Agenda Document Pack - Lanarkshire Valuation Joint Board - 02/12/2024
South Lanarkshire Council · 2 December 2024
Back to Lanarkshire Valuation Joint Board — 2 December 2024 and its agenda
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Tuesday, 26 November 2024 Dear Councillor Lanarkshire Valuation Joint Board The Members listed below are requested to attend a meeting of the above Board to be held as follows:- Date: Monday, 02 December 2024 Time: 14:00 Venue: By Microsoft Teams and Committee Room 1, The business to be considered at the meeting is listed overleaf. Yours sincerely Paul Manning Clerk to the Board Members Walter Brogan (Convener), Jim Reddin (Depute Convener), Bob Burgess, Janine Calikes, Ross Clark, Colin Dewar, Lynsey Hamilton, Martin Hose, Margaret Hughes, Lesley Jarvie, Tom Johnston, Gavin Keatt, Mark McGeever, James McPhilemy, Alex McVey, Anne Thomas Substitutes Mathew Buchanan, Poppy Corbett, Monique Equi, Geri Gray, Cal Johnston-Dempsey, Carol Nugent, Norman Rae, Nicky Shevlin Margaret B Walker 1
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BUSINESS 1 Declaration of Interests 2 Minutes of Previous Meeting Minutes of the meeting of the Lanarkshire Valuation Joint Board held on 2 September 2024 submitted for approval as a correct record. (Copy attached) 5 - 8 Monitoring Item(s) 3 Revenue Budget Monitoring 2024/2025 - Lanarkshire Valuation Joint Board Report dated 19 November 2024 by the Treasurer, Lanarkshire Valuation Joint Board. (Copy attached) 9 - 12 4 External Auditor's Annual Audit Report to the Board 2023/2024 Letter and Annual Report by Audit Scotland, External Auditor. (Copy attached) 13 - 36 Item(s) for Decision 5 Audited Accounts 2023/2024 Report dated 14 November 2024 by the Treasurer, Lanarkshire Valuation Joint Board. (Copy attached) 37 - 86 6 Revenue Budget 2025/2026 – Lanarkshire Valuation Joint Board Report dated 18 November 2024 by the Treasurer, Lanarkshire Valuation Joint Board. (Copy attached) 87 - 94 Item(s) for Noting 7 Change in Membership of the Board Report dated 14 November 2024 by the Clerk, Lanarkshire Valuation Joint Board. (Copy attached) 95 - 96 8 Progress Update Report dated 14 November 2024 by the Assessor and Electoral Registration Officer. (Copy attached) 97 - 112 Urgent Business 9 Urgent Business Any other items of business which the Chair decides are urgent. For further information, please contact:- 2
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Clerk Name: Stuart McLeod Clerk Telephone: 07385 370 117 Clerk Email: stuart.mcleod@southlanarkshire.gov.uk 3
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LANARKSHIRE VALUATION JOINT BOARD Minutes of meeting held via Microsoft Teams and in Committee Room 1, Council Offices, Almada Street, Hamilton on 2 September 2024 Convener: Councillor Walter Brogan Councillors Present: North Lanarkshire Council Councillor Bob Burgess, Councillor Lesley Jarvie, Councillor Tom Johnston, Councillor Jim Reddin (Depute), Councillor Anne Thomas South Lanarkshire Council Councillor Ross Clark, Councillor Colin Dewar, Councillor Lynsey Hamilton, Councillor Martin Hose, Councillor Gavin Keatt Councillors’ Apologies: North Lanarkshire Council Councillor Kenneth Duffy, Councillor Margaret Hughes, Councillor Alex McVey South Lanarkshire Council Councillor Janine Calikes, Councillor Mark McGeever Attending: Assessor and Electoral Registration Service C Maxwell, Assessor and Electoral Registration Officer; J Dell, Assistant Assessor and Electoral Registration Officer Clerk’s Office P Manning, Clerk; S Jessup, Administration Assistant, S McLeod, Administration Officer; South Lanarkshire Council Treasurer’s Office J Taylor, Treasurer 1 Declaration of Interests No interests were declared. 2 Minutes of Previous Meeting The minutes of the meeting of the Lanarkshire Valuation Joint Board held on 3 June 2024 were submitted for approval as a correct record. The Board decided: that the minutes be approved as a correct record. 3 Revenue Budget Monitoring 2024/2025 - Lanarkshire Valuation Joint Board A report dated 31 July 2024 by the Treasurer was submitted:- providing an update on the 2024/2025 revenue budget providing a forecast for the year to 31 March 2025 2 5
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providing actual expenditure at 12 July 2024 Since the previous meeting of the Board held on 3 June 2024, the UK Government had allocated £0.124 million of one-off funding to the Board for New Burdens in relation to the implementation of the Elections Act at the UK Parliamentary General Election. The budget had taken account of this additional funding and included an additional expenditure budget to allow spend to be made appropriately. The income from New Burdens was direct income to the Board and did not affect requisition income from the councils. As at 12 July 2024, the projected outturn variance was an underspend of £0.165 million, which reflected current staffing levels and full establishment moving forward. The actual spend to 12 July 2024 was an underspend of £0.333 million. The Board decided: (1) that the revisions to the Lanarkshire Valuation Joint Board’s Revenue Budget for 2024/2025, as detailed in the report and Appendix A to the report, be noted; (2) that the forecast to 31 March 2025 of an underspend of £0.165 million, as detailed in Appendix A to the report, be noted; and (3) that the actual expenditure to 12 July 2024 of an underspend of £0.333 million, as detailed in Appendix A to the report, be noted. [Reference: Minutes of 3 June 2024 (Paragraph 4)] 4 Progress Update A report dated 20 August 2024 by the Assessor and Electoral Registration Officer was submitted on:- an overview of the Service current issues and Service priorities an update on performance issues affecting the future direction of the Joint Board Statistical information, illustrating progress made in terms of key areas of the work undertaken by Lanarkshire Valuation Joint Board, was provided in the appendices to the report. The Assessor and Electoral Registration Officer provided an update on further progress that had been made in terms of recruitment. The Assessor and Electoral Registration Officer responded to members’ questions on:- the rejection of postal vote ballot papers in the event that the accompanying signature did not match the signature held on file the number of Voter Authority Certificates issued in relation to the UK Parliamentary General Election The Board decided: that the report be noted. [Reference: Minutes of 3 June 2024 (Paragraph 12)] Councillor Johnston joined the meeting during the above item of business 6
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5 Urgent Business There were no items of urgent business. 7
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Report Agenda Item Report to: Lanarkshire Valuation Joint Board Date of Meeting: 2 December 2024 Report by: Treasurer to Lanarkshire Valuation Joint Board Subject: Revenue Budget Monitoring 2024/2025 - Lanarkshire Valuation Joint Board 1. Purpose of Report 1.1. The purpose of the report is to:- [purpose] provide an update on the 2024/2025 Revenue Budget provide the forecast for the year to 31 March 2025 provide actual expenditure as at 1 November 2024 [1purpose] 2. Recommendation(s) 2.1. The Board is asked to approve the following recommendation(s):- [recs] (1) that the forecast underspend to 31 March 2025, and the actual to date at 1 November 2024, both shown in Appendix A, be noted. [1recs] 3. Background 3.1. This is the third revenue budget monitoring report presented to the Lanarkshire Valuation Joint Board for the financial year 2024/2025. 3.2. The report provides an update on the Lanarkshire Valuation Joint Board Revenue Budget (section 5) and details the financial position as at 1 November 2024 (detailed in Appendix A). 4. 2024/2025 Probable Outturn and Revenue Monitoring 4.1. Appendix A shows the results of the Probable Outturn exercise. The financial forecast to 31 March 2025 is a Transfer to Reserves of £0.414 million. This is compared to a budgeted Transfer from Reserves of £0.400 million and means that the Board’s Reserves will be in a better position than budgeted, by £0.814 million. 4.2. The improved position is mainly the result of the ongoing underspend in Employee Costs (£0.744m); Supplies and Services (£0.009m) and Administration Costs (£0.011m). In addition, within Financing Charges there is an over recovery of interest receivable on the Board’s revenue balances (£0.048m). Explanations for these variances are detailed below. Employee Costs: Recruitment/retention of staff has been a feature of the monitoring reports throughout the year and previous forecasts had been based on full establishment moving forward. As part of the formal probable outturn process, a detailed analysis of the staffing position has taken place and that has identified a potential forecast underspend of £0.744m for the year. This reflects the level of turnover experienced in staffing to date and a detailed estimate of 3 9
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timings for the filling of vacant posts between now and the end of the financial year. Recruitment is ongoing and will continue as required. The forecast position also assumes the impact of the 2024/2025 pay award. The budget for employee costs includes new burdens funding referred to in the previous report to the Board. Supplies and Services: The underspend (£0.008m) reflects lower than budgeted for costs of computer equipment maintenance. Administration Costs: The underspend (£0.011m) mainly reflects lower than budgeted for costs of Engaging Counsel in relation to valuation appeals and printing and stationery costs. Financing Charges: The over recovery of interest receivable on the Board’s revenue balances (£0.048m) reflects increased interest rates in 2023/2024 and which have continued into 2024/2025. 4.3. It should be noted that the probable outturn position is based on best information at 1 November 2024. The staffing position will continue to be monitored and the Board will be updated on any significant changes to the forecast position as the year progresses. 4.4. Reserves: As noted in section 4.1, in order to balance Probable Outturn position, there will be a transfer to Reserves of £0.414 million. At the end of 2023/2024, the Board carried forward £1.975 million into 2024/2025. Taking these together means that a balance of £2.389 million will be carried into 2025/2026. 4.5. Period 8 Monitoring Position: As at 1 November 2024, the projected outturn variance is an underspend of £0.814 million, reflecting current staffing levels and full establishment moving forward. New recruitment is currently taking place and depending on start dates this has impacted on the forecast for the year. This projected outturn variance in spend is offset by a reduction in the Transfer to Reserves in Appendix A. 4.6. The actual spend to 1 November 2024 is net income position of £0.447 million, reflecting the timing of spend / income received to date, and indicative of the forecast position for the year. 5. Employee Implications 5.1. None 6. Financial Implications 6.1. The financial implications are noted in section 4 of the report. 7. Climate Change, Sustainability and Environmental Implications 7.1. There are no climate change, sustainability or environmental implications in terms of the information contained in this report. 8. Other Implications 8.1. The main risk associated with the Board’s Revenue Budget is that there is an overspend. The risk has been assessed as low given the detailed budget management applied. The risk is managed through four weekly Budget Monitoring Meetings at which any variance is analysed. In addition, the probable outturn exercise ensures early warning for corrective action to be taken where appropriate. 10
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9. Integrated Impact Assessment and Consultation Requirements 9.1. This report does not introduce a new policy, function or strategy or recommend a change to an existing policy, function or strategy, and therefore, no impact assessment is required. 9.2. There is also no requirement to undertake any consultation in terms of the information contained in this report. Jackie Taylor Treasurer 19 November 2024 Previous References Revenue Budget Monitoring 2024/2025 – Lanarkshire Valuation Joint Board – 3 June 2024 Revenue Budget Monitoring 2024/2025 – Lanarkshire Valuation Joint Board – 2 September 2024 List of Background Papers Revenue Budget 2024/2025 – Lanarkshire Valuation Joint Board – 4 December 2023 Contact for Further Information If you would like to inspect the background papers or want further information, please contact: Graham Booth, Finance Manager (Strategy) Ext: 2699 (Tel: 01698 452699) E-mail: graham.booth@southlanarkshire.gov.uk 11
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Appendix A LANARKSHIRE VALUATION JOINT BOARD Revenue Budget Monitoring Report Period Ended 1 November 2024 (No.8) Annual Budget Projected Outturn Projected Outturn Variance Against Budget (Over) / Under % Variance Year to Date Actual 01/11/24 Note £000 £000 £000 £000 £000 £000 Budget Category Employee Costs 3,336 2,592 744 under 22.3% 1,451 1 Property Costs 0 0 0 0 0.0% 0 Supplies & Services 159 150 9 under 5.66% 158 Transport & Plant 5 5 0 0 0.0% 0 Administration Costs 483 472 11 under 2.28% 372 Payments to Other Bodies 31 31 0 0 0.0% 27 Financing Charges 13 (35) 48 under 369.23% 2 2 Total Controllable Exp. 4,027 3,215 812 under 20.16% 2,010 Total Controllable Inc. (380) (382) 2 over recovered 0.53% (365) Net Controllable Exp. 3,647 2,833 814 under 22.32% 1,645 Add Non-Controllable Budgets Central Support Costs 381 381 0 0 n/a 24 Total Budget 4,028 3,214 814 under 20.21% 1,669 Funded By: North Lanarkshire Council (1,814) (1,814) 0 0 0.0% (1,058) South Lanarkshire Council (1,814) (1,814) 0 0 0.0% (1,058) Transfer To / (From) Reserves (400) 414 (814) under recovered (203.5%) 0 Net Expenditure / (Income) 0 0 0 under n/a (447) Variance Explanations 1 Employee Costs: The forecast underspend reflects current vacant posts for which the recruitment is ongoing. For the purposes of the forecast position, an assumption has been made regarding recruitment timescales and the actual impact of the 2024/2025 pay award settlement. 2 Financing Charges: The forecast over recovery of interest receivable on the Board’s revenue balances (£0.050m) reflects continued higher than budgeted for interest rates in 2024/2025. 12
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Audit Scotland 4th Floor 102 West Port Edinburgh EH3 9DN T: 0131 625 1500 E: info@audit-scotland.gov.uk www.audit-scotland.gov.uk Lanarkshire Valuation Joint Board 02 December 2024 Lanarkshire Valuation Joint Board Audit of 2023/24 annual accounts Independent auditor’s report 1. Our audit work on the 2023/24 annual accounts is now substantially complete. We anticipate being able to issue unqualified audit opinions in the independent auditor’s report on 2 December 2024 (the proposed report is attached at Appendix A). Annual audit report 2. Under International Standards on Auditing in the UK, we report specific matters arising from the audit of the financial statements to those charged with governance of a body in sufficient time to enable appropriate action. We present for the Lanarkshire Valuation Joint Board’s consideration our draft annual report on the 2023/24 audit. The section headed “Significant findings and key audit matters” sets out the issues identified in respect of the annual accounts. There are no significant findings to report from the audit. 3. The report also sets out conclusions on the wider scope areas that frame public audit as set out in the Code of Audit Practice. 4. This report will be issued in final form after the annual accounts have been certified. Unadjusted misstatements 5. We also report to those charged with governance all unadjusted misstatements which we have identified during our audit, other than those of a trivial nature and request that these misstatements be corrected. 6. We have no unadjusted misstatements to be corrected. Fraud, subsequent events and compliance with laws and regulations 7. In presenting this report to the Lanarkshire Valuation Joint Board we seek confirmation from those charged with governance of any instances of any actual, suspected or alleged fraud; any subsequent events that have occurred since the date of the financial statements; or material non-compliance with laws and regulations affecting the entity that should be brought to our attention. 4 13
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Representations from Section 95 Officer 8. As part of the completion of our audit, we are seeking written representations from the Section 95 Officer on aspects of the annual accounts, including the judgements and estimates made. 9. A draft letter of representation is attached at Appendix B. This should be signed and returned to us by the Section 95 Officer with the signed annual accounts prior to the independent auditor’s report being certified. Outstanding matters N/A 14
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APPENDIX A: Proposed Independent Auditor’s Report Independent auditor’s report to the members of Lanarkshire Valuation Joint Board and the Accounts Commission Reporting on the audit of the financial statements Opinion on financial statements I certify that I have audited the financial statements in the annual accounts of Lanarkshire Valuation Joint Board for the year ended 31 March 2024 under Part VII of the Local Government (Scotland) Act 1973. The financial statements comprise the Expenditure and Funding Analysis, Comprehensive Income and Expenditure Statement, Balance Sheet, Movement in Reserves Statement, Cash Flow Statement, and notes to the financial statements, including material accounting policy information. The financial reporting framework that has been applied in their preparation is applicable law and UK adopted international accounting standards, as interpreted and adapted by the Code of Practice on Local Authority Accounting in the United Kingdom 2023/24 (the 2023/24 Code). In my opinion the accompanying financial statements: • give a true and fair view of the state of affairs of the Lanarkshire Valuation Joint Board as at 31 March 2024 and of its income and expenditure for the year then ended; • have been properly prepared in accordance with UK adopted international accounting standards, as interpreted and adapted by the 2023/24 Code; and • have been prepared in accordance with the requirements of the Local Government (Scotland) Act 1973, The Local Authority Accounts (Scotland) Regulations 2014, and the Local Government in Scotland Act 2003. Basis for opinion I conducted my audit in accordance with applicable law and International Standards on Auditing (UK) (ISAs (UK)), as required by the Code of Audit Practice approved by the Accounts Commission for Scotland. My responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of my report. I was appointed by the Accounts Commission on 16 March 2023. My period of appointment is five years, covering 2022/23 to 2026/27. I am independent of the Lanarkshire Valuation Joint Board in accordance with the ethical requirements that are relevant to my audit of the financial statements in the UK including the Financial Reporting Council’s Ethical Standard, and I have fulfilled my other ethical responsibilities in accordance with these requirements. Non-audit services prohibited by the Ethical Standard were not provided to the Lanarkshire Valuation Joint Board. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion. Conclusions relating to going concern basis of accounting I have concluded that the use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Based on the work I have performed, I have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the 15
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Lanarkshire Valuation Joint Board’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from when the financial statements are authorised for issue. These conclusions are not intended to, nor do they, provide assurance on the Lanarkshire Valuation Joint Board’s current or future financial sustainability. However, I report on the Lanarkshire Valuation Joint Board’s arrangements for financial sustainability in a separate Annual Audit Report available from the Audit Scotland website. Risks of material misstatement I report in my Annual Audit Report the most significant assessed risks of material misstatement that I identified and my judgements thereon. Responsibilities of the Treasurer and Lanarkshire Valuation Joint Board for the financial statements As explained more fully in the Statement of Responsibilities, the Treasurer is responsible for the preparation of financial statements that give a true and fair view in accordance with the financial reporting framework, and for such internal control as the Treasurer determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Treasurer is responsible for assessing the Lanarkshire Valuation Joint Board’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless there is an intention to discontinue the Lanarkshire Valuation Joint Board’s operations. The Lanarkshire Valuation Joint Board is responsible for overseeing the financial reporting process. Auditor’s responsibilities for the audit of the financial statements My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the decisions of users taken on the basis of these financial statements. Irregularities, including fraud, are instances of non-compliance with laws and regulations. I design procedures in line with my responsibilities outlined above to detect material misstatements in respect of irregularities, including fraud. Procedures include: • using my understanding of the local government sector to identify that the Local Government (Scotland) Act 1973, The Local Authority Accounts (Scotland) Regulations 2014, and the Local Government in Scotland Act 2003 are significant in the context of the Lanarkshire Valuation Joint Board; • inquiring of the Treasurer as to other laws or regulations that may be expected to have a fundamental effect on the operations of the Lanarkshire Valuation Joint Board; 16
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• inquiring of the Treasurer concerning the Lanarkshire Valuation Joint Board’s policies and procedures regarding compliance with the applicable legal and regulatory framework; • discussions among my audit team on the susceptibility of the financial statements to material misstatement, including how fraud might occur; and • considering whether the audit team collectively has the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations. The extent to which my procedures are capable of detecting irregularities, including fraud, is affected by the inherent difficulty in detecting irregularities, the effectiveness of the Lanarkshire Valuation Joint Board’s controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud are inherently more difficult to detect than irregularities that result from error as fraud may involve collusion, intentional omissions, misrepresentations, or the override of internal control. The capability of the audit to detect fraud and other irregularities depends on factors such as the skilfulness of the perpetrator, the frequency and extent of manipulation, the degree of collusion involved, the relative size of individual amounts manipulated, and the seniority of those individuals involved. A further description of the auditor’s responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website www.frc.org.uk/auditorsresponsibilities. This description forms part of my auditor’s report. Reporting on other requirements Opinion prescribed by the Accounts Commission on the audited parts of the Remuneration Report I have audited the parts of the Remuneration Report described as audited. In my opinion, the audited parts of the Remuneration Report have been properly prepared in accordance with The Local Authority Accounts (Scotland) Regulations 2014. Other information The Treasurer is responsible for the other information in the annual accounts. The other information comprises the Management Commentary, Annual Governance Statement, Statement of Responsibilities and the unaudited part of the Remuneration Report. My responsibility is to read all the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or my knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If I identify such material inconsistencies or apparent material misstatements, I am required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work I have performed, I conclude that there is a material misstatement of this other information, I am required to report that fact. I have nothing to report in this regard. My opinion on the financial statements does not cover the other information and I do not express any form of assurance conclusion thereon except on the Management Commentary 17
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and Annual Governance Statement to the extent explicitly stated in the following opinions prescribed by the Accounts Commission. Opinions prescribed by the Accounts Commission on the Management Commentary and Annual Governance Statement In my opinion, based on the work undertaken in the course of the audit: • the information given in the Management Commentary for the financial year for which the financial statements are prepared is consistent with the financial statements and that report has been prepared in accordance with statutory guidance issued under the Local Government in Scotland Act 2003; and • the information given in the Annual Governance Statement for the financial year for which the financial statements are prepared is consistent with the financial statements and that report has been prepared in accordance with the Delivering Good Governance in Local Government: Framework (2016). Matters on which I am required to report by exception I am required by the Accounts Commission to report to you if, in my opinion: • adequate accounting records have not been kept; or • the financial statements and the audited parts of the Remuneration Report are not in agreement with the accounting records; or • I have not received all the information and explanations I require for my audit. I have nothing to report in respect of these matters. Conclusions on wider scope responsibilities In addition to my responsibilities for the annual accounts, my conclusions on the wider scope responsibilities specified in the Code of Audit Practice, including those in respect of Best Value, are set out in my Annual Audit Report. Use of my report This report is made solely to the parties to whom it is addressed in accordance with Part VII of the Local Government (Scotland) Act 1973 and for no other purpose. In accordance with paragraph 108 of the Code of Audit Practice, I do not undertake to have responsibilities to members or officers, in their individual capacities, or to third parties. Pauline Murray Audit Scotland 4th Floor 102 West Port Edinburgh EH3 9DN 18
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APPENDIX B: Letter of Representation (ISA 580) Pauline Murray Audit Scotland 4th Floor 102 West Port Edinburgh EH3 9DN Dear Pauline Lanarkshire Valuation Joint Board Annual accounts 2023/24 1. This representation letter is provided about your audit of the annual accounts of Lanarkshire Valuation Joint Board for the year ended 31 March 2024 for the purpose of expressing an opinion as to whether the financial statements give a true and fair view in accordance with the financial reporting framework, and for expressing other opinions on the remuneration report, management commentary and annual governance statement. 2. I confirm to the best of my knowledge and belief and having made appropriate enquiries of the Joint Board, the following representations given to you in connection with your audit of Lanarkshire Valuation Joint Board’s annual accounts for the year ended 31 March 2024. General 3. Lanarkshire Valuation Joint Board and I have fulfilled our statutory responsibilities for the preparation of the 2023/24 annual accounts. All the accounting records, documentation and other matters which I am aware are relevant to the preparation of the annual accounts have been made available to you for the purposes of your audit. All transactions undertaken by Lanarkshire Valuation Joint Board have been recorded in the accounting records and are properly reflected in the financial statements. 4. I confirm that the effects of uncorrected misstatements are immaterial, individually and in aggregate, to the financial statements as a whole. I am not aware of any uncorrected misstatements. Financial Reporting Framework 5. The annual accounts have been prepared in accordance with the Code of Practice on Local Authority Accounting in the United Kingdom 2023/24 (2023/24 accounting code), and in accordance with the requirements of the Local Government (Scotland) Act 1973, the Local Government in Scotland Act 2003 and The Local Authority Accounts (Scotland) Regulations 2014. 6. In accordance with the 2014 regulations, I have ensured that the financial statements give a true and fair view of the financial position of the Lanarkshire Valuation Joint Board at 31 March 2024 and the transactions for 2023/24. 19
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Accounting Policies & Estimates 7. All material accounting policies applied are as shown in the notes to the financial statements. The accounting policies are determined by the 2023/24 accounting code where applicable. Where the code does not specifically apply I have used judgement in developing and applying an accounting policy that results in information that is relevant and reliable. All accounting policies applied are appropriate to Lanarkshire Valuation Joint Board’s circumstances and have been consistently applied. 8. The significant assumptions used in making accounting estimates are reasonable and properly reflected in the financial statements. Judgements used in making estimates have been based on the latest available, reliable information. Estimates have been revised where there are changes in the circumstances on which the original estimate was based or as a result of new information or experience. Going Concern Basis of Accounting 9. I have assessed Lanarkshire Valuation Joint Board’s ability to continue to use the going concern basis of accounting and have concluded that it is appropriate. I am not aware of any material uncertainties that may cast significant doubt on Lanarkshire Valuation Joint Board’s ability to continue as a going concern. Assets 10. Owned assets are free from any lien, encumbrance or charge except as disclosed in the financial statements. Liabilities 11. All liabilities at 31 March 2024 of which I am aware have been recognised in the annual accounts. 12. The accrual recognised in the financial statements for holiday untaken by 31 March 2024 has been estimated on a reasonable basis. 13. The pension assumptions made by the actuary in the IAS 19 report for Lanarkshire Valuation Joint Board have been reviewed and I confirm that they are consistent with management’s own view. 14. There are no plans or intentions that are likely to affect the carrying value or classification of the liabilities recognised in the financial statements. Contingent liabilities 15. There are no significant contingent liabilities, arising either under formal agreement or through formal undertakings requiring disclosure in the accounts. Fraud 16. I have provided you with all information in relation to: • my assessment of the risk that the financial statements may be materially misstated because of fraud • any allegations of fraud or suspected fraud affecting the financial statements 20
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• fraud or suspected fraud that I am aware of involving management, employees who have a significant role in internal control, or others that could have a material effect on the financial statements. Laws and Regulations 17. I have disclosed to you all known instances of non-compliance or suspected non- compliance with laws and regulations whose effects should be considered when preparing financial statements. Related Party Transactions 18. All material transactions with related parties have been appropriately accounted for and disclosed in the financial statements in accordance with the 2023/24 accounting code. I have made available to you the identity of all the Lanarkshire Valuation Joint Board’s related parties and all the related party relationships and transactions of which I am aware. Remuneration Report 19. The Remuneration Report has been prepared in accordance with the Local Authority Accounts (Scotland) Amendment Regulations 2014, and all required information of which I am aware has been provided to you. Management commentary 20. I confirm that the Management Commentary has been prepared in accordance with the statutory guidance and the information is consistent with the financial statements. Corporate Governance 21. I confirm that the Lanarkshire Valuation Joint Board has undertaken a review of the system of internal control during 2023/24 to establish the extent to which it complies with proper practices set out in the Delivering Good Governance in Local Government: Framework 2016. I have disclosed to you all deficiencies in internal control identified from this review or of which I am otherwise aware. 22. I confirm that the Annual Governance Statement has been prepared in accordance with the Delivering Good Governance in Local Government: Framework 2016 and the information is consistent with the financial statements. There have been no changes in the corporate governance arrangements or issues identified, since 31 March 2024, which require to be reflected. Events Subsequent to the Date of the Balance Sheet 23. All events subsequent to 31 March 2024 for which the 2023/24 accounting code requires adjustment or disclosure have been adjusted or disclosed. Yours sincerely 21
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Jackie Taylor Treasurer to the Lanarkshire Valuation Joint Board 22
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Prepared for the Lanarkshire Valuation Joint Board and the Controller of Audit November 2024 Lanarkshire Valuation Joint Board 2023/24 Annual Audit Report – DRAFT 23
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Lanarkshire Valuation Joint Board 2023/24 Annual Audit Report – DRAFT | 2 Contents Key messages 3 Introduction 4 Part 1. Audit of 2023/24 annual report and accounts 6 Part 2. Wider Scope 10 24
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Key messages | 3 Key messages 2023/24 annual accounts 1 Audit opinions on the annual accounts are unmodified, i.e. the financial statements and related reports are free from material misstatement. 2 Key risks arising from the audit of the Joint Board’s annual accounts in my Annual Audit Plan were presented to the Board on 4 March 2024. There are no significant matters from that work to draw to the attention of the Board. 3 One material adjustment of £0.525 million was made to the annual accounts to reflect the interest cost on pension asset not recognised in 2022/23. Wider-scope 4 The Joint Board has a medium-term financial strategy in place but will continue to face significant financial challenges in the future. 5 The Joint Board has appropriate arrangements in place for securing Best Value. 25
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Introduction | 4 Introduction 1. This report summarises the findings from the 2023/24 annual audit of Lanarkshire Valuation Joint Board (the Joint Board). The scope of the audit was set out in an Annual Audit Plan presented to the 4 March 2024 meeting of the Joint Board. This Annual Audit Report comprises: • significant matters arising from an audit of the Joint Board’s annual accounts • conclusions on financial sustainability as required by the Code of Audit Practice 2021. 2. This report is addressed to Lanarkshire Valuation Joint Board and the Controller of Audit and will be published on Audit Scotland's website www.audit- scotland.gov.uk in due course. Audit appointment 3. I, Pauline Murray, have been appointed by the Accounts Commission as auditor of Lanarkshire Valuation Joint Board for the period from 2022/23 until 2026/27. The 2023/24 financial year was the second of my five-year appointment. 4. My team and I would like to thank management and staff, particularly those in finance, for their cooperation and assistance in this year and we look forward to working together constructively over the remainder of the five-year appointment. Responsibilities and reporting 5. The Joint Board has primary responsibility for ensuring the proper financial stewardship of public funds. This includes preparing annual accounts that are in accordance with proper accounting practices. The Joint Board is also responsible for compliance with legislation and putting arrangements in place for governance and propriety. 6. My responsibilities as the independent auditor appointed by the Accounts Commission are established by the Local Government in Scotland Act 1973, the Code of Audit Practice 2021 and supplementary guidance and International Standards on Auditing in the UK (ISAs). 7. The weaknesses or risks identified in this report are only those which have come to the attention of the audit team during our normal audit work and may not be all that exist. Communicating these does not absolve management from its responsibility to address the issues we raise and to maintain adequate systems of control. 26
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Introduction | 5 Auditor Independence 8. I can confirm that the audit team comply with the Financial Reporting Council’s Ethical Standard. I can also confirm that we have not undertaken any non-audit related services and therefore the audit fee of £9,330 as set out in my 2023/24 Annual Audit Plan remains unchanged. I am not aware of any relationships that could compromise our objectivity and independence. 9. The annual audit adds value to the Joint Board by: • identifying and providing insight on significant risks, and making clear and relevant recommendations • sharing intelligence and good practice identified. 27
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Part 1. Audit of 2023/24 annual report and accounts | 6 Part 1. Audit of 2023/24 annual report and accounts Public bodies are required to prepare annual accounts comprising financial statements and other related reports. These are principal means of accounting for the stewardship of public funds. Main judgements Audit opinions on the annual accounts are unmodified. One material adjustment of £0.525 million was made to the annual report and accounts as a result of the audit process. Audit opinions on the annual accounts are unmodified 10. The Joint Board approved the annual accounts for the year ended 31 March 2024 on 2 December 2024. As reported in the independent auditor’s report, in my opinion as the appointed auditor: • the financial statements give a true and fair view and were properly prepared in accordance with the financial reporting framework • the audited part of the Remuneration Report, Management Commentary and the Annual Governance Statement were all consistent with the financial statements and properly prepared in accordance with the applicable requirements. Overall materiality was assessed on receipt of the annual accounts as £0.077 million 11. Broadly, the concept of materiality is applied by auditors to determine whether misstatements identified during the audit could reasonably be expected to influence the economic decisions of users of the accounts, and hence impact their opinion set out in the independent auditor’s report. Auditors set a monetary threshold when considering materiality, although some issues may be considered material by their nature. It is ultimately a matter of the auditor’s professional judgement. 28
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Part 1. Audit of 2023/24 annual report and accounts | 7 12. My initial assessment of materiality was carried out during the risk assessment phase of the audit. This was reviewed and revised on receipt of the unaudited annual accounts and is summarised in Exhibit 1. Exhibit 1 Materiality values Materiality level Amount Overall materiality £0.077 million Performance materiality £0.058 million Reporting threshold £4,000 Source: Audit Scotland 13. The overall materiality threshold was set with reference to gross expenditure, which I judged as the figure most relevant to the users of the financial statements. 14. Performance materiality is used by auditors when undertaking work on individual areas of the financial statements. It is a lower materiality threshold, set to reduce the probability of aggregated misstatements exceeding overall materiality. Performance materiality was set at 75% of overall materiality, reflecting a history of no significant errors or material adjustments in prior years. 15. It is my responsibility to request that all misstatements are corrected, other than those below the reporting threshold, although the final decision on making the correction lies with those charged with governance. Significant findings and key audit matters 16. Under International Standard on Auditing (UK) 260, I communicate significant findings from the audit to the Joint Board, including my view about the qualitative aspects of the body’s accounting practices. 17. The Code of Audit Practice also requires me to highlight key audit matters, which are defined in International Standard on Auditing (UK) 701 as those matters judged to be of most significance in my audit of the financial statements. 18. I have no significant findings to report from the audit. 29
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Part 1. Audit of 2023/24 annual report and accounts | 8 Audit work responded to the risks of material misstatement identified in the annual accounts 19. My team and I have obtained audit assurances over the identified significant risks of material misstatement to the annual report and accounts. Exhibit 2 sets out the significant risks of material misstatement to the financial statements identified in my 2023/24 Annual Audit Plan. It also summarises the further audit procedures performed during the year to obtain assurances over these risks and the conclusions from the work completed. Exhibit 2 Identified significant risks of material misstatement in the annual accounts Audit risk Assurance procedure Results and conclusions 1. Risk of material misstatement due to fraud caused by management override of controls As stated in ISA (UK) 240, management is in a unique position to perpetrate fraud because of management’s ability to override controls that otherwise appear to be operating effectively. • Made inquiries of individuals involved in the financial reporting process about inappropriate or unusual activity relating to the processing of journal entries and other adjustments. • Tested journals at the year-end and post-closing entries with focus on significant risk areas. • Considered the need to test journal entries and other adjustments throughout the year. • Evaluated significant transactions outside the normal course of business. • Assessed the adequacy of controls in place for identifying and disclosing related party relationships and transactions in the financial statements. We found no instances of material misstatement due to fraud caused by management override of controls. Source: Audit Scotland, Annual Audit plan 2023/24 20. In addition, I identified one “area of audit focus” in my 2023/24 Annual Audit Plan where I considered there to be other risks of material misstatement to the financial statements. The area of specific audit focus was: 30
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Part 1. Audit of 2023/24 annual report and accounts | 9 21. Pension valuation - there is a significant degree of subjectivity in the measurement and valuation of the pension liability included in the annual accounts. The valuation is based on specialist and management assumptions and changes in these can result in material changes to the pension liability. We utilised the work of PwC as auditor expert in assessing the reasonableness of the methodology used and assumptions made by the Joint Board’s actuary, Hymans Robertson LLP, in arriving at the IAS 19 pension valuation as at 31 March 2024. 22. In accordance with IFRIC14, the pension asset recognised within the financial statements was capped at the estimated future benefit to the Council. My team and I reviewed the assumptions applied by the actuary in arriving at the asset ceiling cap and were satisfied that it is in accordance with IFRIC 14. The net pension asset recognised was £Nil. 23. Where an asset ceiling cap was applied in 2022/23, IFRIC 14 requires that net income/expenditure should be reduced by an amount linked to the interest costs on any asset not recognised in 2022/23. Management obtained a supplementary report from the actuary which identified that amount as £0.525 million. Financing and Investment Income, and the Surplus on Provision of Services, were adjusted downward in the audited accounts by that amount. 24. It should be noted that an appropriate adjustment has been made under statutory accounting rules to the Total Comprehensive Income and Expenditure recognised by the Board, so that the above has no impact on the resources available to meet future revenue expenditure. One material misstatement was identified and corrected for 25. Other than the corrected material misstatement for interest on pension fund asset not recognised for 2022/23 (detailed at paragraph 23), the audit identified no misstatements above the reporting threshold. In addition, I have no unadjusted misstatements to report. The unaudited annual accounts were received in line with the agreed timetable 26. The unaudited annual accounts were received in line with the agreed audit timetable on 29 May 2024. 27. The original audit timetable included a target date of 2 September 2024 for the delivery of the audit outputs. However, due to resourcing pressures, we were not able to complete our field work in time to meet the original timetable. A revised timetable for the delivery of our audit fieldwork was agreed with officers to enable us to deliver audit outputs by 2 December 2024. Follow up on prior year recommendations 28. There were no actions raised in our 2022/23 Annual Audit Report. 31
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Part 2. Wider Scope | 10 Part 2. Wider Scope For less complex bodies wider-scope audit work considers the financial sustainability of the body and the services that it delivers over the medium to longer term, and the arrangements for securing Best Value Conclusion The Joint Board has a medium-term financial strategy in place but will continue to face significant financial challenges in the future The Joint Board has appropriate arrangements in place for securing Best Value The Joint Board reported an underspend of £0.526 million against its final budget in 2023/24 29. The Joint Board is mainly funded by requisitions from its constituent members, North Lanarkshire Council and South Lanarkshire Council. 30. The Joint Board approved its 2023/24 budget in December 2022. This was set based on net expenditure of £4.392 million, with a planned contribution from the Joint Board’s reserves of £0.272 million. During the year, this budget was reduced by £0.112 million to reflect the transfer, from 1 April 2023, of Valuation Appeal Panel activities and their associated costs to the Scottish Courts and Tribunal Service. The final budget was, therefore, £4.280 million for 2023/24. 31. The actual outturn reported for 2023/24 was net expenditure £3.755 million and total funding income £4.009 million, resulting in an underspend of £0.254 million. When compared with the final budget of £4.280 million, there was an actual underspend of £0.526 million. 32. The underspend against original budget arose principally in relation to employee costs, with an underspend against budget of £0.374 million due to turnover of staff and ongoing recruitment difficulties in the sector. Continuing underspends in employee costs have led to the steady increase in the General Fund Reserve balance from £0.947 million to £1.975 million over the five years from 2019/20 to 2023/24. The Joint Board has a medium-term financial strategy in place but will continue to face significant financial challenges in the future 33. The Joint Board approved an update to its medium term ‘Financial Strategy 2023/24 to 2025/26’ in December 2023. The strategy aids management and 32
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Part 2. Wider Scope | 11 members in managing the key risks which directly impact on the funding available to deliver the Board’s objectives, and identifies a future strategy for its financial reserves. 34. The main area of uncertainty in the strategy is in relation to Barclay funding. The strategy assumes that Barclay funding will remain at the same level as 2023/24 ie £0.698 million for the remainder of the current parliamentary term. 35. The Scottish Government has not provided any information beyond 2024/25, with the risk that Barclay funding is reduced or removed after then. The Joint Board considers the forecast reserve balance of £1.104 million as at 2025/26 to be reasonable to mitigate this risk. 36. The Joint Board’s budget for 2024/2025 was approved in December 2023, including assumptions in relation to pay award and pension contributions. The revised expenditure budget totals £4.028 million and is funded by contributions from councils and the use of reserves (£0.400 million). 37. The Joint Board acknowledges the impact of the difficult financial climate on its constituent authorities, therefore continues to seek to generate efficiencies in the provision of services and utilise reserves where appropriate. 38. Overall, the Joint Board’s financial strategy provides assurance over the medium-term financial outlook and therefore the provision of services. The Joint Board has appropriate arrangements in place for securing Best Value 39. The Joint Board has a specific responsibility to ensure that arrangements have been made to secure Best Value. 40. The Joint Board's Service Plan was approved in March 2022 and covers the three-year period from April 2022 to March 2025. The Service Plan sets out the key business areas identified for Lanarkshire Valuation Joint Board over this period to ensure that services are delivered as effectively and efficiently as possible to service users. 41. An updated Strategic Workforce Plan, effective for 1 January 2024 – 31 December 2026, was approved by the Management Team in March 2024. The plan includes: • Wider environment and workforce challenges • Analysis of current workforce • Planning for future challenges in relation to workstreams and staffing • An action and implementation plan. 42. Service performance is measured by standard performance indicators agreed between the Scottish Government and the Scottish Assessors’ Association. The Joint Board reports performance against its key performance indicator targets in the annual accounts: 33
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Part 2. Wider Scope | 12 • Of 2,609 new Council Tax entries added, 95% were completed within 3 months of the effective date against a target of 87%. 97% were completed within 6 months against a target of 92% • Of 3,073 alterations to the non-domestic valuation roll, 69% were completed within 3 months of the effective date against a target of 77% and 79% were completed within 6 months against a target of 92% 43. The three-monthly and six-monthly targets for the non-domestic valuation roll were not met. The Joint Board has reported that this was due to shortage of staff combined with new processes in place for dealing with the 2023 revaluation proposals. 44. Performance information is accessible to all stakeholders, including service users though the Joint Board’s website. 34
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Part 2. Wider Scope | 13 Lanarkshire Valuation Joint Board 2023/24 Annual Audit Report – DRAFT Audit Scotland’s published material is available for download on the website in a number of formats. For information on our accessibility principles, please visit: www.audit-scotland.gov.uk/accessibility Audit Scotland, 4th Floor, 102 West Port, Edinburgh EH3 9DN T: 0131 625 1500 E: info@audit-scotland.gov.uk www.audit-scotland.gov.uk AS.4.0 35
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Report Agenda Item Report to: Lanarkshire Valuation Joint Board Date of Meeting: 2 December 2024 Report by: Treasurer to Lanarkshire Valuation Joint Board Subject: Audited Accounts 2023/2024 1. Purpose of Report 1.1. The purpose of the report is to: [purpose] advise members of the requirement to approve the Audited Accounts for 2023/2024 for signature, following the external audit of the Accounts [1purpose] 2. Recommendation(s) 2.1. The Board is asked to approve the following recommendation(s):- [ (1) that it be noted that the Accounts 2023/2024 received a clean audit certificate (section 4.3.); (2) that the audited Accounts 2023/2024, be approved for signature (Appendix 1); and (3) that it be noted that the audited Accounts 2023/2024 will be available on the Board’s website (section 4.4). [1recs] 3. Background 3.1. The Board’s external auditor, Audit Scotland, is required to supply an audit certificate outlining the findings of the audit process undertaken in relation to the Accounts 2023/2024. 3.2. Following the publication of The Local Authority Accounts (Scotland) Regulations 2014, the members of the Board have to meet to consider whether to approve the audited Accounts for signature. The members are also required to have regard to any report made or advice provided on the Accounts by the auditor. 4. Audited Accounts 4.1. As noted in 3.2. above, members are now required to approve the audited Accounts for signature. Appendix 1 attached provides a copy of the Accounts for members’ consideration. 4.2. The Board’s current external auditors, Audit Scotland, have completed an audit which extends across the 2023/2024 Accounts and related matters. 4.3. In summary, the report provides a clean audit certificate. There were no issues arising from the 2023/2024 audit work which merited a recommendation or action plan point. 5 37
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4.4. The audited Accounts for 2023/2024 will be uploaded to the Lanarkshire Valuation Joint Board website. Paper copies are also available on request from Finance Services, Floor 4, Council Offices, Almada Street, Hamilton or from the Assessor’s office at David Dale House, Blantyre. 5. Employee Implications 5.1. None 6. Financial Implications 6.1. The financial details of the Auditor’s report are contained within section 4 above. 7. Climate Change, Sustainability and Environmental Implications 7.1. There are no climate change, sustainability or environmental implications in terms of the information contained in this report. 8. Other Implications 8.1. The main risk associated with the Board’s Annual Report and Accounts is a qualified audit report. The risk was minimised by the detailed preparation in relation to the year end process and training undertaken by key finance staff. Finance and the Board’s staff work together to achieve key deadlines and actions set from timetables. This has resulted in a clean audit certificate. 9. Integrated Impact Assessment and Consultation Arrangements 9.1. This report does not introduce a new policy, function or strategy or recommend a change to an existing policy, function or strategy and therefore no impact assessment is required. 9.2. There is also no requirement to undertake any consultation in terms of the information contained in the report. Jackie Taylor Treasurer 14 November 2024 Previous References Lanarkshire Valuation Joint Board Unaudited Annual Report and Accounts 2023/2024 (Board Meeting, 3 June 2024) List of Background Papers External Auditor’s report Contact for Further Information If you would like to inspect the background papers or want further information, please contact:- Graham Booth, Finance Manager (Strategy) Ext: 2699 (Tel: 01698 452699) E-mail: graham.booth@southlanarkshire.gov.uk 38
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LANARKSHIRE VALUATION JOINT BOARD ANNUAL ACCOUNTS 2023/2024 5 39
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2 List of Contents Contents Membership of the Board (2023/2024) 3 Management Commentary 4 Statement of Responsibilities 10 Annual Governance Statement 12 Remuneration Report 16 Comprehensive Income and Expenditure Statement 22 Balance Sheet 23 Movement in Reserves Statement 24 Cash Flow Statement 26 Notes to the Financial Statements Note 1 - Accounting Policies 28 Note 2 - Prior Period Adjustments 30 Note 3 - Accounting Standards issued but not Adopted 30 Note 4 - Critical Judgements in Applying Accounting Policies 31 Note 5 - Expenditure and Funding Analysis 32 Note 6 - Notes to the Expenditure and Funding Analysis - Adjustments Between Funding and Accounting Basis 33 Note 7 - Adjustments between Accounting Basis and Funding Basis Under Regulations 34 Note 8 - Assumptions Made About the Future and Other Major Sources of Estimation Uncertainty 35 Note 9 - Events after the Balance Sheet date 35 Note 10 - Contingent Liabilities 35 Note 11 - Leases 36 Note 12 - Property, Plant and Equipment – Movement on Balances 36 Note 13 - Short Term Debtors 36 Note 14 - Short Term Creditors 37 Note 15 - Related Party Transactions 37 Note 16 - Defined Benefit Pension Schemes 37 Note 17 - External Audit Costs 41 Note 18 - Grant Income 41 Note 19 - Balance Sheet Reserves 42 Note 20 - Financing and Management of Liquid Resources 42 Note 21 - Comprehensive Income and Expenditure Statement - financing and investment income and expenditure 43 Note 22 - Going Concern 43 Audit Report 44 40
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3 Membership of the Board (2023/2024) Lanarkshire Valuation Joint Board (herein after referred to as ‘the Board’) is comprised of Elected Members from its two constituent local authorities. The serving Members of the Board during financial year 2023/2024 were as noted below: South Lanarkshire Council North Lanarkshire Council Councillor Walter Brogan (Convener) Councillor Jim Reddin (Depute Convener) Councillor Janine Calikes Councillor Bob Burgess Councillor Ross Clark Councillor Lesley Jarvie Councillor Colin Dewar Councillor Tom Johnston Councillor Lynsey Hamilton Councillor Martin Hose Councillor Fergus MacGregor (until 22 June 2023) Councillor Gavin Wylie Keatt Councillor Alex McVey Councillor Mark McGeever Councillor William Shields (until 22 June 2023) Councillor Anne Thomas Councillor Kenneth Duffy (from 22 June 2023) Councillor Margaret Hughes (from 22 June 2023) Chief Officers Assessor and Electoral Registration Officer: Gary Bennett BSc MSc AEA (Cert-Scotland) MRICS IRRV (Hons) (until 31 May 2023) Renzo Pacitti BSc MRICS (from 5 June 2023) The following appointed office bearers of the Board are employed on a substantive basis by South Lanarkshire Council: Clerk: Cleland Sneddon (Chief Executive of South Lanarkshire Council) (until 31 December 2023) Paul Manning (Chief Executive of South Lanarkshire Council) (from 1 January 2024) Treasurer: Paul Manning (Executive Director of Finance and Corporate Resources, South Lanarkshire Council) (until 10 March 2024) Jackie Taylor (Executive Director of Finance and Corporate Resources, South Lanarkshire Council) (from 11 March 2024) 41
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4 Management Commentary 2023/2024 The management commentary provides an overview of the key messages in relation to the objectives and strategy of Lanarkshire Valuation Joint Board (the Board) and its financial performance for the year ended 31 March 2024. It also provides an indication of the issues and risks that may impact upon the Board’s finances in the future. The Board was established by the Valuation Joint Boards (Scotland) Order 1995 and came into existence on 1 April 1996. It provides a range of valuation and electoral registration services to and on behalf of South Lanarkshire Council and North Lanarkshire Council (the constituent authorities), working in partnership with other Valuation Joint Boards and professional bodies throughout Scotland. Core Purpose, Vision, Service Function and Core Objectives The Board's Service Plan was approved at the Board meeting in March 2022 and covers the period April 2022 through to March 2025. The Plan incorporates the Board's Vision statement which is "to deliver quality in the work which we undertake, provide efficient services to all service users, and ensure completeness and accuracy of the Electoral Register, Valuation Roll and the Valuation (Council Tax) List”. The Plan sets out the key business areas identified for Lanarkshire Valuation Joint Board over the three-year period, with a view to ensuring that the Board’s services are delivered as effectively and efficiently as possible to service users. Where deemed appropriate, each key business area is supported by a series of priorities and measurable key actions, against which performance is regularly reported to the Board. Review of Performance The Board's performance against key performance indicator (KPI) targets during 2023/2024 is detailed below: Of 2,609 new Council Tax entries added, 95% were completed within 3 months of the effective date against a target of 87%. 97% were completed within 6 months against a target of 92%. Of 3,073 alterations to the non-domestic valuation roll, 69% were completed within 3 months of the effective date against a target of 77% and 79% were completed within 6 months against a target of 92%. The three-monthly and six-monthly targets were not met, essentially due to the challenges presented by the shortage of staff combined with the new processes in place to deal with the 2023 Revaluation proposals. With regards to electoral registration, within the period 2023/2024, the principal activities centred on maintaining the completeness and accuracy of the registers. However, during this period there was a recall petition in the Rutherglen and Hamilton West constituency, the first to take place in Scotland, and the first recall petition to take place following the introduction of the requirement to show photographic ID when signing a petition at a signing place. Following the outcome of the recall petition, a resultant by-election was held whereby electors were required to show photographic ID. In addition to this UK Parliamentary By-election, there were 3 additional local by-elections held: 2 in North Lanarkshire and 1 in South Lanarkshire. The annual canvass of electors in 2023 was conducted under the terms of The Representation of the People (Annual Canvass) (Miscellaneous Amendments) (Scotland) Regulations 2020. Under these reforms, data matching is used at the outset of the canvass to identify those properties where all residents are matched with DWP or local data sets. The DWP dataset having already been used in the electoral registration process to verify an applicant's identity. For the 2023 annual canvass of electors, circa. 253,500 households were issued with the Canvass Communication A form (CCA), which advised who was on the register and that unless there was a change in the household no return was required. The next stage to the reformed annual canvass 42
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5 process involved the issuing of circa. 65,000 Canvass Forms (CF) to households which didn’t match during the aforementioned exercise. Furthermore, a Canvass Communication B form (CCB) in respect of postal reminders was issued to circa 52,000 households. The household visit element of the 2023 canvass was undertaken, with circa 36,000 properties being canvassed. The canvass reforms have also allowed for e-communications that include telephone and email contact to be undertaken, a new telephone module was used to facilitate this process. The annual canvass was concluded successfully, and the registers were published timeously on 1 December 2023. Rolling Registration activity, introduced in 2000 to assist in maintaining the Electoral Register, continued throughout 2023/24 with the bulk of registration applications received via the central government online registration system (www.gov.uk/register-to-vote). More information on the Board's performance during 2023/2024 can be found on the Board’s website at www.lanarkshire-vjb.gov.uk Financial Performance Revenue The Comprehensive Income and Expenditure Statement on page 22 summarises the total costs of providing services and the income available to fund those services. The Board set a net operating expenditure budget for 2023/2024 of £4.280m to be funded by contributions from the two constituent local authorities. The budget was based on experience of expenditure and income levels during previous years and included a planned contribution from the Board’s reserves of £0.272m. This budget included funding received from the Scottish Government for the implementation of the Barclay Review. In comparison to this revised 2023/2024 budget, the Board returned a surplus of income over expenditure of £0.254m which, compared with the budgeted deficit of £0.272m, meant there was £0.526m of an improvement in the Board’s position. This surplus excludes the accounting adjustments relating to pensions and short-term accumulating absences. In the main, the improved financial position reflected reductions in spend due to turnover of staff and ongoing recruitment difficulties in the sector. The Table below compares the revised budget of the Board at the 31 March 2024. The difference between the net expenditure figure below and that reported in the Comprehensive Income and Expenditure Statement is due to the accounting adjustments, which are analysed in Note 5 Expenditure and Funding Analysis on page 32. Lanarkshire Valuation Joint Board Revenue Budget 2023/2024 Budget Actual Variance £000 £000 £000 Employee Costs 3,261 2,887 374 Property Costs 202 208 (6) Supplies and Services 159 115 44 Transport and Plant 5 5 0 Administration Costs 669 627 42 Payments to Other Bodies 31 30 1 Financing Charges 13 (51) 64 Total Expenditure 4,340 3,821 519 Income (60) (66) 6 Net Expenditure 4,280 3,755 525 Funded by: Contributions from Councils (4,008) (4,009) 1 Total (4,008) (4,009) 1 (Surplus) / Deficit for the Financial Year 272 (254) 526 43
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6 As noted above, the main underspend was in respect of employee costs, reflecting a combination of the turnover of staff and difficulties in the recruitment of staff. In addition, there was an underspend on the purchase of computer equipment, now expected to be undertaken during 2024/2025, lower than anticipated administration costs, and due to higher than anticipated interest rates experienced during the year, there was an underspend on financing charges for interest received on the revenue balances of the Board. Balance Sheet The Board’s Balance Sheet as at 31 March 2024 reported net assets of £2.018m compared with net assets of £2.071m as at 31 March 2023, a movement of £0.053m during the year. This is mainly due to the reduction in the Pension Asset, offset by an increase in cash and cash equivalents. Adding the surplus on the Balance Sheet as at 31 March 2023 (£0.254m) to the Board’s General Reserve carried forward from 2022/2023 (£1.721m), gives the Board a closing General Reserve position of £1.975m at the end of 2023/2024. This is shown in Note 5 Expenditure and Funding Analysis on page 32 and the Movement in Reserves Statement on page 24. Pension Fund The disclosure requirements for pension benefits under International Accounting Standard 19 are detailed at Note 16. The appointed actuary assessed the Board’s share of Strathclyde Pension Fund as a net asset of £0 as at 31 March 2024. This reflects the assumptions used by the actuary, including financial and demographic assumptions, resulting in a significant increase to the Pension Asset since the previous year. The 2023/2024 pension reports provided by the actuary indicate an increased Asset (a surplus) for this year (compared to 2022/2023), and in line with IFRIC14, an asset ceiling has been applied. This reduced the Asset from £11.846m to £0 and reflects the present value of employer future service costs less the present value of future employer contributions, over the future working lifetime of your active scheme. Whilst indicative of a broad position in terms of a pension asset, the reader should be aware of a range of factors, inherent in the figure, before drawing conclusions on the Asset shown in the Board’s Financial Statements. The Board continues to meet pension contributions on an annual basis. Note 16: Defined Benefit Pension Schemes on page 37 provides more details on pensions including the factors affecting the pension asset such as assumptions about mortality, salary inflation, pension inflation and discount rates. The Board’s actuary has confirmed that the IAS19 Balance Sheet is based on financial market values and future market expectation indicators as at 31 March 2024 to comply with the standard. Provisions, contingencies and write-offs The Board is not aware of any eventualities which may have a material effect on its financial position and has therefore made no provision for such eventualities. Contingent assets and liabilities are disclosed as a note to the financial statements. No debts were written off during the financial year. Service Changes and Future Developments The Board noted the annual update of Lanarkshire Valuation Joint Board’s Service Plan at its meeting of 6 March 2023. Such updates on the service plan are provided annually to the Board. Future developments are anticipated in the following service areas: Electoral Registration Following the introduction of the Elections Act 2022, new legislative undertakings associated with the Act have included the introduction of Voter I.D. for certain elections and changes associated with the arrangements associated with overseas electors. Guidance on both matters are available from the LVJB website alongside forms to download or links to the Electoral Commission for more information. Work continued early 2024 on the preparation for the UK Parliamentary General 44
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7 Election, which was then held on 4 July 2024. All tasks and procedures were undertaken timeously in line with the associated election plan & risk register. Valuation: Non-domestic Work over the period 2024/25 will continue with maintaining the valuation roll. There remains a significant challenge in respect of dealing with the voluminous numbers of outstanding 2017 running roll appeals, the vast majority of which were lodged as a result of the pandemic. At the time of writing, LVJB have approximately 3,000 appeals that have been transferred to the Local Taxation Chamber (LTC) with a disposal date of 31/12/2024. The LTC have embarked on a program of citing these appeals for all Assessors’ offices in large numbers to facilitate their efficient disposal. However, due to shortages of staff able to deal with non-domestic proposals this will be a very onerous task and will undoubtedly impact on service delivery and other planned work streams. With regard to the 2023 Revaluation proposals of which circa.1,400 were received, Proposal Determination Dates (PDD’s) have been scheduled through to April 2025. The last date for a PDD to be set for the 2023 revaluation proposals being 30/09/2025. Valuation: Domestic In respect of Council Tax, work will continue with maintaining the Valuation List, entering new houses on the List as well as reviewing bands of houses which have been sold (where there have been alterations which may result in a band increase), as efficiently as possible. With regard to proposals, although we have seen a recent upsurge, the number of proposals being converted to appeals is comparatively low at this stage. Recent changes to the proposal/appeals system have resulted in a number of proposals deemed invalid, being heard by the First-tier Tribunal then further appealed to the Upper Tribunal for Scotland. This new step in the appeal process has brought with it a new cost burden which will have to be closely monitored. Financial Outlook Most economic commentators forecast that pressures on public finances will continue for the foreseeable future. The Board recognises the impact of this difficult financial climate on its constituent authorities and as a consequence it continues to seek to generate efficiencies where possible. The Board’s Financial Budget Strategy was updated in December 2023 to refresh the Strategy and to extend the timeframe to 2025/2026. The Financial Strategy assists in managing a number of key risks which directly impact on the funding available to deliver the Board’s objectives. It also identifies a future strategy in respect of financial reserves. The Budget for 2024/2025 was approved in December 2023, and included assumptions in relation to pay award and use of reserves. The revised expenditure budget totals £4.028 million and is funded by contributions from councils (including the Barclay allocations) and the use of Reserves (£0.400 million). It also takes account of New Burdens funding for the Electoral Integrity Programme. Taking into account the use of £0.400 million in 2024/2025 will leave £1.575 million in Reserves for future years. This equates to 39% of the Board’s annual budget for 2024/2025. The Table below summarises the revised impact on Reserves across the 3 years of the Strategy leaving a balance of £1.104 million at the end of 2025/2026. Reserves Forecast and Strategy – Revised December 2023 2023/24 (year 1) £m 2024/25 (year 2) £m 2025/26 (year 3) £m Opening Balance 1.721 1.975 1.575 Transfer to Reserves 0.254 - - Transfer to Reserves / (Utilisation of Reserves) - (0.400) (0.471) Closing Balance 1.975 1.575 1.104 The balance on Reserves (£1.104 million) is after a reduction in council contributions of £0.400m in 2024/2025 and significantly, the reduction in requisitions to reflect lower Pension Contributions. 45
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8 This is in respect of the recent valuation of Strathclyde Pension Fund resulted in the reduction of Employer Pension Contributions from their current levels. Instead of the current contribution of 19.3%, there will be a reduction in the contribution rates to 6.5% for 2024/2025 and 2025/2026, rising back up to 17.5% in 2026/2027. This still represents a significant balance. The reason it is considered appropriate to work towards holding this level of reserve relates to a risk that funding for Barclay may not be recurring beyond this timeframe. Consequently, the Assessor and Electoral Registration Officer will look to continue to implement efficiency savings in future, although with a significant number of statutory duties to be met the continued pressure on resources could have an adverse impact on performance and service delivery. The Board’s Financial Strategy will continue to be revised annually, with consideration given to any changes in the financial horizon and will be presented to the Board as appropriate. Risks and Uncertainties The Board noted the Risk Register Update 2024 at its meeting in March 2024. The main risks highlighted are the challenges associated with dealing with the 2017 valuation roll Covid-19 non- domestic appeals, the difficulties faced in recruiting and retaining qualified valuation staff, and the uncertainty surrounding the funding going forward for the duties brought about by the Barclay review into non-domestic rates. In respect of the first highlighted risk, the disposal date for the outstanding Covid-19 appeals has been extended to the end of December 2024. However, as the Local Taxation Chamber, First-tier tribunal are now responsible for citing the outstanding appeals, these can only be dealt with on a reactive and not a proactive basis. With regard to the second risk, following discussions with South Lanarkshire Council’s Personnel Services, a review of the salary being paid to LVJB graduate surveyors was undertaken. The resultant change to the salary grading to match SLC Estates department has ensured that with appropriate training, graduate trainee valuers will be able to undertake the outstanding workload associated with the 2023 proposals. Finally, in respect of the third risk, dialogue continues with the Scottish Government to ensure that all new statutory requirements emanating from the Barclay review are properly funded. All risks are monitored by the Board’s management team with a view to mitigating each risk, whether an existing or emerging risk. Post-Coronavirus Pandemic Revised working practices introduced include home/office blended working arrangements, however, where a business need is identified, staff are required to attend the office every day. Conclusion Despite the ongoing challenges with regards to the recruitment and retention of qualified staff, performance on the whole was positive across all three main business areas, albeit the non- domestic performance targets were not met. Sound financial management and medium-term planning has enabled the Board to successfully manage the financial challenges faced during the financial year 2023/24. However, there remain several challenges going forward, not least those posed by the introduction of three yearly non- domestic revaluations: the next being 1 April 2026. The impact of changes to the non-domestic appeals system, which have not yet been fully realised and it will only be once the bulk of the PDD’s are set and decision notices issued, will the conversion rate of proposals to full appeals be known. Further challenges, introduced by the Elections Act 2022, which were implemented during 2023/24, such as the requirement for electors to produce appropriate I.D. when voting in UK parliamentary elections and the changes to the rules regarding British citizens living abroad being eligible to register to vote in UK general elections, it is expected, will continue to impact on the workload of LVJB. 46
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9 We wish to acknowledge the significant efforts of all staff in contributing to the Board's operational performance, of budget managers and support staff whose financial stewardship have contributed to the Board's financial position at 31 March 2024, and to everyone involved in the preparation of the Annual Accounts. Jackie Taylor Christine Maxwell Cllr Walter Brogan Treasurer Assessor and ERO Convener 47
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10 Statement of Responsibilities This statement sets out the respective responsibilities of the Board and the Treasurer for the Annual Accounts. The Board’s Responsibilities The Board is required to: • Make arrangements for the proper administration of its financial affairs, and to ensure that one of its officers has responsibility for the administration of those affairs. For the Board, that officer is the Executive Director of Finance and Corporate Resources for South Lanarkshire Council, designated as the Treasurer of the Board. • Manage its affairs to secure economic, efficient and effective use of resources and safeguard its assets. • Ensure the Annual Accounts are prepared in accordance with legislation (The Local Authority Accounts (Scotland) Regulations 2014) and is compatible with that legislation, in accordance with proper accounting practices (section 12 of the Local Government in Scotland Act 2003). • Approve the Annual Accounts for signature. I confirm that these Annual Accounts were approved for signature by the Board at its meeting on 2 December 2024. Councillor Walter Brogan Convener of Lanarkshire Valuation Joint Board 48
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11 The Treasurer’s Responsibilities The Treasurer is responsible for the preparation of the Board'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 Treasurer has: • Selected suitable accounting policies, and applied them consistently. • Made judgements and estimates that were reasonable and prudent. • Complied with legislation. • Complied with the Code of Practice on Local Authority Accounting in the United Kingdom. The Treasurer has also: • Kept adequate accounting records which were up to date. • Taken reasonable steps for the prevention and detection of fraud and other irregularities. I certify that the annual accounts give a true and fair view of the financial position of the Board at the reporting date and the transactions of the Board for the year ended 31 March 2024. Jackie Taylor Treasurer of Lanarkshire Valuation Joint Board 49
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12 Annual Governance Statement Annual Governance Statement This statement sets out the framework within which the Board has proper arrangements for the governance of the Board’s affairs, thereby facilitating the effective exercise of its functions, ensuring that appropriate arrangements are in place for the management of risk and appropriate systems of internal control are in place. The Annual Governance Statement has been prepared within the context of the Board’s governance framework and meets legislative requirements to include the Annual Governance Statement with the Annual Accounts. A consolidated Code of Corporate Governance was approved at the Board meeting of 4 March 2019, and this is still applicable. Scope of Responsibility In delivering its aims and objectives, the Board 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 Board also has a statutory duty to make arrangements to secure best value under the Local Government in Scotland Act 2003. In discharging this responsibility, the Board’s elected members and senior officers 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. Governance Framework The Board operates a system of internal control designed to manage risk to a reasonable level. Internal controls 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 Board’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 main features of the Board’s Corporate Governance arrangements are:- • Consolidated Code of Corporate Governance; • Clearly defined Standing Orders, Scheme of Delegation and Financial Regulations and Tender Procedures; • Comprehensive business planning arrangements, setting key targets and action plans designed to achieve our corporate objectives; • Arrangements to manage risk, including a risk management strategy and Corporate Risk Register and business continuity plans; • Clear customer complaints procedures; • Policies to regulate employee related matters, including the Employee Code of Conduct and Disciplinary Procedures; and • Regular public performance monitoring. As part of the overall control arrangements, the system of internal control is designed to ensure that assets are safeguarded, transactions are authorised and properly recorded and material errors are detected and corrected. This system 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 Board. In particular, the system includes:- • Financial management supported by Financial Regulations; • Detailed budgeting systems; • Regular reviews of periodic and annual financial reports which indicate financial performance against forecasts; 50
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13 • Setting targets to measure performance, including financial performance; • The preparation of regular financial reports that compare actual expenditure and income against forecasts; and • A range of policies such as the Counter Fraud, Bribery and Corruption Policy. These continue to be updated to reflect best practice and support a culture of ethical behaviour amongst employees and councillors. The Board considered the adequacy and effectiveness of the Board’s governance arrangements and internal control environment and approved the Annual Governance Statement and Accounts. South Lanarkshire Council is the administering authority. All financial transactions of the Board are processed through the financial systems of the Council and are subject to the same controls and scrutiny as those of the Council. This includes regular reviews by the Council’s Internal Audit Manager. CIPFA Financial Management Code The Chartered Institute of Finance and Public Accountancy (CIPFA) previously introduced a Financial Management Code (the FM Code) which provides “guidance for good and sustainable financial management in local authorities. By complying with the principles and standards within the code, authorities will be able to demonstrate their financial sustainability”. A key goal of the FM Code is to improve the financial resilience of organisations by embedding enhanced standards of financial management. The Board reviewed the principles of the FM Code and carried out a self-assessment as part of its internal governance regime during 2020-2021. This identified that the Board where appropriate had fully embedded all but 1 of the principles of the Code in its normal business. An action was identified for the remaining principle which was to include a statement regarding the adequacy of reserves in the next budget strategy paper. The 2024/2025 Budget Strategy paper was presented to the Board in December 2023. This included reference to the level of Reserves and a plan for their use moving forward, across financial years 2024/2025 and 2025/2026. This will be refreshed as the Budget for 2025/2026 is prepared for consideration in December 2024. Review of Effectiveness The Board purchases an internal audit service from South Lanarkshire Council, through a Service Level Agreement. The role of Internal Audit is to provide an independent audit opinion on the adequacy and effectiveness of the Board’s governance, risk management and internal control systems based on audit work undertaken in the year. The internal audit service provided to the Board operates in accordance with the Public Sector Internal Audit Standards (revised 2017). A rolling programme of audits are undertaken on an annual basis targeted at the areas of greatest risk. The Internal Audit Manager provides an annual report to the Board and an audit opinion on the adequacy and effectiveness of the Board’s governance, risk management and internal control systems based on audit work undertaken in the year. The annual report for 2023/2024 was presented to the Board on 3 June 2024. The Internal Audit Manager’s annual assurance statement concluded that a reasonable level of assurance can be placed on the adequacy and effectiveness of the Board’s framework of governance, risk management and control arrangements for the year ended 31 March 2024. Statement on the Role of the Chief Financial Officer CIPFA published the statement on the role of the Chief Financial Officer in 2010 and under the Code, the Board is required to state whether it complies with the statement, and if not, to explain how their governance arrangements deliver the same impact. 51
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14 The Board’s financial management arrangements comply with the principles set out in CIPFA’s statement on the Role of the Chief Financial Officer. Continuous Improvement As part of the annual audit review, recommendations are provided which not only assist management to improve their control environment, but also provide an assessment of the adequacy of existing systems and procedures, including highlighting any necessary improvements to maintain and improve the Board’s governance arrangements going forward. The external auditor’s report, Annual Audit Report 2022/2023 did not identify any Governance actions for implementation during 2023/2024. Post- Coronavirus Pandemic Revised working practices introduced as a result of the pandemic are now established and include home/office blended working arrangements, sourcing more information digitally with the continued use of electronic communications, where deemed appropriate. However, where a business need is identified, staff are required to attend the office every day. The Board’s staff are once again to be commended on their ability to adapt to changing processes to ensure that all statutory functions are carried out. Assurance In conclusion, there were no significant weaknesses identified in the Annual Audit Report relating to improvements requiring action in 2023/2024. Systems are in place to continually review and improve the control environment and governance arrangements operated by the Board. The effectiveness of governance is dependent on the actions of officers of the Board and by the work of Internal and External Audit. It is the Board’s view that the governance arrangements were effective during financial year 2023/2024. Significant Governance Areas The Board’s management team identifies risks which LVJB is exposed to and documents the controls in place to help mitigate each risk. At the latest review in January 2024, 3 risks were deemed high and are summarised in the table below. Risk Classification Key Risk Description of Risk Controls in Place 1 Operational, Continuity and Performance Inability to deal with increase in non-domestic appeals activity Upsurge in non- domestic appeal activity, in particular the voluminous appeals received in connection with the coronavirus pandemic. Also, dealing with voluminous levels of proposals against the 2023 non-domestic revaluation in a three yearly revaluation cycle. This leads to greater time spent by LVJB staff on handling appeals 1) Structured non-domestic proposal disposal programme. 2) Regular case review meetings as required. 3) Follow agreed disposal strategy of non-domestic proposals with Scottish Assessors Association’s (SAA) where appropriate. 4) Monitored by all Valuation Managers. 5) Liaising with the Scottish Courts and Tribunals Service in respect of facilitating hearings to deal with the increased workload. 6) Liaising with the Scottish Government and the Tribunal set-up via the Scottish Assessors Association, on proposal and appeal volumes 52
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15 Risk Classification Key Risk Description of Risk Controls in Place and statutory disposal deadlines. 7) Liaising with agents regards appeal volumes and the prospect of settlement without the need for a hearing. 2 People Failure to recruit and/or retain qualified valuation staff. Failure to retain or recruit staff including those with appropriate qualifications, due to industry salaries. 1) Work life balance/conditions of service/personnel policies/job families. 2) PDR process. 3) Recruitment of trainee valuers, employed when appropriate, with structured training scheme in place. 4) Offer to existing staff of training/professional qualifications where deemed appropriate. 5) Ongoing monitoring of grading matrix alongside key duties to ensure fair and equal pay with constituent authorities to retain staff. 3 Financial Lack of funding for new duties associated with the Barclay review into non- domestic rates. Insufficient funding for new duties could lead to difficulties in delivery of statutory undertakings. There is no detail on future years’ funding from the Scottish Government for such duties. 1) Risk to the new statutory duties has been raised with Scottish Government officials, and directly with the Minister for Public Finance, Planning and Community Wealth 2) Three yearly budget planning assists with the identification of when funding levels become critical to service delivery. Christine Maxwell Councillor Walter Brogan Assessor and ERO Convener 53
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16 Remuneration Report The remuneration report provides details of the Board’s remuneration policy for senior Board members and senior employees. Introduction The Remuneration Report has been prepared in accordance with the Local Authority Accounts (Scotland) Regulations 1985 (as amended by the Local Authority Accounts (Scotland) Regulations 2014. These Regulations require various disclosures about the remuneration and pension benefits of senior Board members and senior employees. All information disclosed in tables 1 – 3 and 5 and 6 in this Remuneration Report and details of exit packages have been audited by Audit Scotland. The other sections of the Remuneration Report have been reviewed by Audit Scotland to ensure that they are consistent with the financial statements. Senior Employees The remuneration 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 Officers of Scottish local authorities. COSLA Industrial Relations Circular 11-23b sets the amount of salary for Chief Officers for 2023/2024. Senior Councillors The Convener and Depute Convener of the Lanarkshire Valuation Joint Board are remunerated by the Council of which they are a council member, as shown in Table 3. The remuneration of councillors is regulated by the Local Governance (Scotland) Act 2004 (Remuneration) Regulations 2007 (SSI No. 2007/183) as amended most recently by the Local Governance (Scotland) Act 2004 (Remuneration) Amendment Regulations 2022 (SSI 2022/18). The Regulations provide for the grading of Councillors for the purposes of remuneration arrangements, as either the Leader of the Council, the Provost, Senior Councillors or Councillors. These regulations also set out the amounts a councillor may be paid for being a Convener or Depute Convener of a Joint Board. This is inclusive of any amount payable to them as either a Councillor or Senior Councillor. The Board has an arrangement with each Council who remunerates the Convener and Depute Convener/s to reimburse the Council for the additional costs of that councillor arising from them being a Convener or Depute Convener of the Board. The disclosures made in this report are limited to the amounts paid to the Council by the Board for remuneration and does not reflect the full value of the remuneration that may be paid to the councillor. Trade Unions (Facility Time Publication Requirements) Regulations 2017 In addition to the regulations governing senior employees and councillors, the Trade Union (Facility Time Publication Requirements) Regulations 2017, which applied from 1 April 2017, require public sector employers to collect and publish a range of information on trade union facility time in respect of their employees who are Trade Union Representatives. The Trades Unions (Facility Time Publication Requirements) is available on the Board’s website. There are no employees within the Board who are Trade Union Representatives, as noted on the Board’s website. 54
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17 General Pay Bands for Senior Employees The number of officers who received remuneration (excluding pension contributions) in excess of £50,000 for the financial year is shown in Table 1: Table 1 - General Pay Band Disclosure for Senior Employees Annual Remuneration Number of Employees Number of Employees £ 2023/24 2022/23 50,000 – 54,999 5 2 55,000 – 59,999 3 2 60,000 – 64,999 0 1 65,000 – 69,999 0 2 70,000 – 74,999 1 0 75,000 – 79,999 0 1 80,000 – 84,999 1 1 85,000 – 114,999 (Note 1) 0 0 115,000 – 119,999 1 0 120,000 – 124,999 0 0 125,000 – 129,999 0 1 Note 1: These are merged pay bands covering more than £5,000 due to the fact that no employees fell into these bands in either financial year. Disclosure of Remuneration Tables 2 and 3 provide details of the remuneration paid to the Board’s senior employees, Convener and Depute Convener. Comparative figures for 2022/2023 have been shown. Table 2 – Senior Employees Name / Post Salary / Fees Taxable Expenses Compensation for Loss of Office Any other Remuneration 2023/24 Total 2022/23 Total G Bennett Assessor and Electoral Registration Officer (To 31 May 2023) £22,000 (Full Time Equivalent £133,535) - - - £22,000 (Full Time Equivalent £133,535) £125,772 R Pacitti Assistant Assessor and Electoral Registration Officer (To 11 June 2023) Assessor and Electoral Registration Officer (From 12 June 2023) £15,631 (Full Time Equivalent £81,594) £103,973 (Full Time Equivalent £129,224) - - - - - - £15,631 (Full Time Equivalent £81,594) £103,973 (Full Time Equivalent £129,224) £76,847 - C Maxwell Assistant Assessor and Electoral Registration Officer (From 6 April 2022) £81,594 - - - £81,594 £73,811 (Full Time Equivalent £74,584) J Dell Assistant Assessor and Electoral Registration Officer (From 9 October 2023) £37,923 (Full Time Equivalent £79,182) - - - £37,923 (Full Time Equivalent £79,182) n/a 55
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18 The senior employees included in Table 2 include any Board employee: • Who has responsibility for management of the Board to the extent that the person has power to direct or control the major activities of the Board (including activities involving the expenditure of money), during the year to which the report relates, whether solely or collectively with other persons; • Who 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; or • Whose annual remuneration, including remuneration from a local authority subsidiary body, is £150,000 or more. Table 3 – Conveners and Depute-Conveners Name / Post Salary / Fees Taxable Expenses Compensation for Loss of Office Any other Remuneration 2023/24 Total 2022/23 Total W Brogan Convener (From 27 June 2022) £5,029 - - - £5,029 £3,729 J Reddin Depute Convener (From 27 June 2022) £3,773 - - - £3,773 £2,798 A McVey Convener (To 5 May 2022) - - - - - £469 L Hamilton Depute Convener (To 5 May 2022) - - - - - £352 Total £8,802 - - - £8,802 £7,348 Pension Rights Pension benefits for councillors and Lanarkshire Valuation Joint Board employees are provided through the Local Government Pension Scheme (LGPS). The Board’s employees had a final salary pension scheme prior to 1 April 2015. This means that pension benefits are based on the final year’s pay and the number of years that person has been a member of the scheme. As of 1 April 2015, the Board’s employees are now part of a defined benefit pension scheme worked out on a career average basis. Benefits built up are calculated using pensionable pay each scheme year, rather than final salary. All benefits built up prior to this date are protected. From 1 April 2009, a five-tier contribution system was introduced with contributions from scheme members based on how much pay falls into each tier. This is designed to give more equality between the costs and benefits of scheme membership. Under The Local Government Pension Scheme (Scotland) Regulations 2014, the earnings ranges used to determine annual contribution rates are to be increased each year by any increase applied to pensions under the Pensions Name / Post Salary / Fees Taxable Expenses Compensation for Loss of Office Any other Remuneration 2023/24 Total 2022/23 Total J Neason Assistant Assessor and Electoral Registration Officer (To 5 April 2022) - - - - - £884 (Full Time Equivalent £76,847) Total £261,121 - - - £261,121 £277,314 56
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19 (Increase) Act 1971. In accordance with this the salary bands for 2022/2023 were uprated by the Consumer Price Index (CPI) increase for 2023/2024. The member contribution rates and tiers for 2023/2024 are shown in Table 4 along with those that applied in 2022/2023. Table 4 – Pension Contribution Rates Pensionable Pay Contribution rate 2023/24 Pensionable Pay Contribution Rate 2022/23 On earnings up to an including £25,300 5.50% On earnings up to an including £23,000 5.50% On earnings above £25,300 and up to £31,000 7.25% On earnings above £23,000 and up to £28,100 7.25% On earnings above £31,000 and up to £42,500 8.50% On earnings above £28,100 and up to £38,600 8.50% On earnings above £42,500 and up to £56,600 9.50% On earnings above £38,600 and up to £51,400 9.50% On earnings above £56,600 12.0% On earnings above £51,400 12.0% From April 2015, if a person works part-time their contribution is based on their part-time pay. Prior to this, if a person worked part-time, their contribution rate was worked out on the whole-time pay rate for the job, with actual contributions paid on actual pay earned. 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. From 1 April 2015, benefits are calculated on the basis of a revalued annual pension built up of 1/49th of pensionable pay each year, plus inflation to keep up with the cost of living. Prior to this date, the accrual rate guaranteed a pension based on 1/60th of final pensionable salary and years of pensionable service and prior to 2009 the accrual rate guaranteed a pension based on 1/80th and a lump sum based on 3/80th of final pensionable salary and years of pensionable service. The value of the benefits has been calculated without exercising any option to commute pension entitlement into a lump sum and without any adjustment for the effects of future inflation. In those cases where members have transferred pension entitlements from previous employments, the pension figures shown relate to the benefits that the person has accrued as a consequence of their total local government service, and not just their current appointment. It also reflects both employer and employee contributions. The Pension entitlement of Senior Employees for the year to 31 March 2024 are shown in the Table 5, together with the contribution made by the Board to each senior employees’ pension during the year. The accrued pension benefit reflects both the employer and employee contributions. 57
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20 Table 5 – Pension Benefits: Senior Employees Name / Post Accrued Pension Benefits March 2024 Movement in accrued pension benefits since 31 March 2023 Pension Contribution made by Board 2023/24 Pension Contribution made by Board 2022/23 G Bennett Assessor and Electoral Registration Officer (To 31 May 2023) Pension Lump Sum £73,431 £114,849 £130 £0 £4,246 £24,274 R Pacitti Assistant Assessor and Electoral Registration Officer (To 11 June 2023) Assessor and Electoral Registration Officer (From 12 June 2023) Pension Lump Sum £65,789 £117,282 £23,242 £47,457 £23,083 £14,831 - C Maxwell Assistant Assessor and Electoral Registration Officer (From 6 April 2022) Pension Lump Sum £37,054 £54,853 £2,910 £3,132 £15,748 £14,395 J Dell Assistant Assessor and Electoral Registration Officer (From 9 October 2023) Pension Lump Sum £34,114 £43,641 n/a n/a £7,319 - J Neason Assistant Assessor and Electoral Registration Officer (To 5 April 2022) Pension Lump Sum n/a n/a n/a n/a £0 £171 Total £50,396 £53,671 Table 6 – Pension Benefits: Conveners and Depute Conveners Name / Post Pension Contribution made by Board 2023/24 Pension Contribution made by Board 2022/23 W Brogan, Convener (From 27 June 2022) £971 £720 J Reddin, Depute Convener (From 27 June 2022) £729 £540 A McVey, Convener (To 5 May 2022) £91 L Hamilton, Depute Convener (To 5 May 2022) - £68 58
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21 Exit Packages There were no exit packages agreed or paid for in 2023/2024 or 2022/2023. Christine Maxwell Councillor Walter Brogan Assessor and ERO Convener 59
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22 Comprehensive Income and Expenditure Statement for the year ended 31 March 2024 This statement shows income generated by the Board during the year and how it was spent on services and financing costs. 2022/23 2023/24 Note Actual Actual £000 £000 3,456 Employee Costs 2,909 201 Property Costs 208 152 Supplies and Services 115 3 Transport and Plant 5 660 Administration Costs 598 30 Payments to Other Bodies 30 29 Financing Charges (30) 4,531 Total Expenditure 3,835 (4,237) Income (4,075) 294 Net Cost of Services (240) (28) Financing and Investment Income and Expenditure 8 266 (Surplus)/Deficit on the Provision of Services (232) 977 Re-measurement of the Net Defined Benefit (Asset)/Liability 282 16 977 Other Comprehensive Income and Expenditure 282 1,243 Total Comprehensive Income and Expenditure 50 60
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23 Balance Sheet as at 31 March 2024 This statement shows the resources of the Board and means by which they were financed. It shows the values as at the Balance Sheet date of the assets and liabilities recognised by the Board. 31 March 2023 31 March 2024 Note £000 £000 Non-Current Assets: 135 Property, Plant and Equipment 113 12 289 Pension Asset 0 16 424 Total Non-Current Assets 113 Current Assets: 100 Short Term Debtors 106 13 1,814 Cash and Cash Equivalents 1,992 1,914 Total Current Assets 2,098 Current Liabilities: (267) Short Term Creditors (193) 14 (267) Total Current Liabilities (193) 2,071 Total Assets less Current Liabilities 2,018 Long Term Liabilities (496) Pension Liability (493) 16 1,575 Total Assets less Liabilities 1,525 Financed By: Unusable Reserves (207) Pension Reserve (493) 19 (74) Accumulating Compensated Absences Reserve (70) 19 135 Capital Adjustment Account 113 19 Usable Reserves 1,721 General Fund Reserve 1,975 19 1,575 1,525 The notes on pages 28 to 43 form part of the financial statements. The unaudited accounts were approved for issue by the Board on 3 June 2024, and the audited accounts were authorised for issue on 2 December 2024. The audited accounts are signed on behalf of the Board by: Jackie Taylor Treasurer of Lanarkshire Valuation Joint Board 61
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24 Movement in Reserves Statement for the year ended 31 March 2024 This statement shows the movement in the year on the different reserves held by the Board, analysed into usable reserves and unusable reserves. The surplus on the provision of services shows the true economic cost of providing the Board’s services, which is fully analysed in the Comprehensive Income and Expenditure Statement on page 22. This cost excludes other statutory charges to the General Fund balance. The net increase / (decrease) before transfers to / from other statutory reserves shows the statutory General Fund balance before any discretionary transfers to or from the other statutory reserves of the Board. General Fund Balance Total Usable Reserves Unusable Reserves Total Reserves £000 £000 £000 £000 Balance as at 31 March 2023 1,721 1,721 (146) 1,575 Movement in Reserves during 2023/2024 Surplus on the provision of services 232 232 - 232 Other comprehensive income and expenditure - - (282) (282) Total comprehensive income and expenditure 232 232 (282) (50) Adjustments between accounting basis and funding basis (note 5) 22 22 (22) 0 Net increase before transfers to / from other statutory reserves 254 254 (304) (50) Transfers to / from other statutory reserves - - - - Increase / (Decrease) in 2023/2024 254 254 (304) (50) Balance as at 31 March 2024 1,975 1,975 (450) 1,525 62
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25 Movement in Reserves Statement for the year ended 31 March 2023 General Fund Balance Total Usable Reserves Unusable Reserves Total Reserves £000 £000 £000 £000 Balance as at 31 March 2022 1,479 1,479 1,339 2,818 Movement in Reserves during 2022/2023 Surplus on the provision of services (266) (266) - (266) Other comprehensive income and expenditure - - (977) (977) Total comprehensive income and expenditure (266) (266) (977) (1,243) Adjustments between accounting basis and funding basis (note 5) 508 508 (508) 0 Net increase before transfers to / from other statutory reserves 242 242 (1,485) (1,243) Transfers to / from other statutory reserves - - - - Increase / (Decrease) in 2022/2023 242 242 (1,485) (1,243) Balance as at 31 March 2023 1,721 1,721 (146) 1,575 63
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26 Cash Flow Statement This statement shows the changes in cash and cash equivalents of the Board during the year. The statement shows how the Board generates and uses cash and cash equivalents by classifying them as either operating, investing or financing activities. • The level of net cash arising from operating activities is a key indicator of the extent to which the operations of the Board are funded by way of taxation and grant income or from service users and constituent authorities. • Investing activities represent the extent to which cash outflows have been made for resources which are intended to contribute to the Board’s future service delivery. • There were no financing activities as the board had no requirement to borrow. Further analysis of movements is provided in the cash flow notes following the statement. 2022/23 2023/24 £000 £000 (266) (Surplus)/Deficit on the Provision of Services 232 508 Adjust (Surplus)/Deficit on the Provision of Services for non-cash movements (143) 30 Adjust for items included in the (Surplus)/Deficit on the Provision of Services that are investing and financing activities 89 272 Net cash flows from operating activities 178 0 Investing Activities 0 272 Net increase or decrease in cash and cash equivalents 178 1,542 Cash and cash equivalents at 1 April 1,814 1,814 Cash and cash equivalents at 31 March 1,992 Cash Flow Statement Note – Non Cash Movements The balance of non-cash movements is made up of the following elements: 2022/23 2023/24 £000 £000 21 Depreciation, impairment and amortisation of assets 22 (28) Movement in Debtors (6) 63 Movement in Creditors (70) 503 Movement in Pension Liability 4 (16) Movement in the Employee Statutory Adjustment Account (4) (5) Movement in the Flexible Working Scheme Adjustment Account - (30) Interest received (89) 508 Net Cash flows from the provision of services for non-cash movements (143) Cash Flow Statement Note – Operating Activities The cash flows for operating activities include the following items: 2022/23 2023/24 £000 £000 30 Interest received 89 0 Interest paid 0 30 Net cash flows from operating activities 89 64
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27 Cash Flow Statement Note – Cash and Cash Equivalents The balance of Cash and Cash Equivalents is made up of the following elements: 2022/23 2023/24 £000 £000 1,814 Short term deposits 1,992 1,814 Total Cash and Cash Equivalents 1,992 65
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28 Notes to the Financial Statements Note 1: Accounting Policies General Principles Lanarkshire Valuation Joint Board is required to prepare annual accounts by the Local Authority Accounts (Scotland) Regulations 2014, section 12 of the Local Government in Scotland Act 2003 requires they be prepared in accordance with proper accounting practices. The general policies adopted in compiling and presenting the Accounts are those recommended by the Code of Practice on Local Authority Accounting in the United Kingdom 2023/2024 issued jointly by the Chartered Institute of Public Finance and Accountancy (CIPFA) and the Local Authority (Scotland) Accounts Advisory Committee (LASAAC), supported by International Financial Reporting Standards (IFRS). There are no significant departures from those recommendations. The Annual Accounts has been prepared under the historic cost convention. All accounting policies have been applied consistently. Debtors and Creditors Accruals basis The Comprehensive Income and Expenditure Statement is compiled on an accruals basis. Income and expenditure activities are accounted for in the year in which they take place, not simply when payments are made or received. Where goods and services have been sold but the income not received by 31 March 2024 or goods have been received but not paid for by 31 March 2024 then the Comprehensive Income and Expenditure Statement has been amended to reflect the outstanding amounts and a debtor or creditor for the relevant amount is recorded in the Balance Sheet. (i) Debtors All specific and material sums payable to the Board have been brought into account. (ii) Creditors Sundry Creditors are accrued on the basis of payments made during the first three weeks following 31 March 2024; together with specific accruals in respect of further material items. (iii) Accumulating Compensated Absences International Accounting Standard 19 (IAS19) states that ‘an organisation should account for employment benefits when employees earn them and the authority is committed to providing them, even if the actual provision might be in future years.’ All salaries and wages earned up to 31 March 2024 are included irrespective of when actual payments were made. The requirements of IAS 19 have been fully applied in the current year, in respect of annual leave provision, including recognition of the net liability and an accumulating compensated absences reserve in the Balance Sheet and entries in the Comprehensive Income and Expenditure Statement for movements in the liability relating to the scheme. (iv) Pension Costs The Board participates in the Local Government Superannuation Scheme (Strathclyde Pension Fund), which is administered by Glasgow City Council. The cost of providing pensions for employees is charged to the Comprehensive Income and Expenditure Statement in accordance with the statutory requirements governing the particular pension schemes to which the Board contributes. While the requirements of IAS19 have been fully applied in the current year, the Pension report provide by the actuary has indicated a significant net Asset (a surplus). The significant nature of the Asset has been reviewed, and in line with IFRIC14, the asset has been de-recognised to equate to the level of the asset ceiling, provided by the Fund’s actuary. This reflects the net present value of future service costs less the net present value of future obligations over the future working lifetime as at 31 March 2024. This derecognition has been applied through the Comprehensive Income and Expenditure Statement. Previous year budget and expenditure information has been provided to allow comparability. 66
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29 In assessing liabilities for retirement benefits for the 2022/2023 Annual Accounts (included in the net asset), a discount rate based on the current rate of return on a high-quality corporate bond of equivalent currency and term to the scheme was used. The Actuary has advised that a rate of 4.75% per annum is appropriate (2021/2022 – 2.7%). Actuarial Gains and Losses – changes in the net pension asset / liability that arise because of events have not coincided with assumptions made at the last actuarial valuation or because the actuaries have updated their assumptions – debited to the Pension Reserve. (v) Allocation of Central Support Expenses The allocation of Central Support Expenses is the cost of those South Lanarkshire central support departments which provide a service to the Board. The individual support departments are Administration Services, Personnel, Information Technology and Finance Services. The method of allocation is determined by each individual department and in most instances is a time-based allocation of employee costs or the recharge of actual costs incurred. The recharge is made on a consistent basis. (vi) Borrowing Facilities The Board is a separate legal entity and has South Lanarkshire Council as its lead authority. The loans’ fund of South Lanarkshire Council acts as banker to the Board and consequently lends or borrows according to the required cash flow and activities of the Board. (vii) Financial Instruments Where an instrument has a maturity of less than 12 months the fair value is taken to be the principal outstanding. Creditors due within 12 months are not classed as a financial instrument. Intangible Assets Expenditure on non-monetary assets that do not have physical substance but are controlled by the Board as a result of past events (for example, software licences) is capitalised when it is expected that it will bring benefits to the Board for more than 12 months. Intangible Assets are measured at cost. The depreciable amount of an intangible asset is amortised over its useful life in the Comprehensive Income and Expenditure Statement. The useful life of these assets is deemed to be 1-5 years. The Board has no Intangible Assets. Leases Leases are classified as finance leases where the terms of the lease transfer substantially all the risks and rewards incidental to ownership of the property, plant or equipment from the lessor to the lessee. All other leases are classified as operating leases. The Board as Lessee – Operating Leases Rentals paid under operating leases are charged to the Comprehensive Income and Expenditure Statement as an expense for the use of the leased property, plant or equipment. Property, Plant and Equipment Assets that have physical substance and are held for use in the supply of services or 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 merely maintains the condition of an asset e.g. repairs and maintenance is charged as an expense when it is incurred. Measurement Assets are initially measured at cost, comprising: • the purchase price. 67
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30 • any costs attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Assets are then carried in the Balance Sheet using the following measurement bases: • other land and buildings – fair value, determined by the amount that would be paid for the asset in its existing use (existing use value – EUV). • vehicles, plant and equipment – where non- property assets that have short useful lives or low values (or both), depreciated historical cost basis is used as a proxy for fair value. Depreciation Depreciation is provided for on all Property, Plant and Equipment assets and is calculated on the following bases: • other buildings – straight-line allocation over the useful life of the property as estimated by the valuer (other buildings 10 – 40 years). • vehicles, plant and equipment – straight line allocation over the useful life of the asset (5 – 20 years). • over the term of the remaining lease of David Dale House. Note 2: Prior Period Adjustments There are no prior period adjustments included within the 2023/2024 Annual Accounts. Note 3: Accounting Standards Issued but Not Adopted The Accounting Code of Practice requires the Board to disclose information relating to the impact of an accounting change that is required by a new standard that has been issued but not yet adopted. At the balance sheet date, the following new standards and amendments to existing standards have been published but not yet adopted by The Code: • IFRS 16 Leases - Implementation of IFRS 16 Leases will be mandatorily implemented in the Code of Practice on Local Authority Accounting in the United Kingdom (the Code) for 2024/25. Therefore, with effect from 2024/25 the Board will adopt this new accounting standard for Leases. This standard replaces IAS 17 Leases and removes the operating classification for leases where the Board acts as lessee, eliminating the ability for organisations to keep operating leases off balance sheet, by reporting them as a note to the accounts. This means that, for lease arrangements previously accounted for as operating leases, a right-of -use (ROU) asset and a lease liability will be brought onto the balance sheet as at 1 April 2024. Exemptions are applicable for low value and short-term leases. The Board, as a lessee, had formerly classified leases into either operating or finance leases, depending on whether it met the criteria for transferring the majority of the risks and rewards relating to ownership. Under IFRS 16 the Board will recognise ROU assets and lease liabilities on the balance sheet for most leases. It has been identified that short term leases – those that have a lease term of 12 months or less, and leases of low value assets will not be recognised in accordance with exemption guidelines. IFRS 16 will be applied retrospectively, but with a cumulative effect being recognised as at 1 April 2024. Therefore, the ROU asset and lease liabilities will be calculated as if IFRS 16 had previously been applied but will only be recognised in 2024/25 with no prior year adjustments required. The following new standards are not expected to have an impact on the Board’s financial statements and are noted overleaf: 68
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31 • Classification of Liabilities as Current or Non-current (Amendments to IAS 1) issued in January 2020 • Lease Liability in a Sale and Leaseback (Amendments to IFRS 16) issued in September 2022. • Non-current Liabilities with Covenants (Amendments to IAS 1) issued in October 2022 • International Tax Reform: Pillar Two Model Rules (Amendments to IAS 12) issued in May 2023. • Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7) issued in May 2023. Note 4: Critical Judgements in Applying Accounting Policies In applying the accounting policies, the Board is obliged to highlight whether it has had to make certain judgements about complex transactions or those involving uncertainty about future events. The critical judgements made in the Annual Accounts are: • In assessing the potential for significant costs arising from Valuation Appeal Panels, the Board has considered its level of exposure as low and therefore no provision for an outflow of money has been made. • The Accounts have been prepared on a going concern basis as it is expected that despite the uncertainty around future local government funding, a medium-term Financial Strategy has been developed in conjunction with the Boards constituent authorities. This gives certainty regarding the medium-term financial outlook and the level of service provision. • If a Pension Scheme was in deficit (a liability), this would be recognised in the Accounts. Conversely, if the Pension scheme was in a surplus (an Asset), in line with IFRIC14, this would not be recognised on the basis that there is no ability to recover any surplus from the fund, not recover any of the funds from future contributions. The surplus/deficit is arrived at by obtaining a valuation from the actuary. In the event of a surplus, consideration is given to whether it can be recognised based on whether the surplus can be recovered, or the contributions can be reduced. It is believed that under the agreement with Strathclyde Pension Fund, such a surplus cannot be recovered. 69
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32 Note 5: Expenditure and Funding Analysis The Expenditure and Funding Analysis shows the expenditure and income figures reported to Lanarkshire Valuation Joint Board and, through a single adjustments column, reconciles it to the accounting figures presented in the Comprehensive Income and Expenditure Statement. 2022/2023 2023/2024 Net Exp. Chargeable to GF Adjustment between Funding and Accounting Basis (Note 6) Net Exp. in CIES Net Exp. Chargeable to GF Adjustment between Funding and Accounting Basis (Note 6) Net Exp. in CIES £000 £000 £000 £000 £000 £000 2,917 539 3,456 Employee Costs 2,887 22 2,909 201 201 Property Costs 208 208 152 152 Supplies and Services 115 115 3 3 Transport and Plant 5 5 684 (24) 660 Administration Costs 627 (29) 598 30 30 Payments to Other Bodies 30 30 8 21 29 Financing Charges (51) 21 (30) 3,995 536 4,531 Total Expenditure 3,821 14 3,835 (4,237) (4,237) Income (4,075) (4,075) (242) 536 294 Net Cost of Services (254) 14 (240) 0 (28) (28) Financing and Investment Income and Expenditure 0 8 8 (242) 508 266 (Surplus) or Deficit (254) 22 (232) 2022/23 2023/24 General Fund General Fund £000 £000 (1,479) Opening General Fund Balance (1,721) (242) (Surplus) or Deficit (254) - Transfers To/From Reserves - (1,721) Closing General Fund Balance (1,975) 70
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33 Note 6: Notes to the Expenditure and Funding Analysis - Adjustments Between Funding and Accounting Basis 2023/24 2023/24 2023/24 2023/24 Adjustments for Capital Purposes (note a) £000 Net Change for the Pensions Adjustments (note b) £000 Other Differences (note c) £000 Total Adjustments between Funding and Accounting Basis £000 Employee Costs - 25 (3) 22 Property Costs - - - - Supplies and Services - - - - Transport and Plant - - - - Administration Costs - (29) - (29) Payments to Other Bodies - - - - Financing Charges 21 - - 21 Total Expenditure 21 (4) (3) 14 Income - - - - Net Cost of Services 21 (4) (3) 14 Financing and Investment Income and Expenditure - 8 - 8 (Surplus) or Deficit 21 4 (3) 22 2022/23 2022/23 2022/23 2022/23 Adjustments for Capital Purposes (note a) £000 Net Change for the Pensions Adjustments (note b) £000 Other Differences (note c) £000 Total Adjustments between Funding and Accounting Basis £000 Employee Costs - 555 (16) 539 Property Costs - - - - Supplies and Services - - - - Transport and Plant - - - - Administration Costs - (24) - (24) Payments to Other Bodies - - - - Financing Charges 21 - - 21 Total Expenditure 21 531 (16) 536 Income - - - - Net Cost of Services 21 531 (16) 536 Financing and Investment Income and Expenditure - (28) - (28) (Surplus) or Deficit 21 503 (16) 508 Note a – Adjustment for Capital Purposes This column adds in depreciation and impairment and revaluation of gains and losses in the financing charges line. Note b – Net Change for the Pensions Adjustment Net change for the removal of pension contributions and the addition of IAS19 Employee benefits pension related expenditure and income: 71
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34 • For Employee Costs and Administration Costs this represents the removal of the employer contributions made by the Board as allowed by statute and the replacement with current service costs and past service costs. • For Financing and Investment Income and Expenditure – the net interest on the defined benefit liability is charged to the Comprehensive Income and Expenditure Statement. Note c – Other Differences Other differences between amounts debited/credited to the Comprehensive Income and Expenditure Statement and amounts payable /receivable to be recognised under statute: • For Employee Costs this represents the accrual made for the cost of holiday/leave entitlements earned by employees but not taken before the year-end which employees can carry forward into the next financial year. These require to be included within the Net Cost of Services under generally accepted accounting practices, however, are not chargeable to the General Fund. Note 7: Adjustments between Accounting Basis and Funding Basis Under Regulations This note details the adjustments that are made to the total Comprehensive Income and Expenditure Statement recognised by the Board in the year in accordance with proper accounting practice to arrive at the resources that are specified by statutory provisions as being available to the Board to meet future revenue expenditure. Useable Reserves £000 £000 2023/24 2022/23 Adjustments to Revenue Resources Pension Costs (transferred to (or from) the Pensions Reserve 286 1,480 Holiday Pay (transferred to the Employee Statutory Adjustment Account) (4) (16) Reversal of entries in the surplus or deficit on the Provision of Services in relation to capital expenditure (these items are charged to the Capital Adjustment Account) 22 21 Total Adjustments to Revenue Resources 304 1,485 Adjustments between Revenue and Capital Resources Capital expenditure finance from revenue balances (transfer to Capital Adjustment Account) 0 0 Total Adjustments between Revenue and Capital Resources Total Adjustments 304 1,485 Total Comprehensive Income and Expenditure (50) (1,243) Net Increase / (Decrease) before transfers to / from Reserves 254 242 Increase / (Decrease) in year 254 242 72
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35 Note 8: Assumptions Made About the Future and Other Major Sources of Estimation Uncertainty The Annual Accounts contain estimated figures that are based on assumptions made by the Board 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 Board’s Balance Sheet at 31 March 2024 for which there is a significant risk of material adjustment in the forthcoming financial year are as follows: Items Uncertainties Effect if Actual Results Differ from Assumptions Pension Asset Estimation of the net asset 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, commissioned by Strathclyde Pension Fund, is engaged to provide the Board with expert advice about the assumptions to be applied. The effect on the net pension asset of changes in individual assumptions can be measured. E.g. a 0.1% decrease in the discount rate assumption would result in a decrease in the pension asset of £0.437m. The assumptions interact in complex ways. During 2023/2024, the actuaries advised that the net pension asset had increased by: £0.995m attributed to the updating of financial assumptions; increased by £0.057m attributable to changes in demographic assumptions; and decreased by £2.558m due to other experience. The net asset had increased by £1.651m due to the expected return on pension fund assets. In line with IFRIC14, while there is a net asset, an asset ceiling has been applied to the Balance Sheet. Note 9: Events after the Balance Sheet The audited Annual Accounts were authorised for issue by the Treasurer of Lanarkshire Valuation Joint Board on 2 December 2024. There were no events that occurred between 1 April 2024 and the date that the Annual Accounts were authorised for issue that would have an impact on the financial statements. Note 10: Contingent Liabilities Pensions A circular from the Scottish Public Pensions Agency (Local Government Pension Scheme 2020/04) refers to a ruling that same-sex survivors were originally entitled to survivor benefits, taking into account the member’s service from 6 April 1978. Following the Goodwin Tribunal, regulatory amendments will now need to be made with effect from the same date to extend that entitlement to male survivors of female members. While this could have a financial impact on future years’ costs, and the impact cannot yet be quantified, current information from the Board’s actuaries suggests that any impact is likely to be minimal. Given the uncertainty, and the expected immaterial nature of any potential impact, no provision has been made in the Accounts. The Board’s actuaries also highlighted an awareness of 2 other court cases which may impact on pension benefits in the future. The first was the Walker case where it was ruled that surviving spouses in same sex marriages should be entitled to the same benefits as those in different sex marriages and also the O’Brien case where it was ruled that recognition of part time benefits should apply to service for the period prior to 7 April 2000. The actuaries understanding is that these are unlikely to be significant judgements in terms of impact on future pension obligations of Employers. Again, given the uncertainty, and the immaterial nature of any potential impact, no provision has been made in the Accounts. 73
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36 Valuation Appeals Number of Appeals: Voluminous numbers of appeals have been received in connection with the pandemic with the possibility of additional expenditure in legal costs as a consequence of these appeals. Neither the value nor the timing of these costs can be reliably estimated at this time as legislation drafted by the Scottish Government to assist in dealing with such appeals has yet to be implemented. The Board recognises that a contingent liability may exist in respect of potential costs arising from these appeals. Note 11: Leases Operating Leases – Lanarkshire Valuation Joint Board as Lessee: The Board has entered into an operating lease and details are provided across the asset category of Property, Plant and Equipment, and Land and Buildings. Land and Buildings – the Board leases their offices which have been accounted for as an operating lease. The rent payable in 2023/2024 was £0.093m (2022/2023 £0.093m) The rent payable will increase in August 2025. The future minimum lease payments due under non-cancellable leases in future years are: 2023/24 2022/23 £000 £000 Not later than one year 93 93 Later than one year and not later than five years 406 397 Later than five years 138 240 Total 637 730 Note 12: Property, Plant and Equipment 2023/24 2022/23 £000 £000 Cost or Valuation At 1 April 181 181 Additions 0 0 At 31 March 181 181 Accumulated Depreciation At 1 April 46 25 Depreciation 22 21 At 31 March 68 46 Net Book Value at 31 March 113 135 Note 13: Short Term Debtors The debtors figure comprises prepayments and is analysed as follows: 2023/24 2022/23 £000 £000 Information Technology Annual Support and Maintenance 103 100 Membership Fees / Annual Subscriptions 3 0 Total 106 100 74
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37 Note 14: Short Term Creditors The creditors figure is analysed as follows: 2023/24 2022/23 £000 £000 Valuation Appeal Panel – Fees 0 54 Royal Mail – Postal Charges 3 1 North Lanarkshire Council – Depute Convenor Salary 5 4 South Lanarkshire Council – Convenor / Depute Convenor Salary 0 1 Accumulated Compensated Absences – Annual Leave 70 74 Other – Employee Cost Accrual 111 121 Audit Scotland 1 - Civic Penalties to be refunded - 3 Administration and Legal Costs 3 9 Total 193 267 Note 15: Related Party Transactions The Board is required to disclose material transactions with related parties. During the year transactions arose with the following related parties: 2023/24 2023/24 2022/23 2022/23 Receipts Payments Receipts Payments £000 £000 £000 £000 South Lanarkshire Council 2,004.5 407 2,102.5 376 North Lanarkshire Council 2,004.5 7 2,102.5 4 Fife Council - 3 - - Total 4,009 417 4,205 380 The Board occupied the premises at David Dale House, 45 John Street, Blantyre, G72 0JG during 2023/24, and are recharged for the cost of accommodation by South Lanarkshire Council. Included within payments to South Lanarkshire Council is a charge of £0.207m for the lease of office accommodation at David Dale House (2022/23: £0.201m). Note 16: Defined Benefit Pension Schemes As part of the terms and conditions of employment, the Board offers retirement benefits. The Board participates in the Local Government Pension Scheme (Strathclyde Pension Fund), a funded defined benefit scheme, administered by Glasgow City Council. The scheme is supported by contributions from both employer and employees. The 2023/2024 pension reports provided by the actuary indicate an increased Asset (a surplus) for this year (compared to 2022/2023), and in line with IFRIC14, an asset ceiling has been applied. This reduces the Asset from £11.846m to £0m and reflects the present value of employer future service costs less the present value of future employer contributions, over the future working lifetime of your active scheme. Transactions relating to Retirement Benefits The cost of retirement benefit is recognised in the reported cost of services when it is earned by the Board’s employees, rather than when the benefits are eventually paid as pensions. However, the charge that is statutorily required to be made against the Board’s funding from councils is based on the pension contributions payable by the Board in the year, and an adjustment is made in the Movement in Reserves Statement to this effect. The following transactions have been made in the Comprehensive Income and Expenditure Statement. 75
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38 Comprehensive Income and Expenditure Statement 2023/24 2022/23 £000 £000 Cost of Services: Service cost comprising: Current service cost 431 956 Past Service Cost (including curtailments) 0 0 Financing and Investment Income and Expenditure Net interest expense 8 (28) Total post-employment benefit charged to the Deficit on the Provision of Services 439 928 Other Post Employment Benefit Charged to the Comprehensive Income and Expenditure Statement: Re-measurement of the net defined benefit liability/(asset) comprising: • return on pension fund assets 1,651 (1,403) • actuarial (gains) or losses arising on changes in demographic assumptions 57 221 • actuarial (gains) or losses arising on changes in financial assumptions 1,354 12,593 • actuarial (gains) or losses arising on changes in other experience (2,588) (1,330) • actuarial (gains) or losses arising on de-recognition of Pension Asset (759) (10,562) • actuarial (gains) or losses arising on present value of Unfunded Liability 3 (496) Total post-employment benefit charged to the Comprehensive Income and Expenditure Statement (282) (977) Net Charge to the Surplus/Deficit on the Provision of Services brought forward 439 928 Movement In Reserves Statement • reversal of net charges made to the surplus or deficit for the provision of services for post-employment benefits in accordance with the Code (4) (503) Actual amount charged against the General Fund balance for pensions in the year: • employers’ contributions payable to the scheme 435 425 Pensions Assets and Liabilities Recognised in the Balance Sheet The amount included in the Balance Sheet arising from the Lanarkshire Valuation Joint Board’s obligation in respect of its defined benefit plan is as per the Table overleaf. The net asset arising from the Board’s involvement in the defined benefit scheme totals £11.846m at 31 March 2024. However, this has been limited to £nil in line with the accounting requirements of IFRIC 14 to limit the recognition of a pension asset to the extent to which the Board can recover the benefits through either refunds or reduced contributions. As the Board is not able to withdraw from the scheme or recover funds directly, the asset is therefore limited to the forecast reductions in contributions as compared to the forecast future service costs. This has limited the recognition of the pension asset to £nil. Separately the Board has continued to recognise the unfunded element of its pension liabilities as there are no scheme assets to cover the future costs of these liabilities as they are due going forward. 76
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39 2023/24 2022/23 £000 £000 Present value of the defined obligation (23,193) (21,526) Fair value of pension fund assets 35,039 32,377 De-Recognition of Pension Assets (Surplus) to Asset Ceiling (11,846) (10,562) Present Value of the Unfunded Liability Accounted for Separately (493) (496) Net asset / (liability) arising from defined benefit obligations (493) (207) A reconciliation of the Board’s share of the present value of the Fund’s defined obligation is as follows: 2023/24 2022/23 £000 £000 Opening Balance at 1 April (21,526) (31,554) Current Service Cost (431) (956) Interest Cost (1,020) (859) Contributions by scheme participants (137) (138) Re-measurement gains and losses actuarial gains and losses arising on changes in demographic assumptions 57 221 actuarial gains and losses arising from changes in financial assumptions 1,354 12,593 actuarial gains and losses arising from changes in other experience (2,235) (1,330) Past service gains / losses - - Settlements and curtailments - - Estimated Unfunded benefits paid 29 26 Estimated Benefits paid 716 471 Closing Balance at 31 March (23,193) (21,526) A reconciliation of the movement in the Board’s share of the fair value of the Fund’s assets is as follows: 2023/24 2022/23 £000 £000 Opening Fair Value of Pension Fund Assets 32,377 32,827 Interest Income 1,537 887 Re-measurement gains and (losses) expected return on pension fund assets 1,651 (1,403) actuarial gains and losses - - other experiences (353) - The effect of changes in foreign exchange rates - - Contributions by members 137 138 Contributions by the employer 406 399 Contributions in respect of Unfunded Benefits 29 26 Benefits Paid (745) (497) Closing Fair Value of the Scheme Assets 35,039 32,377 77
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40 Analysis of Pension Fund Assets 31/03/24 31/03/23 Quoted prices in active markets Quoted prices not in active markets Total Quoted prices in active markets Quoted prices not in active markets Total £000 £000 £000 £000 £000 £000 Cash and Cash Equivalents 54 595 649 448 166 614 Equity Instruments 7,077 8 7,085 6,322 56 6,378 Debt Instruments 0 0 0 0 0 0 Real Estate 0 2,755 2,755 0 2,670 2,670 Derivatives 0 0 0 0 0 0 Private Equity 0 8,365 8,365 0 7,958 7,958 Investment Funds 144 16,041 16,185 140 14,617 14,757 Asset Backed Securities 0 0 0 0 0 0 Structured Debt 0 0 0 0 0 0 Total 7,275 27,764 35,039 6,910 25,467 32,377 Basis for Estimating Assets and Liabilities Liabilities have been assessed on an actuarial basis using the projected unit credit method, to provide an estimate of the pensions that will be payable in future years dependant on assumptions about mortality rates, salary levels etc. The Local Government Pension Scheme has been assessed by Hymans Robertson LLP, an independent firm of actuaries, with estimates for the Strathclyde Pension Fund being based on the latest valuation of the scheme as at 31 March 2024. The principal assumptions used by the actuary were: 2023/24 2022/23 Years Years Mortality Assumptions: Longevity at 65 for current pensioners Male 21.1 19.3 Female 23.2 22.2 Longevity at 65 for future pensioners Male 22.6 20.5 Female 24.4 24.2 Financial Assumptions: % % Rate of inflation / pension increase rate 2.75 2.95 Rate of increase in salaries 3.45 3.65 Return on assets 9.90 (2.30) Rate for discounting scheme liabilities 4.85 4.75 Take up option to convert annual pension into retirement lump sum Pre April 2009 / (Post April 2009) 75(75) 50(75) The estimation of the defined benefit obligation is sensitive to the actuarial assumptions set out in the table above. The sensitivity analyses overleaf 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 assumptions analysed changes while all the other assumptions remain constant: 78
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41 Approximate % increase in employer’s liability Approximate monetary amount Change in assumption at 31 March 2024 £000 0.1% decrease in real discount rate 2% 437 1 year increase in member life expectancy 4% 928 0.1% increase in the salary increase rate 0% 38 0.1% increase in the pension increase rate 2% 406 Asset and Liability Matching Strategy The Fund has an asset and liability matching (ALM) strategy that matches, to the extent possible, the types of assets invested to the liabilities in the defined benefit obligation. The Fund has matched assets to the pension obligations by investing in long-term fixed interest securities and index linked gilt edged investments with maturities that match the benefits payments as they fall due. A large proportion of the assets relate to equities (78%) and bonds (12%). The scheme also invests in properties (8%) and cash (2%). The comparative year’s figures for equities and bonds are 78% and 12% respectively. The ALM strategy is monitored annually or more frequently if necessary. Impact on the Board’s Cash Flow The objectives of the fund are to keep employers’ contributions at a constant a rate as possible. The Fund has an agreed strategy to achieve a funding rate of 100% in the longer term. The Scheme is a multi-employer defined benefit plan and employers’ contributions have been determined so that employee and employer rates are standard across all participating local authorities. Employers’ contributions were set at 19.3% for 2023/2024 based on the last triennial valuation completed on 31 March 2020. Following completion of the triennial valuation as at 31 March 2023, employers’ contribution rates have been set at 6.5% for the next year (2024/2025). The total contributions expected to be made by the Board to the Fund for the year ending 31 March 2025 is approximately £0.137m. The weighted average duration of the defined benefit obligation for Fund members is 17 years. Note 17: External Audit Costs The Board has incurred the following external audit costs: 2023/24 2022/23 £000 £000 Fees payable to Audit Scotland with regard to external audit services carried out by the appointed auditor for the year 9 9 Total 9 9 Note 18: Grant Income The following Government Grants were received during the year: 2023/24 2022/23 £000 £000 Scottish Government Grant – Barclay Funding 698 698 Total 698 698 79
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42 Note 19: Balance Sheet – Reserves Unusable Reserves 2023/24 2022/23 Capital Adjustment Account Pension Reserve Employee Statutory Adj. Account Total Capital Adjustment Account Pension Reserve Employee Statutory Adj. Account Total £000 £000 £000 £000 £000 £000 £000 £000 Opening Balance 1 April 135 (207) (74) (146) 156 1,273 (90) 1,339 Movement in Pension Reserve - (286) - (286) - (1,480) - (1,480) Movement in Annual Leave Accrual - - 4 4 - - 16 16 Capital Expenditure charged against the General Fund - - - - - - - - Charges for Depreciation of Non Current Assets (22) - - (22) (21) - - (21) Amortisation of Intangible Assets - - - - - - - - Closing Balance as at 31 March 113 (493) (70) (450) 135 (207) (74) (146) Usable Reserves 2023/24 2022/23 General Fund Reserve Total General Fund Reserve Total £000 £000 £000 £000 Opening Balance 1 April 1,721 1,721 1,479 1,479 Increase / (Decrease) in Reserve 254 254 242 242 Closing Balance as at 31 March 1,975 1,975 1,721 1,721 Note 20: Financing and Management of Liquid Resources Liquid resources are held by South Lanarkshire Council as lead authority and are available to the Board as required. 80
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43 Note 21: Comprehensive Income and Expenditure Statement – financing and investment income and expenditure 2023/24 2022/23 £000 £000 Pension Interest Cost and Expected Return on Pensions Assets 8 (28) Total 8 (28) Note 22: Going Concern As at 31 March 2024, the Balance Sheet of the Board shows a Net Asset position of £1.525m. There are statutory arrangements for funding the long-term deficit in respect of the net pension liability and the statutory accumulated absences, as detailed in the Movement in Reserves Statement on page 24, leaving a General Fund Reserve of £1.975m to be carried forward for use in future years. This will be taken into account in future years’ budget strategies. 81
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44 Independent auditor’s report to the members of Lanarkshire Valuation Joint Board and the Accounts Commission Reporting on the audit of the financial statements Opinion on financial statements I certify that I have audited the financial statements in the annual accounts of Lanarkshire Valuation Joint Board for the year ended 31 March 2024 under Part VII of the Local Government (Scotland) Act 1973. The financial statements comprise the Comprehensive Income and Expenditure Statement, Balance Sheet, Movement in Reserves Statement, Cash Flow Statement, and notes to the financial statements, including material accounting policy information. The financial reporting framework that has been applied in their preparation is applicable law and UK adopted international accounting standards, as interpreted and adapted by the Code of Practice on Local Authority Accounting in the United Kingdom 2023/24 (the 2023/24 Code). In my opinion the accompanying financial statements: • give a true and fair view of the state of affairs of the Lanarkshire Valuation Joint Board as at 31 March 2024 and of its income and expenditure for the year then ended; • have been properly prepared in accordance with UK adopted international accounting standards, as interpreted and adapted by the 2023/24 Code; and • have been prepared in accordance with the requirements of the Local Government (Scotland) Act 1973, The Local Authority Accounts (Scotland) Regulations 2014, and the Local Government in Scotland Act 2003. Basis for opinion I conducted my audit in accordance with applicable law and International Standards on Auditing (UK) (ISAs (UK)), as required by the Code of Audit Practice approved by the Accounts Commission for Scotland. My responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of my report. I was appointed by the Accounts Commission on 16 March 2023. My period of appointment is five years, covering 2022/23 to 2026/27. I am independent of the Lanarkshire Valuation Joint Board in accordance with the ethical requirements that are relevant to my audit of the financial statements in the UK including the Financial Reporting Council’s Ethical Standard, and I have fulfilled my other ethical responsibilities in accordance with these requirements. Non-audit services prohibited by the Ethical Standard were not provided to the Lanarkshire Valuation Joint Board. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion. Conclusions relating to going concern basis of accounting I have concluded that the use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Based on the work I have performed, I have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Lanarkshire Valuation Joint Board’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from when the financial statements are authorised for issue. These conclusions are not intended to, nor do they, provide assurance on the Lanarkshire Valuation Joint Board’s current or future financial sustainability. However, I report on the Lanarkshire Valuation Joint Board’s arrangements for financial sustainability in a separate Annual Audit Report available from the Audit Scotland website. 82
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45 Risks of material misstatement I report in my Annual Audit Report the most significant assessed risks of material misstatement that I identified and my judgements thereon. Responsibilities of the Treasurer and Lanarkshire Valuation Joint Board for the financial statements As explained more fully in the Statement of Responsibilities, the Treasurer is responsible for the preparation of financial statements that give a true and fair view in accordance with the financial reporting framework, and for such internal control as the Treasurer determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Treasurer is responsible for assessing the Lanarkshire Valuation Joint Board’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless there is an intention to discontinue the Lanarkshire Valuation Joint Board’s operations. The Lanarkshire Valuation Joint Board is responsible for overseeing the financial reporting process. Auditor’s responsibilities for the audit of the financial statements My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the decisions of users taken on the basis of these financial statements. Irregularities, including fraud, are instances of non-compliance with laws and regulations. I design procedures in line with my responsibilities outlined above to detect material misstatements in respect of irregularities, including fraud. Procedures include: • using my understanding of the local government sector to identify that the Local Government (Scotland) Act 1973, The Local Authority Accounts (Scotland) Regulations 2014, and the Local Government in Scotland Act 2003 are significant in the context of the Lanarkshire Valuation Joint Board; • inquiring of the Treasurer as to other laws or regulations that may be expected to have a fundamental effect on the operations of the Lanarkshire Valuation Joint Board; • inquiring of the Treasurer concerning the Lanarkshire Valuation Joint Board’s policies and procedures regarding compliance with the applicable legal and regulatory framework; • discussions among my audit team on the susceptibility of the financial statements to material misstatement, including how fraud might occur; and • considering whether the audit team collectively has the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations. The extent to which my procedures are capable of detecting irregularities, including fraud, is affected by the inherent difficulty in detecting irregularities, the effectiveness of the Lanarkshire Valuation Joint Board’s controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud are inherently more difficult to detect than irregularities that result from error as fraud may involve collusion, intentional omissions, misrepresentations, or the override 83
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46 of internal control. The capability of the audit to detect fraud and other irregularities depends on factors such as the skillfulness of the perpetrator, the frequency and extent of manipulation, the degree of collusion involved, the relative size of individual amounts manipulated, and the seniority of those individuals involved. A further description of the auditor’s responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website www.frc.org.uk/auditorsresponsibilities. This description forms part of my auditor’s report. Reporting on other requirements Opinion prescribed by the Accounts Commission on the audited parts of the Remuneration Report I have audited the parts of the Remuneration Report described as audited. In my opinion, the audited parts of the Remuneration Report have been properly prepared in accordance with The Local Authority Accounts (Scotland) Regulations 2014. Other information The Treasurer is responsible for the other information in the annual accounts. The other information comprises the Management Commentary, Annual Governance Statement, Statement of Responsibilities and the unaudited part of the Remuneration Report. My responsibility is to read all the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or my knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If I identify such material inconsistencies or apparent material misstatements, I am required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work I have performed, I conclude that there is a material misstatement of this other information, I am required to report that fact. I have nothing to report in this regard. My opinion on the financial statements does not cover the other information and I do not express any form of assurance conclusion thereon except on the Management Commentary and Annual Governance Statement to the extent explicitly stated in the following opinions prescribed by the Accounts Commission. Opinions prescribed by the Accounts Commission on the Management Commentary and Annual Governance Statement In my opinion, based on the work undertaken in the course of the audit: • the information given in the Management Commentary for the financial year for which the financial statements are prepared is consistent with the financial statements and that report has been prepared in accordance with statutory guidance issued under the Local Government in Scotland Act 2003; and • the information given in the Annual Governance Statement for the financial year for which the financial statements are prepared is consistent with the financial statements and that report has been prepared in accordance with the Delivering Good Governance in Local Government: Framework (2016). Matters on which I am required to report by exception I am required by the Accounts Commission to report to you if, in my opinion: • adequate accounting records have not been kept; or 84
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47 • the financial statements and the audited parts of the Remuneration Report are not in agreement with the accounting records; or • I have not received all the information and explanations I require for my audit. I have nothing to report in respect of these matters. Conclusions on wider scope responsibilities In addition to my responsibilities for the annual accounts, my conclusions on the wider scope responsibilities specified in the Code of Audit Practice, including those in respect of Best Value, are set out in my Annual Audit Report. Use of my report This report is made solely to the parties to whom it is addressed in accordance with Part VII of the Local Government (Scotland) Act 1973 and for no other purpose. In accordance with paragraph 108 of the Code of Audit Practice, I do not undertake to have responsibilities to members or officers, in their individual capacities, or to third parties. Pauline Murray Audit Scotland 4th Floor 102 West Port Edinburgh EH3 9DN 85
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Report Agenda Item Report to: Lanarkshire Valuation Joint Board Date of Meeting: 2 December 2024 Report by: Treasurer to Lanarkshire Valuation Joint Board Subject: Revenue Budget 2025/2026 – Lanarkshire Valuation Joint Board 1. Purpose of Report 1.1. The purpose of the report is to:- [purpose] advise members of the draft budget for the coming financial year (2025/2026) [1purpose] 2. Recommendation(s) 2.1. The Board is asked to approve the following recommendation(s):- [recs] (1) that the budget strategy resulting in the budget of £4.064 million being set for 2025/2026, summarised in Appendix 1, be approved; and (2) that the updated Reserves position, detailed in Table 2, be noted. [1recs] 3. Background 3.1. A Financial Strategy for 2023/2024 to 2025/2026 was approved by the Board on 27 June 2022 and was updated in December 2023 to reflect changes in assumptions for the pay award and the transfer of the Valuation Appeal Panel to the Scottish Courts Service. This report set out a position for 2025/2026. This paper will take the opportunity to review these assumptions and formally propose the Board’s Revenue Budget for 2025/2026. 3.2. In relation to the Board’s Budget Strategy, the workload across all three key business areas of the Board (Non-Domestic Valuation, Council Tax Valuation and Electoral Registration) means that ways of maintaining service delivery and compliance with statutory duties of the Assessor and Electoral Registration Officer, continue to be reviewed and are reflected in the proposals in this paper. 3.3. Following the 2024/2025 probable outturn exercise, also presented to this meeting, a balance of £0.414 million is anticipated to be transferred to Reserves at the end of this financial year. This will be added to the Reserves carried forward from the previous financial year (£1.975 million, reported to the Board in June 2024) and will mean a balance on Reserves of £2.389 million for use in 2025/2026 and beyond. In the main, this significant Reserves balance reflects underspends in employee costs due to difficulties in recruitment and retention of staff across recent years. This paper provides an update on the Budget Strategy last reported to the Board in December 2023. 3.4. Section 4 provides a reminder of the 2025/2026 Budget Strategy approved as part of the Medium-Term Financial Strategy, and an update on the assumptions used including a proposed temporary reduction in requisition for 2025/2026. 6 87
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3.5. Section 5 outlines the level of Reserves available for 2025/2026 and beyond. 4. 2025/2026 Budget Assumptions 4.1. The Board’s Financial Strategy (June 2022) was updated as part of the Budget process for 2024/2025 (December 2023). The December 2023 paper also set out a draft position for 2025/2026 which included the use of £0.471 million of Reserves. This was based on the continuation of the 2024/2025 Budget assumptions:- that the Employee Cost Budget reflects the progression of staff through pay grades, in line with agreed pay structures that price increases, pay awards and an estimated 1% reduction in council contributions are managed by efficiencies generated by the Board in each year that the budget includes a staff turnover target of 4% per annum that the pay award is budgeted for 2024/2025 and beyond, and was noted as an area of risk (refer 4.2) that the Barclay funding is assumed at the same level as 2024/2025, as no information is known beyond that year that this position may be affected by further in-year underspends that have not yet been foreseen 2025/2026 Updated Assumptions 4.2. Employee Costs including Pay Award (2024/2025 and 2025/2026): Since this Strategy was approved, the pay award for 2024/2025 has been confirmed at a level higher than budgeted. The increased Pay Award has been managed through underspends in-year, however, this will need to be addressed in the Budget for 2025/2026. The budget proposed includes the higher level for 2024/2025 and an assumed level for 2025/2026 (a requirement of £0.079 million into 2025/2026). As noted above, the draft Budget assumes that the Pay Award is funded by efficiencies and turnover therefore having no impact on the Budget overall. The Budget proposed in Appendix 1 assumes the costs for a full establishment for the full year but reflects a higher turnover rate of 5%, to reflect recent experience in recruitment and retention of staff. The net increase in the employee cost budget remains at £0.023 million in line with the December 2023 position. 4.3. Pension Contributions: In September 2023, councils were informed that the valuation of Strathclyde Pension Fund resulted in the reduction of Employer Pension Contributions from their current levels. Instead of the current contribution of 19.3%, there was a reduction in the contribution rates to 6.5% for 2024/2025 and 2025/2026, rising back up to 17.5% in 2026/2027. 4.4. The financial impact of this is a second year of reduced spend in 2025/2026 (£0.320 million) – no change from the position in 2024/2025. The proposed Budget for 2025/2026 reflects this second year of reduced budget required and also the second year of reduction in council requisitions. There is therefore no year-on-year change in requisitions as a result of this. This position will be revisited into 2026/2027 where the permanent saving is anticipated at £0.040 million, rather than the £0.320 million experienced in 2024/2025 and 2025/206. Council requisitions may need to increase to reinstate the higher budget level required. 4.5. 2025/2026 Budget: The impact of the 2024/2025 Pay Award (confirmed), the 2025/2026 Pay Award (assumed), and the reduced Pension Contributions for 2025/2026 is included in Appendix 1 as a proposed Budget for 2025/2026. This revises the expenditure budget for 2025/2026 to £4.064 million. 88
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4.6. Council Requisitions: The assumptions in section 4.1 note that council requisitions should be reduced by 1% and covered by efficiencies in Board expenditure. This equates to a year-on-year reduction in the requisition of £0.018 million for each council (£0.036 million in total). Since this Strategy was drafted, there has been an underspend in the Board’s position at the year-end for 2023/2024, and an anticipated underspend in the Probable Outturn for 2024/2025. This means that the Reserves position of the Board is significantly higher than previously provided to Board Members (in December 2023). 4.7. As a result, it is proposed that consideration be given to the level of requisitions paid by both councils in 2025/2026. This is covered in detail in Section 5. 5. Reserves 5.1. The Board’s Strategy in December 2023 included the position across the Board’s Reserves. This is shown in Table 1 and shows that the Board anticipated a balance of Reserves of £0.970 million at the end of 2025/2026. This took account of the Transfer to Reserves expected in 2023/2024 (£0.120m) and the assumed Use of Reserves into 2024/2025 (£0.400m). Table 1 – Reserves Forecast and Strategy – December 2023 2022/23 (year 0) £m 2023/24 (year 1) £m 2024/25 (year 2) £m 2025/26 (year 3) £m Opening Balance 1.479 1.721 1.841 1.441 Proposed Utilisation of Reserves 0.242 0.120 (0.400) (0.471) Closing Balance 1.721 1.841 1.441 0.970 5.2. Given the favourable 2023/2024 Year-End position (section 3.3), as well as the underspend in the 2024/2025 Probable Outturn detailed in the report also presented to this meeting of the Board (section 3.3), the Reserves position in Table 1 needs to be updated to reflect these additional Reserves. 5.3. Table 2 updates the impact on Reserves. It shows that by applying the principles noted in 4.1, the revised assumptions (from section 4.2 onwards) and the updated position on Reserves, the Board would now have a balance of £1.918 million at the end of 2025/2026. This is significantly higher than the level of reserves anticipated at the end of 2025/2026 noted in last year’s Budget Strategy (£0.970m in Table 1). 5.4. On that basis, it is proposed that a further use of Reserves is proposed, allowing a temporary reduction in both councils’ requisition payments of £0.529 million in 2025/2026. The use of a further £0.529 million of Reserves would mean the total use of Reserves would be £1.000 million (the original £0.471 million plus the additional £0.529 million detailed in Table 2). Even after the proposed 1-year reduction, this still represents a significant Reserves balance at the end of 2025/2026 of £1.389 million. 5.5. The proposed use of £1.000 million of Reserves in total is an increase of £0.600 million from that budgeted for 2024/2025. This results in a temporary reduction in councils’ requisition payments of £0.529 million in 2025/2026. The reinstatement of the £0.529 million temporary reduction in requisitions will be considered as part of the next 3-year Budget Strategy commencing in 2026/2027. 89
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Table 2 – Reserves Forecast and Strategy – Revised December 2024 2022/23 (year 0) £m 2023/24 (year 1) £m 2024/25 (year 2) £m 2025/26 (year 3) £m Opening Balance 1.479 1.721 1.975 2.389 Proposed Utilisation of Reserves 0.242 0.254 0.414 (0.471) Closing Balance 1.721 1.975 2.389 1.918 Additional Use of Reserves (s5.4) - - - (0.529) Revised Closing Balance 1.721 1.975 2.389 1.389 5.6. It is considered appropriate to hold this level of Reserve due to the risk that funding for Barclay may not be recurring and there is the potential that beyond 2025/2026, the Board will require to cover the risk of the Barclay funding being reduced or removed (for context, £0.718 million of Barclay funding was received in 2024/2025). The £1.389 million balance of Reserves is considered appropriate to mitigate this risk and manage any reduction in budget into 2026/2027. The reinstatement of the £0.529 million temporary reduction in requisitions will be considered as part of the next 3-year Budget Strategy commencing in 2026/2027. This will also take cognisance of any information regarding the continuation of Barclay funding. 5.7. In 2025/2026, there is a reliance on Reserves of (£1.000 million) when balancing the budget. As advised to the Board in June 2022, we will undertake a review of this balance and its role in the Board’s financial resilience during the last year of the Strategy (2025/2026). This will be presented to the Board in June 2025, after the year-end position for 2024/2025 is known. 5.8. There is no prescribed minimum or maximum level of Reserves which should be held by a Joint Board. However, it is appropriate that the Board hold some monies in reserve which can be utilised as and when the need arises in any financial year. To facilitate this, notwithstanding the position as detailed in Table 2 / Appendix 1, any underspends which may arise in year, will be transferred to Reserves at the end of the financial year. This gives the Board flexibility in managing its budget across years. 5.9. As a body that is predominantly funded by contributions from councils under the direction of the Board, the Board will manage its budget in year with any risk items identified to the Treasurer as required. Any budget pressures and funding solution would be considered by the Assessor and Electoral Registration Officer and the Treasurer. 6. Employee Implications 6.1. There are no direct employee implications contained within this report. 7. Financial Implications 7.1. The proposed 2025/2026 Revenue Budget for the Valuation Board is £4.064 million. 7.2. This budget assumes a permanent reduction in requisitions of £0.036 million (£0.018 million per Council) covered by efficiencies in Board expenditure as outlined in section 4.6. 7.3. The Budget also assumes a further temporary reduction in requisitions of £0.529 million (£0.264 million per Council) outlined in sections 5.4 and 5.5. The reinstatement of the £0.529 million temporary reduction in requisitions will be considered as part of the Board’s next 3-year Budget Strategy commencing in 90
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2026/2027 and could mean an increase in the council requisitions into 2026/2027. This will be considered as part of the Board’s 2026/2027 Budget and Medium-Term Strategy (due to Members in June). 7.4. The budget is based on the use of £1.000 million from Reserves for 2025/2026. This is a year-on-year increase of £0.600 million in the use of Reserves and a further £0.529 million over and above the £0.471 million originally anticipated for 2025/2026 (as per the December 2023 paper, and Table 1). 7.5. The Reserves balance is expected to be £2.389 million at the end of 2024/2025, as detailed in the Revenue Budget Monitoring and Probable Outturn Position 2024/2025 report, also presented to this meeting (shown in Table 2). Assuming the £1.000 million use of reserves proposed in section 5.4 leaves an anticipated Reserves balance of £1.389 million at the end of 2025/2026. 7.6. This proposed Budget assumes a continuation of the temporary reduction in requisitions for reduced pension contributions of £0.320 million from 2024/2025 (section 4.4). The reinstatement of this will require to be considered as part of the 2026/2027 Budget and Medium-Term Strategy (due to Members in June 2025). 8. Climate Change, Sustainability and Environmental Implications 8.1. There are no climate change, sustainability or environmental implications in terms of the information contained in this report. 9. Other Implications 9.1. The main risk in setting this budget is that there is no additional Barclay funding and that the level of expenditure cannot be managed within the budget set. On behalf of the Board, the Treasurer continues to have dialogue with the Scottish Government via COSLA, to confirm funding and spend expectations. 9.2. An additional risk associated with the Valuation Board’s Revenue Budget into 2026/2026 is an overspend as a result of the increased workload across the three main service delivery areas. The risk is managed through four weekly Budget Monitoring Meetings at which any variance is analysed. In addition, the probable outturn exercise ensures early warning for corrective action to be taken where appropriate. 10. Integrated Impact Assessment and Consultation Arrangements 10.1. This report does not introduce a new policy, function or strategy or recommend a change to an existing policy, function or strategy and, therefore, no impact assessment is required. 10.2. There is also no requirement to undertake any consultation in terms of the information contained in the report. Jackie Taylor Treasurer 18 November 2024 91
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Previous References Revenue Budget 2024/2025 – Lanarkshire Valuation Joint Board – 4 December 2023 Financial Strategy 2023/2024 to 2025/2026 – Lanarkshire Valuation Joint Board – 27 June 2022 List of Background Papers None Contact for Further Information If you would like to inspect the background papers or want further information, please contact:- Graham Booth, Finance Manager (Strategy) Ext: 2699 (Tel: 01698 452699) E-mail: graham.booth@southlanarkshire.gov.uk 92
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Appendix 1 Lanarkshire Valuation Joint Board Revenue Budget 2025/2026 Description 2024/2025 Base Budget £m 2025/2026 Required Budget £m Budget Movement (Inc) / Dec £m Employee Costs 3.004 3.027 (0.023) Property Costs 0.202 0.208 (0.006) Supplies and Services 0.159 0.159 - Transport and Plant 0.005 0.005 - Administration Costs 0.632 0.638 (0.006) Payments to Other Bodies 0.031 0.031 - Financing Charges 0.013 0.014 (0.001) Gross Expenditure 4.046 4.082 (0.036) Income (0.018) (0.018) - Net Expenditure 4.028 4.064 (0.036) Net Expenditure Budget Funded by: Requisition from North Lanarkshire Council * 1.814 1.532 0.282 Requisition from South Lanarkshire Council * 1.814 1.532 0.282 Use of Monies held in Balance Sheet (c/f from previous years) 0.400 1.000 (0.600) Total Funding 4.028 4.064 (0.036) * This reflects the assumed reduction of £0.018m per council to reflect efficiencies being made by the Board (section 4.6), as well as a temporary net reduction in requisition payments of £0.264m per Council facilitated by the use of reserves (sections 5.4 and 5.5). The requisition payments also reflect the temporary reduction due to lower Pension Contribution Payments (£0.320m). The requisition levels will be considered as part of the 2026/2027 Budget / Medium-Term Strategy in June 2025. 93
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Report Agenda Item Report to: Lanarkshire Valuation Joint Board Date of Meeting: 2 December 2024 Report by: Clerk to Lanarkshire Valuation Joint Board Subject: Change in Membership of the Board 1. Purpose of Report 1.1. The purpose of the report is to:- [purpose] advise members of a change to North Lanarkshire Council’s membership of the Lanarkshire Valuation Joint Board [1purpose] 2. Recommendation(s) 2.1. The Board is asked to approve the following recommendation(s):- [recs] (1) to note that Councillor James McPhilemy has replaced Councillor Kenneth Duffy as a North Lanarkshire Council member of the Lanarkshire Valuation Joint Board. [1recs] 3. Background 3.1. At the meeting of North Lanarkshire Council held on 11 October 2024, it was agreed that Councillor James McPhilemy replace Councillor Kenneth Duffy as a member of the Lanarkshire Valuation Joint Board. The change in membership was effective immediately. 4. Employee Implications 4.1. None. 5. Financial Implications 5.1. None. 6. Climate Change, Sustainability and Environmental Implications 6.1. There are no climate change, sustainability or environmental implications in terms of the information contained in this report. 7. Other Implications 7.1. There are no implications for risk in terms of the information contained in this report. 8. Equality Impact Assessment and Consultation Arrangements 8.1. This report does not introduce a new policy, function or strategy or recommend a change to an existing policy, function or strategy and, therefore, no impact assessment is required. 8.2. There was no requirement for consultation in terms of the information contained in this report. 7 95
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Paul Manning Clerk to the Board 14 November 2024 Previous References None List of Background Papers Report to North Lanarkshire Council held on 11 October 2024 Contact for Further Information If you would like to inspect the background papers or want further information, please contact:- Stuart McLeod, Administration Officer Ext: 4815 (Tel: 01698 454815 / 07385 370 117) E-mail: stuart.mcleod@southlanarkshire.gov.uk 96
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h??1 June Report Agenda Item Report to: Lanarkshire Valuation Joint Board Date of Meeting: 2 December 2024 Report by: Assessor and Electoral Registration Officer Subject: Progress Update 1. Purpose of Report 1.1. The purpose of the report is to:- provide an overview of the service to members outline current issues and service priorities provide an update on performance highlight issues affecting the future direction of the Joint Board 2. Recommendation(s) 2.1. The Board is asked to approve the following recommendation(s):- (1) that the content of the report be noted. 3. Service Overview and Priorities 3.1. Electoral Registration 3.1.1. Annual Canvass The work on the annual canvass started shortly after the General Election and now the last of the door-to-door canvassers have returned their paperwork. 7,515 E- communications were issued on 23 September 2024 and just over 4,000 properties were contacted by telephone canvass. In addition, around 37,000 properties were contacted by a personal visit from a canvasser to encourage a response to the canvass form. This exercise has just been completed. After all the strands of the canvass have been collated the revised register of electors will be published on 1 February 2025 to include the ‘Review of Polling Districts and Polling Places’ currently being conducted by the Returning Officers in both North and South Lanarkshire Councils. 3.1.2. Boundary Reviews The consultation on further proposals for the Scottish Parliament constituency boundaries and provisional proposals for regions was undertaken, this had a closing date of 26 October 2024. Boundaries Scotland will now submit their final recommendations to Scottish Ministers by 1 May 2025. If subsequently approved by the Scottish Parliament, the new boundaries will be effective at the next Scottish Parliament election, which is expected in May 2026. 8 97
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3.1.3. Elections Act 2022 All measures have now been implemented as a result of the Elections Act 2022. The UK Government (MHCLG) continue to improve the ERO Portal after feedback from stakeholders and various post-election reviews. The Scottish Assessor’s Association have been working with partners at the Electoral Commission and with their own electoral management system providers to ensure that the user journey is as simple and as informative as possible. 3.1.4. Elections Held Since Last Board Meeting Since the last board meeting 2 by-elections have been held on 10 October 2024 in the North Lanarkshire area:- Ward 13 Fortissat Ward 16 Mossend and Holytown Both by-elections were run successfully with no issues reported. 3.2. Non-Domestic Valuation A summary of information in this area can be found in Appendices 1.1 to 1.6. 3.2.1. Changes to the 2023 Valuation Roll (Running Roll) These are highlighted in Appendices 1.1 and 1.2 for the period 1 April 2024 to 1 November 2024. 3.2.2. 2005 Valuation Roll Appeals (Revaluation and Running Roll) A summary of the position with 2005 Revaluation and Running Roll appeals is contained in Appendix 1.3. The outstanding appeals from this revaluation period relate to telecommunication subjects. Although these don’t fall under the designated regime, Renfrewshire Valuation Joint Board (RVJB) as a courtesy deal with these. 3.2.3. 2010 Valuation Roll Appeals (Revaluation and Running Roll) As in previous progress update reports, for completeness a summary of the position with regard to the 2010 Revaluation and Running Roll appeals is contained in Appendix 1.4. It should be noted that all appeals relevant to the 2010 Revaluation period have been settled. 3.2.4. 2017 Valuation Roll Appeals (Revaluation and Running Roll) A summary of the position with regards to 2017 Revaluation and Running Roll appeals is contained in Appendix 1.5. Table 2 continues to include the large numbers of appeals that were received in connection with the coronavirus pandemic, the disposal date for these appeals being 31 December 2024. The Local Taxation Chamber of the Scottish Courts and Tribunals Service with whom the outstanding appeals sit, issued over 20,000 dismissal letters throughout Scotland, around 2,300 being issued for appeals transferred by Lanarkshire Valuation Joint Board. A few hundred of these transferred appeals have, over the last few months, been listed for hearing, currently there remains 47 appeals listed over 5 separate hearing dates, the latest being 27 December 2024. As the First-tier Tribunal has not, as yet, provided a definitive list of transferred appeals that they have now dismissed as withdrawn, the tables at Appendix 1.5 cannot be accurately updated. However, as both parties to any appeal require to be 98
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given 70 days’ notice of a hearing, it has to be assumed that all outstanding appeals have now been either dismissed as withdrawn or are one of the 47 appeals currently listed for hearing on the Local Taxation Chamber website:- www.localtaxationchamber.scot/hearings The valuation staff have continued to tirelessly engage with ratepayers or their professional agents, with regard to these outstanding appeals to ensure that they are disposed of in an efficient manner. 3.2.5. 2023 Valuation Roll Proposals (Revaluation and Running Roll) Appendix 1.6, Table 1 shows the number of 2023 Revaluation proposals received by the final date to lodge such an appeal, 31 August 2023, as 1,406. To ensure that they are disposed of by the statutory deadline of 30 September 2025 proposals are allocated a “proposal determination date” (PDD); the date by which the Assessor’s staff must issue a written decision to the proposer. Following this part of the process any dissatisfied proposer has the opportunity to lodge a formal appeal with the First-tier Tribunal. To date we have disposed of just over 50% of the 2023 Revaluation proposals that we received and received just 1 appeal. 3.3. Council Tax A summary of information in this area can be found in Appendices 2.1 to 2.4. 3.3.1. New Houses A summary of the position for the period 1 April 2024 to 1 November 2024 is contained at Appendix 2.2. 3.3.2. Proposals and Appeals Appendices 2.3 and 2.4 contain information on the outstanding Council Tax proposals and appeals. 4. Staffing 4.1. Since the last Board meeting the following recruitment and selection processes have been undertaken: In terms of departures and arrivals, we have had 2 members of staff resign and a new secretary take up their position. Adverts for a number of posts including trainee technicians, technicians, valuers, principal valuers and divisional valuers have been posted to the My job Scotland website, with a very poor response. In order to proactively deal with the extra work that has been identified in the valuation sections, the management team have agreed to redeploy, on a temporary basis, a number of the clerical staff from their current electoral registration roles. The staff will amongst other duties, assist the valuers with regards to the issue and logging of Assessors Information Notices (AIN’s), it is hoped that this will in turn allow the valuation staff to concentrate on the efficient disposal of proposals and legacy appeals. 4.2. Staff absence levels for the last year are summarised in Appendix 3.1. 99
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5. Other Matters 5.1. Complaints Received and Dealt with Since Last Progress Update Report Since the last update provided to the Board, there have been 3 complaints received by the organisation: Service Area Nature of Complaint Outcome Electoral Registration (ref: 2024/25 19) Ballot paper rejected, requested documentation used for validation purposes. Confirmed by letter that the elector had used the wrong date of birth on the correspondence. Electoral Registration (ref: 2024/25 20) Postal ballot paper could not be returned from overseas in time to be counted. In addition, there was an error deciphering the address overseas. Confirmed by letter that the correct address held and that the ballot paper was issued to this address, confusion arose as a result of handwriting which had been corrected. Apology issued for misinterpretation of address. Explained ERO duties and RO duties, confirmed queries relating to issuing and returning postal ballot packs are forwarded to RO. Electoral Registration (ref: 2024/25 21) Overseas elector wished to have their name reinstated to allow them to vote. Confirmed by letter, declaration had expired, 2 reminders were issued to the correct email address which included the relevant form to renew the declaration, but elector missed both reminders and declaration expired. Option to reapply as an overseas elector, links to declaration, postal and proxy applications included in the response. 5.2. Complaints to the Ombudsman No decisions have been received from the Scottish Public Services Ombudsman (SPSO) since the last meeting of the Board. 6. Employee Implications 6.1. See 4 above. 7. Financial Implications 7.1. No implications. 100
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8. Climate Change, Sustainability and Environmental Implications 8.1. There are no climate change, sustainability, or environmental implications in terms of the information contained in this report. 9. Other Implications 9.1. There are no implications for risk in terms of the information contained in this report. 10. Equality Assessment and Consultation Arrangements 10.1. This report does not introduce a new policy, function or strategy or recommend a change to an existing policy, function, or strategy and, therefore, no impact assessment is required. 10.2. There is no requirement for consultation in respect of this report. 11. Privacy Impact Assessment 11.1. This report does not introduce a new policy, function or strategy or recommend a change to an existing policy, function or strategy and, therefore, no impact assessment is required. Christine Maxwell BSc MRICS Assessor and Electoral Registration Officer 14 November 2024 Previous References Progress Update Report for Board meeting of 2 September 2024 List of Background Papers None Contact for Further Information If you require further information, please contact: - Christine Maxwell, Assessor and Electoral Registration Officer Phone: 01698 476078 E-mail: assessor@lanarkshire-vjb.gov.uk 101
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Alterations made to the Valuation Roll (including appeal adjustments) between 01/04/2024 and 01/11/2024 Area AS AT 01/04/2024 ADDED DELETED ALTERED AS AT 01/11/2024 SUBJECTS RV SUBJECTS RV SUBJECTS RV SUBJECTS RV SUBJECTS RV North Lanarkshire 11,359 308,428,575 173 1,376,555 85 752,370 290 -1,990,620 11,448 307,062,140 South Lanarkshire 11,886 782,677,809 194 3,689,175 60 578,830 194 -4,259,110 12,020 781,529,044 LVJB total 23,245 £1,091,106,384 367 £5,065,730 145 £1,331,200 484 - £6,249,730 23,468 £1,088,591,184 Appendix 1.1 102
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Summary of time taken to make alterations (excluding appeal adjustments) to the Valuation Roll Period : 1 April 2024 to 1 November 2024 Area Total altered altered < 3 months altered 3 to 6 months altered > 6 months No. No. %age No. %age No. %age North Lanarkshire 327 112 34.25% 161 49.24% 54 16.51% South Lanarkshire 291 254 87.29% 20 6.87% 17 5.84% LVJB totals 618 366 60.77% 181 28.06% 71 11.18% Appendix 1.2 103
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Valuation Roll Appeals: Revaluation and Running Roll 2005 1. Revaluation Appeals Area Appeals received since 2005 Valuation Roll Appeals resolved as at 1 November 2024 Appeals heard but awaiting stated case for appeal to Lands Valuation Appeal Court (historic) Rateable Value of Appeals in process of appeal to LVAC (historic) Appeals outstanding awaiting determination of Upper Tribunal Rateable Value of Outstanding Appeals awaiting determination of Upper Tribunal Appeals Outstanding as at 1 November 2024 North Lanarkshire 3,921 3,920 0 £0 1 £18,000 1 South Lanarkshire 3,148 3,147 0 £0 1 £50,800 1 LVJB total 7,069 7,067 0 £0 2 £68,800 2 2. Running Roll Appeals Area Appeals received since 2005 Valuation Roll Appeals resolved as at 1 November 2024 Appeals heard but awaiting stated case for appeal to Lands Valuation Appeal Court (historic) Rateable Value of Appeals in process of appeal to LVAC (historic) Appeals outstanding awaiting determination of Upper Tribunal Rateable Value of Outstanding Appeals awaiting determination of Upper Tribunal Appeals Outstanding as at 1 November 2024 North Lanarkshire 2,023 2,022 0 £0 1 £36,500 1 South Lanarkshire 1,695 1,693 0 £0 2 £90,050 2 LVJB total 3,718 3,715 0 £0 3 £126,550 3 Appendix 1.3 104
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Valuation Roll Appeals: Revaluation and Running Roll 2010 1. Revaluation Appeals Area Appeals received since 2010 Valuation Roll Appeals resolved as at 1 November 2024 Appeals heard but awaiting stated case for appeal to Lands Valuation Appeal Court Rateable Value of Appeals in process of appeal to LVAC Appeals outstanding awaiting determination of Lands Tribunal for Scotland Rateable Value of Outstanding Appeals awaiting determination of LT Appeals Outstanding as at 1 November 2024 North Lanarkshire 4,460 4,460 0 £0 0 £0 0 South Lanarkshire 3,103 3,103 0 £0 0 £0 0 LVJB total 7,563 7,563 0 £0 0 £0 0 2. Running Roll Appeals Area Appeals received since 2010 Valuation Roll Appeals resolved as at 1 November 2024 Appeals heard but awaiting stated case for appeal to Lands Valuation Appeal Court Rateable Value of Appeals in process of appeal to LVAC Appeals outstanding awaiting determination of Lands Tribunal for Scotland Rateable Value of Outstanding Appeals awaiting determination of LT Appeals Outstanding as at 1 November 2024 North Lanarkshire 5,480 5,480 0 £0 0 £0 0 South Lanarkshire 6,727 6,727 0 £0 0 £0 0 LVJB total 12,207 12,207 0 £0 0 £0 0 Appendix 1.4 105
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Valuation Roll Appeals: Revaluation and Running Roll 2017 1. Revaluation Appeals Area Appeals received since 2017 Valuation Roll Appeals resolved as at 1 November 2024 Appeals heard but awaiting stated case for appeal to Lands Valuation Appeal Court (historic) Rateable Value of Appeals in process of appeal to LVAC (historic) Appeals outstanding awaiting determination of Upper Tribunal for Scotland Rateable Value of Outstanding Appeals awaiting determination of Upper Tribunal for Scotland Appeals Outstanding as at 1 November 2024 North Lanarkshire 4,726 4,717 0 £0 9 £2,681,850 9 South Lanarkshire 4,553 4,546 0 £0 7 £1,144,350 7 LVJB total 9,279 9,263 0 £0 16 £3,826,200 16 2. Running Roll Appeals Area Appeals received since 2017 Valuation Roll Appeals resolved as at 1 November 2024 Appeals heard but awaiting stated case for appeal to Lands Valuation Appeal Court (historic) Rateable Value of Appeals in process of appeal to LVAC (historic) Appeals outstanding awaiting determination of Local Taxation Chamber Rateable Value of Outstanding Appeals awaiting determination of Local Taxation Chamber Appeals Outstanding as at 1 November 2024 North Lanarkshire 4,672 3,730 0 £0 942 £69,292,250 942 South Lanarkshire 5,044 3,714 0 £0 1,330 £176,248,880 1,330 LVJB total 9,716 7,444 0 £0 2,272 £245,541,130 2,272 Appendix 1.5 106
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Valuation Roll Proposals/Appeals: Revaluation and Running Roll 2023 1. Revaluation Proposals Area Proposals received since 2023 Revaluation Proposals Determined by Assessor Proposals now Appealed to Local Taxation Chamber Rateable Value of appeals at Local Taxation Chamber Appeals awaiting determination at Upper Tribunal Rateable Value of Outstanding Appeals awaiting determination at Upper Tribunal Proposals / Appeals Outstanding as at 1 November 2024 North Lanarkshire 759 456 0 0 0 0 303 South Lanarkshire 647 293 0 0 0 0 354 LVJB total 1406 749 0 0 0 0 657 2. Running Roll Proposals Area Proposals received since 2023 Revaluation Proposals Determined by Assessor Proposals now Appealed to Local Taxation Chamber Rateable Value of appeals at Local Taxation Chamber Appeals awaiting determination at Upper Tribunal Rateable Value of Outstanding Appeals awaiting determination at Upper Tribunal Proposals / Appeals Outstanding as at 1 November 2024 North Lanarkshire 113 34 0 0 0 0 79 South Lanarkshire 114 65 0 0 0 0 49 LVJB total 227 99 0 0 0 0 128 Appendix 1.6 107
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Appendix 1.6 Council Tax Subjects as at 01/11/2024 ENTRIES AS AT 01/04/2024 ADDITIONS DELETIONS CURRENT ENTRIES BAND 'D' EQUIVALENT BAND NORTH SOUTH TOTAL NORTH SOUTH TOTAL NORTH SOUTH TOTAL NORTH SOUTH TOTAL NORTH SOUTH TOTAL A 52496 36093 88589 36 14 50 26 10 36 52506 36097 88603 35006 24066 59072 B 38086 30909 68995 54 17 71 2 3 5 38138 30923 69061 29664 24052 53716 C 20553 27105 47658 112 39 151 3 7 10 20662 27137 47799 18366 24122 42488 D 18337 22441 40778 209 170 379 4 3 7 18542 22608 41150 18542 22608 41150 E 17533 20938 38471 100 134 234 0 5 5 17633 21067 38700 23168 27680 50848 F 10508 14025 24533 138 189 327 3 4 7 10643 14210 24853 17295 23091 40386 G 3165 7174 10339 30 73 103 1 2 3 3194 7245 10439 6255 14188 20443 H 170 590 760 2 0 2 0 1 1 172 589 761 421 1443 1864 TOTAL 160848 159275 320123 681 636 1317 39 35 74 161490 159876 321366 148717 161250 309967 'D' EQIV. 147956 160434 308390 794 853 1647 32 38 70 148717 161250 309967 JOINT BOARD TOTALS 01/04/2024 01/11/2024 Increase TOTAL CHARGEABLE ENTRIES North 160848 161490 642 159275 159876 601 159618 343 Total 320123 321366 1243 BAND 'D' EQUIVALENT North 147956 148717 761 160434 161250 816 473 Total 308390 309967 1577 Appendix 2.1 108
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Summary of time taken to enter new houses in Valuation (Council Tax) List Period: 1 April 2024 to 1 November 2024 Area Total added added < 3 months added 3 to 6 months added > 6 months North Lanarkshire 681 605 88.84% 30 4.41% 46 6.75% South Lanarkshire 636 604 94.97% 8 1.26% 24 3.77% LVJB totals 1317 1209 91.90% 38 2.84% 70 5.26% Appendix 2.2 109
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Summary of Council Tax Proposals/Appeals Received and Dealt with as at 1 November 2024 Valid Proposals/Appeals outstanding @ 1 April 2024 Proposals/Appeals received since 1 April 2024 Proposals/Appeals completely resolved 01/04/2024 to 01/11/2024 North Lanarkshire 26 13 11 South Lanarkshire 35 51 34 LVJB total 61 64 45 Invalid Proposals/Appeals outstanding @ 1 April 2024 Proposals/Appeals received since 1 April 2024 Proposals/Appeals completely resolved 01/04/2024 to 01/11/2024 North Lanarkshire 26 40 34 South Lanarkshire 46 45 61 LVJB total 72 85 95 Combined Proposals/Appeals outstanding @ 1 April 2024 Proposals/Appeals received since 1 April 2024 Proposals/Appeals completely resolved 01/04/2024 to 01/11/2024 North Lanarkshire 52 53 45 South Lanarkshire 81 96 95 LVJB total 133 149 140 Appendix 2.3 110
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Summary of Resolution of Council Tax Proposals/Appeals Between 1 April 2024 and 1 November 2024 Valid Proposals/Appeals completely resolved 01/04/2024 to 01/11/2024 Number withdrawn Number abandoned Number adjusted Number dismissed by VAC/LTC Number adjusted by VAC North Lanarkshire 11 0 10 1 0 0 South Lanarkshire 34 14 15 2 3 0 LVJB total 45 14 25 3 3 0 Invalid Proposals/Appeals completely resolved 01/04/2024 to 01/11/2024 Number withdrawn Number abandoned Number adjusted Number dismissed by VAC/LTC Number adjusted by VAC North Lanarkshire 34 0 23 1 10 0 South Lanarkshire 61 3 58 0 0 0 LVJB total 95 3 81 1 10 0 Combined Proposals/Appeals completely resolved 01/04/2024 to 01/11/2024 Number withdrawn Number abandoned Number adjusted Number dismissed by VAC/LTC Number adjusted by VAC North Lanarkshire 45 0 33 2 10 0 South Lanarkshire 95 17 73 2 3 0 LVJB total 140 17 106 4 13 0 Appendix 2.4 111
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Appendix 3.1 ABSENCE MANAGEMENT STATISTICS Self-Certified Medically-Certified Unauthorised Total Total Month Absence No of Days Work days available No of Days % No of Days % No of Days % No of Days Work Days Avail % Month % November 2023 34 2.6% 63 4.9% Nil 0% 97 1293 7.5% November 2022 64 1378 4.6% December 2023 15 1.2% 118 9.6% Nil 0% 133 1226 10.8% December 2022 80 1384 5.8% January 2024 15 1.2% 139 10.7% Nil 0% 154 1301 11.8% January 2023 40 1369 2.9% February 2024 38 3.2% 133 11.3% Nil 0% 171 1174 14.6% February 2023 50 1226 4.1% March 2024 22 1.9% 111 9.5% Nil 0% 133 1166 11.4% March 2023 57 1397 4.1% April 2024 20 1.7% 191 15.% Nill 0% 211 1206 17.5% April 2023 36 1225 2.9% May 2024 13 1.0% 140 11.2 Nil 0% 153 1249 12.2% May 2023 32 1417 2.3% June 2024 10 0.9% 107 9.6% Nil 0% 117 1109 10.6% June 2023 30 1306 2.3% July 2024 9 0.7% 104 8.3% Nil 0% 113 1247 9.1% July 2023 24 1240 1.9% August 2024 15 1.3% 99 8.5% Nill 0% 114 1169 9.8% August 2023 32 1336 2.4% September 2024 8 0.7% 96 7.9% Nil 0% 104 1217 8.5% September 2023 38 1216 3.1% October 2024 0 0.0% 125 9.5% Nil 0% 125 1313 9.5% October 2023 68 1318 5.2% Averages for 12 months 17 1.4% 119 9.7% Nil 0% 111 1223 11.1% 46 1318 3.5% 112