.081 0.000 0.081 0.000 Depreciation writeback on Revaluation 0.000 0.000 0.000 0.000 At 31 March 2022 0.082 0.000 0.082 0.000 Net Book Value at 31 March 2022 0.734 0.275 1.009 0.063 Net Book Value at 31 March 2021 0.815 0.275 1.090 0.063 Page 173 of 212
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Renfrewshire Council Common Good Funds Financial Statements 16 | P a g e B RENFREW COMMON GOOD FUND Operational Land and Buildings Plant and Equipment Non- operational Assets: Investment Properties Non- Operational Assets: Surplus Assets Total Tangible Fixed Assets Heritage Assets Gross Book Value £m £m £m £m £m £m At 1 April 2021 9.642 3.284 0.540 0.015 13.481 0.109 Additions 0.000 0.000 0.000 0.000 0.000 0.000 Disposals 0.000 0.000 0.000 0.000 0.000 0.000 Transfers 0.000 0.000 0.000 0.000 0.000 0.000 Revaluations 0.298 0.000 (0.113) 0.000 0.185 0.000 At 31 March 2022 9.940 3.284 0.427 0.015 13.666 0.109 Depreciation At 1 April 2021 0.586 0.598 0.014 0.000 1.198 0.000 Depreciation for year 0.197 0.235 0.006 0.000 0.438 0.000 Impairment 0.000 0.000 0.000 0.000 0.000 0.000 Depreciation writeback on revaluations (0.561) 0.000 (0.020) 0.000 (0.581) 0.000 Impairment losses written out on revaluation 0.000 0.000 0.000 0.000 0.000 0.000 At 31 March 2022 0.222 0.833 0.000 0.000 1.055 0.000 Net Book Value at 31 March 2022 9.718 2.451 0.427 0.015 12.611 0.109 Net Book Value at 31 March 2021 9.056 2.686 0.526 0.015 12.283 0.109 C JOHNSTONE COMMON GOOD FUND Heritage Assets Gross Book Value £m At 1 April 2021 0.047 Additions 0.000 Disposals 0.000 Revaluations 0.000 At 31 March 2022 0.047 Depreciation At 1 April 2021 0.000 Depreciation for year 0.000 At 31 March 2022 0.000 Net Book Value at 31 March 2022 0.047 Net Book Value at 31 March 2021 0.047 Page 174 of 212
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Renfrewshire Council Common Good Funds Financial Statements 17 | P a g e HERITAGE ASSETS Heritage Assets include items of civic regalia and equipment formerly used by the Provost of the Council on civic occasions. The assets are now held in Renfrewshire museums. 5: FIXED ASSET INVESTMENTS Investments are held specifically to provide the funds from which donations and civic activities can be funded. ANALYSIS OF MARKET VALUES 2021/22 2020/21 Paisley Renfrew Total Paisley Renfrew Total Market Value £m £m £m £m £m £m At 1 April 2021 4.757 16.079 20.836 3.943 13.326 17.269 Additions 1.425 7.477 8.902 0.642 2.168 2.810 Disposals (1.212) (4.557) (5.769) (0.606) (2.073) (2.679) Net gain/(loss) on revaluation 0.204 0.700 0.904 0.815 2.759 3.574 Increase/(decrease) in cash in bank awaiting investment 0.086 0.376 0.462 (0.037) (0.101) (0.138) At 31 March 2022 5.260 20.075 25.335 4.757 16.079 20.836 ASSET ALLOCATION ANALYSIS 2021/22 2020/21 Paisley Renfrew Total Paisley Renfrew Total £m £m £m £m £m £m Bonds: UK Government Bonds 0.275 0.950 1.225 0.247 0.833 1.080 Other UK Bonds 0.277 1.169 1.446 0.342 1.098 1.440 Overseas Bonds 0.104 0.395 0.499 0.134 0.510 0.644 Equities: UK Equities 1.632 6.547 8.179 1.633 5.505 7.138 Overseas Equities 2.725 10.341 13.066 2.261 7.628 9.889 Non-Region Specific 0.000 0.000 0.000 0.000 0.000 0.000 Property Investments 0.083 0.000 0.083 0.061 0.206 0.267 Cash 0.161 0.664 0.825 0.075 0.287 0.362 Accrued Interest 0.003 0.009 0.012 0.004 0.012 0.016 Total Investment Assets 5.260 20.075 25.335 4.757 16.079 20.836 All investments were held in unrestricted funds during 2021/22 and 2020/21. Page 175 of 212
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Renfrewshire Council Common Good Funds Financial Statements 18 | P a g e 6: RESERVES COVER Funds tied up in fixed assets are represented by investments held by the Common Good Funds. 2021/22 2020/21 Paisley Johnstone Renfrew Total Paisley Johnstone Renfrew Total Free Reserves £m £m £m £m £m £m £m £m Unrestricted Funds 3.629 0.036 20.859 24.524 3.622 0.036 20.340 23.998 Allocation Adjustment 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Unrestricted Funds from SOFA (0.031) 0.000 0.469 0.438 (0.049) 0.000 (0.032) (0.081) Total Unrestricted Funds 3.598 0.036 21.328 24.962 3.573 0.036 20.308 23.917 Less Funds tied up in fixed assets (5.260) 0.000 (20.076) (25.336) (4.757) 0.000 (16.079) (20.836) Total Free Reserves (1.662) 0.036 1.252 (0.374) (1.184) 0.036 4.229 3.081 Annual Running Costs exclude impairment 0.227 0.000 0.773 1.000 0.226 0.000 0.756 0.982 Number of months held in reserve 0 0 19 0 0 67 7: CASH FLOW STATEMENT A RECONCILIATION OF NET INCOME/EXPENDITURE TO NET CASH INFLOW/ (OUTFLOW) FROM OPERATING ACTIVITIES Year to 31 March 2022 Year to 31 March 2021 Paisley Johnstone Renfrew Paisley Johnstone Renfrew £m £m £m £m £m £m Net Incoming / (Expenditure) and net movement in funds before gains and losses on investments (0.031) 0.000 0.469 (0.049) 0.000 (0.033) Depreciation and impairment 0.082 0.000 0.010 0.071 0.000 0.433 Decrease/(increase) in debtors 0.000 0.000 0.014 0.000 0.000 (0.032) Increase/(decrease) in creditors 0.000 0.000 (0.028) (0.029) 0.000 0.032 Net cash (inflow)/outflow from operating activities 0.051 0.000 0.465 (0.007) 0.000 0.400 Page 176 of 212
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Renfrewshire Council Common Good Funds Financial Statements 19 | P a g e B ANALYSIS OF CHANGES IN NET FUNDS At 1 April 2021 Movement in net funds At 31 March 2022 At 1 April 2020 Movement in net funds At 31 March 2021 Short term deposits £m £m £m £m £m £m Paisley 0.568 (0.248) 0.320 0.573 (0.005) 0.568 Johnstone 0.005 0.000 0.005 0.005 0.000 0.005 Renfrew 4.852 (2.831) 2.021 4.447 0.405 4.852 5.425 (3.079) 2.346 5.025 0.400 5.425 8: TRUSTEES’ REMUNERATION AND EXPENSES Neither the Trustees of the Common Good Funds 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 2021/22 (nil 2020/21). 9: RELATED PARTIES During the year, the Common Good Fund balances were invested by Renfrewshire Council, who manage the administration of the Funds on behalf of the Trustees. The costs of this are disclosed in note 3B: Governance Costs. The Council also acts as banker for the Common Good Funds and all transactions, incoming and outgoing, are made via the Council’s accounts. This creates a debtor, as detailed in the respective Funds’ balance sheets. There are no outstanding balances due to or from Renfrewshire Council other than those that appear in the balance sheet. 10: COMMITMENTS As at 31 March 2022, no Common Good Fund had outstanding commitments on capital contracts. There were no outstanding commitments for operating lease rentals. 11: STAFF COSTS AND EMOLUMENTS No members of staff were employed directly by the Common Good Funds during 2021/22 (2020/21 nil). All costs were incurred by Renfrewshire Council and recharged as detailed in note 3B: Governance Costs. There are therefore no employees with emoluments above £60,000 (2020/21 nil). 12: AUDIT COSTS Costs of £5,000 were incurred in relation to the audit of the 2021/22 financial statements (£4,660 for 2020/21). 13: SHORT-TERM DEPOSITS Short-term deposits are held with Renfrewshire Council, who process receipts, payments and accounting entries on behalf of the Common Good Funds. Page 177 of 212
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Renfrewshire Council Common Good Funds Financial Statements 20 | P a g e 14: DEBTORS Year to 31 March 2022 Year to 31 March 2021 Paisley Johnstone Renfrew Total Paisley Johnstone Renfrew Total £m £m £m £m £m £m £m £m Accrued Income 0.000 0.000 0.026 0.026 0.000 0.000 0.040 0.040 Grant 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 Total Debtors 0.000 0.000 0.026 0.026 0.000 0.000 0.040 0.040 15: CREDITORS Year to 31 March 2022 Year to 31 March 2021 Paisley Johnstone Renfrew Total Paisley Johnstone Renfrew Total £m £m £m £m £m £m £m £m Trade Creditors 0.005 0.000 0.067 0.072 0.005 0.000 0.104 0.109 Rents in Advance 0.000 0.000 0.013 0.013 0.000 0.000 0.004 0.004 Total Creditors 0.005 0.000 0.080 0.085 0.005 0.000 0.108 0.113 16: EVENTS AFTER THE BALANCE SHEET DATE Events taking place after the authorised issue date 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 2022, the figures in the financial statements and notes have been adjusted in all material respects to reflect the impact of this information. There are no non-adjusting events. Page 178 of 212
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RENFREWSHIRE COUNCIL COATS OBSERVATORY TRUST FUND SC019454 TRUSTEES’ REPORTAND FINANCIAL STATEMENTS 1 APRIL 2021 to 31 MARCH 2022 Page 179 of 212
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Table of Contents TRUSTEES’ REPORT ........................................................................1 TRUST ACCOUNTS FINANCIAL STATEMENTS OVERVIEW ................................5 STATEMENT OF RECEIPTS AND PAYMENTS FOR THE YEAR ENDED 31 MARCH 2022 .6 STATEMENT OF BALANCES AS AT 31 MARCH 2022 .....................................6 NOTES TO THE FINANCIAL STATEMENTS .................................................7 Page 180 of 212
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Renfrewshire Council Coats Observatory Trust Fund Trustees’ Report P a g e | 1 Trustees’ Report INTRODUCTION Renfrewshire Council acts as sole trustee for the Coats Observatory Trust Fund (“the Trust Fund”), which has charitable status and is registered with the Office of the Scottish Charity Regulator (OSCR): The financial statements of the Trust Fund 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, 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 Fund “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.renfreshire.gov.uk. Independent Auditors: Audit Scotland 4th Floor, South Suite The Athenaeum Building 8 Nelson Mandela Place Glasgow G2 1BT Page 181 of 212
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Renfrewshire Council Coats Observatory Trust Fund Trustees’ Report P a g e | 2 TRUSTEES Guidance provided by OSCR advises that those who have general control and management of the charity are the charity’s 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 at Renfrewshire Council. The guidance is therefore interpreted as all elected members of Renfrewshire Council being charity Trustees. The following individuals were Trustees of the Coats Observatory Trust Fund in their capacity as elected members of Renfrewshire Council during the 2021/22 financial year: Alison Ann-Dowling John Hood Alistair Mackay John McIntyre Andrew Doig John McNaughtan Andrew Steel John Shaw Audrey Doig Karen Devine-Kennedy Carolann Davidson Kenneth MacLaren Catherine McEwan Kevin Montgomery Colin McCulloch Lisa-Marie Hughes Derek Bibby Lorraine Cameron Edward Devine Margaret MacLaren Edward Grady Marie McGurk Eileen McCartin Michelle Campbell Emma Rodden Natalie Don Iain Nicolson Neill Graham Jacqueline Cameron Paul Mack (until 9 May 2021) James MacLaren Scott Kerr James Sheridan Stephen Burns Jane Strang Tom Begg Jennifer Marion Adam-McGregor William Binks Jim Harte William Brown Jim Paterson William Mylet Jim Sharkey Day-to-day management of the Trust Fund is delegated to the Director of Finance and Resources of Renfrewshire Council. All 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. The list above does not reflect any changes following the most recent local government election on 5 May 2022. 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 Ltd for nil consideration. Page 182 of 212
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Renfrewshire Council Coats Observatory Trust Fund Trustees’ Report P a g e | 3 HISTORY The original purpose of the Trust Fund when it was set up was: “for the upkeep of Coats Observatory equipment”. This purpose was relevant while cash funds were available; however, these funds have now 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 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 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 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). 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. 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. FUTURE PLANS Given that there are no cash funds remaining, nor anticipated, the Council is currently exploring with OSCR the future of the charity, always considering the ongoing sustainability of the Observatory and ensuring appropriate governance arrangements remain in place. Page 183 of 212
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Renfrewshire Council Coats Observatory Trust Fund Trustees’ Report P a g e | 4 The Trustees wish to thank Renfrewshire Council officers involved in producing the Report and Financial Statements. Signed: Date: Alastair MacArthur Director of Finance and Resources Renfrewshire Council On behalf of the Trustees: Date: Councillor John Shaw Convener – Finance, Resources and Customer Services Policy Board Renfrewshire Council Page 184 of 212
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Renfrewshire Council Coats Observatory Trust Fund Financial Statements P a g e | 5 Trust Accounts Financial Statements Overview INTRODUCTION The following pages detail the Statement of Receipts and Payments, 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 Cash Flow Statement. STATEMENT OF RECEIPTS AND PAYMENTS The Statement of Receipts and Payments provides an analysis of the incoming and outgoing cash and bank transactions for the period. If applicable, the Statement would also show any cash movements in relation to fixed assets. In the case of the Trust Fund, there have been no purchases or sales of fixed assets. 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 Receipts and Payments. The Statement of Balances also summarises final closing balances at the end of the period. NOTES TO THE ACCOUNTS Notes to the accounts expand on or explain the information contained in the Statement of Receipts and Payments and the Statement of Balances. Page 185 of 212
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Renfrewshire Council Coats Observatory Trust Fund Financial Statements P a g e | 6 Statement of Receipts and Payments for the year ended 31 March 2022 2021 2022 Total Unrestricted Restricted Total £ £ £ £ 0 Total receipts 0 0 0 0 Total payments 0 0 0 0 Surplus / (deficit) for period 0 0 0 Statement of Balances as at 31 March 2022 2021 2022 Total Unrestricted Restricted Total £ Cash funds £ £ £ Balances held with Renfrewshire Council: 0 Opening balance 0 0 0 0 Surplus / (deficit) for period 0 0 0 0 0 0 0 Other assets (at current valuation) Land and buildings: 770,227 Coats Observatory, Paisley 0 697,208 697,208 0 Long Term Investments 0 0 0 770,227 0 697,208 697,208 Signed: Signed: Date: Date: Alastair MacArthur Councillor John Shaw Director of Finance and Resources Convenor, Finance, Resources and Customer Services Policy Board Renfrewshire Council Renfrewshire Council Page 186 of 212
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Renfrewshire Council Coats Observatory Trust Fund Financial Statements P a g e | 7 Notes to the Financial Statements ACCOUNTING POLICIES INTRODUCTION The Financial Statements for the year ended 31 March 2022 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 Trust Fund will not continue indefinitely. This has no impact on the financial statements, as the assets of the fund comprise solely of the Observatory buildings, which are independently valued. The accounting concept of accruals is not relevant to these statements, which have been prepared on a receipts and payments basis. The accounts have been prepared under the historic cost convention, other than changes resulting from the revaluation of certain categories of assets. The accounting policies reported 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. Further explanations of the nature and purpose of each fund is included in the notes to the financial statements. Audited 2020/21 comparative figures have been brought forward unchanged. Page 187 of 212
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Renfrewshire Council Coats Observatory Trust Fund Financial Statements P a g e | 8 INCOMING/OUTGOING RESOURCES Recognition of incoming resources All income is recognised and included in the Statement of Receipts and Payments when the money is actually received. Recognition of expenditure Expenditure is recognised and included in the Statement of Receipts and Payments when it is paid out. Charitable Activities Decisions regarding the way the Trust Funds’ income is spent are taken by the Finance, Resources and Customer Services Policy Board, whose membership comprises 15 of the Trustees of the Trust Fund. Costs of Generating Funds The cost of administering the Trust Fund, including the audit fee of £340, 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 valuation is based on fair value, determined as the market value that would be paid for the asset in its current use. Valuation is provided by the Council Valuer, who is MRICS qualified, and updated as a minimum every five years. The Observatory building is being depreciated on a straight-line basis over 30 years. ANALYSIS OF RECEIPTS/PAYMENTS No income was received in the year. 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 year (2020/21 nil). RELATED PARTIES During the year, Renfrewshire Council acted as banker for the Trust Fund, and all transactions, incoming and outgoing, were made via the Council’s bank accounts. There are no outstanding balances due to or from Renfrewshire Council at 31 March 2022, nor were there any cash transactions during the year. Page 188 of 212
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___________________________________________________________________ To: Council On: 30 June 2022 ___________________________________________________________________ Report by: Director of Finance and Resources ___________________________________________________________________ Heading: Governance Arrangements ___________________________________________________________________ 1. Summary 1.1 At the statutory meeting held on 19 May 2022 the Council approved the composition of its Boards. A number of member appointments were made at the meeting, and it was agreed that the other members to be nominated be intimated to the Head of Corporate Governance by 24 May 2022. A number of such nominations were received and the composition of each of the Boards is detailed in Appendix 1 to this report. 1.2 A small number of vacancies remained on Boards and other bodies following the 19 May meeting of Council. These vacancies include: • Petitions Board – three Administration Members required • Joint Consultative Board Non-teachers – five members required (to comprise three members from the Administration and two members from the opposition groups or parties) • Audit, Risk and Scrutiny Board – two members required from the Administration • Glasgow and the Clyde Valley Strategic Development Planning Authority (Clydeplan) – one member required • Cultural Recovery and Renewal Fund Panel – one member required (not to be a member of the OneRen Board) Item 6 Page 189 of 212
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The Administration have subsequently intimated nominations as follows: • Councillors Adam, Hughes and Paterson in respect of the Petitions Board. • Councillors Audrey Doig (as Convener), Airlie-Nicolson (as Depute Convener) and Hughes in respect of the Joint Consultative Board Non-teachers • Councillors Hughes and Adam in respect of the Audit, Risk and Scrutiny Board • Councillor Paterson in respect of the Glasgow and the Clyde Valley Strategic Development Planning Authority (Clydeplan) The Administration have also intimated that that Councillor Hughes will replace Councillor Shaw on the Economy and Regeneration Policy Board. 1.3 The Glasgow City Region Cabinet has now submitted a completed questionnaire requesting that one member and one substitute member be appointed by this Council. This request was received too late to be submitted to the meeting of this Council held on 19 May 2022. The Administration have nominated Councillor Nicolson with Councillor Jacqueline Cameron as substitute. 1.4 It had previously been agreed that the Depute Convener of the Audit, Risk & Scrutiny Board be a member of the opposition. Councillor Montgomery has been nominated by the Labour group. 1.5. Appointments to other bodies were also approved at the statutory meeting and Appendix 2 to this report provides the complete list of the members appointed. 1.6 At the meeting of Council on 19 May it was agreed that the existing Board structure be disbanded with six Boards being created. Accordingly, it was agreed that the Head of Corporate Governance be instructed to draft a timetable for the meetings of Boards and Panels to be held throughout June 2022 and that an updated timetable of meetings from August to December 2022 be submitted to this meeting of Council for approval. Accordingly, a timetable of meetings is attached as Appendix 3 hereto. Members are also requested to agree that a timetable of meetings to December 2024 be submitted to the meeting of Council to be held on 29 September 2022. 1.7 At the meeting of the Council on 19 May it was agreed that a subcommittee of the Leadership Board be created and instructed the Head of Corporate Governance to bring a report to the Council Meeting Page 190 of 212
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of 30 June in respect of the proposed remit and membership of the subcommittee. This report sets out the proposed membership of the new Fairer Renfrewshire Subcommittee, with the proposed remit set out in Appendix 4 hereto. 1.8 At the meeting of Council on 19 May, Council agreed the number of elected members to be remunerated as Senior Councillors and the amount of remuneration to be paid to each Senior Councillor, and which elected members were to be paid as Senior Councillors. The Administration have subsequently proposed a revised structure of payments reducing the number of Senior Councillors by one, and revising amounts paid to Senior Councillors accordingly. This is set out in Appendix 5 hereto. 1.9 This report also sets out arrangements for Board and Council meetings going forward considering the current position on public health measures and guidance in place to combat Covid-19. 1.10 The arrangements set out in the report continue those previously put in place to allow maximum flexibility to enable meetings to take place in the most appropriate and safe way, while considering any public health guidance or advice available at the time of the meetings. 1.11 The report also proposes amendments to the Scheme of Delegated Functions. ___________________________________________________________________ 2. Recommendations 2.1 That the membership of the Boards as approved at the meeting of the Council held on 19 May 2022 and the appointment of the other members as detailed in Appendix 1 to this report be noted; 2.2 That Council agrees the appointment of members of the Boards and other bodies set out in paragraph 1.2 of this report; 2.3 That Council considers the appointment of Councillor Nicolson and Councillor Jacqueline Cameron as member and substitute member to the Glasgow City Region Cabinet; 2.4 That Council consider the appointment of Councillor Montgomery as the Depute Convener of the Audit, Risk & Scrutiny Board; 2.5 That the appointments to Joint Boards and other bodies as approved at the meeting of the Council held on 19 May 2022, and the other members as detailed in Appendix 2 to this report, be noted; Page 191 of 212
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2.6 That Council agrees the updated timetable of meetings from August to December 2022 attached as Appendix 3 to the report and further agrees that a timetable of meetings to December 2024 be submitted to the meeting of Council to be held on 29 September 2022; and 2.7 That Council agree the membership of the new Fairer Renfrewshire Subcommittee of the Leadership Board as set out in section 3 of this report and the Remit set out in Appendix 4. 2.8 That Council consider the proposed revised structure of payments to Senior Councillors as set out in Appendix 5. 2.9 That Council approve the arrangements for Council and Board meetings set out in section 4 of this report, which will continue to include the options to use hybrid meetings involving elected members attending meetings in person in Renfrewshire House. 2.10 That Council approves the changes to the Scheme of Delegated Functions as set out in section 5 of this report. ___________________________________________________________________ 3. Background – Fairer Renfrewshire Subcommittee 3.1 At the meeting of the Council on 19 May it was agreed that a subcommittee of the Leadership Board be created. It is proposed that this subcommittee be called the Fairer Renfrewshire Subcommittee. 3.2 It is further proposed that the subcommittee will comprise of seven members drawn from the membership of the Leadership Board, being four members from the Administration and one member from each of the other political parties represented on the Leadership Board. 3.3 It is further proposed that the subcommittee will be chaired by the Leadership Board Depute Convener, Councillor Jacqueline Cameron. 3.4 The proposed remit is set out in Appendix 4 hereto. ___________________________________________________________________ 4. Arrangements for the Next Cycle of meetings 4.1 At the Meeting of Council on 28 April Council agreed to continue the previously approved arrangements for the conduct of Council and Board meetings including the availability of hybrid meetings for Council with conveners having discretion to continue holding meetings of their Board by Teams. It was also noted that all of the Council and board meetings would be broadcast live to allow the public to observe those meetings. Page 192 of 212
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4.2 The Scottish Government Strategic Framework sets out a system of Covid Threat Levels. The guidance for workplaces, supports a managed and gradual return to office-based working, with a hybrid and flexible working practices encouraged. A focus is retained on maximising ventilation and enhanced cleaning and hygiene measures such as provision of alcohol based hand sanitizer. The ongoing return to Renfrewshire House is continuing for the time being to apply such measures including in the Council Chamber, reflecting the current guidance and the duty on the Council to protect the health and well- being of its elected members and employees. 4.3 An assessment of the ventilation within the Council Chamber has established that the capacity within the Chamber exceeds the number of seats available, including the public seating. However, the ability to hold hybrid meetings allows a significant degree of flexibility for Members and the public to attend meetings even where the majority of those attending the meeting are doing so in person. 4.4 Accordingly it is proposed that Council and Board meetings now proceed on an assumption of in person meetings within the Chamber but retaining the hybrid capability to allow remote participation where requested. It is also proposed that the protocol previously adopted by the Council for hybrid meetings be retained allowing each convener to decide to hold the meeting remotely by Teams if required. It is proposed that the Head of Corporate Governance will review the protocol to consider any potential changes to procedure to better facilitate meetings where all Members are physically present in the chambers and will report back to the next scheduled Council meeting on 29 September 2022. ___________________________________________________________________ 5 Amendment to Scheme of Delegated Functions 5.1 As part of a Right for Renfrewshire review of Communities and Public Protection, changes to the Council’s enforcement of certain Civic and Liquor Licensing matters were considered. To enhance the capacity in these areas it is proposed that additional officers be empowered to carry out enforcement work in these areas, namely Fair Trading Officers. The existing Civic Licensing Standards Enforcement Officer and Licensing Standards Officer have changed services from the Licensing Section within Finance and Resources to now sit within Communities and Housing to work alongside the Fair Trading Officers. 5.2 These changes require certain changes to be made to the Council’s Scheme of Delegations. It is therefore proposed that in Section 4 Statutory Appointments of Officers, the section:- Page 193 of 212
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Civic Government (Scotland) Act 1982 s.45G Civic Licensing Standards Officer Civic Government Enforcement Officer and Licensing Standards Officers be amended to:_ Civic Government (Scotland) Act 1982 s.45G Civic Licensing Standards Officer Civic Licensing Standards Officer, Licensing Standards Officer .and Fair Trading Officers 5.3 Also in Section 4 Statutory Appointments of Officers, that a new delegation be created as follows:- Licensing (Scotland) Act 2005 s13 Licensing Standards Officer Civic Licensing Standards Officer, Licensing Standards Officer and Fair Trading Officers 5.4 In paragraph 76 of section F, the delegation:- Civic Government Enforcement Officer and Licensing Standards Officer 76. All Civic Government Enforcement and Licensing Standards Officers are appointed as authorised officers in terms of the Civic Government (Scotland) Act 1982 to carry out enforcement activities as required in relation to the licensing provisions of the Act and also as regards any conditions of licence attached to licences granted under the Act, all as directed by the Head of Corporate Governance, Legal & Democratic Services Manager, and Assistant Managing Solicitor (Licensing). be amended to read:- Civic Licensing Standards Officer, Licensing Standards Officer and Fair Trading Officers 76. All Civic Licensing Standards Officers, Licensing Standards Officers and Fair Trading Officers are appointed as authorised officers in terms of the Civic Government (Scotland) Act 1982 to carry out enforcement activities as required in relation to the licensing provisions of the Act and also as regards any conditions of licence attached to licences granted under the Act, all as directed by the Head of Corporate Governance, Legal & Democratic Services Manager, and Assistant Managing Solicitor (Licensing). ___________________________________________________________________ Page 194 of 212
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Implications of the Report 1. Financial - none 2. HR & Organisational Development - none 3. Community/Council Planning – none 4. Legal – none 5. Property/Assets – none 6. Information Technology - none 7. Equality & Human Rights - The Recommendations contained within this report have been assessed in relation to their impact on equalities and human rights. No negative impacts on equality groups or potential for infringement of individuals’ human rights have been identified arising from the recommendations contained in the report because for example it is for noting only. If required following implementation, the actual impact of the recommendations and the mitigating actions will be reviewed and monitored, and the results of the assessment will be published on the Council’s website. (Report author to arrange this). 8. Health & Safety - none 9. Procurement – none 10. Risk - none 11. Privacy Impact - none 12. Cosla Policy Position – none. _________________________________________________________ List of Background Papers (a) Correspondence from Councillors McMillan and N Graham intimating their nominations to Boards and Outside Bodies. ___________________________________________________________________ Author: Mark Conaghan Head of Corporate Governance 0141 618 7177 mark.conaghan@renfrewshire.gov.uk Page 195 of 212
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Appendix 1 Board/Panel Composition Convener/Depute Administration Members Labour Conservative Independent/ Liberal Democrat Education and Children’s Services Policy Board 20 members, to comprise 9 members from the Administration, 8 members from the opposition groups and parties and 3 church representatives. Councillor Rodden, Convener and Councillor Paterson, Depute Convener Councillors Rodden, Paterson, Audrey Doig, Hughes, Innes, Mylet, Airlie- Nicolson and Adam and Provost L Cameron Councillors McMillan, G Graham, Grady, Davidson and Smith Councillors Gray and McGonigle Councillor Hannigan Economy and Regeneration Policy Board 15 members, to comprise 8 members from the Administration and 7 members from the opposition groups and parties Councillor Steel, Convener and Councillor Campbell, Depute Convener Councillors Steel, Campbell, Hughes, Nicolson, Burns, McNaughtan, McGurk and Paterson Councillors McMillan, Ann- Dowling, McCulloch, Clark and McGuire Councillor N Graham Councillor Andy Doig Communities and Housing Policy Board 15 members, to comprise 8 members from the Administration and 7 members from the opposition groups and parties Councillor McGurk, Convener and Councillor Innes, Depute Convener Councillors McGurk, McNaughtan, Innes, J Cameron, M MacLaren, Hughes, Rodden and McEwan Councillors McMillan, McDonald, Graham, Hood, McCulloch and McGuire Councillor Leishman Infrastructure, Land and Environment Policy Board 15 members, to comprise 8 members of the Administration and 7 members of the opposition groups and parties Councillor Campbell, Convener and Councillor Burns, Depute Convener Councillors Campbell, Burns, Adam, McNaughtan, J Cameron, Audrey Doig, Mylet and Nicolson Councillors Hood, Gilmour, Smith, Davidson and McDonald Councillors J MacLaren and Gray Page 197 of 212
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Appendix 1 Finance, Resources and Customer Services Policy Board 15 members, to comprise 8 members from the Administration and 7 members from the opposition groups and parties. Councillor Shaw, Convener and Councillor Airlie- Nicolson, Depute Convener Councillors Shaw, Airlie-Nicolson and Provost L Cameron and Councillors Audrey Doig, Campbell, Nicolson, MacFarlane and J Cameron Councillors Clark, Ann-Dowling, Gilmour, Mullin and Grady Councillors McGonigle and N Graham Planning and Climate Change Policy Board 15 members, to comprise 8 members from the Administration and 7 members from the opposition groups and parties. Councillor Paterson, Convener and Councillor MacFarlane, Depute Convener Councillors Paterson, MacFarlane, McGurk, McNaughtan, Shaw, K MacLaren, Nicolson and Adam Councillors Hood, Gilmour, McGuire and Davidson Councillor N Graham Councillors Hannigan and Andy Doig Local Review Body 5 members of the Planning and Climate Change Policy Board to deal with each Review Councillor Paterson, Chairperson Leadership Board 15 members, to comprise 8 members of the Administration and 7 members from the opposition groups or parties Councillor Nicolson, Convener and Councillor J Cameron, Depute Convener Councillors Nicolson, J Cameron, McGurk, Rodden, Shaw, Campbell, Paterson and Steel Councillors McMillan, Ann- Dowling, G Graham and Clark Councillors N Graham and Leishman Councillor Hannigan Audit, Risk and Scrutiny Board 9 members, to comprise 3 members from the Administration and 6 members from Councillor Andy Doig, Convener Councillors Innes Councillors Hood, Gilmour and Montgomery Councillors J MacLaren and Gray Councillor Andy Doig Page 198 of 212
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Appendix 1 the opposition groups or parties Regulatory Functions Board 10 members, to comprise 6 members of the Administration and 4 members from the opposition groups or parties Councillor McNaughtan, Convener and Councillor McEwan, Depute Convener Councillors McNaughtan, McEwan, Audrey Doig, Hughes, Rodden and Steel Councillors Mullin, Montgomery and Hood Councillor N Graham Appeals To be formed as and when required on the basis of the Council decision and the special rules governing each panel Councillor Burns, Convener and Councillor Campbell, Depute Convener Appointments Boards: Conveners and Deputes appointed other members will be identified should a Board be required. Chief Executive 9 members, to comprise the Leader and Depute Leader of the Council, 3 further members of the Councillor Nicolson, Convener and Councillor J Cameron, Depute Convener Page 199 of 212
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Appendix 1 Directors Heads of Service Administration and 4 members from the opposition groups or parties. 9 members, to comprise 5 members of the Administration, and 4 members of the opposition groups or parties. 7 members, to comprise 4 members from the Administration and 3 members from the opposition group or parties. Councillor Nicolson, Convener and Councillor J Cameron, Depute Convener Councillor Nicolson, Convener and Councillor J Cameron, Depute Convener Emergencies Board 5 members, to comprise 3 members from the Administration and 2 members from the opposition groups or parties Councillor Nicolson, Convener and Councillor J Cameron, Depute Convener Councillors Nicolson, J Cameron and Paterson Councillor McMillan Councillor N Graham Investment Review Board 5 members, to comprise 3 members from the Councillor Shaw, Convener and Councillor Councillors Shaw, Nicolson and J Cameron Councillor Ann- Dowling Councillor McGonigle Page 200 of 212
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Appendix 1 Administration and 2 members from the opposition groups or parties Nicolson, Depute Convener JCB (non-teaching) 5 members, to comprise 3 members from the Administration and 2 members from the opposition groups or parties. TBC TBC TBC TBC Renfrewshire Joint Negotiating Committee for Teaching Staff 2 members both from the Administration. Councillors Rodden and Paterson N/A N/A N/A Cross Party Sounding Board 6 members, to comprise the Leader and Depute Leader of the Council plus one member each from the other political groups and parties on the Council. Councillor Nicolson, Convener and Councillor J Cameron, Depute Convener Councillors Nicolson and J Cameron Councillor McMillan Councillor J MacLaren Councillors Andy Doig and Hannigan Petitions Board 9 members, to compromise 5 members from the Administration and 4 members from the opposition groups or parties. Councillor Burns, Convener and Councillor Campbell, Depute Convener Councillors Burns and Campbell Councillors Grady and Smith Councillors N Graham and McGonigle Page 201 of 212
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Appendix 2 Organisation Appointments Made Association for Public Service Excellence Councillor Shaw Councillor McNaughtan (S) Association for Public Service Excellence (Scottish Region) Councillor Shaw Councillor McNaughtan (S) Clyde & Loch Lomond Local Plan District Joint Committee Councillor Shaw Councillor MacFarlane(S) Clyde Valley Learning and Development Joint Committee Councillor Rodden Councillor Paterson (S) Community Planning Oversight Group Councillor Adam Councillor Steel Councillor McGurk Councillor Nicolson Councillor Paterson Councillor Shaw Councillor McMillan Cultural Recovery and Renewal Fund Panel Councillor Hughes Future Paisley Partnership Board Councillor Hughes Councillor Nicolson Councillor McMillan Councillor Ann-Dowling Councillor McDonald Glasgow & the Clyde Valley Strategic Development Planning Authority (Clydeplan) Councillor McNaughtan Glasgow Airport Flight Path Fund Councillor Nicolson Councillor Mullin Houston Old School Trust Councillor Audrey Doig Councillor McGonigle Linstone Housing Association Councillor Andy Steel Local Partnership - Erskine, Inchinnan, Bishopton & Langbank Councillor Campbell (Chair) Local Partnership – Gleniffer Councillor MacFarlane (Chair) Local Partnership – Johnstone & Linwood Councillor Audrey Doig (Chair) Local Partnership – Paisley East Councillor Adam (Chair) Local Partnership – Paisley North, West & Central Councillor McNaughtan (Chair) Page 203 of 212
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Appendix 2 Local Partnership - Renfrew Councillor Shaw (Chair) Local Partnership – The Villages Councillor Innes (Chair) Lowland Reserve Forces & Cadet Association Councillor McGonigle Member Officer Group: Public Protection Councillor Adam Councillor J Cameron Councillor Nicolson Councillor N Graham Councillor McMillan Councillor Ann-Dowling Miss Elizabeth Kibble’s Trust Provost Cameron NHS Greater Glasgow & Clyde Board Councillor J Cameron OneRen (formerly Renfrewshire Leisure Limited Board of Directors) Councillor Hughes Councillor Hannigan Councillor G Graham PACE Theatre Company Councillor Hughes Paisley Museum Reimagined Limited Councillor Nicolson Provost’s Community Awards – Judging Panel Provost Cameron Councillor J MacLaren Councillor Davidson Councillor Smith Renfrewshire Access Panel Councillor K MacLaren Renfrewshire Area Support Team Councillor Hughes Renfrewshire Citizens Advice Bureau Councillor Paterson Councillor McEwan Renfrewshire Economic Leadership Panel Councillor Nicolson Renfrewshire Educational Trust Councillor Hughes Councillor Steel Renfrewshire Fairtrade Steering Group Councillor Paterson Councillor Nicolson (S) Renfrewshire Health & Social Care Integration Joint Board Councillor Adam Councillor Airlie-Nicolson Councillor J Cameron Page 204 of 212
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Appendix 2 Councillor I McMillan Councillor Innes (S) Councillor M MacLaren (S) Councillor Campbell (S) Councillor Ann-Dowling (S) Renfrewshire Local Outdoor Access Forum Councillor Davidson Renfrewshire Valuation Joint Board Councillor MacFarlane Councillor Audrey Doig Councillor K MacLaren Councillor M MacLaren Councillor Steel Councillor Mullin Councillor Hood Councillor Clark Councillor Adam (S) Councillor Campbell (S) Councillor Hughes (S) Councillor McNaughtan (S) Councillor Paterson (S) Councillor Gilmour (S) Councillor McGuire (S) Councillor McMillan(S) Scotland Excel Joint Committee Councillor Shaw Councillor Airlie-Nicolson (S) Scotland Excel Executive Sub-committee Councillor Shaw Councillor Airlie-Nicolson (S) Scottish Councils Committee on Radioactive Substances Councillor Campbell Strathclyde Concessionary Travel Scheme Joint Committee Councillor McEwan Councillor Steel (S) Page 205 of 212
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Appendix 2 Strathclyde Partnership for Transport (Strathclyde Passenger Transport Authority) Councillor Paterson Councillor Steel (S) West of Scotland Archaeology Services Joint Committee Councillor M MacLaren Councillor Steel (S) West of Scotland European Forum Councillor Steel Councillor Campbell (S) Organisations who have not as yet submitted details of insurance cover Organisation Appointments Made Glasgow City Region Education Committee Councillor Rodden Councillor Paterson (S) Nuclear Free Local Authorities (Scotland) Councillor Audrey Doig Councillor Paterson (S) Williamsburgh Housing Association Limited Councillor M MacLaren Page 206 of 212
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Appendix 3 August 2022 Sunday Monday Tuesday Wednesday Thursday Friday Saturday 1 public holiday 2 recess 3 recess 4 recess 5 recess 6 7 8 recess 9 recess 10 recess 11 recess 12 recess 13 14 15 16– 10am – Fairer Renfrewshire Sub- committee 1pm: Communities and Housing 3pm – Police, Fire & Rescue Scrutiny 17 – 10am: Regulatory Functions 18 – 1pm: Education & Children’s Services 19 20 21 22 – 3pm : Audit, Risk & Scrutiny 23 – 10 am : Economy and Regeneration 1 pm: Planning & Climate Change 24 – 25 – 9.30am: Appeals 26 27 28 29 – 2pm: Petitions 30– 2pm: Joint Negotiating Committee for Teaching Staff 31 – 10 am : Infrastructure, Land & Environment 3 pm: JCB Non- teaching September 2022 Sunday Monday Tuesday Wednesday Thursday Friday Saturday 1 – 10am: Regulatory Functions 2 3 4 6 6 – 2pm: Local Review Body 7 8 - 10 am Finance, Resources & Customer Services 9 10 11 12 13 14 – 1pm: Leadership 15 16 17 18 19 20 21 22 23 Public Holiday 24 25 26 Public Holiday 27 – 3 pm: Audit, Risk & Scrutiny 28 29 – 9.30am: Council 30 October 2022 Sunday Monday Tuesday Wednesday Thursday Friday Saturday 1 2 3 4 5 6 - 10 am Finance, Resources & Customer Services 7 8 9 10 recess 11 recess 12 recess 13 recess 14 recess 15 16 17 recess 18 recess 19 recess 20 recess 21 recess 22 23 24 25 – 10am – Fairer Renfrewshire Sub- committee 1pm: Communities & Housing 3pm: Police and Fire & Rescue Scrutiny 26 – 10am: Regulatory Functions 27 – 1pm: Education & Children’s Services 28 29 30 31 – 3 pm: Audit, Risk & Scrutiny Page 207 of 212
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Appendix 3 November 2022 Sunday Monday Tuesday Wednesday Thursday Friday Saturday 1—10 am : Economy and Regeneration 1 pm: Planning & Climate Change 2 3 – 9.30am: Appeals 4 5 6 7 – 2pm: Petitions 8 – 2pm: Joint Negotiating Committee for Teaching Staff 9 – 10 am: Infrastructure, Land & Environment 3 pm: JCB Non- teaching 10 – 10am: Regulatory Functions 11 12 13 15 15 – 2pm: Local Review Body 16 –11am: Investment Review Board 17 – 10 am Finance, Resources & Customer Services 18 19 20 22 22 23 24 25 26 27 29 29 30– 1pm: Leadership December 2022 Sunday Monday Tuesday Wednesday Thursday Friday Saturday 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15– 9.30am: Council 16 17 18 19 recess 20 recess 21 recess 22 recess 23 recess 24 25 26 public holiday 27 public holiday 28 recess 29 recess 30 recess 31 Page 208 of 212
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Appendix 4 Fairer Renfrewshire Sub-committee Terms of Reference To consider matters relating to:- 1. Poverty and financial insecurity and the cost of living crisis. 2. Food and fuel insecurity. 3. Inequalities across Renfrewshire. 4. The Council’s response to the Alcohol and Drug Commission report. 5. Oversight of the Fairer Renfrewshire Programme; and to make recommendations to the Council and the Leadership Board regarding those matters. Page 209 of 212
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Appendix 5 Proposed Revised Remuneration of Senior Councillors a) That the number of Councillors remunerated as Senior Councillors be reduced from fourteen to thirteen, with their remuneration being set as outlined in b) below. b) That elected members holding the following positions be remunerated as Senior Councillors, with renumeration as detailed: • Conveners of the following 6 Policy Boards: Education and Children’s Services; Infrastructure, Land and Environment; Finance, Resources and Customer Services; Communities and Housing; Economy and Regeneration; and Planning and Climate Change (£28,190) • Conveners of the following 4 Regulatory Boards: Audit, Risk and Scrutiny Board; Appeals Board; the Regulatory Functions Board and the Licensing Board (£23,400) • The Chair/Vice Chair of the Renfrewshire Integrated Joint Board (£28,190) • The Chair of OneRen (£28,190) • The Leader of the largest Opposition Group (£23,400) Page 211 of 212
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