Item 13 - Appendix 1
West Dunbartonshire Council · 31 August 2022
Back to West Dunbartonshire Council — 31 August 2022 and its agenda
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DRAFT ANNUAL ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2022
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 1 Table of Contents Page Page Management Commentary 2 Note 21 Impairment Losses 86 Note 22 87 Explanatory and Assurance Statements Statement of Responsibilities 23 Note 23 Debtors 88 Annual Governance Statement 24 Note 24 Common Good Fund 88 Remuneration Report 31 Note 25 Trust Funds 89 Note 26 Cash and Cash Equivalents 90 Principal Financial Statements - Single Entity Note 27 Financial Instruments 91 Comprehensive Income and Expenditure Statement 39 Note 28 Creditors 97 Movement in Reserves Statement 40 Note 29 97 Balance Sheet 41 Cash Flow Statement 42 Note 30 Other Reserves 98 Note 31 Contingent Assets and Liabilities 101 Notes to Single Entity Note 32 Financial Guarantee 102 Note 1 Accounting Policies 43 Note 2 55 Supplementary Financial Statements 103 Note 3 56 Housing Revenue Account Income and 104 Expenditure Statement Notes to the Housing Revenue Account Income and 105 Note 4 Accounting Standards that have been 58 Expenditure Statement issued but have not yet been adopted Council Tax Account 106 Note 5 Material Items of Income and Expense 59 Non Domestic Rates Account 107 Note 6 60 Principal Financial Statements - Group Note 7 Events After the Balance Sheet Date 64 Group Accounts 108 Note 8 Related Parties 64 Group Comprehensive Income and Expenditure 110 Note 9 Agency Services 68 Statement Note 10 Grant Income 69 Group Movement in Reserves Statement 111 Note 11 Operating Leases 70 Group Balance Sheet 112 Note 12 Termination Benefits 71 Group Cashflow Statement 113 Note 13 Defined Benefit Pension Schemes 71 Note 14 External Audit Costs 76 Notes to Group Note 15 Expenditure and Funding Analysis 76 Notes to the Group Accounts 114 Note 16 Property, Plant and Equipment 81 Note 17 Intangible Assets 84 Glossary Note 18 Assets Held for Sale 84 Glossary of Terms 119 Note 19 Heritage Assets 85 Note 20 86 Capital Expenditure and Capital Financing Private Finance Initiatives and Similar Contracts Assumptions Made About the Future and Other Major Sources of Estimation Uncertainty General Fund & HRA Reserves and Earmarked Balances Movement on the Housing Revenue Account Statement Critical Judgement in Applying Accounting Policies Adjustments between funding accounting basis and funding basis under regulations
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 2 Management Commentary 1. Introduction Welcome to the financial statements for West Dunbartonshire Council (the Council) and its group for the year ended 31 March 2022. The statements have been compiled in accordance with the Code of Practice on Local Authority Accounting in the United Kingdom (the Code). This Management Commentary will demonstrate the stewardship of public funds entrusted to the Council and outlines the key messages regarding the performance of the Council over the 2021/22 financial year as well as providing an indication of risks and issues which may impact upon the Council in the future. 2. Profile of West Dunbartonshire Council The Council is an average sized Council at around 71 square miles and has many strengths; including significant sites of natural beauty and heritage, good transport links and close proximity to Glasgow and its airport. The area has a rich past, shaped by its world-famous shipyards along the Clyde, and boasts many attractions ranging from the iconic Dumbarton Rock and the Titan Crane, to the beauty of Loch Lomond. The Council is responsible for providing a wide range of local authority services (including education, housing, environmental health, environmental services, planning, economic development, employment, highways and transport) to residents within the West Dunbartonshire area. The Council is led by 22 councillors, elected every five years to represent the residents within the area. Following the Local Government elections in May 2017, the Council had a minority SNP administration with Councillor Jonathan McColl as its Leader. The Local Government Elections in March 2022 returned a majority Labour administration and Councillor Martin Rooney was appointed as the new Council Leader.
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 3 Management Commentary During 2021/22 the senior management structure consists of the Chief Executive, eight Chief Officers, with the Integration Joint Board (referred to as Health and Social Care Partnership (HSCP)) managed at a senior level by a Chief Officer. In addition the Council retained 20% of the time of the former Strategic Director of Regeneration, Environment and Growth who, since October 2020 is seconded to the Glasgow City Region for a two year period. The Council also has: West Dunbartonshire Leisure Trust – an arms length organisation which operates certain services on the Council’s behalf a regeneration company called Clydebank Property Company West Dunbartonshire Energy Company which is an energy generation company 99.9% owned by the Council. In early 2022 Joyce White announced her intention to stand down as the Council’s Chief Executive and, in June 2022, Peter Hessett was appointed as the Council’s new Chief Executive. 3. The Strategic Plan, Vision and Priorities Nationally, the Scottish Government sets out its joint priorities and local authorities, in conjunction with community planning partners, agree a planned approach aligned to these through the Local Outcome Improvement Plan (LOIP). The Council’s LOIP, covering the period from 2017 to 2027, feeds through into our 2017-2022 Strategic Plan which sets out our commitment to improving outcomes in key areas to deliver on our vision that: West Dunbartonshire Council will deliver high quality services, led by priorities identified by the communities of West Dunbartonshire, in an open and transparent way The Strategic Plan identifies the following five priorities aligned to the Council’s vision: A strong local economy and improved job opportunities. Supporting individuals, families and carers living independently and with dignity. Meaningful engagement with active, empowered and informed citizens who feel safe and engaged. Open, accountable & accessible local government. Efficient and effective frontline services that improve the everyday lives of residents. To support delivery of the Strategic Plan and the Council’s strategic objectives each Chief Officer has developed Service Delivery Plans. These are refreshed annually and progress reported to relevant committees every six months. The HSCP also has a Strategic Plan which is linked to the Council’s and the LOIP. 4. Performance Reporting The Council monitors and reports its performance against these priorities through the Strategic Plan Scorecard (SPS); where planned performance targets are monitored through a suite of key performance indicators. Performance is reported to Council and Committees for scrutiny and identification of any required remedial action. The Council also publishes an annual Public Performance Report which provides residents with a summary of progress being made.
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 4 Management Commentary In conjunction with this internal SPS, the Council (together with all Scottish local authorities) measures a common set of performance indicators called the Local Government Benchmarking Framework. Using the same indicators across all councils allows comparisons of performance, identification of best practice and enables councils to learn from each other. Full details of the most up to date performance information are available on the Council’s website at: www.west- dunbarton.gov.uk/council/performance-and-spending/ Some of our achievements in 2021/22, in relation to our five strategic priorities, are highlighted below. Priority 1 - A strong local economy and improved job opportunities We continued our strong focus on town centre regeneration securing Levelling Up Funding to transform Dumbarton with a state of the art new museum and library and redeveloping the Artizan Centre. We also finalised 10-year investment plans for Alexandria and Clydebank focusing on boosting local enterprise and community activity, celebrating the towns’ heritage and making it safe and easy for citizens to move around. We progressed the £34.1million Glasgow City Region City Deal project which will provide up to 980 full-time jobs and a further 670 during construction. We also invested in the Scottish Marine Technology Park at Carless, which is expected to create 1,000 local jobs and bring £65.6 million annually to the Glasgow City Region economy. In addition, we provided support to 200 new business start- ups, took on 50 modern apprentices with a further £1million investment planned over the next four years and supported 90.99% of school pupils to leave school to a positive destination. Priority 2 - Supported individuals, families and carers living independently and with dignity. Improving the lives of the people of West Dunbartonshire is at the heart of our work An increased £75 million investment in our housing stock has provided 530 additional affordable, sustainable, accessible and adaptable housing options that meet the changing needs of our population. Among those projects is the new 147 home development at Queens Quay which will be supplied by affordable, environmentally sustainable energy from the multi-award winning Energy Centre and District Heating network. Tackling the root causes of poverty is at the forefront of the Council’s Working4U service, providing advice to sustain or increase income through employment and benefit maximisation. We assisted 288 people to secure a Foundation Apprenticeship/Modern Apprenticeship and make progress in the workplace. We also supported 420 people to secure employment and assisted residents to secure an additional £7.2million of benefits, and manage £2.5m of debt. In addition, Working4U supported 993 people to enter education and training and 457 people have subsequently secured a full qualification that will allow them to pursue their life and career ambitions.
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 5 Management Commentary Priority 3 - Meaningful engagement with active, empowered and informed citizens who feel safe and engaged Our commitment to empowering citizens is demonstrated in the implementation of our Community Empowerment strategy and action plan, which helps citizens to help themselves and provides opportunities for the Council to work in partnership with citizens in local decision-making. A review of the scheme for establishment of community councils was undertaken, consulting with existing community councils, the Community Council Forum, active community groups in areas with no community councils at present and citizens to update and improve how they operate. To reduce the impact of antisocial behaviour we installed additional CCTV cameras, increased the presence of our antisocial behaviour team and extended the hours in which citizens can contact them for support. Priority 4 - Open, accountable and accessible local government The Council believes in equity and accessibility for all residents. During the pandemic, we continued to hold Council meetings online, giving citizens the opportunity to ask questions, raise concerns and listen to proceedings. Many services were updated to online to ensure citizens could continue to access services and receive support. On average, the Council answered 8,000 calls every month from citizens. We are committed to ensuring everyone has the opportunity to have their say and in particular to increase participation from under-represented groups. Working4U worked with partners to provide citizens with access to devices, free Wi-Fi and support to use them. The programme focused its efforts on those most likely to face digital exclusion with priority given to older people who were in the COVID shielded group, families who are facing disadvantage and disabled people. As part of a four-year equality plan approved in May 2021, the Council has established the Stronger Voices community group, which is helping the Council increase participation of under-represented groups. Priority 5 - Efficient and effective frontline services that improve the everyday lives of residents The Council is committed to providing sustainable and attractive local communities which make residents proud of the area they live in. We invested £3.6million in Lomond Bridge, Balloch. Works included modified steelwork which was refurbished and painted; a replaced bridge deck, as well as new lighting and parapet renewal. We recognise the importance a healthy diet plays in a child’s development and the health and wellbeing of our young people is a priority. Free school meals are available for all pupils in Primary 1 to Primary 5 in West Dunbartonshire, giving our children a freshly prepared, nutritionally balanced meal every day.
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 6 Management Commentary We were one of the first councils in Scotland to introduce 1140 hours of free early learning and childcare ahead of schedule. We provide 1140 hours of childcare to all three and four-year-olds as well as eligible two-year-olds. The Council recruited more than 400 employees to support the introduction, refurbished 15 existing centres, introduced 10 new centres and built four new Early Learning Centres. 5. Council’s 2021/22 Budgets Revenue The Council approved the 2021/22 revenue budget on 22 March 2021 based on band D council tax at £1,293.55. The budget was set at £231.919m (as detailed in the table below) to be funded by Scottish Government Grant (£193.854m); council tax (£37.053m), with a net contribution from reserves for the remainder (£1.012m). Service Area Budget (£m) % of Budget Corporate Services 32.280 13.92% Educational Services 103.682 44.71% Infrastructure, Regeneration and Economic Development 12.034 5.19% Housing and Communities 3.224 1.39% Health & Social Care Partnership, including Criminal Justice 74.122 31.96% Loan charges 6.523 2.81% Other 0.054 0.02% Total 231.919 100.00% The budget was updated during the year for a number of variables, resulting in a final planned net expenditure of £252.986m. The year-end revenue budgetary position is detailed on page 9 of this commentary. Capital On 22 March 2021 the Council also approved the revised capital plan with a planned General Services spend in 2021/22 of £18.835m and re-phased capital from the previous year of £29.223m making a total of £48.058m. In-year additional projects increasing the planned spend by £8.622m to £56.680m. This investment is funded from a range of sources including: government grants and council ongoing revenue. Major areas of investment are economic regeneration, schools modernisation, roads and infrastructure and a range of other Council assets. The year end capital budget position is further detailed on page 16. Housing Revenue Account On 3 March 2021 the Council approved the Housing Revenue Account budget and agreed an increase in council house rents of 1.5% with planned capital investment for 2021/22 of £34.591m, and re-phased capital from the previous year of £15.153m making a total of £49.744m. Further in-year changes updated the planned spend for 2021/22 to £48.328m. The year-end revenue budgetary position is detailed on page 10 of this commentary, with the capital year end budgetary position shown on page 16.
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 7 Management Commentary 6. Overview of Core Financial Statements The Statement of Accounts contains the Financial Statements of the Council and its group for the year ended 31 March 2022. The Council operates two main Funds: 1. General Fund - expenditure and income associated with running council services (except the provision of council houses). Predominantly funded by Scottish Government grant and council tax. 2. Housing Revenue Account - expenditure and income associated with the provision of council housing. Predominantly funded primarily through rental income from tenants. Two major categories of expenditure are included in the financial statements: 1. Revenue expenditure - day to day running costs incurred to provide services. 2. Capital expenditure - cost of buying, constructing and improving the assets which the Council uses to provide services. Expenditure is recorded in a number of the main statements in these accounts with the purposes of these main statements being as follows: Comprehensive Income and Expenditure Statement (page 39) - shows the income and expenditure for all council services. Movement in Reserves Statement (page 40) - shows how the Income and Expenditure Account surplus or deficit for the year reconciles to the movement on the General Fund for the year. It also highlights movement on all other reserves held on the Council’s Balance Sheet (including the Housing Revenue Account). Further information on each of the reserves held and how they may be used is also detailed within notes 29 and 30 on pages 97 to 101. Housing Revenue Account (pages 103-105) - shows the income and expenditure for council housing services for the year and also includes the Statement of Movement on the Housing Revenue Account Balance. Capital expenditure (page 86, note 20) - details the capital expenditure and the sources of finance used to fund the capital plan investment in 2021/22. Balance Sheet (page 41) - summarises the assets and liabilities of the Council. It is a statement of the resources of the Council and the means by which they have been financed. It is also a report on the Council’s financial position at one particular point in time, a snapshot of its financial affairs at the close of the year expressed in accounting terms. Cash Flow Statement (page 42) - shows the inflows and outflows of cash arising from transactions with third parties on both day to day revenue transactions and on capital activities. Cash is defined for the purpose of the statement as cash-in-hand and deposits repayable on demand less overdrafts repayable on demand. Notes to the Core Financial Statements (pages 43-102) provide further information and analysis of each statement, including the main accounting policies detailed on pages 43 to 55. 7. 2021/22 Financial Performance Revenue: Outturn against Budget General Fund This account covers the day to day operational income and expenditure for each service of the Council and is reported in line with the Council’s committee structure. Income from council tax, non-domestic rates, capital and revenue support grants was £260.765m with a net expenditure on services for the year of £279.317m (shown on page 39 - Net Cost of Services).
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 8 Management Commentary Due to tight financial control over service spending, the Council was able to return an in-year surplus from services of £0.159m against budget (2020/21 £0.585m surplus). The main favourable variances (particularly within Corporate Services and Education service areas) are due to specific management action in areas such as control of vacancies and staff cover; general process and efficiency reviews; and spending control, with a one-off adjustment for Council Tax income. Although, there is an element of demand led favourable variances, these have been partially offset by cost pressures, particularly within vacant building costs (such as former HSCP properties) and within the Infrastructure, Regeneration and Economic Development service areas due mainly to commercial rental income and the Housing Maintenance Trading Account outturn. During the Council’s annual budget process, efficiencies are identified and agreed for action. These savings are monitored monthly as part of the budgetary control process. For 2021/22 the savings monitored were valued at £3.212m, with the target reduction to the budget being achieved in year. The Council's in-year collection of council tax increased from 94.18% in 2020/21 to 94.53% in 2021/22. It is positive that collection has improved given the continued impact that COVID had in 2021/22 on the ability of people to pay council tax. The Council continued to allow eased payment terms and follow up processes to assist residents impacted, provided key financial support and assistance during the year and would expect payments to be caught-up in future years. After taking account of the decrease in general earmarked balances since 31 March 2021 (£0.167m), the net commitment to future budgets (£1.219m, included within the overall earmarked balance) and the in-year budgetary position (£0.159m), the overall deficit for the year was £0.008m. This results in an accumulated surplus at 31 March 2022 of £15.020m (as shown on page 40), compared to the previous year value of £15.028m). This includes an earmarked amount of £11.524m leaving an unearmarked balance of £3.496m available for future use. Of the earmarked reserves £6.648m is for COVID purposes leaving £4.876m of general earmarked reserves, of which £1.257m is set aside for the Council’s Change Fund, £1.018m of Scottish Government funding for the Young Person’s Guarantee and £1.219m is committed to the delivery of a balanced 2022/23 budget. This unearmarked balance compares with that of £3.337m as at 31 March 2021 and shows that the unearmarked reserve position has increased by £0.159m during the year. The Council's Prudential Reserves Policy is to retain a prudential reserve of 2% of net expenditure (excluding requisitions to HSCP, Valuation Joint Board, SPT, etc.) in order to safeguard assets and services against financial risk. The current target prudential reserves level for the General Fund is £3.123m and the position at financial year end is higher than this by £0.373m (the main reason for this position is due to financial performance in 2021/22). The General Fund’s budgetary performance for the year is summarised in the following table. The table also highlights how the in-year surplus affects the overall reserves balance held for future use.
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 9 Management Commentary The movement of £0.008m noted above reflects the in-year movement in the General Fund balance (i.e. opening balance 1 April 2021 of £15.028m and the closing balance as at 31 March 2022 of £15.020m) and is further detailed within the Movement in Reserves Statement on page 40. The following table sets out a reconciliation of the surplus on the provision of services within the Comprehensive Income and Expenditure Statement (page 39) of £41.922m to the revenue budgetary outturn of £0.159m. Original Budget Revised Budget Spend Against Budget Variance £000 £000 £000 £000 £000 Total General Services Reserves Held as at 31/3/21 (15,028) Corporate Services 32,280 32,326 31,637 (689) Educational Services 103,682 108,906 107,693 (1,213) Infrastructure, Regeneration and Economic Development 12,034 11,837 14,671 2,834 Housing and Communities 3,224 5,111 5,005 (106) Health & Social Care Partnership, including Criminal Justice 74,122 76,622 76,622 0 Loan charges 6,523 6,159 6,012 (147) Other (including one-off covid spend) 54 12,025 12,091 66 Total Expenditure (1) 231,919 252,986 253,731 745 Council Tax (37,053) (37,053) (37,957) (904) Revenue Support Grant/ NDR (193,854) (214,905) (214,905) 0 Use of Reserves (1,012) (1,028) (1,028) 0 Total Income (2) (231,919) (252,986) (253,890) (904) Net Budgetary Control Position (3) = (1) + (2) (159) Net movement in Earmarked balances 167 Movement in Reserves from 1/04/21 to 31/03/22 8 Total General Services Reserves Held as at 31/3/22 (15,020) Net decrease in the Movement in Reserves before transfer to Statutory Reserves 2,396 Transfer from statutory reserves (2,388) 8 £000 £000 Deficit on Provision of Services in the Comprehensive Income and Expenditure Statement 41,992 Removal of statutory adjustments not included in budget outturn (note 6): Reversal of entries included in the surplus/ deficit on the provision of services in relation to capital expenditure (including depreciation and impairment) (25,009) CFCR 13,247 Pension adjustment (32,116) Statutory repayment of debt 9,303 Transfer to other statutory reserves 302 Net gain / (loss) on sale of non current assets (998) (35,271) Deficit on Provision of Services in Note 15 - Expenditure and Funding Analysis 6,721 Adjust for movements to/from other statutory reserves HRA reserve (4,325) Other reserves (2,388) (6,713) Movement in General Fund Balance 8 Movement in earmarked sums (167) (167) Net General Fund budgetary control position 2021/22 (159)
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 10 Management Commentary Housing Revenue Account (HRA) By law the Council maintains a separate account for the running and management of its housing stock and had 10,378 housing units at 31 March 2022 (10,153 31 March 2021). The movement in year is follows: Opening house numbers 10,153 Disposals 0 Demolitions 0 Buy back 14 New builds 211 Closing house numbers 10,378 After the impact of earmarked balances, the account shows a deficit for the year of £4.630m. In line with the prudential reserves policy (2% of expenditure), the target reserves level for the HRA for 2021/22 is £0.940m. Taking account of the in-year deficit (£4.630m), which is in line with the HRA financial plan to fund some capital from revenue to reduce the cost of borrowing, the brought forward balance from the previous year £7.364m, the balance available to the HRA for future use is £2.734m, (earmarked reserves of £1.794m and free reserves of £0.940m). The HRA’s budget performance for the year is summarised in the following table. The table also highlights how the in-year deficit affects the overall reserves balance held for future use. Further information is noted on pages 103 to 105. Budget Spend Against Budget Variance £000 £000 £000 £000 Total HRA Reserves Held as at 31/3/21 (7,364) Total Expenditure 46,168 50,588 4,420 Total Income (46,168) (50,664) (4,496) Net Budgetary Control Position (76) Net transfer from earmarked balances 4,706 Movement in Reserves from 1/04/21 to 31/03/22 4,630 Total HRA Reserves Held as at 31/3/22 (2,734) The net deficit budgetary position on the HRA Statement noted above of £4.630m compares to the surplus noted within the HRA Income and Expenditure Statement (page 104) as detailed below: £000 £000 (Surplus)/Deficit for the year on HRA Services (1,229) HRA Movement in Reserves Adjustments to the revenue resource (13,116) Adjustments between Revenue and Capital Resources 18,670 Transfers (to)/from Other Statutory Reserves 305 5,859 Movement in the HRA Reserve 4,630 Adjustments for earmarked funds: Use of earmarked sums (4,706) Net HRA budgetary control position 2021/22 (76) HRA reserve as at 1 April 2021 (7,364) Use of earmarked sums 4,706 Transfer of surplus to reserves (76) HRA reserve as at 31 March 2022 (2,734)
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 11 Management Commentary Spend relating to the net budget position of £0.076m surplus is included within note 15 (Expenditure and Funding Analysis) on pages 76 to 79. Reserves As at 31 March 2022, the usable reserves currently held by the Council are noted below, with further information on the future use of such reserves detailed within notes 29 and 30 on pages 97 to 101. An analysis of the earmarked revenue balances is shown in the chart below Provisions The Council currently has no provisions held on its Balance Sheet as at 31 March 2022. Cash Flow Statement The Council’s cash flow statement shows a decrease of cash and cash equivalents of £10.101m during 2021/22 (see page 42) mainly as a result of borrowing for capital spend on non-current assets. General Services HRA Total £000 £000 £000 Unearmarked Reserve 3,496 940 4,436 Earmarked Reserve 11,524 1,794 13,318 Total Revenue Reserve 15,020 2,734 17,754 Capital Receipts Reserve 30 0 30 Capital Grants Unapplied 42 0 42 Capital Reserve 759 0 759 Other Reserves 468 0 468 Total Usable Reserves 16,319 2,734 19,053 Prudential Target 3,123 940 0 1 2 3 4 5 6 7 8 COVID Change Fund 2022/23 Budget Commitments Young Person's Guarantee Other Committed Spend (<£0.1m) HR/Legal Historic Abuse Cases Social Welfare Fund Earmarked Revenue Reserves (£ Millions)
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 12 Management Commentary 8. COVID (Financial) The financial analysis provided above takes into account the impact of COVID. During 2021/22 officers continued to monitor the financial impact of COVID on the Council’s revenue positon and reported on this through budget control reports taken to Committees and full Council. £4.488m of general COVID funding was made available in 2021/22 which was added to the £1.973m which had been carried forward from 2020/21. During 2021/22 the Council exercised the Loans Fund Principal Repayment Holiday and Use of Capital Receipts financial flexibilities approved by the UK Government and Scottish Government to help councils respond to the financial pressures faced by local authorities as a result of the COVID pandemic. The Loans Fund Principal Repayment Holiday allows the Council to take a loans fund payment holiday in 2021/22 or 2022/23 on the condition the amount not repaid in year would by fully paid over a 20 year period. The in-year principal payment would have been £1.673m which the Council would have paid using in-year capital receipts and this holiday released a balance of £1.311m of capital receipts. Exercising the Use of Capital Receipts financial flexibility means this £1.311m can be used to fund COVID cost pressures. Use of COVID funds is summarised in the table below (note this excludes COVID funding made available to the Health & Social Care Partnership): £000 £000 2020/21 COVID Funding Carried Forward 1,972 2021/22 COVID Funding 4,488 Capital Receipts Financial Flexibility 1,311 Total Available COVID Funding in 2021/22 7,771 2021/22 COVID Spend (4,469) Total Estimated COVID Funding to Carry Forward into 2022/23 3,302 Estimated 2022/23 COVID Expenditure (2,058) Estimated Available COVID Funding at 31/03/23 1,244 In February 2022 the Scottish Government announced an £80m Local Authority COVID Economic Recovery (LACER) Fund. The Council’s share of this is £1.458m. The fund is to be provided via General Revenue Grant and Scottish Government expectations are that it will be fully utilised during 2022/23. The Scottish Government proposed the following principles of spend to guide how the fund should be used by local authorities: Interventions that support local economic recovery and contribute to businesses being able to move from surviving the period of trading restrictions towards recovery, growth, adaptation and building resilience. Projects that can rebuild consumer confidence and stimulate demand and economic activity in their specific contexts. To support the low-income households that are disproportionately impacted by the pandemic and the current cost of living crisis, to become more economically active. This funding has not been included in the general COVID funding table above as the proposed principles means there are restrictions on use. The following expenditure was agreed at the Council budget meeting on 9 March 2022.
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 13 Management Commentary 2022/23 Expenditure £000 Four year modern apprenticeship scheme (£250k per annum) 250 Cost of Living Crisis Fund 400 Double School Clothing Grant 774 COVID Compliance Officers 101 Total 1,525 £1.458m of this will be funded by the LACER fund with the balance of £0.067m funded from general COVID funding. 9. COVID (Service Delivery) Throughout 2021/22 COVID continued to provide unprecedented challenges for delivery of Council services which included managing the impact of changes to national restrictions, especially as a result of rising infection rates due to the emergence of the Omicron variant. The Council’s Strategic Resilience Group (SRG) and the Operational Resilience Group (ORG) continue to meet to discuss the challenges the pandemic presented to the Council with regular updates reported to Council to ensure elected members were fully updated on the impact across all services. This included: Service Impact and Action Taken Education Continued to respond and adapt to the regularly updated Scottish Government ‘Reducing Risks in Schools Guidance’ issuing Education Leaders with the relevant advice and support to maintain the necessary protective measures for operational delivery of the service. Continued to work with colleagues in Environmental Health and Corporate Health and Safety to ensure enhanced and rigorous COVID Safe Protocols and COVID Risk Assessments in place. Delivered the schools and ELC’s Asymptomatic Testing Programme to support twice weekly lateral flow testing for staff and secondary school pupils to minimise the spread of COVID. Significant operational challenges faced by the service through the numbers of positive COVID cases among staff and children and young people. Staff showed great commitment and effort to ensuring there has been minimal disruption to the learning for children and young people. Created agile and flexible working plans to offset the impact of staff or child/young person absence which provided continuous service across all schools and ELC’s. This was supported by remote/blended learning. Continued to enhance the digital technologies inclusion provision to support remote/blended learning. Re-established programme of transition experiences for children and young people entering P1 or S1. Provided financial and food support to families requiring most support. Closely monitored CO2 levels across the learning estate. Provided free Summer 2021 Activity Programme. Citizen, Culture and Facilities Providing enhanced cleaning in Council premises including schools and nurseries. Processing £1m of Self-Isolation Support Grants. Recruited additional staff to ensure capacity to engage with citizens on issues being experienced with housing repairs due to the impact of COVID.
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 14 Management Commentary Supply, Distribution & Property With restrictions in place during the pandemic, internal works such as housing repairs could not be undertaken, except for emergencies. This resulted in a significant backlog or work. Restrictions were lifted 26 April and an action plan was put in place to address outstanding repairs and improve performance where possible. However, continuous high levels of COVID related absence, together with the national skills shortage in trades, impacted on the ability of building services to deal with the backlog as well as newly reported repairs. Monitored and reported progress regularly to the Chief Executive and elected members. Maintained communication with tenants through appropriate forums including tenant groups, housing news, social media, and text messaging. People & Technology All teams continued to deliver full service to support the organisation and maintain essential service delivery during pandemic. Delivered a managed ‘Return to Office’ programme designed to deliver a safe, gradual return with appropriate restrictions maintained to protect our employees. Implemented enhanced ICT security measures to better support employees and Members working in hybrid environment and to protect the organisation. Actively supported the recruitment and associated contracts and payment of over 80 COVID recovery posts and over 50 Vaccination support team posts Housing & Employability Established a number of community based facilities to allow the Communities Team to engage with the community. Increased focus on homelessness prevention working with landlords and introducing a Tenant Support Fund. Maintained communication with tenants through appropriate forums including tenant groups, housing news, social media, and text messaging. Over the course of the pandemic delivered 316 new homes. Working 4U established remote community hubs from which they delivered one-to-one and group support services and established and managed a crisis support service which has also informed future priorities Implemented revised working practices to deliver services across Housing Operations during the pandemic in line with restrictions. Allocated over 900 houses despite pandemic restrictions. Neighbourhood team and caretaking service continued to operate in communities during the pandemic Regulatory & Regeneration Visited and provided advice to businesses to ensure they are aware of applicable health protection guidance and that they continue to operate in a safe manner. Changed to deliver services remotely including registration of deaths. Delivered a range of sector specific Scottish Government COVID grants across our business community. Resources Continued to update their estimates of the cost of COVID to ensure Scottish Government funding was allocated appropriately. Supported local communities by processing COVID hardship payments and free school meal payments. Adapted interventions to meet emerging needs including allocation of funds to foodbank support, Scottish Welfare fund top ups and additional support for people facing housing rent and council tax pressures.
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 15 Management Commentary 10. Balance Sheet The Balance Sheet on page 41 summarises the Council’s assets and liabilities as at 31 March 2022 and explanatory notes are provided. The net worth of the Council has increased by £102.967m from £318.629m as at 31 March 2021 to £421.596m as at 31 March 2022. The major changes are set out in the table below. Main Balance Sheet Changes Pension Assets and Liabilities The Balance Sheet on page 41 shows an assessed pension fund liability of £55.690m, using a snapshot valuation at 31 March 2022. Further information on this is provided in note 13 on pages 71 to 76. The valuation states that assets held at the valuation date were sufficient to cover 95% of accrued liabilities (85.6% in 2020/21). The pension scheme liability has decreased by £107.925m as advised by the appointed actuaries, and this is mainly as a result of the downwards movement in the assumptions of the discount rate, partially offset by future pension, and salary increase assumptions. The appointed actuaries remain of the view that the asset holdings of Strathclyde Pension Scheme and the contributions from employees and employers together with planned recent increases in employers’ contributions provide sufficient security and future income to meet future pension liabilities. Non-Current Assets The Council owns a number of different types of assets, as listed in the Balance Sheet. These assets are used for ongoing and future service delivery provided by the Council to its citizens. The remit for the Council’s Strategic Asset Management Group is to ensure the most efficient use of these assets in pursuit of the Council’s strategic priorities. The Group manages this through ongoing review of the overarching Strategic Asset Management Plan, which is then supported by a number of individual Asset Management Plans (including properties, infrastructure, vehicles and equipment, etc.). The Council requires to assess the value of assets held based on current market conditions. In the current year particular assets have increased in value by £5.383m. At the same time, impairment and downward revaluations have reduced the value of other assets held by the Council by £0.804m, resulting in a net increase in value of £4.579m. These movements adjust either the revaluation reserve in the Balance Sheet or are included within the Net Cost of Service within the Income and Expenditure Statement, depending on the history of the asset. 31 March 2021 31 March 2022 Change £000 £000 £000 Long Term Assets 1,113,415 1,148,987 35,572 Increase in Property Plant and Equipment, in line with capital expenditure Current Assets 87,954 79,723 (8,231) Cash and Cash Equivalents held has decreased, partially offset by an increase in Debtors Current Liabilities (340,449) (352,731) (12,282) Short-term Borrowing has increased (in line with the Treasury Strategy and capital spend), as has Creditors Long Term Liabilities (542,291) (454,383) 87,908 Net Pension Liability has significantly decreased, partially offset by an increase in Long Term Borrowing (in line with the Treasury Strategy and capital spend) Total 318,629 421,596 102,967 Main Reason
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 16 Management Commentary Borrowing The Council’s Treasury Strategy for 2021/22 was agreed by the Council on 22 March 2021. The Council raised new long term loans of £35.000m (2020/21 £10.000m) and short term loans of £315.500m (2020/21 £260.250m) and repaid naturally maturing debt of £320.748m (2020/21 £235.115m). The total outstanding long term debt (excluding PPP debt) as at 31 March 2022 was £307.485m (2020/21 £284.798m) including £132.588m (2020/21 £114.006m) for the Council’s housing stock. The total outstanding short term debt was £270.923m (2020/21 £263.861m), including £116.822m (2020/21 £90.362m) for the housing stock. The interest and expenses rate charged by the Council’s loans fund was 1.94% (2.29% in 2020/21). Due to the current interest rates, the Council has followed a strategy to maximise the benefit in short term borrowing to fund capital expenditure. Capital Finance The Council is able to regulate its own capital spending limits within the framework recommended by the Chartered Institute of Public Finance and Accountancy and endorsed by the Scottish Government. The necessary treasury indicators and safeguards have been approved by Council and have resulted in increases to both the General Services and Housing capital programmes for 2021/22 and beyond. The Council’s Treasury Management Strategy and Capital Strategy are approved at Council as part of the budget setting package. Details of the capital expenditure and financing are shown in note 20 on page 86. Total gross capital expenditure amounted to £64.219m with the split between General Services and HRA noted in the table below. During 2021/22, the Council had budgeted capital expenditure of £105.054m with an actual in year spend of £64.219m. The unspent amount (£40.835m) includes overspends, underspends and slippage. The total slippage on planned spend was £44.883m – 42.72% (2020/21 33.72%) of the overall capital programme which is summarised in the following table: The main capital projects progressed during 2021/22 were: General Services HRA New Renton Campus Void Housing Strategy Programme Posties Park Hub Building external component renewals Clydebank Charrette Statutory compliance works Artizan Redevelopment Targeted EESSH compliance works Exxon City Deal Heating Improvement works Local Economic Development and Regeneration Affordable Housing Supply Programme Actual Budget Spend Variance Overspend Underspend Slippage £000 £000 £000 £000 £000 £000 Service Corporate Services 5,672 2,309 (3,363) 26 (40) (3,349) Education 9,567 6,127 (3,440) 156 0 (3,596) Infrastructure, Regeneration and Development 36,243 19,835 (16,408) 1,013 (43) (17,378) Housing and Communities 89 66 (23) 0 0 (23) Miscellaneous Services 3,502 4,241 739 739 0 0 Health and Social Care Partnership 1,653 1,041 (612) 0 0 (612) General Services 56,726 33,619 (23,107) 1,934 (83) (24,958) HRA 48,328 30,600 (17,728) 3,700 (1,503) (19,925) Total 105,054 64,219 (40,835) 5,634 (1,586) (44,883)
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 17 Management Commentary The majority of the slippage has occurred within a small number of larger capital projects and is mainly due to the timing of starting individual projects, for various reasons, not all within Council control, and the delayed spend on these projects moved into capital budgets for 2022/23 onwards. The most significant slippage was experienced against the following projects: General Services District Heating Expansion Network expansion to Golden Jubilee National Hospital will commence pending positive commercial discussions. Heritage Capital Fund COVID impacted on the timescale for delivery of a number of projects including Clydebank Town Hall, the Clydebank Museum, and the Dalmuir Library and Gallery. Work is now underway to get these projects progressed. Vehicle Replacement Delay due to the vehicle build time associated with the specialist vehicles and the delivery lead time from the date of supply order placement. Schools Estate Improvement Plan As a result of COVID Skills School was rephased during 2021/22 and further costs are still expected for Renton Campus. HRA New house build Due to a number of different complexities there were delays to getting on site across each of the new build sites. Projects to deliver housing strategies (Buy Backs) These are subject to stringent criteria to ensure accountability and value for money for tenants and involves several key stakeholders which resulted in time delays Doors/Windows Installations are behind original planned targets due to internal and external contractor resource issues Building external components Resource issues has delayed the roof renewal programme which continues into 2022/23. Additional installations by support contractors is underway to assist completions Public Private Partnership (PPP) and other Long Term Liabilities The Council entered into a PPP for the provision of three community learning centres and a primary school providing the Council with replacement buildings for three secondary schools which were handed over in 2009/10 with the primary school handed over during 2011/12. In accordance with statutory accounting guidance, full detail is provided within note 22 on pages 87 to 88. On 31 March 2016, the Council entered into a 25 year ‘Design, Build, Finance and Maintain’ (DBFM) arrangement with the Scottish Government via the Scottish Futures Trust, for the provision of a further new secondary school. The school was handed over for use by the Council during 2017/18. 11. Group Accounts Local authorities are required to prepare group accounts in addition to their own Financial Statements where they have material interest in other organisations. The group accounts on pages 108 to 117 consolidate the Council’s Financial Statements, the Common Good and Trust Funds and six other entities (including three further subsidiaries – West Dunbartonshire Leisure Trust, Clydebank Property Company and West Dunbartonshire Energy LLP). The effect of combining these entities on the Group Balances Sheet is to increase reserves and net assets by £48.600m creating an overall net asset of £470.195m. This includes the combined pension liability of these organisations similar to that of the
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 18 Management Commentary Council. As there is no reason to suggest the future funding to these organisations will not continue, the accounts have been prepared on a going concern basis. 12. The Financial Outlook, Key Risks and the Future In setting the 2022/23 budget on 9 March 2022, the Council faced a number of significant financial pressures resulting from real term reductions in government funding, inflationary pressures, in particular utilities, service demand increases and the ongoing impact of the national economic position. The 9 March 2022 Council meeting also approved the updated General Fund capital plan, the 2022/23 HRA revenue budget and the updated five year HRA capital plan. The capital plans include funding for a number of projects over the next three years and the revenue impact of these investments will be built into future revenue plans. On the 31 May 2022 the Scottish Government published its Resource Spending Review in providing insight into strategic priorities and highlighting the scale of ongoing challenges for councils and the wider public sector. The Resource Spending Review is high level at this time and based on ‘Level 2’ funding positions over the next four years. ‘Level 2’ does not provide councils with their specific allocations which would provide for more detailed financial planning however it is sufficient to provide an overview of Scottish Government intentions. Early analysis of these priorities continues to reflect the prominence previously given to Health & Social Care and Social Security spending relative to councils. Taken together these two priority areas account for 90% of the increase in the day-to-day spending budget from 2022/23 to 2026/27. Whilst the Resource Spending Review states that Council funding will remain as ‘flat cash’ (at current 2022/23 levels) until 2025/26 with a further £100m added in 2026/27, the real term impact (taking into account inflation) of this for the next four years is a continuing erosion of core funding for councils with a 7% reduction between 2022/23 and 2026/27. Following the setting of the budget in March 2022, budget projections identified expected budget gaps of £13.761m in 2023/24 rising cumulatively to £18.622m in 2024/25. At a Council meeting on 22 June 2022 a further Financial Update was presented which adjusted these gaps to reflect the Resource Spending Review and other changes to budget assumptions. This resulted in amended estimated budget gaps of £14.309m in 2023/24 rising cumulatively to £19.849m in 2024/25. Management of Risk The main financial risks identified by the Council over the medium and long term include: the unknown position on future funding levels particularly given the ongoing decline in council population, whilst the Resource Spending Review suggests there will be a flat cash settlement for the foreseeable this is not guaranteed and still represents real term reductions in local government funding any future financial implications of COVID and funding support from Scottish Government the impact of the ongoing implementation of Universal Credit and the potential impact of previously implemented austerity measures on the economic strength of the West Dunbartonshire population and business base changing demands and needs for council services (particularly in relation to older people) continued rises in inflation and interest rates which impact on the cost of service delivery and capital programmes increasing costs of capital construction due to global constraints in the supply chain. The Annual Governance Statement, shown on pages 24 to 30, details the arrangements the Council has put in place for the proper governance of the Council’s affairs and for the management of risk.
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 19 Management Commentary This Statement explains the system of internal control in place and sets out improvement actions to the governance framework identified from the Council’s ongoing review of these arrangements. Risks are identified with actions to minimise and/or mitigate those risks (where possible) through the Council’s performance monitoring system (pentana), which is reported to Members on a regular basis. The Future In recognition of the scale of the current financial challenge the Council will continue to identify service redesign and business transformation options and these will be reported to appropriate committees during 2022/23. Significant cost reductions have been generated through planned actions in prior years however more work is required to deliver a balanced budget in 2023/24 and future years. A number of major projects continue to be progressed as follows: Glasgow City Region City Deal – the Council, together with a number of other Scottish local authorities, is participating in the Glasgow Region City Deal which will see over £1.1 billion invested in the area. The City Deal consists of a number of significant capital projects across the area together with employability projects – in order to generate economic regeneration and additional jobs. The project within the City Deal specific to the Council is an infrastructure project at the Exxon site at Bowling to regenerate that site and to create a relief road along the A82 at Milton. The project is progressing with the full business case scheduled to be produced by June 2023. Green Freeport - A Green Freeport is a large zoned area within a defined boundary which includes a rail, sea or airport. Operators and businesses in the zone can benefit from a package of tax and other incentives through a combination of devolved and reserved levers.Green Freeports are designed to boost innovation and inclusive growth within communities, while supporting Fair Work First practices, creating new green jobs, upholding the highest environmental protections and supporting economic transformation. A Green Freeport bid has been submitted by the Glasgow City Region Cabinet for a multi-site bid centred around Mossend, Glasgow Airport for four sites in the Clyde region under single ownership within Inverclyde, West Dunbartonshire and Glasgow City. From a West Dunbartonshire perspective this means that land at Scotts Yard in Bowling and Rothesay Dock in Clydebank will be included in the bid. Development of Queens Quay– The Council’s investment of £15.62m in Queens Quay over the past five years has helped fund the infrastructure needed to prepare the site for redevelopment. In collaboration with the development partners, good progress has been made on key developments, including the completion of the District Heating Energy Centre, new Care home, social housing development, a partnership between Council, Wheatley Group and Clydebank Housing Association, and the new NHS Clydebank health centre. Housing development plots are being marketed to fulfil the ambition of delivering 1,000 new homes on Queens Quay. The ongoing redevelopment of this site will be transformational for all our communities in Clydebank and create stronger links with the town centre and public transport. The District Heating Energy Centre Energy won a European Heat Pump award during 2021 and was showcased globally during COP26. Levelling Up Fund – The Levelling Up Fund is a capital fund to address systemic weaknesses in the economies of the UK’s towns and cities. The first round of the Levelling Up Fund was announced at the 2020 Spending Review with an aim to support communities in realising this vision. The Council were successful, as part of round 1, in securing funds for a project requiring up to £20m with the Dumbarton Town Regeneration project. The second round of the Levelling Up Fund has now been announced and the Council will be submitting a bid for a large scale transportation project.
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 20 Management Commentary Shared Prosperity Fund – The UK Shared Prosperity Fund (SPF) is a part of the UK government’s ‘Levelling Up’ agenda and was established, in part, to replace funds available through the European Structural Funds. Lead authorities are encouraged to collaborate with their neighbouring authorities to develop regional investment plans. West Dunbartonshire is working in partnership with Glasgow City Region Partners. The UK Government has allocated funds to the City Region with West Dunbartonshire share allocated by the UK Government in proportion to the population and level of need. West Dunbartonshire has been allocated up to £3.9 million. Local Authorities in the Glasgow City Region area have agreed to develop a regional approach to managing the relationship with the UKSPF Team. The Regional Investment Plan has to be finalised in August 2022 and is a pre-requisite for the release of UKSPF. While the commitment to a regional approach and single Investment Plan has been agreed, the identification of UKSPF priorities and therefore the targets for funding remains the preserve of each member local authority. 13. Other Information Asset Management The Council has a significant investment embedded in assets, comprising offices, schools, vehicles, houses, ICT infrastructure and equipment, etc. and it is important that these are managed in an efficient and effective manner. The Council has an overarching Asset Management Strategy which was refreshed in December 2016 along with the Property Asset Management Plan. Service specific Asset Plans covering Open Spaces, Roads Structures, Housing and Vehicle, Fleet and Plant were all approved at the relevant service committees during 2017. Whilst the next update was due at the end of 2021 it was agreed this would be delayed by one year and brought back to Committee at the end of 2022 to ensure this was incorporated into the new Council Administration’s updated key strategic priorities. In addition an updated Property and Land Disposal Strategy 2021-2026 has been approved which seeks to maximize the benefit from Council assets which are surplus to requirement. Carbon Emissions and Energy Consumption The Council has met and exceeded its annual target set out in the Carbon Management Plan, emitting a total of 23,635 tonnes of carbon dioxide from our operations in 2020/21. This equates to a 3.1% reduction against the previous financial year, or a 28.3% total reduction overall against the 2012-13 baseline year. The Council approved a new Climate change Strategy in November 2020 which has set a target to reduce WDC carbon emissions to ‘net zero’ by 2045 which will align with Scottish Government targets. Equality and Diversity The Council is firmly committed to the principle of equality of opportunity. The Council recognises its responsibility as a community leader, service provider and employer to encourage the fair treatment of all individuals and to tackle social exclusion. The Council is also committed to eradicate all forms of discrimination, direct or indirect and aims to eliminate discriminatory practices and promote measures to combat its effects. Information on the Council’s Equality Outcomes and Mainstreaming Report 2021-2025 can be found on the Council website at: https://www.west-dunbarton.gov.uk/council/strategies-plans-and-policies/council-wide-plans-and- strategies/equality-diversity-and-fairness/mainstreaming-report-and-equality-outcomes/ Consultation and Communication with Workforce The Council has employee governance arrangements to ensure its employees are well informed, involved in decisions, appropriately trained, treated fairly and consistently and provided with a safe environment. The Council carries out regular employee engagement, and seeks the views of the workforce through regular consultations with staff and trade unions.
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 21 Management Commentary 14. Remuneration Report This report presents information on the remuneration of senior elected members and senior officers within the Council (pages 31 to 38). Financial Performance Indicators This commentary includes information on a set of financial performance indicators. These are aimed at providing the reader with a summary of key information and are summarised in the following table: 15. Where to find more information In This Publication - An explanation of the Financial Statements which follow and their purpose are shown at the top of each page. The accounting policies and a glossary of terms can be found at the end of this publication and these provide an explanation of the main guidelines and terms used. On Our Website - Further information about the Council can be obtained on the Council’s website (West Dunbartonshire Council) or from Finance Services, 16 Church Street, Dumbarton, G82 1QL. 2020/21 Outturn 2021/22 Target 2021/22 Outturn Housing Performance 18.11% Percentage of current tenants owing more than 13 weeks rent, excluding those owing less than £250 Demonstrates the Council's effectiveness in collecting local housing rents n/a 18.94% 1,718 number of current tenants owing more than 13 weeks rent, excluding those owing less than £250 Demonstrates the Council's effectiveness in collecting local housing rents n/a 1,805 8.53% Current / former / total tenant arrears as a percentage of net rent due in year Demonstrates the Council's effectiveness in collecting local housing rents 10.35% 9.11% £3.621m Amount of current/ former/ total tenant rent arrears Demonstrates the Council's effectiveness in collecting local housing rents n/a £4.027m 100% Value of free reserves expressed as a percentage of the prudential reserve target Demonstrates how much free reserves the HRA has, in comparison to the agreed minimum 100% 100% 2.00% Value of free reserves expressed as a percentage of the net annual budget Demonstrates the percentage of budget covered by free reserves (2% minimum target) 2.00% 2.00% (£0.040m) Movement in the free reserve balance Demonstrates variances contributing to the overall free reserve position n/a (£0.017m) 92.21% Revenue budget compared to actual outturn at year end Demonstrates actual spend as a percentage of the planned budget (less than 100% indicates an underspend) n/a 99.99% General Services Performance £6.84 Cost of collecting council tax (per dwelling) Demonstrates the Council's effectiveness in collecting local taxation £5.00 £5.85 15.98% Council tax as a percentage of overall funding Demonstrates the amount of budget raised through council tax n/a 15.10% 94.18% In-year council tax collection rate Demonstrates the Council's effectiveness in collecting local taxation 93.50% 94.53% £35.624m Amount of income from council tax for the year that was received Demonstrates the Council's effectiveness in collecting local taxation n/a £36.485m 111% Value of free reserves expressed as a percentage of the prudential reserve target Demonstrates how much free reserves the GS has, in comparison to the agreed minimum 100% 112% 2.19% Value of free reserves expressed as a percentage of the net annual budget Demonstrates the percentage of budget covered by free reserves (2% minimun target) 2.00% 2.06% £0.585m Movement in the free reserve balance Demonstrates variances contributing to the overall free reserve position n/a £0.159m 99.74% Revenue budget compared to actual outturn at year end - including top up of provisions Demonstrates actual spend as a percentage of the planned budget (less than 100% indicates an underspend) n/a 99.94% Prudence And Affordability – Capital 4.07% Ratio of financing costs to net revenue stream (excluding PPP) – General Services Demonstrates how much of the General Fund revenue budget is used to support previous capital investment 3.63% 3.28% 23.59% Ratio of financing costs to net revenue stream – HRA Demonstrates how much of the HRA revenue budget is used to support previous capital investment 25.07% 23.55% £646.190m Capital Financing Requirement The amount of planned capital expenditure not yet funded £698.886m £680.113m £644.951m External Debt Levels (including PPP) The amount of external debt held by the Council. Increases due to funding of the capital programme £697.556m £670.893m
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 22 Management Commentary 16. Conclusion The financial results show the Council’s finances in a fairly healthy position and, considering the ongoing significant financial pressures being faced by the Council, we have successfully managed our affairs within the budget set and the financial objectives prescribed. This is a satisfactory outcome and reflects well on both the efforts and professionalism of management, budget holders and on the council’s financial management and monitoring procedures. However the Council faces a significant financial challenge in 2023/24 and beyond due to reductions in funding, the impact of high levels of inflation and uncertainty over the rate and funding of future local government pay awards. The Council’s Financial Statements continue to be reported on a going concern basis. Acknowledgement The production of the Annual Financial Statements is very much a team effort and we wish to record our thanks to both Finance staff and to colleagues in all services whose efforts have contributed to the completion of these Statements of Accounts. Councillor Martin Rooney Peter Hessett Laurence Slavin Leader of the Council Chief Executive Chief Officer - Resources Date: 30 June 2022 Date: 30 June 2022 Date: 30 June 2022
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 23 Statement of Responsibilities The Authority’s Responsibilities: The Authority is required: to make arrangements for the proper administration of its financial affairs and to secure that one of its officers has the responsibility for the administration of those affairs (section 95 of the Local Government (Scotland) Act 1973). In this authority, that officer is the Chief Officer – Resources; to manage its affairs to secure economic, efficient and effective use of resources and safeguard its assets; to ensure the Annual Accounts are prepared in accordance with legislation (The Local Authority Accounts (Scotland) Regulations 2014 and the Coronavirus (Scotland) Act 2020) and so far as is compatible with legislation, in accordance with proper accounting practices (Section 12 of the Local Government in Scotland Act 2003); and to approve the Annual Accounts for signature. I confirm that these Annual Accounts were authorised for issue on 30 June 2022. Signed on behalf of West Dunbartonshire Council Councillor Martin Rooney Leader of the Council Date: 30 June 2022 The Chief Officer - Resources Responsibilities: The Chief Officer - Resources is responsible for the preparation of the Authority’s Annual Accounts in accordance with proper practices as required by legislation and as set out in the CIPFA/LASAAC Code of Practice on Local Authority Accounting in the United Kingdom (the Code). In preparing this Statement of Accounts, the Chief Officer - Resources has: selected suitable accounting policies and then applied them consistently; made judgements and estimates that were reasonable and prudent; complied with legislation; and complied with the local authority Accounting Code (in so far as it is compatible with legislation). The Chief Officer - Resources has also: kept adequate accounting records which were up to date; and taken reasonable steps for the prevention and detection of fraud and other irregularities. I certify that the Financial Statements give a true and fair view of the financial position of the local authority (and its group) at the reporting date and the transactions of the local authority (and its group) for the year ended 31 March 2022. Laurence Slavin Chief Officer - Resources Date: 30 June 2022
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 24 Annual Governance Statement The Annual Governance Statement explains the Council’s governance arrangements as it meets the requirements of the “Code of Practice for Local Authority Accounting in the UK” (the Code) and reports on the effectiveness of its system of internal control, including the reliance placed on the governance frameworks of our partners. It is included within the Council’s Financial Statements to assure stakeholders on how the Council directs and controls its functions and how it relates to communities in order to enhance transparency and scrutiny of the Council’s activities. Scope of Responsibility The Council is responsible for ensuring that its business is conducted in accordance with the law and proper standards, and that public money is safeguarded and properly accounted for, and used economically, efficiently and effectively. It also has a statutory duty to make arrangements to secure best value under the Local Government in Scotland Act 2003. In discharging this overall responsibility, the Council's Elected Members and Corporate Management Team (CMT) are responsible for putting in place proper arrangements for the governance of its affairs and facilitating the effective exercise of its functions, which includes arrangements for the management of risk. The Council has established an arms-length external organisation: West Dunbartonshire Leisure Trust – to deliver leisure services more effectively on the Council’s behalf, which reports regularly to Elected Members. From 1 July 2015 the West Dunbartonshire Health and Social Care Partnership was established to continue the development of the integration of social care and health services between the Council and NHS Greater Glasgow and Clyde. The Council has approved and adopted a Local Code of Corporate Governance (“the Local Code”), which is consistent with the principles of the Chartered Institute of Public Finance and Accountancy (CIPFA) and the Society of Local Authority Chief Executives (SOLACE) Framework: “Delivering Good Governance in Local Government”. The Local Code evidences the Council's commitment to achieving good governance and demonstrates how it complies with the governance standards recommended by CIPFA. A copy of this Code is available from the Council website at: http://www.west-dunbarton.gov.uk/media/4312582/wdc-local-code.pdf This statement explains how the Council expects to comply with the Local Code and also meets the Code of Practice on Local Authority Accounting in the UK, which details the requirements for the Annual Governance Statement. The Purpose of the Governance Framework The governance framework comprises: the systems and processes; and culture and values - by which the Council is directed and controlled and through which it accounts to and engages with communities. It enables the Council to monitor the achievement of the strategic objectives set out in the Strategic Plan. It enables the Council to consider whether those objectives have led to the delivery of appropriate and value for money services. The Council has put in place a system of internal control designed to manage risk to a reasonable level. Internal controls cannot eliminate risk of failure to achieve policies, aims and objectives and can therefore only provide reasonable and not absolute assurance of effectiveness. The system of internal control is based on an ongoing process designed to identify and prioritise the risks to the achievement of the Council's policies, aims and objectives, to evaluate the likelihood of those risks being realised and the impact should they be realised, and to manage them efficiently, effectively and economically. The governance framework has been in place at the Council for the year ended 31 March 2022 and up to the date of the approval of the Statement of Accounts.
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 25 Annual Governance Statement The Governance Framework The main features of our governance arrangements are described in the Local Code but are summarised below: The overarching strategic vision and objectives of the Council are detailed in the Strategic Plan 2017/22, which sets out the key priorities of the Council and key outcomes the Council is committed to delivering with its partners, as set out in the Local Outcome Improvement Plan; Services are able to demonstrate how their own activities link to the Council's vision and priorities through their Delivery Plans. Performance management and monitoring of service delivery is reported through service committees regularly. The CMT monitors performance information regularly. The Council regularly publishes information about its performance; The West Dunbartonshire Community Alliance, which supports Community Planning West Dunbartonshire, represents the views of community organisations, communities of interest and geographical communities. In addition the Council has an Engaging Communities Framework in place which sets out our approach to engaging with citizens, community organisations and stakeholders. Consultation on the future vision and activities of the partnership is undertaken in a range of ways, including seeking the views of the Alliance and through specific service consultations and the Council actively engages with its partners through community planning arrangements; The Council has adopted a Code of Conduct and associated employment policies for its employees. Elected members adhere to the nationally prescribed Code of Conduct for Members in a localised format. In addition, the Council has in place a protocol on member/ officer relations and an inter-party protocol; The Council operates within an established procedural framework which incorporates a Scheme of Delegation, Standing Orders and Financial Regulations. These describe the roles and responsibilities of Elected Members and officers and are subject to regular review. The Council facilitates policy and decision making through the agreed committee structure; Responsibility for maintaining and operating an effective system of internal financial control rests with the Council’s Chief Officer Resources as Section 95 Officer. The system of internal financial control is based on a framework of regular management information, the Financial Regulations, administrative procedures (including separation of duties), management and supervision, and a system of delegation and accountability. Development and maintenance of the system is undertaken by managers within the Council; The Council’s approach to risk management is set out in the Risk Management Framework. A strategic risk register is in place and an update report on this is regularly submitted to the Corporate Services Committee and Audit Committee. The approach is embedded within the Council’s strategic planning and performance management framework with regular reporting of risk management reported to service committees; and Comprehensive arrangements are in place to ensure Elected Members and officers are supported by appropriate training and development. The Council has adopted a response that is appropriate for its fraud and corruption risks and commits to maintain its vigilance to tackle fraud. The Council continues to assess and monitor ongoing compliance with the CIPFA Finance Management Code. Review of Effectiveness The Council has a responsibility to review, at least annually, the effectiveness of its governance framework including the system of internal financial control. The review of effectiveness of the framework is informed by the work of the CMT which has responsibility for the development, implementation and maintenance of the governance environment, the Chief Internal Auditor’s annual report; and reports from the external auditors and other review agencies and inspectorates. The Council’s current Code of Good Governance was approved at the Audit & Performance Review Committee on 8 March 2017. An assessment of the Council’s compliance with the Code of Good
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 26 Annual Governance Statement Governance is supported by a process of self-assessment and assurance certification by Chief Officers and the outcome of this assessment was reported to the Audit Committee on 15 June 2022. Each Chief Officer was presented with a self-assessment checklist to complete and return as evidence of review of seven key areas of the Council’s governance framework and provided a certificate of assurance for their service areas. The Audit Committee performs a scrutiny role in relation to the application of the Code of Good Governance and regularly monitors the performance of the Council's Internal Audit service. In relation to the effectiveness of governance arrangements and systems of internal control for the Council’s group entities, the Council places reliance upon the individual bodies’ management assurances in relation to the soundness of their systems of internal control. The Internal Audit service operates in accordance with the Public Sector Internal Audit Standards (PSIAS) 2017 and reports to the Audit Committee. An annual programme of work is determined and undertaken by Internal Audit, approved by the Audit Committee, based upon an established risk based methodology. The Shared Service Manager – Audit & Fraud provides an independent opinion on the adequacy and effectiveness of the Council’s System of Internal Financial Control. The Audit Committee performs a scrutiny role in relation to the application of PSIAS and regularly monitors the performance of the Internal Audit service. The Council's Shared Service Manager – Audit & Fraud (the Council’s Chief Internal Auditor) has responsibility for reviewing independently and reporting to the Audit Committee annually, to provide assurance on the adequacy and effectiveness of the code and the extent of compliance with it. It is our view that the Council has in place a sound system of internal financial control and that appropriate mechanisms are in place to identify areas of weakness. This is corroborated by an annual assurance statement prepared by the Shared Service Manager – Audit & Fraud stating that reasonable assurance can be placed upon the adequacy and effectiveness of the Council's internal control systems. Due to the COVID-19 pandemic, some audits from 2021/22 could not be carried out and have been rescheduled to take place in early 2022/23. However the overall audit plan is set within the context of a multi-year approach to audit planning such that key risk areas are reviewed over a 5 year cycle. The system of governance (including the system of internal control) can provide only reasonable and not absolute assurance that the assets are safeguarded, the transactions are authorised and properly recorded, that material errors or irregularities are either prevented or would be detected within a timely period and that significant risks impacting on the achievement of the Council's objectives have been mitigated. COVID The significant incident which began in late March 2020 and the Council’s responses as a Category 1 responder during the COVID pandemic continued to test how well the Council’s risk management, governance and internal controls framework operated during 2021/22. This was achieved using amended governance arrangements, embracing new ways of decision-making, leadership and implementation including virtual meetings and secure remote access to systems to allow homeworking for Council employees as the Council moved forward through the recovery phase. All members of the Council’s Senior Leadership Team and key stakeholders participated in a variety of Local Authority specific COVID /Business Continuity response groups supported by the Civil Contingencies Service. A comprehensive COVID Impact Risk Register was developed covering all aspects of service delivery affected by the pandemic which was maintained throughout 2021/22.
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 27 Annual Governance Statement Governance Issues and Planned Actions The following main issues and areas for improvement during 2021/22 have been identified through the self-assessment exercise carried out by Chief Officers against key aspects of the Code of Good Governance: Improvement Area identified by 2021/22 Exercise Responsible Officer Embedding Be the Best Conversations within all service teams. Chief Officer, Citizen, Culture and Facilities Chief Officer, Supplies, Distribution and Property Work is required in some services to review and update business continuity planning documentation. Chief Officer, Housing and Employability Chief Officer, Resources Business Classification Scheme will be rolled out to relevant service areas. Chief Officer, People and Technology Chief Officer, Resources Chief Officer, Education, Learning and Attainment Due to ongoing COVID restrictions during 2021/22, some services have been unable to access offices and therefore physical access to hard copy files for destruction has not been possible. This will be resumed in line with easing of restrictions. Chief Officer, Regulatory and Regeneration Chief Officer, People and Technology Appropriate and proportionate assurances will be sought from key partners and suppliers in relation to business continuity arrangements in place for managing key risks. Chief Officer, Education, Learning and Attainment Chief Officer, People and Technology Although improvement activity stimulated by external inspection and internal improvement activity is monitored by the HSCP Board and relevant Projects, it is recognised that the HSCP would benefit from establishing arrangements to ensure consistency in monitoring processes. Chief Officer, HSCP Staff training and development has been identified as an area for improvement and resources have been identified and agreed to ensure co-ordination of approach to training and development across the HSCP. Chief Officer, HSCP An integrated workforce plan is being developed for the HSCP for approval by the HSCP Board during 2022/23. Succession planning has been identified as an area for improvement for the HSCP and work is ongoing in this regard. Chief Officer, HSCP In relation to self-evaluation, work is ongoing to review complaints and consider how all feedback can be captured and used to inform service improvement across the HSCP. Chief Officer, HSCP Work is ongoing to implement the Council’s information classification policy and procedure as part of the Microsoft Office 365 project. Data Protection/Information Governance Officer Review of Learning Disability Service to improve on ways of working to ensure the service is fit for the future demands. Service Improvement lead aligned to service. Full review to be picked up as part of renewal and recovery work. Head of Mental Health, Addictions & Learning Disabilities A Project Overview document has been developed and approved by the Integrated Housing Project Board in relation to the IHMS. This document is being utilised to manage all remaining Phase 2 implementation items. Chief Officer, Housing and Employability At the appropriate time a post-incident review will be carried out in relation to the COVID Pandemic highlighting any lessons learned which will inform future emergency response and recovery arrangements. Chief Executive
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 28 Annual Governance Statement The 2020/21 Annual Governance Statement highlighted a range of areas for improvement during 2021/22. The following table provides an update on progress with these with a number having been completed or are areas which continue to have ongoing focus: Improvement Area identified by 2020/21 Exercise Status Embedding Be the Best Conversations within all service teams. Ongoing. There is improvement to be made to ensure all employees have regular 121s Following COVID work is required in some services to review and update business continuity planning documentation. Ongoing Business Classification Scheme will be rolled out to relevant service areas. Ongoing. This will be resumed in line with easing of restrictions. Due to COVID restrictions during 2020-21, some services have been unable to access offices and therefore physical access to hard copy files for destruction has not been possible. This will be resumed in line with easing of restrictions. Ongoing. This will be resumed in line with easing of restrictions Improvement activity is ongoing within teams in order to develop and maintain strong supervision practices. Complete Although the Health and Safety team undertake the co- ordination role of Health and Safety Executive inspection reports to ensure that action plans are put in place, there is a need to ensure that there is regular review of action plan progress which will be included on agendas for 121 meetings between Chief Executive and Chief Officers going forward. Complete Work is ongoing to implement the Council’s information classification policy and procedure as part of the Microsoft Office 365 project. Ongoing as part of the Microsoft Office 365 rollout Within the HSCP, work is ongoing with Healthcare Improvement Scotland in respect of self-evaluation activity. Complete Within the HSCP, continue to undertake targeted interventions for areas with higher absence levels to support line managers and ensure individual absences are being managed in an appropriate manner to support return to work. Complete Within the HSCP, governance processes developed for tracking of audit action plans and ensuring action deadlines are met will continue to be embedded. Complete Continue to develop plans in response to the ageing population. We continue to develop and review services in response to the changing demographic. Complete Review of Learning Disability Service to improve on ways of working to ensure the service is fit for the future demands. Service Improvement lead aligned to service. Full review to be picked up as part of renewal and recovery work. Ongoing Improved case recording and assessment for children and families who receive statutory social work services. Complete
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 29 Annual Governance Statement Improvement Area identified by 2020/21 Exercise Status A Project Overview document has been developed and approved by the Integrated Housing Project Board in relation to the IHMS. This document is being utilised to manage all remaining Phase 2 implementation items. Ongoing At the appropriate time a post-incident review will be carried out in relation to the COVID-19 Pandemic highlighting any lessons learned which will inform future emergency response and recovery arrangements. Ongoing Best Value Assurance Report Audit Scotland reported a Best Value Assurance Report on West Dunbartonshire Council to the Accounts Commission on 28 June 2018 which contained five recommendations, all of which are complete. Health and Social Care Integration The Council, as the funder of the Social Care services within the HSCP has an interest in the governance arrangements within the HSCP. Internal Audit arrangements for the HSCP is provided jointly by the Council’s Internal Audit service and the Health Board’s Internal Audit Service, with the Council’s Internal Audit service providing audit arrangements for social care services and the general oversight of the HSCP’s governance arrangements. The HSCP has arrangements in place to review its own ongoing compliance with the revised Code of Governance. Due to the Council’s role as social care service provider Internal Audit’s process outcomes on such services are reported to the Council’s Audit Committee as well as that of the HSCP. The Chief Social Worker provides Council with an annual report on the performance of the HSCP. The financial arrangements for the Council’s funding to the HSCP are aligned and budget processes run parallel to ensure that appropriate budgets for the HSCP are aligned with Council policy and budgeting approaches, particularly in relation to ensuring any efficiency targets for the HSCP funding from the Council are planned for and appropriate efficiencies are approved by the HSCP. On an ongoing basis Council continues to receive budgetary control information in relation to HSCP services funded by the Council. Compliance with Best Practice Statement on the role of the Chief Financial Officer in local government The Council complies with the requirements of the CIPFA Statement on “The Role of the Chief Financial Officer in Local Government 2010”. The Council’s Chief Financial Officer (Section 95 Officer) has overall responsibility for the Council’s financial arrangements, and is professionally qualified and suitably experienced to lead the Council’s finance function and to direct finance staff. Statement on the role of the Head of Internal Audit in Public Service Organisations The Council complies with the requirements of the CIPFA Statement on “The Role of the Head of Internal Audit in Public Service Organisations 2019”. The Council’s Chief Internal Auditor has responsibility for the Council’s Internal Audit function and is professionally qualified and suitably experienced to lead and direct the Council’s Internal Audit staff. The Internal Audit service generally operates in accordance with the CIPFA “Public Sector Internal Audit Standards 2017”.
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 30 Annual Governance Statement Assurance Subject to the above, and on the basis of the assurances provided, we consider the governance and internal control environment operating during 2021/22 provides reasonable and objective assurance that any significant risks impacting on the achievement of our principle objectives will be identified and actions taken to avoid or mitigate their impact. Systems are in place to continually review and improve the governance and internal control environment with plans in place to address improvement areas. Martin Rooney Peter Hessett Laurence Slavin Leader of the Council Chief Executive Chief Officer – Resources Date: 30 June 2022 Date: 30 June 2022 Date: 30 June 2022
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 31 Remuneration Report Introduction The council is required under statute to provide information on the remuneration of each senior elected member and senior officer and any other officer not otherwise included whose remuneration is over £0.150m per annum. All information disclosed in the tables 1-6 and section (b) of the Remuneration Report is due to be audited by Audit Scotland. The other sections are reviewed by Audit Scotland to ensure that they are consistent with the Financial Statements. a) Remuneration - Councillors The remuneration of Councillors is regulated by the Local Governance (Scotland) Act 2004 (Remuneration) Amendment Regulations 2021 (SSI No. 2021/18). The Regulations provide for the grading of Councillors for the purposes of remuneration arrangements, as the Leader of the Council, the Civic Head (Provost), Senior Councillors and Councillors. The Leader of the Council and the Provost cannot be the same person for the purposes of payment of remuneration. A Senior Councillor is a Councillor who holds a significant position of responsibility in the Council’s political management structure. The regulations stipulate that in addition to the Leader of the Council and the Provost, West Dunbartonshire can appoint a maximum of ten Senior Councillors. The level of remuneration paid to the Leader of the Council, Provost and Senior Councillors is detailed in Table 1. The salary that is to be paid to the Leader of the Council is set out in the Regulations. For 2021/22 the salary for the Leader of West Dunbartonshire Council was £37,213. The Regulations also state that the maximum yearly amount that may be paid to the Provost (£27,910) is 75% of the total yearly amount payable to the Leader of the Council. The Regulations also state the remuneration that may be paid to Senior Councillors and the total number of Senior Councillors the Council may have. The maximum yearly amount that may be paid to a Senior Councillor (£27,910) is 75% of the total yearly amount payable to the Leader of the Council. For 2021/22 the total yearly amount payable by the Council for remuneration of all of its Senior Councillors shall not exceed £232,570. The Council is able to exercise local flexibility in the determination of the precise number of Senior Councillors and their salary within these maximum limits. Council policy is to pay Senior Councillors a salary of £23,257, per the decision at Council on 17 May 2017 for 2017/18 onwards. During 2021/22, the Council agreed the appointment of a Council Leader, Provost, Bailie and 8 Senior Councillors and the remuneration due paid to the 8 Senior Councillors totalled £177,568 (£178,587 in 2020/21 for those Senior Councillors). The Regulations also permit the Council to pay contributions or other payments as required to the Local Government Pension Scheme in respect of those Councillors who elect to become Councillor members of the pension scheme. The pension entitlements for the year to 31 March 2022 are shown in Table 5 on page 36. The Scheme of Members Allowances which encompasses the salaries of all elected members including the Leader, Provost, Bailie and Senior Councillors was agreed at a meeting of the full Council on 17 May 2017. The report to Council and the Register of Members’ Expenses is available online.
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 32 Remuneration Report Table 1: Remuneration of Senior Councillors Note: The term Senior Councillor means a Leader of the Council, the Civic Head or a Senior Councillor, all as defined by regulation 2 of the Local Governance (Scotland) Act 2004 (Remuneration) Regulations 2007(3). Salaries, allowances and expenses in 2021/22 have only been included for Senior Councillors. Remuneration paid to all Councillors The Council paid the following salaries, allowances and expenses to all Councillors (including the Senior Councillors above) during the year: 2020/21 Name Position Salary, Fees & Allowances Taxable Expenses Non-cash Expenses, Benefits-in kind Total Remuneration Total Remuneration £ £ £ £ £ Leader of Council 37,213 0 0 37,213 35,713 Convener of Recruitment & Individual Performance Management Committee Convener of Sub Committee on Scheme of Delegation William Hendrie Provost 27,910 0 0 27,910 26,785 Depute Provost Depute Leader Convener of Appeals Committee Convener of Educational Services Committee Caroline McAllister Depute Leader (to 29/3/2021) 18,644 0 0 18,644 22,275 Denis Agnew Bailie 23,257 0 0 23,257 22,320 Convener of West Dunbartonshire Health & Social Care Partnership (IJB) Convener of Cultural Committee Ian Dickson Convener of Corporate Services Committee 23,254 0 0 23,254 22,338 Convener of Tendering Committee Convener of Licensing Board Diane Docherty Convener of Housing & Communities Committee 23,254 0 0 23,254 22,338 Convener of Licensing Committee Convener of Planning Committee Iain Mclaren Convener of Infrastructure Regeneration & Economic Development Committee 23,254 0 0 23,254 22,338 Marie McNair Convener of West Dunbartonshire Health & Social Care Partnership (IJB) (to 1 June 2021) 19,394 0 0 19,394 22,320 John Mooney Convener of Audit Committee 23,257 0 0 23,257 22,320 Year ended 31 March 2022 22,320 Jonathan McColl Karen Conaghan 23,254 0 0 23,254 22,338 Jim Finn 23,257 0 0 23,257 2020/21 2021/22 £ £ 459,853 Salaries 470,582 2,083 Expenses 4,020 461,936 Total 474,602
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 33 Remuneration Report b) Remuneration - Senior Employees and Senior Employees of Subsidiaries Note: The annual return of Councillors’ salaries and expenses for 2021/22 is available for any member of the public to view at all Council libraries and public offices during normal working hours and is also available on the Council website at https://www.west- dunbarton.gov.uk/council/councillors-and-committees/councillors-allowances/ The salary of senior employees is set by reference to national arrangements. The Scottish Joint Negotiating Committee (SJNC) for Local Authority Services sets the salaries for the Chief Executives of Scottish local authorities. Circular CO/151 sets the amount of salary for the Chief Officials of the Council for the period 1 April 2021 to 31 March 2022. The post of Chief Officer Health and Social Care Partnership is a joint post between the Council and NHS Greater Glasgow and Clyde. The post of Chief Officer Roads & Neighbourhood is a joint post between the Council and Inverclyde Council. The only benefits received by employees are: salary; employer contributions to the pension fund; and where applicable, payment for election duties. There were no bonuses, compensation for loss of office or other benefits paid to senior employees during the year. The remuneration details for senior employees are noted in Table 2: Election payments for 2021/22 are for the Scottish Parliamentary Election held on the 6 May 2021. There were no elections during 2020/21. Details of the post of Chief Officer-Health & Social Care Partnership are included in the remuneration report of the Integration Joint Board. The Council funds 50% of this post and NHS Greater Glasgow fund the remaining 50%. Details of the post of Chief Officer - Roads & Neighbourhood (shared post with Inverclyde Council) are included in the remuneration report of Inverclyde Council. The Council funds 50% of this post which was £60,897 (including employer on costs). Name Position at 31/03/22 Salary, Fees & Allowances 2021/22 Election Duties 2021/22 Total Remuneration 2021/22 Total Remuneration 2020/21 £ £ £ £ Remuneration of Senior Employees Joyce White Chief Executive 133,472 8,815 142,287 133,398 115,158 Jonathan Hinds Head of Children’s Healthcare & Criminal Justice - Chief Social Work Officer (to 29 August 2021) 37,598 (FYE 88,165) 0 37,598 (FYE 88,165) 88,190 Lesley James Head of Children’s Healthcare & Criminal Justice - Chief Social Work Officer (from 6 Dec 2021) 27,411 (FYE 88,322) 0 27,411 (FYE 88,322) 0 Laura Mason Chief Officer - Education, Learning & Attainment 96,399 0 96,399 89,645 Stephen West Chief Officer - Resources - S95 Officer (to 3 Jan 2022) 73,912 (FYE 95,872) 0 73,912 (FYE 95,872) 93,588 Laurence Slavin Chief Officer - Resources - S95 Officer (from 3 Jan 2022) 22,357 (FYE 92,817) 0 22,357 (FYE 92,817) 0 Peter Hessett Chief Officer - Regulatory & Regeneration 96,804 5,498 102,302 91,062 Victoria Rogers Chief Officer - People & Technology 96,804 350 97,154 91,062 Angela Wilson Chief Officer - Supply, Distribution & Property 115,070 0 115,070 115,158 Peter Barry Chief Officer - Housing & Employability 96,804 0 96,804 91,062 Malcolm Bennie Chief Officer - Citizen, Culture & Facilities (to 2 Jan 2022) 71,292 (FYE 95,872) 140 71432 (FYE 96,012) 89,534 Amanda Graham Chief Officer - Citizen, Culture & Facilities (from 5 Jan 2022) 74,340 (FYE 92,817) 380 74,720 (FYE 93,197) 0 Remuneration of Senior Employees of Subsidairies John Anderson General Manager of West Dunbartonshire Leisure 77,780 0 77,780 76,912 Richard Cairns Strategic Director of Regeneration, Environment & Growth (seconded role from 1/10/2020) 115,070115,070 0
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 34 Remuneration Report The amounts for post of Strategic Director of Regeneration, Environment & Growth relate to the salary, fees and allowances and employer pension contributions paid by the Council. Glasgow City Council fund 75% of the salary and pension contributions for the seconded role. Notes 1. The term senior employee means any local authority employee: who has responsibility for the management of the local authority to the extent that the person has the power to direct or control the major activities of the authority (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 Local Government and Housing Act 1989 (4); or whose annual remuneration, including any remuneration from a local authority subsidiary body, is £150,000 or more. 2. The figure for gross salary, fees and allowances shown for senior employees for the year ended 31 March 2022 includes any amounts received for the roles performed for West Dunbartonshire in the elections. There was one election during 2021/22 (Scottish Parliamentary Election). There was no elections during 2020/21. 3. The Local Government (Discretionary Payments and Injury Benefits)(Scotland) Regulations 1998 make provision for authorities to make discretionary payments to local government employees to pay compensation for premature retirement. There were no discretionary payments made to senior employees during the year. c) Remuneration of Employees receiving more than £50,000 Council employees receiving more than £50,000 remuneration for the year were paid the following amounts. In accordance with the disclosure requirement of the Regulations, the information in the table shows the number of employees in bands of £5,000. This information includes the senior employees who are subject to the fuller disclosure requirements in the tables above. Table 3: Remuneration of Employees 2021/22 2020/21 £50,000 - £54,999 128 140 £55,000 - £59,999 46 43 £60,000 - £64,999 28 22 £65,000 - £69,999 48 52 £70,000 - £74,999 10 3 £80,000 - £84,999 1 2 £85,000 - £89,999 4 6 £90,000 - £94,999 0 7 £95,000 - £99,999 5 0 £100,000 - £104,999 1 0 £115,000 - £119,999 3 3 £130,000 - £134,999 0 1 £140,000 - £144,999 1 0 Total 275 279 Number of Employees
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 35 Remuneration Report d) Pension Benefits Pension benefits for Councillors and most local government employees are provided through the Local Government Pension Scheme (LGPS). Councillors’ pension benefits are based on career average pay. The Councillor’s pay for each year or part year ending 31 March (other than the pay in the final year commencing 1 April) is increased by the increase in the cost of living, as measured by the appropriate index (or indices) between the end of that year and the last day of the month in which their membership of the scheme ends. The total of the revalued pay is then divided by the period of membership to calculate the career average pay. This is the value used to calculate the pension benefits. The pension entitlements for the year to 31 March 2022 are shown in Table 5 on pages 36. The table details the pension entitlement and contributions made by the Council in respect of all senior Councillors and senior officers of the Council who have opted to join the LGPS. For local government employees, the LGPS 2015 is a career average pension scheme. This means that pension benefits from 01/04/2015 are based on pensionable pay with inflation added. Pension is accrued at a rate of 1/49 of pensionable pay for each scheme year. Pension benefits can be accessed from age 55 but are reduced prior to 60th birthday. Pension benefits accrued before 1 April 2015 are protected and are based on final pay on retiring. Pension benefits for teachers are provided through Scottish Teachers Superannuation Scheme (STSS).The STSS is a contributory scheme administered by the Scottish Public Pension Agency (SPPA). From 1 April 2015 the scheme is a career average pension scheme. Pension benefits are increased in line with inflation. Pension is accrued at 1/57 of pensionable earnings each year. Pension benefits can be accessed earlier than the normal state pension age but will be reduced if taken earlier than the normal pension age (state pension age). From 1 April 2009, a five tier contribution system was introduced with contributions from scheme members being based on how much pay falls into each tier. This is designed to give more equality between the cost and benefits of scheme membership. Table 4 provides information on these tiered contribution rates. Table 4: Contribution Rate Contribution rate 2021/22 Contribution rate 2020/21 The tiers and members contribution rates for 2021/22 whole time pay: Local Government employees On earnings up to and including £22,300 (£22,200) 5.50% 5.50% On earnings above £22,300 (£22,200) and up to £27,300 (£27,100) 7.25% 7.25% On earnings above £27,300 (£27,100) and up to £37,400 (£37,200) 8.50% 8.50% On earnings above £37,400 (£37,200) and up to £49,900 (£49,600) 9.50% 9.50% On earnings above £49,900 (£49,600) 12.00% 12.00% The tiers and members contribution rates for 2021/22 actual pay: Teachers On earnings up to and including £ 28,309 (£28,168) 7.20% 7.20% On earnings above £28,309 (£28,168)and up to £37,918 (£37,918) 8.70% 8.70% On earnings above £ 38,801 (£37,918) and up to £45,186 (£44,961) 9.70% 9.70% On earnings above £45,186 (£44,961) and up to £ 59,884 (£59,586) 10.40% 10.40% On earnings above £ 59,844 (£59,586) and up to £81,659 (£81,253) 11.50% 11.50% On earnings above £81,659 (£81,253) 11.90% 11.90%
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 36 Remuneration Report If a person works part-time their contribution rate is 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. The accrual rate guarantees a pension based on 1/49th of pay from 1 April 2015. Prior to this the accrual rate guarantees a pension based on 1/60th of final pensionable salary and years of pensionable service. 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 accrued benefits has been calculated on the basis of the age at which the person will first become entitled to receive a pension on retirement without reduction on account of its payment at that age; without exercising any option to commute pension entitlement into a lump sum; and without any adjustment for the effects of future inflation. You can retire and receive your benefits in full from your normal pension age. The normal pension age is 65 for any benefits built up before 1 April 2015. For pension build up from 1 April 2015, the Normal Pension Age is not fixed at age 65 but, instead, is the same as the State Pension Age (but with a minimum of age 65). Table 5: Pension Benefits of Senior Councillors; Senior Employees and Senior Employees of Subsidiaries Name Position at 31/03/22 For year to 31 March 2022 For year to 31 March 2021 As at 31 March 2022 As at 31 March 2021 £ £ £ £ Jonathan McColl Leader of Council 7,182 6,893 9,927 8,643 Convener of Sub Committee on Scheme of Delegation Convener of Recruitment & Individual Performance Management Committee Denis Agnew Bailie 4,489 4,308 8,303 7,324 Convener of West Dunbartonshire Health & Social Care Partnership (IJB) Convener of Cultural Committee John Mooney Convener of Audit Committee 4,489 4,308 4,445 3,867 Karen Conaghan Depute Provost 4,480 4,298 2,268 1,785 Depute leader Convener of Appeals Committee Convener of Educational Services Committee Ian Dickson Convener of Corporate Services Committee 4,480 4,298 2,268 1,785 Convener of Tendering Committee Convener of Licensing Board Diane Docherty Convener of Housing & Communities Committee 4,480 4,298 2,268 1,785 Convener of Licensing Committee 4,489 4,308 5,002 4,357 Convener of Planning Committee Caroline McAllister Depute Leader (to 29/3/2021) 3,570 4,298 2,173 1,785 Iain McLaren Convener of Infrastructure Regeneration & Economic Development Committee 4,480 4,298 2,268 1,785 Senior Employees Joyce White Chief Executive 27,404 25,667 40,989 38,005 Richard Cairns Strategic Director of Regeneration, Environment & Growth (seconded role from 1/10/2020) 24,037 22,157 72,805 70,397 Jonathan Hinds Head of Children’s Healthcare & Criminal Justice - Chief Social Work Officer (to 29 Aug 2021) 6,853 16,970 60,925 60,163 Lesley James Head of Children’s Healthcare & Criminal Justice - Chief Social Work Officer (from 6 Dec 2021) 5,431 0 592 0 Laura Mason Chief Officer - Education, Learning & Attainment 18,605 17,302 137,027 135,105 Stephen West Chief Officer - Resources - S95 Officer (to 3 Jan 2022) 14,065 18,009 131,249 127,902 Laurence Slavin Chief Officer - Resources - S95 Officer (from 3 Jan 2022) 4,466 0 473 0 Peter Hessett Chief Officer - Regulatory & Regeneration 18,646 17,535 98,687 94,312 Victoria Rogers Chief Officer - People & Technology 18,646 17,535 72,996 69,349 Angela Wilson Chief Officer-Supply,Distrubtion & Property 22,157 22,157 161,987 159,556 Peter Barry Chief Officer - Housing & Employability 18,646 17,535 60,535 57,241 Malcolm Bennie Chief Officer - Citizen, Culture & Facilities (to 2 Jan 2022) 13,751 17,263 18,992 17,502 Amanda Graham Chief Officer - Citizen, Culture & Facilities (from 5 Jan 2022) 14,357 0 10,103 0 Senior Employees of Subsidiaries John Anderson General Manager of West Dunbartonshire Leisure 14,979 14,799 59,796 57,718 In-year pension contributions Accrued pension benefits Senior Councillors Jim Finn
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 37 Remuneration Report The pension figures shown relate to the benefits that the person has accrued as a consequence of their total public sector service, and not just their current appointment. The pension entitlements for the year to 31 March 2022 for Senior Councillors are shown in Table 5, together with the contribution made by the Council to each Senior Councillor’s pension during the year. Senior councillors omitted from the table above are not members of the Local Government Pension Scheme. e) Exit Packages There were no exit packages agreed during 2021/22. f) Trade Union Facility Time Facility time generates benefits for employees, managers and the wider community from effective joint working between union representatives and employers. Details of the facility time within West Dunbartonshire Council during the year to 31 March 2022 is shown in Table 7 below. Further detail can be found at: https://www.west-dunbarton.gov.uk/council/performance-and-spending/trade-union-facility-time- reports/ Table 7 Banding 2021/22 2020/21 2021/22 2020/21 £ £ £0 - £20,000 0 4 0 8,033 £20,001 - £40,000 0 2 0 57,403 £60,001 - £150,000 0 0 0 0 Total 0 6 0 383,381 Total cost Number of departures Number of Employees FTE employee Number Number of Employees FTE employee Number 37 31 56 52 Percentage Number of Employees Percentage Number of Employees Less < 1% 27 Less < 1% 37 1-50% 9 1-50% 17 51%-99% 1 51%-99% 0 100% 0 100% 2 Percentage of Pay Bill Spent on Facility Time Percentage of Pay Bill Spent on facility 1.17% 22.00% 0.17% 0.06% Paid TU Activities Paid TU Activities £97,862 £97,973 Total pay bill Total pay bill £58,699,980 £158,326,164 Education Function Employee All Other Function Employee Percentage of Time Spent on Facility Percentage of Time Spent on Facility Total cost of facility time Total cost of facility time
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 38 Remuneration Report Martin Rooney Peter Hessett Leader of the Council Chief Executive Date: 30 June 2022 Date: 30 June 2022
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 39 Comprehensive Income and Expenditure Statement This statement shows the accounting cost in year, of providing services in accordance with relevant International Financial Reporting Standards, rather than the amount to be funded from taxation. The Council raises taxation to cover expenditure in accordance with regulations; this may be different from the accounting cost. The taxation position is shown in the Movement in Reserves Statement. Further detail on the expenditure and income within the Net Cost of Services below is available in Note 15 on pages 76 to 80. 2020/21 2020/21 2020/21 2021/22 2021/22 2021/22 Gross Gross Net Gross Gross Net Expenditure Income Expenditure Expenditure Income Expenditure £000 £000 £000 Note £000 £000 £000 Service 67,986 (42,105) 25,881 Corporate Services 71,197 (38,346) 32,851 116,612 (17,593) 99,019 Educational Services 125,602 (15,424) 110,178 67,809 (17,814) 49,995 Infrastructure, Regeneration and Economic Development 65,015 (16,032) 48,983 37,083 (32,922) 4,161 Housing and Communities 39,631 (31,853) 7,778 34,003 (43,354) (9,351) Housing Revenue Account 38,661 (44,675) (6,014) 8,597 (6,117) 2,480 Miscellaneous Services 7,021 (8,501) (1,480) 177,261 (101,678) 75,583 Health and Social Care Partnership 192,224 (107,720) 84,504 2,339 0 2,339 Requisitions 2,517 0 2,517 511,690 (261,583) 250,107 Net Cost of Service (1) 541,868 (262,551) 279,317 883 (Gain) / loss on Disposal of Fixed Assets 998 883 Other Operating Expenditure (2) 998 (36,765) Council Tax (38,207) (55,963) 10 Non-Domestic Rates (81,408) (153,086) 10 Revenue Support Grant (133,404) (26,210) 10 Recognised Capital Income (Grants, Contributions & Donations) (7,746) (272,024) Taxation and Non-specific Grant Income (3) (260,765) (165) 27 Interest Earned (81) 19,180 27 External Interest Payable / Similar Charges 17,865 1,382 Impairment Loss - Debtors 1,101 0 27 (Gain)/Loss early settlement of borrowing 0 3,379 13 Pension Interest Cost/Expected Return on Pension Assets 3,557 23,776 Finance/Investment Income and Expenditure (4) 22,442 2,742 (Surplus)/Deficit on Provision of Services (5) = (1)+(2)+(3)+(4) 41,992 (49,393) (Surplus)/Deficit arising from revaluation of property, plant and equipment (4,917) 0 (Surplus)/Deficit on revaluation of available for sale assets 0 12,934 13 Actuarial (gains)/losses on pension fund assets and liabilities (140,041) (36,459) Other Comprehensive (Income) and Expenditure (6) (144,958) (33,717) Total Comprehensive (Income) and Expenditure (5) + (6) (102,966)
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 40 Movement in Reserves Statement This statement shows the movement in the year on the different reserves held by the Council, analysed into ‘usable reserves’ (i.e. those that can be applied to fund expenditure or reduce local taxation) and other reserves. The surplus or (deficit) on the provision of services line in the Comprehensive Income and Expenditure Statement (page 39) shows the true economic cost of providing the Council’s services. These are different from the statutory amounts required to be charged to the General Fund balance and the Housing Revenue Account for council tax setting and dwelling rent setting purposes. The net increase/decrease before transfer to other statutory reserves line shows the statutory general fund balance and housing revenue account balance before any discretionary transfers to or from earmarked reserves undertaken by the Council. General Fund balance HRA Balance Capital Receipts Reserve Capital Grants and Receipts Unapplied Account Capital Reserve Capital Fund Other Reserves Total Usable Reserves Unusable Reserves Total Reserves Note £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 2021/22 Opening Balance at 1 April 2021 (15,028) (7,364) 0 (42) (1,469) 0 (308) (24,211) (294,418) (318,629) Movement in reserve 2021/22 Total Comprehensive Expenditure and Income 43,221 (1,229) 0 0 0 0 0 41,992 (144,958) (102,966) Adjustments between accounting basis and funding basis under regulations 6 (40,825) 5,554 (30) (1,837) 0 (403) 0 (37,541) 37,541 0 Net (Increase)/Decrease before Transfers to Other Statutory Reserves 2,396 4,325 (30) (1,837) 0 (403) 0 4,451 (107,417) (102,966) Transfers to/from other statutory reserves (2,388) 305 0 1,837 711 403 (160) 708 (708) 0 Closing Balance at 31 March 2022 (15,020) (2,734) (30) (42) (758) 0 (468) (19,052) (402,543) (421,595) 2020/21 Opening Balance at 1 April 2020 (9,395) (3,924) 0 (132) (2,169) 0 (214) (15,834) (269,078) (284,912) Movement in reserve 2020/21 Total Comprehensive Expenditure and Income 11,039 (8,297) 0 0 0 0 0 2,742 (36,459) (33,717) Adjustments between accounting basis and funding basis under regulations 6 (15,280) 4,504 0 (279) 0 (916) 0 (11,971) 11,971 0 Net (Increase)/Decrease before Transfers to Other Statutory Reserves (4,241) (3,793) 0 (279) 0 (916) 0 (9,229) (24,488) (33,717) Transfers to/from other statutory reserves (1,392) 353 0 369 700 916 (94) 852 (852) 0 Closing Balance at 31 March 2021 (15,028) (7,364) 0 (42) (1,469) 0 (308) (24,211) (294,418) (318,629) Usable Reserves
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 41 Balance Sheet The balance sheet shows the value, as at the balance sheet date, of the assets and liabilities recognised by the Council. The net assets of the Council (assets less liabilities) are matched by the reserves held by the Council. Reserves are reported in two categories: 1. Usable reserves, i.e. those reserves that the Council may use to provide services, subject to the need to maintain a prudent level of reserves and any statutory limitations on their use (for example the capital receipts reserve that may only be used to fund capital expenditure or repay debt); and 2. Unusable reserves, i.e. those that the Council is not able to use to provide services. This category of reserves includes reserves that hold unrealised gains and losses (for example the revaluation reserve), where amounts would only become available to provide services if the assets are sold; and reserves that hold timing differences shown in the MIRS line ‘adjustments between accounting basis and funding basis under regulations’. The unaudited Financial Statements were authorised for issue on 30 June 2022. Laurence Slavin Chief Officer - Resources West Dunbartonshire Council Date: 30 June 2022 2020/21 2021/22 £000 Note £000 1,111,227 16 Property, Plant and Equipment 1,146,365 271 17 Intangible Assets 631 22 Long Term Debtors 21 1,406 19 Heritage Assets 1,485 489 Long Term Investments 485 1,113,415 Long Term Assets 1,148,987 7,755 18 Asset Held for Sale 5,117 1,338 Inventories 1,279 66,620 23 Short Term Debtors 71,187 12,241 26 Cash and Cash Equivalents (net) 2,140 87,954 Current Assets 79,723 (53) Donated Inventories (76) (72,858) 28 Short Term Creditors (78,362) (263,861) 27 Short Term Borrowing (270,923) (3,677) 22 PPP (3,370) (340,449) Current Liabilities (352,731) 860,920 875,979 (284,798) 27 Long Term Borrowing (307,485) (92,615) 22 PPP and Finance Lease Liabilities (89,115) (163,615) 13 Net Pensions Liability (55,690) (1,263) 10 Capital Grants Receipts in Advance (2,093) (542,291) Long Term Liabilities (454,383) 318,629 Net Assets 421,596 Represented by: 24,211 MIR/30 Usable Reserves 19,053 294,418 MIR/31 Unusable Reserves 402,543 318,629 Total Reserves 421,596
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 42 Cash Flow Statement The cash flow statement shows the changes in cash and cash equivalents of the Council during the reporting period. The statement shows how the Council generates and uses cash and cash equivalents by classifying cash flows as operating, investing and financing activities. The amount of net cash flows arising from operating activities is a key indicator of the extent to which the operations of the Council are funded by way of taxation and grant income or from the recipients of services provided by the Council. Investing activities represent the extent to which cash outflows have been made for resources which are intended to contribute to the Council’s future service delivery. Cash flows arising from financing activities are useful in predicting claims on future cash flows by providers of capital (i.e. borrowing) to the Council. 2020/21 2021/22 2021/22 £000 £000 £000 Operating Activities 2,742 Net deficit on the provision of services 41,992 (39,121) Depreciation, amortisation and impairment (32,756) (884) Net gain/loss on fixed assets (1,006) (16,604) Movement in pension liabilities (32,116) 54 Movement in inventories (82) 21,536 Movement in debtors 6,915 (25,795) Movement in creditors and provisions (9,567) 351 Other non-cash movements 272 (60,463) Adjustments to net deficit on the provision of services for non-cash movements (68,340) 6 Financing movements 15 26,210 Investing movements 7,746 26,216 Adjustments for items included in the net surplus/deficit on the provision of services that are investing and financing activities 7,761 (31,505) Net cash inflow from Operating Activities (18,587) 88,866 Purchase of property, plant and equipment and intangible assets 66,341 (1,284) Proceeds from sale of property, plant and equipment and intangible assets (2,262) (6) Movement on long term investments (4) (17,810) Other receipts from investing activities (10,037) 69,766 Net cash outflows from investing activities 54,038 (270,250) Cash receipts of short-term and long-term borrowing (350,501) 3,652 Repayment of PPP liabilities 3,808 235,115 Repayment of short-term and long-term borrowing 320,751 42 Debtors held for agency payments (888) (2,023) Creditors held for agency payments 1,480 (33,464) Financing Activities (25,350) 4,797 10,101 17,038 Cash and cash equivalents at the beginning of the reporting period 12,241 12,241 Cash and cash equivalents at the end of the reporting period 2,140 4,797 Movement – (Increase)/ Decrease in Cash 10,101
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 43 Notes to the Financial Statements Note 1 - Accounting Policies 1. General Principles The Financial Statements summarises the Council’s transactions for the 2021/22 financial year and its position at the year end of 31 March 2022. The Council is required to prepare an Annual Statement of 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. These practices primarily comprise the Code of Practice on Local Authority Accounting in the United Kingdom 2021/22 (“the code”) and the Service Reporting Code of Practice 2021/22, supported by International Financial Reporting Standards (IFRS). The accounting convention adopted in the Financial Statements is principally historic cost, modified by the revaluation of certain categories of non-current assets and financial instruments. The convention also adopts the assumption that the Council will continue as a going concern for the foreseeable future. 2. Accruals of Income and Expenditure Activity is accounted for in the year that it takes place, not simply when payment is made or received. In particular: revenue from sale of goods is recognised when the Council transfers the significant risks and rewards of ownership to the purchaser and when it is probable that the economic benefits associated with the transaction will flow to the Council; revenue from the provision of services is recognised when the Council can measure reliably the percentage of completion of the transaction and when it is probable that the economic benefits associated with the transaction will flow to the Council; expenses in relation to services received are recorded as expenditure when the services are received, rather than when payment is made; supplies are recorded as expenditure when they are consumed. Where there is a gap between the date supplies are received and their consumption their value is carried as inventories on the Balance Sheet; interest payable on borrowings and receivable on investments is accounted for on the basis of the effective interest rate for the relevant financial instrument, rather than on cash flows fixed or determined by the contract; where income and expenditure have been recognised but cash has not been received or paid, a debtor or creditor for the relevant amount is recorded in the Balance Sheet. Where there is evidence that debts are unlikely to be settled, the balance of debtors is written down and charged to revenue for the income that might not be collected; and Revenue from contracts with service recipients, whether for services or the provision of goods, is recognised when (or as) the goods or services are transferred to the service recipient in accordance with the performance obligations in the contract. 3. Changes in Accounting Policies, Estimates and Errors Changes in accounting policies are only made when required by proper accounting practices or the change provides more reliable or relevant information about the effect of transactions, events or conditions on the Council’s financial position or performance. Where a change is made, it is applied retrospectively by adjusting opening balances and comparative figures, as if the new policy has always been applied. Changes in accounting estimates are accounted for prospectively, i.e. in the current and future years only. Material errors discovered in prior period figures are corrected retrospectively by amending opening balances and comparative figures.
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 44 Notes to the Financial Statements 4. Charges to Revenue for Property, Plant and Equipment Council Services are debited/ credited with the following amounts to record the cost of using or holding fixed assets during the year: depreciation, attributable to the assets used by the relevant service or trading account; revaluation and impairment losses, where there is no accumulated gain in the Revaluation Reserve; revaluation gains, where these reverse an impairment loss previously charged to the service or trading account; and amortisation of intangible fixed assets. The Council is not required to raise council tax to cover depreciation, revaluation gains or losses or impairment losses. However, it is required to make annual provision from revenue towards the reduction in its overall borrowing requirement. Depreciation, revaluation and impairment losses and amortisations are replaced by the revenue provision in the General Fund by an adjustment within the Capital Adjustment Account in the Movement in Reserves Statement for the difference between the two. 5. Intangible assets Internally generated assets are capitalised where it is demonstrable that the project is technically feasible and is intended to be completed (with adequate resources being available) and the Council will be able to generate future economic benefits or deliver service potential by being able to sell or use the asset. Expenditure is capitalised where it can be measured reliably as attributable to the asset and restricted to that incurred during the development phase (research expenditure is not capitalised). Expenditure on the development of websites is not capitalised if the website is solely or primarily intended to promote or advertise the Council’s goods or services. Assets are measured originally at cost and only revalued where the fair value of the asset can be determined by reference to an active market. Where an intangible asset has a finite useful life, the depreciable amount of the asset is charged over its useful life to the relevant service line(s) in the Comprehensive Income and Expenditure Statement. An asset is tested for impairment whenever there is an indication that the asset might be impaired – any losses recognised are posted to the relevant service line(s) in the Comprehensive Income and Expenditure Statement. Any gain or loss arising on the disposal or abandonment of an intangible asset is recognised in the Surplus or Deficit on the Provision of Services when the asset is derecognised. 6. Property, Plant and Equipment Assets that have physical substance and are held for the supply of goods and services, either directly or indirectly, and that are expected to be used during more than one financial year are classified as Property, Plant and Equipment. Recognition Expenditure on the acquisition, creation or enhancement of property, plant and equipment is capitalised on an accruals basis, provided that it is probable that the future economic benefits or service potential associated with the item will flow to the Council and the cost of the asset can be measured reliably. Expenditure that maintains, but does not add to the asset’s potential to deliver future economic benefits or service potential, is charged as an expense when it is incurred.
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 45 Notes to the Financial Statements Measurement Initially measured at cost, comprising of: purchase price (the Council has no de minimis level set); any costs associated with bringing the asset to the location or condition necessary for it to be capable of operating in the manner intended by management; and the initial estimate of costs for dismantling and removing the item and restoring the site on which it is located to its original state. The Council does not capitalise borrowing costs incurred during construction of an asset. Where property, plant or equipment are acquired in exchange for a non monetary asset or assets, or a combination of monetary and non monetary assets, the cost of the acquired item shall be measured at fair value unless there is no economic substance to the exchange transaction, or the fair value of neither the asset received nor the asset given up can be reliably measured. The acquired item is measured at fair value even if the Council cannot immediately derecognise the asset given up. The acquired item is measured at the carrying amount of the asset given up if it is not measured at fair value. Assets are then carried in the Balance Sheet using the following measurement bases: Asset Type Valuation Method Infrastructure, community and assets under construction assets Historic Cost Council dwellings Fair value - determined in accordance with existing use value of social housing (EUV-SH) Other buildings Fair value. Where there is no market based evidence of fair value because of the specialised nature of the asset and the asset is rarely sold, depreciated replacement cost is used as an estimate of fair value Plant and equipment and other non property assets Fair value. Where assets in this class have either short useful lives or low values (or both), depreciated historical cost is considered to be a proxy for fair value where the useful life is a realistic reflection of the life of the asset and the depreciation method provides a realistic reflection of the consumption of the asset class Revaluation Assets included in the Balance Sheet at fair value are re-valued regularly to ensure their carrying amount is not materially different from the fair value at the year end, as a minimum every five years. The programme of revaluation for 2021/22 and planned each of the following four years is as follows: 2021/22 Offices / depots/ cemeteries/ crematorium lodges; 2022/23 All Council non-operational properties/ HRA housing stock; 2023/24 Schools/school houses/ social work homes/adult training centres/ community education centres/early education centres; 2024/25 Halls/ Public conveniences/ libraries/ outdoor centres/ golf course/ pavilions/ sports centres/ swimming pools/ travellers site/ car parks/ HRA housing stock; and 2025/26 Any properties not previously re-valued / general re-appraisal / HRA housing stock.
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 46 Notes to the Financial Statements In addition to assets being revalued within the programme of revaluation assets will be revalued in any given year if any of following three criteria is met: When the historic cost of the building is less than £2m but the combined value of the building historic cost and any enhancement expenditure incurred since the last revaluation date exceeds £2m then the asset will be revalued and (if new valuations exceeds £2m) componentised if necessary; Where the historic cost of the building exceeds £2m (and is therefore already componentised) and where any enhancement expenditure incurred since the last revaluation date exceeds 25% of the historic cost of the building then the asset will be revalued; and Where the combined value of building historic cost and any enhancement expenditure incurred since the last revaluation date spend is less than £2m but the value of the enhancement expenditure exceeds 50% of building historic cost and in value is more than £0.500m then the asset will be revalued. Valuations in 2021/22 have been carried out by an external valuer. Valuations of land and buildings are carried out in accordance with the methodologies and bases for estimation set out in the professional standards of the Royal Institution of Chartered Surveyors. Increases in valuations are matched by credits to the Revaluation Reserve to recognise unrealised gains. Where decreases in value are identified, the revaluation loss is accounted by: where a balance of revaluation gains for the asset is held in the Revaluation Reserve – the carrying amount of the asset is written down against that balance (up to the total gain); or where no balance of revaluation gains for the asset is held in the Revaluation Reserve – the carrying amount is written down against the relevant service line(s) in the Comprehensive Income and Expenditure Statement. The Revaluation Reserve contains revaluation gains recognised since 1 April 2007, the date of its formal implementation. Gains arising before that date have been consolidated into the Capital Adjustment Account. Impairment Where impairment losses are identified, they are accounted for in the same way as revaluation decreases. Where an impairment loss is reversed subsequently, the reversal is credited to the relevant service line(s) in the Comprehensive Income and Expenditure Statement, up to the amount of the original loss, adjusted for depreciation that would have been charged if the loss had not been recognised. Disposals When it becomes apparent that the carrying amount of an asset will be recovered principally through a sale transaction rather than through its continuing use, it is re-classed as either a surplus asset or an Asset Held for Sale. The asset is re-valued immediately before re-classification and then carried at the lower of this amount and the fair value less sale costs. Assets to be scrapped are not re-classified as Assets Held for Sale. When an asset is disposed of or decommissioned, both the carrying amount in the Balance Sheet and receipts from disposal are transferred to the Surplus and Deficit on the Provision of Services line in the Comprehensive Income and Expenditure Statement as part of a gain or loss on sale. Any revaluation gains accumulated for the asset in the Revaluation reserve are transferred to the Capital Adjustment Account.
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 47 Notes to the Financial Statements Amounts received for a disposal are categorised as capital receipts. The balance of receipts is credited to either the Capital Receipts Reserve or the Capital Fund and can only be used for new capital investment, set aside to reduce the Council’s underlying borrowing requirement, to fund the principal element of loan charges or to fund premium charges. Receipts are appropriated to these reserves from the General Fund balance in the Movement in Reserves Statement. The written-off value of disposals is not a charge against council tax. It is appropriated to the Capital Adjustment Account from the General Fund balance in the Movement in Reserves Statement. Depreciation Depreciation is provided on all property, plant and equipment over their useful economic lives, with an exception made for assets without a determinable finite useful life (i.e. non depreciating land and certain community assets) and assets that are not yet available for use (i.e. assets under construction). The useful lives of assets and depreciation method are as follows: Council Dwellings 10 – 80 years Straight line Other buildings 15 – 80 years Straight line Open spaces 10 – 120 years Straight line Infrastructure 15 – 120 years Straight line Vehicles, plant, equipment 5 – 20 years Straight line Intangibles 5 – 10 years Straight line Other 10 – 120 years Straight line * Including components such as structure, mechanical and electrical, etc. Where an item of property, plant and equipment assets has major components whose cost is significant in relation to the total cost of the item, the components are depreciated separately. Revaluation gains are also depreciated, with an amount equal to the difference between current depreciation charged on assets and the depreciation that would be chargeable based upon historic cost being transferred each year from the Revaluation Reserve to the Capital Adjustment Account. Tangible fixed assets and depreciation – Common Good Assets All assets valued over £6,000 are capitalised and valued at market value. Depreciation is charged on assets other than Investment assets on a straight line basis over their estimates life. The Fund only holds investment assets. 7. Assets Held for Sale These assets are measured at fair value, based on the amount at which the asset could be exchanged between knowledgeable parties at arm’s length, less costs to sell at the initial classification and at the end of each reporting date. Revaluation gains shall be recognised for any initial or subsequent increase in fair value less costs to sell but not in excess of the cumulative impairment loss or revaluation loss that have been recognised in the Surplus of Deficit on the Provision of Services. Impairment losses (or revaluation losses) will be recognised for any subsequent decrease to fair value less costs to sell following reclassification in the Surplus or Deficit on the Provision of Service even where there is a balance on the assets Revaluation Reserve. 8. Heritage Assets Heritage assets are presented separately in the balance sheet from other property, plant and equipment. The assets are measured at historic cost or fair value. Where the Council considers that it is not practical to obtain a reliable valuation, the asset is not recognised on the Balance Sheet. Where assets are measured at fair value, valuations are made by any method that is appropriate:
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 48 Notes to the Financial Statements Type of Asset Valuation Method for Balance Sheet Purposes Ship models/ Silver and Commemorative wear The last formal valuations were by Bonhams, Sotheby’s and Phillips. Further formal valuations will be commissioned where it is considered that there could potentially be a material change in value and where the value of the asset is estimated to be in excess of £10,000 Works of art The last formal valuations were by Bonhams, Sotheby’s and Phillips. Where a lower and upper valuation has been provided the mid valuation has been used Further formal valuations will be commissioned where it is considered that there could potentially be a material change in the value of the assets held Civic Regalia The robes are not recognised on the balance sheet as they are considered to have no significant value. However the chains are reported in the balance sheet at insurance value. Sewing Machine Collection These collections are not recognised on the balance sheet as cost information is not readily available. Nearly all the items are believed to have an immaterial value. Listed Buildings and Scheduled Ancient Monuments These assets are not recognised on the balance sheet as it is considered that there is a lack of available, comparable market values to establish a ‘fair value’. It is unlikely that the Council would procure such assets but is more likely to refurbish or enhance existing structures. In this respect, the cost of those works will be capitalised at cost. Purchased assets are initially recognised at cost and donations are recognised at valuation where that value is estimated to be greater than the threshold of £10,000 as specified above. The carrying amounts are reviewed where there is evidence of impairment e.g. where an item has suffered physical deterioration or breakage or where doubts arise as to its authenticity. Any impairment is recognised and measured in accordance with the Council’s general policies on impairment. No depreciation shall be chargeable on any heritage asset, in view of the indeterminate life and residual value. The proceeds from any disposal of heritage assets are accounted for in accordance with the council’s general provisions relating to the disposal of property, plant and equipment. Work in progress is valued at cost plus an appropriate proportion of overheads, together with attributable profits and allowances for foreseeable losses. 10. Employee Benefits Benefits payable during employment Short term employee benefits (i.e. fall due within 12 months of the year-end), such as wages and salaries, paid leave, paid sick leave, bonuses and non monetary benefits for current employees are recognised as an expense in the year in which the employees render service to the Council. An accrual is made against the services in the Surplus or Deficit on the Provision of Service for the costs of holiday entitlement and other forms of leave earned by the employee but not taken before the year end and which employees can carry forward into the next financial year. Any accrual made is required under statute to be reversed out of the General Fund balance by a credit to the Statutory Mitigation Account in the Movement in Reserves Statement.
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 49 Notes to the Financial Statements Termination Benefits Termination benefits are amounts payable as a result of a decision made by the Council to terminate an officer’s employment before the normal retirement date or an officer’s decision to accept a voluntary termination package in exchange for those benefits. Termination benefits do not provide the Council with future economic benefits and consequently they are recognised on an accruals basis immediately in the Surplus or Deficit on the Provision of Services line in the Comprehensive Income and Expenditure Account when the Council is demonstrably committed to provision of the termination benefits. Where termination benefits involve the enhancement of pensions, they are treated as pension costs for the purpose of the statutory transfer between the Pension Reserve and the General Fund of the amount by which the pension costs calculated in accordance with the Code are different from the contributions due under the pension scheme regulations. In the Movement in Reserves Statement appropriations are required to and from the Pension Reserve to remove notional debits and credits for termination benefits related to pensions enhancements and replace them with the cost of the cash paid, including any amounts due and not paid at the year end. Post Employment Benefits Employees of the Council are members of two separate defined pension schemes: the Teachers’ Pension Scheme, administered by the Scottish Pensions Agency; and the Local Government Pensions Scheme, administered by Glasgow City Council. In relation to retirement benefits, statutory provisions require the General Fund to be charged with the amount payable by the Council to the pension fund or directly to pensioners in the year, not the amount calculated in accordance to the relevant accounting standards. In the Movement in Reserves Statement this means that there are appropriations to and from the Pension Reserve to remove any notional debits and credits for retirement benefits and replace them with the cash paid or payable at the year end, to the pension fund and pensioners. The negative balance that arises on the Pension Reserve measures the beneficial impact on the General Fund of being required to account for retirement benefits on the basis of cash flows rather than as benefits earned by employees. Discretionary Benefits The Council has restricted powers to make discretionary awards of retirement benefits in the event of early retirements. Any liabilities estimated to arise as a result of an award to any member of staff (including teachers) arising from the use of these discretionary powers are accrued in the year of the decision to make the award and accounted for using the same policies as are applied to the local government pension scheme. 11. Events after the Reporting Period Events after the reporting period are those events (both favourable and unfavourable) that occur between the end of the reporting period and the date when the Financial Statements are authorised for issue. Two types have been identified: those that provide evidence of conditions that existed at the end of the reporting period – the Financial Statements are adjusted to reflect this; and those that are indicative of conditions that arose after the reporting period – the Financial Statements are not adjusted to reflect this. However, if the event is material, a disclosure is made within the notes of the nature and financial effect.
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 50 Notes to the Financial Statements 12. Exceptional Items When items of income and expenditure are material, their nature and amount is disclosed separately, either within the Comprehensive Income and Expenditure Statement or in the notes to the accounts, depending on how significant the items are to the understanding of the Council’s financial performance. 13. Financial Liabilities Financial liabilities are recognised on the Balance Sheet when the Council becomes party to the contractual provisions of a financial instrument and initially measured at fair value and carried at their amortised cost. Annual charges to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement for interest payable are based upon the carrying amount of the liability, multiplied by the effective rate of interest for the instrument. The effective interest rate is the rate that exactly discounts estimated future cash payments over the life of the instrument to the amount at which it was originally recognised. For most of the borrowing that the Council has this means that the amount presented in the Balance Sheet is the outstanding principal repayable (plus accrued interest). Interest charged to the Comprehensive Income and Expenditure Statement is the amount payable for the year according to the loan agreement. Gains and losses on the repurchase or early settlement of borrowing are credited or debited to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement in the year of repurchase/settlement. However, where repurchase has taken place as part of a restructuring of the loan portfolio that involves the modification or exchange of existing instruments, the premium or discount is respectively deducted from or added to the amortised cost of the new or modified loan and the write-down to the Comprehensive Income and Expenditure Statement is spread over the life of the loan by an adjustment to the effective interest rate. Where premiums and discounts have been charged to the Comprehensive Income and Expenditure Statement regulations allow the impact on the General Fund balance to be spread over future years. Premiums and discounts that were on the balance sheet as at 31 March 2007 are written off in accordance with the schedules in place at that time, however premiums and discounts that are incurred as a result of transactions that have taken place since 1 April 2007 are written off in accordance with regulations as follows: Modified Loans both old and new premiums and discounts are amortised over the life of the new loan using the effective interest rate as noted above. Unmodified Loans new premiums and discounts are written off over the life of the new loan (if fixed) or over a maximum of 20 years (if variable or with an option to vary); old premiums are written off over a maximum of 20 years; and old discounts are written off over a maximum of 5 years. Straight Repayment both old and new premiums and discounts are written off over a maximum of 5 years. 14. Financial Assets Financial assets are classified using a principles based approach with the accounting treatment being determined by both the particular characteristics of the individual instrument and the overarching investment strategy under which the instrument has been acquired or originated. Three classes of financial asset have been identified:
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 51 Notes to the Financial Statements amortised cost; fair value through other comprehensive income; and fair value through profit or loss Amortised Cost For assets carried at amortised cost interest is credited (using the effective interest rate) and movements in impairment loss allowances are debited or credited to surplus or deficit on the provision of services with no recognition of gains or losses in fair value until reclassification or derecognition of the asset. Fair Value Through Other Comprehensive Income For assets carried at fair value through other comprehensive income movements in amortised cost are debited or credited to the surplus or deficit on the provision of services with movements in fair value debited or credited to other comprehensive income and expenditure. Fair Value Through Profit or Loss For assets carried at fair value through profit or loss all gains or losses are posted to surplus or deficit on the provision of services as they arise. Financial assets are classified into two types: loans and receivables – assets that have fixed or determinable payments but are not quoted in an active market; and available-for-sale assets – assets that have a quoted market price and/or do not have fixed or determinable payments Loans and Receivables Loans and receivables are recognised on the Balance Sheet when the Council becomes party to the contractual provisions of a financial instrument and initially measured at fair value. They are then measured at their amortised cost. Annual credits to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement for interest receivable are based on the carrying amount of the asset multiplied by the effective rate of interest for the instrument. Where considered material movements in impairment loss allowances are also debited or credited as appropriate. For most other the loans that the Council has made, this means that the amount presented in the Balance Sheet is the outstanding principal receivable (plus accrued interest) and interest credited to the Comprehensive Income and Expenditure Statement is the amount receivable for the year in the loan agreement. Where soft loans are made and are material, a loss is recorded in the Comprehensive Income and Expenditure Statement (debited to the appropriate service line) for the present value of the interest that will be foregone over the life of the loan, resulting in a lower amortised cost than the outstanding principal. Interest is credited to the Financing and Investment Income and Expenditure line in the Comprehensive Income and Expenditure Statement at a marginally higher effective rate of interest than the rate receivable from the community groups, with the difference increasing the amortised cost of the loan in the Balance Sheet. Statutory provisions require that the impact of soft loans on the General Fund balance is the interest receivable for the financial year – the reconciliation of amounts debited or credited to the Comprehensive Income and Expenditure Statement to the net gain required against the General Fund balance is managed by a transfer to or from the Financial Instruments Adjustment Account in the Movement in Reserves Statement. Instruments Entered Into Since 1 April 2006 Any financial guarantees the Council has committed to since 1 April 2006 have been recognised at fair value and assessed for probability of the guarantee being called and the likely amount payable under the guarantee. Any material provision for this has been recognised in the Financial Statements to the extent that provisions might be required or a contingent liability note is needed.
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 52 Notes to the Financial Statements 15. Fair Value Measurement The Council measures some on its non-financial assets and some of its financial instruments at fair value at each reporting date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement assumes that the transaction to sell the asset takes place either: in the principal market for the asset or liability; or in the absence of a principal market, in the most advantageous market for the asset The Council measures the fair value of an asset or liability using the assumptions that market participants would use when pricing the asset, assuming that market participants act in their economic best interest. When measuring fair value of a non-financial asset, the Council takes into account a market participant’s ability to generate economic benefit by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. The authority uses valuation techniques that are appropriate in the circumstances and for which sufficient data is available, maximising the use of relevant observable inputs and minimising the use of unobservable inputs. Inputs to the valuation techniques in respect of assets for which fair value is measured or disclosed in the Council’s financial statements are categorised within the fair value hierarchy as follows: Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities that the authority can access at the measurement date; Level 2 – inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and Level 3 – unobservable inputs for the asset or liability. 16. Government Grants and Contributions Government grants and other contributions are recognised as due by the Council when there is reasonable assurance that: the Council will comply with the conditions attached to the payments, and the grants or contributions will be received. Amounts recognised as due to the Council are not credited to the Comprehensive Income and Expenditure Account until conditions attached to the grant or contribution have been satisfied. Conditions are stipulations that specify that the future economic benefits or service potential embodied in the asset acquired using the grant or contribution are required to be consumed by the recipient as specified for future economic benefit or service potential must be returned to the transferor. Monies advanced as grants and contributions for which conditions have not been satisfied are carried in the Balance Sheet as creditors. When conditions are satisfied, the grant or contribution is credited to the relevant service line (attributable revenue grants/contributions) or Taxation and Non Specific Grant Income (non ringfenced revenue grants and all capital grants) in the Comprehensive Income and Expenditure Statement. Where capital grants are credited to the Comprehensive Income and Expenditure Statement, they are reversed out of the General Fund balance in the Movement in Reserves Statement. Where the grant has not yet been used to finance capital expenditure, it is posted to the Capital Grants Unapplied Account. Where it has been applied, it is posted to the Capital Adjustment Account. Amounts in the Capital Grants Unapplied Account are transferred to the Capital Adjustment Account once they have been applied.
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 53 Notes to the Financial Statements 17. Inventories Inventories are held by a number of Council services, such as asset maintenance services, roads, services, school technician services, hospitality services, etc., and include consumable stock and work in progress, where appropriate. Consumable stock is included in the Balance Sheet on a cost price basis, with inventory quantities based on physical stock at the end of the year. 18. Leases Leases are classified as finance leases where the terms transfer substantially all the risks and rewards incidental to ownership from the lessor to the lessee. All other leases are classified as operational. Where the lease covers both land and buildings, the elements are considered separately for classification. Council as Lessee Finance Leases Assets held under finance lease are recognised in the Balance Sheet at the start of the lease at its fair value at the lease’s inception, or, if lower the present value of the minimum lease payments. The asset recognised is matched by a liability for the obligation to pay. Initial direct costs are added to the carrying amount of the asset. Premiums paid on entry into a lease are applied to writing down the lease liability. Contingent rents are charged to revenue in the years they incur. Lease payments are apportioned between: a charge for the acquisition of the interest in the asset – applied to write down the lease liability; and a finance charge (debited to the Financing and Investment income and Expenditure line in Comprehensive Income and Expenditure Statement). Assets recognised under the finance lease are accounted for using the policies applied generally to council owned assets, subject to depreciation being charged over the lease term if this is shorter than the asset’s estimated useful life. Operating Leases Rentals paid under operating leases are charged to the Comprehensive Income and Expenditure Statement as an expense. Charges are made on a straight line basis over the life of the lease, even if it does not match the pattern of payment. Council as Lessor Finance Leases When the Council grants a finance lease over an asset, the asset is written out of the Balance Sheet as a disposal. At the start of the lease the carrying amount of the asset is written off to the Other Operating Expenditure line in the Comprehensive Income and Expenditure Statement as part of the gain/loss on disposal. A gain, representing the Council’s net investment in the lease is credited to the same line in the Comprehensive Income and Expenditure Statement, matched by a lease asset in the Balance Sheet. Lease rentals receivable are apportioned between: a receipt for the acquisition of the interest in the asset – applied to write down the lease asset (together with any premiums received); and finance income (credited to the Financing and Investment income and Expenditure line in Comprehensive Income and Expenditure Statement).
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 54 Notes to the Financial Statements The gain credited to the Comprehensive Income and Expenditure Statement on disposal is not permitted by statute to increase the General Fund balance and will be required to be treated as a capital receipt. Where a premium has been received, this is posted out of the General Fund Balance to the Capital Receipts Reserve in the Movement in Reserves Statement. Where the amounts due in relation to the lease asset is to be settled by the payment of rentals in future financial years, this is posted out of the General Fund Balance to the Deferred Capital Receipts Reserve in the Movement in Reserves Statement. When the future rentals are paid, the element of the charge for the acquisition of the interest in the asset is used to write down the lease asset. At this point, the deferred capital receipts are transferred to the Capital Receipts Reserve. The written off value of the disposals is not a charge against council tax, as the cost of fixed assets is fully provided for under separate arrangements for capital financing. Amounts are appropriated to the Capital Adjustment Account from the General Fund balance in the Movement in Reserves Statement. Operating Leases Where the council grants an operating lease over an asset, the asset is retained in the Balance Sheet. Rental income is credited to the Other Operating Expenditure line in the Comprehensive Income and Expenditure Statement. Credits are made on a straight line basis over the life of the lease, even if it doesn’t match the pattern of payment. 19. Overhead and Support Services The costs of overheads and support services are charged to non General Fund services that benefit from the supply in accordance with the costing principles of the CIPFA Service Reporting Code of Practice 2021/22. The total absorption costing principle is used – the full cost of overheads and support services are shared between those users in proportion to the benefits received. General Fund Services have not been charged for these support service costs, in line with the Council’s budgetary reporting structure. 20. Public Private Partnership (PPP) and Similar Contracts PPP and similar contracts are agreements to receive services, where the responsibility for making available the property, plant and equipment needed to provide the services passes to the private contractor. As the Council is deemed to control the services that are provided under the PPP scheme and as ownership of the property, plant and equipment will pass to the council at the end of the contract for no additional charge, the Council carries the asset on its Balance Sheet. 21. Provisions Provisions are made where an event has taken place that gives the Council a legal obligation or constructive obligation that probably requires settlement by a transfer of economic benefits or service potential and a reliable estimate can be made of the amount of that obligation. Provisions are charged as an expense to the appropriate service line in the Comprehensive Income and Expenditure Statement in the year the Council becomes aware of the obligation and measured at the best estimate at the Balance Sheet date, taking account of relevant risks and uncertainties. When payments are made they are charged to the provision carried in the Balance Sheet. Estimated settlements are reviewed at the end of each financial year. Where it becomes less probable that a transfer of economic benefits is required; the provision is reversed and credited back to the relevant service.
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 55 Notes to the Financial Statements 22. Impairment of Debt Any changes to the impairment value of debt is charged to the appropriate line in the Comprehensive Income and Expenditure Statement. This includes impairment of outstanding Council Tax, Non Domestic Rates, Rent and other sundry debt. To calculate the level of impairment required consideration is given to the type of debt, the age of debt, arrangements for repayment by the debtor, historic movement of the debt. 23. Interest in Companies and Other Entities The council has material interests in companies and other entities that have the nature of associates/ subsidiaries and require it to prepare group accounts. In the Council’s own single entity accounts, the interests of two companies are recorded as an investment in the Balance Sheet, as the council has shares and full ownership of the Clydebank Property Company (purchased during 2014/15) and has an investment with Hub West Scotland (invested 2015/16). No other interests are recorded in the council’s single entity accounts of any of other organisation. 24. VAT VAT payable is included as an expense only to the extent that it is not recoverable from HM Revenue and Customs. VAT receivable is excluded from income. 25. Loans Advances Repayment In accordance with The Local Authority (Capital Finance and Accounting) (Scotland) Regulations 2016, the Council has recalculated the repayments of the loans fund advances to reflect the life of the specific assets associated with the debt, using an annuity of 9%. Note 2 – Critical Judgement in Applying Accounting Policies The preparation of the consolidated financial statements requires management to make some judgements and assumptions when applying the accounting policies that have the most significant effect on carrying amounts in the financial statements. These judgements are usually about complex transaction or involve uncertainty about future events. Where a critical judgement has been made, this is referred to in the relevant note to the core financial statements; however a summary of those with the most significant effect are detailed below: Public Private Partnership (PPP) and Design-Build-Finance-Maintain (DBFM) - The Council has entered into a PPP contract for the provision of three secondary schools and one primary school. The Council has also entered into a DBFM contract for one secondary school. The contracts include the build of the schools as well as their maintenance and provision of related facilities over the period of each contract. After consideration of International Financial Reporting Interpretations Committee IFRIC12 (Service Concession Arrangements), it has been concluded that these are service concession arrangements and the Council controls the services provided under the scheme and ownership of the schools will pass to the Council at the end of the contracts for no additional charge. The assets used to provide services at the schools are recognised on the Council’s Balance Sheet as operational assets and as a finance lease liabilitiy. The value of these assets (£104m) is included within the Property, Plant and Equipment (note 16) and the liability within note 22 - Private Finance Initiatives and similar Contracts (£92m). Public Sector Funding – There is a high degree of uncertainty about future levels of funding for local government. The Council has a Longer Term Financial Strategy, updated and reported to Council annually, which provides a list of current assumptions over a 10 year period regarding funding. However, the Council has determined that this uncertainty is not yet sufficient to provide an indication that the assets held might require to be impaired as a result of a need to close facilities and reduce levels of service provision.
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 56 Notes to the Financial Statements Council Acting as Principal or Agent - When the Council receives funding it requires to consider the degree of control it has over how this funding is to be utilised. If the Council has no discretion over the utilisation of the funds it deems that it is acting as an agent and this funding is reported in the Agency Services note and not reflected in the Council’s income and expenditure, but with any amounts owed to/ from the Council held within its Balance Sheet. In 2021/22 funding was provided by the Scottish Government through the Council to businesses and individuals affected by the COVID pandemic. Any agency funding is noted within Note 9 (Agency Services), with further detail of COVID related grants shown and cross referred in Note 10 (Grant Income). Provision or Contingent Liability - Where the Council faces a future liability and this can be quantified with a reasonable degree of certainty, a provision for that liability is made. If the liability can not be quantified, it will be disclosed as a Contingent Liability (Note 31). Most of these involve ongoing or prospective legal action meaning the outcome and potential amounts involved can not be determined with any level of accuracy. Note 3 – Assumptions Made About the Future and Other Major Sources of Estimation Uncertainty The Financial Statements contain estimated figures that are based on assumptions about the future or that are otherwise uncertain. Estimates are made taking into account historical experience, current trends and other relevant factors. However, because balances cannot be determined with certainty, actual results could be materially different from the assumptions and estimates. The items in the Council’s balance sheet as at 31 March 2022, for which there is a significant risk of material adjustment in the forthcoming financial year are noted below. Examples are provided of each potential uncertainty and the effect it would have within the Financial Statement are also noted. These examples provide an understanding of the significance of a small change in the estimation assumption: Estimation assumptions which impact within the next 12 months: Item Uncertainty Potential effect Property Plant and Equipment – valuation The Council’s assets are valued on a rolling programme over a maximum of 5 years. The valuation assumptions are ascertained by the professional valuers used by the Council. The Council’s valuers considered uncertainty regarding the valuation of assets following COVID and have concluded that the valuations are not subject to ‘material valuation uncertainty’ due to the current economic climate as at the valuation date. If the actual results differ from the assumptions, the value of the assets could be affected. The value of the assets subject to revaluation over the rolling programme is £918.586m. During 2021/22 the assets that were revalued are now held in the Balance Sheet to a total value of £29.326m for General Services and £425m for HRA The impact for each 1% change in these valuations would be £0.293m General Services and £4.250m HRA within the Balance Sheet, resulting in an increase or a decrease to the Revaluation Reserve, or an impairment charge, but with no effect on the General Fund or the HRA reserves. Any change would also impact on annual depreciation charges.
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 57 Notes to the Financial Statements Item Uncertainty Potential effect Property Plant and Equipment – depreciation / useful lives Assets are depreciated over useful lives that are dependent on assumptions about the level of repairs and maintenance that will incur in relation to those assets. The current economic climate makes it uncertain that the Council will be able to sustain its current level of spending on maintenance, bringing into doubt the useful lives assigned to assets. If the useful lives of assets were too high, it is estimated that the annual depreciation charge for buildings would increase by £1.625m for every year that useful lives had to be reduced, resulting in a further charge to that value through the Comprehensive Income and Expenditure Statement and the value of the assets held in the Council’s Balance Sheet would also be reduced by the same value. Any change would not affect the reserves position of the Council. Arrears and bad debts As at 31 March 2022, the Council had a balance of various debtors of £71.187m with a sliding scale of bad debt provision written against each type, depending on the age of the debt. For example of the council tax debt of £42.907m, the Council holds £25.334m as a provision for doubtful debts; of the debt held for HRA rents of £4.027m, £2.444m is held as a provision for doubtful debts. If collection rates were to deteriorate, the provision for bad debts would require to be reviewed to consider the appropriate level of provision. If a 10% increase was considered appropriate, this would result in a further £2.533m being required to be provided for council tax provision and £0.244m for an HRA rent provision. Any change in the provision would affect the reserves position of the Council. However, based upon prior experience, in year movements and with each type of debt considered individually, the bad debt provision is considered adequate. Fair Value Measureme -nt When the fair value of financial assets and financial liabilities cannot be measured based on quoted prices in active markets (i.e. Level 1 inputs), their fair value is measured using valuation techniques (e.g. quoted prices for similar assets or liabilities in active markets or the discounted cash flow (DCF) model). Where possible, the inputs to these valuation techniques are based on observable data, but where this is not possible judgement is required in establishing fair values. These judgements typically include considerations such as uncertainty and risk. Changes in the assumptions used could affect the fair value of the Council’s assets and liabilities. Where Level 1 inputs are not available, the Council utilises relevant experts to identify the most appropriate valuation techniques (for example for surplus assets and non-current assets held for sale, the Council’s estates valuer and for financial instruments the Council’s treasury advisors). Information about the valuation techniques and inputs used in determining the fair value of the Council’s assets and liabilities is disclosed in notes 16, 18 and 27. The Council uses the DCF model to measure the fair value of financial instruments. Surplus assets and non- current assets held for sale have been based on the market value approach. Market conditions are such that similar properties are marketed, purchased and sold actively. The significant observable inputs used include current market conditions and recent sales prices and other relevant information for similar assets in the West Dunbartonshire area together with evidence across the wider West of Scotland for surplus assets and non-current assets held for sale and discount rates for financial instruments. Significant changes in any of these would result in significantly lower or higher fair value measurement for financial instruments as detailed in note 27. Significant changes to the key inputs for non-financial assets would have a significant impact on the value of the properties. However as the properties are valued annually and form a small proportion in relation to the value of the Council’s overall portfolio the impact of any changes would be limited.
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 58 Notes to the Financial Statements Estimation assumptions which impact longer term: Item Uncertainty Potential effect Pension liability Estimation of the net liability to pay pensions depends on a number of complex judgements relating to the discount rates used, the rate at which salaries are projected to increase by, changes to retirement ages, mortality rates and expected returns on pension assets held. This is further detailed within Note 11 to the Financial Statements. A firm of consulting actuaries is engaged to provide the Council with expert advice about the assumptions applied. The effect on the net liability can be measured. For example, a decrease in the discount rate of 0.1% would increase the pension liability held on the Balance sheet by 2% or £21.239m; and increase in the pension rate by 0.1% would increase the pension liability held on the Balance sheet by 2% or £18.250m However, the assumptions interact in complex ways. During 2021/22 the appointed actuaries advised that the net liability had decreased year on year by £107.925m as a result of estimates being updated and an update to the assumptions. The current liability held in the Council’s balance sheet is £55.690m. Note 4 – Accounting Standards that have been issued but have not yet been adopted For 2021/22, the Code requires the disclosure of information relating to the expected impact of an accounting change that will be required by a new standard that has been issued but not yet adopted. This applies to the adoption of the following new or amended standards: Amendments to IAS16: Property, Plant, Equipment – proceeds before intended use; Annual improvements to IFRS Standards 2018 – 2020 (the annual IFRS improvement programme) includes: - Amendments: o IFRS1: First time adoption, in relation to foreign operations of acquired subsidiaries transitioning to IFRS; o IAS41: Agriculture - Clarifications: o IAS37: Onerous contracts, in relation to clarifying the intention of the standard; o IFRS16: Leases, removing a misleading example. Overall, these new or amended standards are not expected to have a significant impact on the Annual Accounts in future years. IFRS16 Leases will require local authorities that are lessees to recognise these leases on their Balance sheet as right-of-use assets along with the corresponding liabilities, except for low value and short term leases. CIPFA/LASACC have deferred implementation of this until 1 April 2023.
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 59 Notes to the Financial Statements Note 5 - Material Items of Income and Expense Where items are not disclosed on the face of the Comprehensive Income and Expenditure Statement, the Code requires a disclosure of the nature and amount of material items. Material items of expenditure charged to services in the year are shown in the table below: Item Nature £000 Housing Benefit received Benefit received to support customers on low incomes with housing rent costs 35,248 Housing Benefit paid Benefit paid to support customers on low incomes with housing rent costs (34,111) Supplementation Residential Accommodation for adults and children with disabilities 22,660 Unitary Charge Payment Public Private Partnership agreement for the provision of 3 secondary schools and one primary school 12,154 Landfill Tax A tax paid on the disposal of waste. It is payable to Her Majesty’s Revenue and Customs (HMRC) 3,461 Insurances Insurance premiums for all policies 2,773 Care Homes Cost of providing care home services by external providers 3,857 Integration Joint Board - West Dunbartonshire Health and Social Care Partnership Payments to other bodies 3,744 Integration Joint Board - West Dunbartonshire Health and Social Care Partnership Day Support 2,407 Integration Joint Board - West Dunbartonshire Health and Social Care Partnership Payments to Clients 2,729 Integration Joint Board - West Dunbartonshire Health and Social Care Partnership Payments to external fostering agencies 1,500 Integration Joint Board - West Dunbartonshire Health and Social Care Partnership Payments to Voluntary Organisations 2,506
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 60 Notes to the Financial Statements Note 6 – Adjustments between funding accounting basis and funding basis under regulations This note provides further breakdown of the adjustments summarised in the Movement in Reserves Statement on page 40. It is identified under the headings Usable and Unusable Reserves. Further detail of the reserves identified under the classification of usable and unusable is given in notes 29 and 30 on pages 97 to 101. 2021/22 General Fund Balance HRA Balance Capital Receipts Reserve Capital Grants and Receipts Unapplied Account Capital Reserve Capital Fund Other Reserves Total Usable Reserves £000 £000 £000 £000 £000 £000 £000 £000 Usable Reserves Adjustments to the Revenue Resources Pension Costs (transferred to (or from) the Pensions Reserve) (30,947) (1,169) 0 0 0 0 0 (32,116) Financial Instruments (transferred to the Financial Instruments Adjustment Account) 8 7 0 0 0 0 0 15 Holiday Pay (transferred to the Accumulated Absences Reserve) 252 35 0 0 0 0 0 287 Reversal of entries included in the Surplus or Deficit on the Provision or Services in relation to capital expenditure (these items are charges to the Capital Adjustment Account) (13,020) (11,989) 0 0 0 0 0 (25,009) (43,707) (13,116) 0 0 0 0 0 (56,823) Adjustments between Capital and Revenue Resources Transfer of non-current asset sale gain/loss from revenue to the Capital Receipts Reserve (998) 0 998 0 0 0 0 0 Statutory provision for the repayment of debt (transfer to the Capital Adjustment Account) 3,808 5,495 0 0 0 0 0 9,303 Capital expenditure financed from revenue balances (transfer to the Capital Adjustment Account) 72 13,175 0 0 0 0 0 13,247 2,882 18,670 998 0 0 0 0 22,550 Adjustments to the Capital Resources Disposal of non-current asset sale proceeds 0 0 (3,268) 0 0 0 0 (3,268) Transfer from the Capital Receipts Reserve to the Capital Fund/ Capital Grants and Receipts Unapplied Account 0 0 2,240 (1,837) 0 (403) 0 0 Application of capital grants to finance capital expenditure 0 0 0 0 0 0 0 0 0 (1,028) (1,837) 0 (403) 0 (3,268) Total Adjustments (40,825) 5,554 (30) (1,837) 0 (403) 0 (37,541)
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 61 Notes to the Financial Statements 2021/22 Capital Adjustment Account Revaluation Reserve Pension Reserve Employee Statutory Adjustment Account FIAA Total Unusable Reserves £000 £000 £000 £000 £000 £000 Unusable Reserves Adjustments to the Revenue Resources Pension Costs (transferred to (or from) the Pensions Reserve) 0 0 32,116 0 0 32,116 Financial Instruments (transferred to the Financial Instruments Adjustment Account) 0 0 0 0 (15) (15) Holiday Pay (transferred to the Accumulated Absences Reserve) 0 0 0 (287) 0 (287) Reversal of entries included in the Surplus or Deficit on the Provision or Services in relation to capital expenditure (these items are charges to the Capital Adjustment Account) 25,009 0 0 0 0 25,009 25,009 0 32,116 (287) (15) 56,823 Adjustments between Capital and Revenue Resources Statutory provision for the repayment of debt (transfer to the Capital Adjustment Account) (9,303) 0 0 0 0 (9,303) Capital expenditure financed from revenue balances (transfer to the Capital Adjustment Account) (13,247) 0 0 0 0 (13,247) (22,550) 0 0 0 0 (22,550) Adjustments to the Capital Resources Disposal of non-current asset sale proceeds 3,268 0 0 0 0 3,268 Depreciation adjustment between Capital Adjustment Account and Revaluation Reserve (7,746) 7,746 0 0 0 0 Write out Revaluation Reserve of Disposals (617) 617 0 0 0 0 Use of the Capital Receipts Reserve to finance capital expenditure 0 0 0 0 0 0 Application of capital grants to finance capital expenditure 0 0 0 0 0 (5,095) 8,363 0 0 0 3,268 Total Adjustments (2,636) 8,363 32,116 (287) (15) 37,541
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 62 Notes to the Financial Statements 2020/21 General Fund Balance HRA Balance Capital Receipts Reserve Capital Grants and Receipts Unapplied Account Capital Reserve Capital Fund Other Reserves Total Usable Reserves £000 £000 £000 £000 £000 £000 £000 £000 Usable Reserves Adjustments to the Revenue Resources Pension Costs (transferred to (or from) the Pensions Reserve) (15,967) (637) 0 0 0 0 0 (16,604) Financial Instruments (transferred to the Financial Instruments Adjustment Account) 3 3 0 0 0 0 0 6 Holiday Pay (transferred to the Accumulated Absences Reserve) (117) 2 0 0 0 0 0 (115) Reversal of entries included in the Surplus or Deficit on the Provision or Services in relation to capital expenditure (these items are charges to the Capital Adjustment Account) (4,390) (8,520) 0 0 0 0 0 (12,910) (20,471) (9,152) 0 0 0 0 0 (29,623) Adjustments between Capital and Revenue Resources Transfer of non-current asset sale gain/loss from revenue to the Capital Receipts Reserve (883) 0 883 0 0 0 0 0 Statutory provision for the repayment of debt (transfer to the Capital Adjustment Account) 5,800 5,019 0 0 0 0 0 10,819 Capital expenditure financed from revenue balances (transfer to the Capital Adjustment Account) 274 8,637 0 0 0 0 0 8,911 5,191 13,656 883 0 0 0 0 19,730 Adjustments to the Capital Resources Disposal of non-current asset sale proceeds 0 0 (2,167) 0 0 0 0 (2,167) Transfer from the Capital Receipts Reserve to the Capital Fund/ Capital Grants and Receipts Unapplied Account 0 0 1,284 (368) 0 (916) 0 0 Application of capital grants to finance capital expenditure 0 0 0 89 0 0 0 89 0 0 (883) (279) 0 (916) 0 (2,078) Total Adjustments (15,280) 4,504 0 (279) 0 (916) 0 (11,971)
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 63 Notes to the Financial Statements 2020/21 Capital Adjustment Account Revaluation Reserve Pension Reserve Employee Statutory Adjustment Account FIAA Total Unusable Reserves £000 £000 £000 £000 £000 £000 Unusable Reserves Adjustments to the Revenue Resources Pension Costs (transferred to (or from) the Pensions Reserve) 0 0 16,604 0 0 16,604 Financial Instruments (transferred to the Financial Instruments Adjustment Account) 0 0 0 0 (6) (6) Holiday Pay (transferred to the Accumulated Absences Reserve) 0 0 0 115 0 115 Reversal of entries included in the Surplus or Deficit on the Provision or Services in relation to capital expenditure (these items are charges to the Capital Adjustment Account) 12,910 0 0 0 0 12,910 12,910 0 16,604 115 (6) 29,623 Adjustments between Capital and Revenue Resources Statutory provision for the repayment of debt (transfer to the Capital Adjustment Account) (10,819) 0 0 0 0 (10,819) Capital expenditure financed from revenue balances (transfer to the Capital Adjustment Account) (8,911) 0 0 0 0 (8,911) (19,730) 0 0 0 0 (19,730) Adjustments to the Capital Resources Disposal of non-current asset sale proceeds 2,167 0 0 0 0 2,167 Depreciation adjustment between Capital Adjustment Account and Revaluation Reserve (9,012) 9,012 0 0 0 0 Write out Revaluation Reserve of Disposals (426) 426 0 0 0 0 Use of the Capital Receipts Reserve to finance capital expenditure 0 0 0 0 0 0 Application of capital grants to finance capital expenditure (89) 0 0 0 0 (89) (7,360) 9,438 0 0 0 2,078 Total Adjustments (14,180) 9,438 16,604 115 (6) 11,971
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 64 Notes to the Financial Statements Note 7 – Events After the Balance Sheet Date The draft Financial Statements were authorised for issue by the Chief Officer - Resources on 30 June 2022. Events taking place after this date are not reflected in the financial statements or notes. Where events taking place after this date provide information about conditions existing as at 31 March 2022, the figures in the Financial Statements and notes have been adjusted in all material respects to reflect the impact of this information. Note 8- Related Parties The council is required to disclose material transactions with related parties – bodies or individuals that have the potential to control or influence the Council or to be controlled or influenced by the council. Disclosure of these transactions allows readers to assess the extent to which the Council might have been constrained in its ability to operate independently or might have secured the ability to limit another party’s ability to bargain freely with the Council. Central & Scottish Government The Scottish Government has effective control over the general operations of the Council. It provides the statutory framework within which the Council operates, provides the majority of its funding in the form of grants and prescribes the terms of many transactions that the Council has with other parties (e.g. council tax, housing benefits). The details of grants received and balances due in comparison to previous year are as shown in Note 10 Grant Income. Related transactions with comparison to previous years detailed below: Elected Members Members of the Council have direct control over the Council’s financial and operating policies. The total of members’ allowances paid in 2021/22 is shown in the remuneration statement on pages 31 to 38. The Council maintains a register of interests for Members and reviews this for transactions carried out in the year with entities which Members have an interest. In the year ended 31 March 2022, the Council has not had any material transactions for any body in which Members have an interest. The elected member’s register of interest can be found on the Council’s website page: https://www.west-dunbarton.gov.uk/council/councillors-and-committees/councillors-allowances/ Subsidiaries Subsidiaries are independent bodies over which the Council is considered to have control. The following subsidiaries have been identified and are included in the group accounts pages 108-117. West Dunbartonshire Leisure Trust Established in April 2012, the Leisure Trust is a company limited by guarantee and has charitable status. It is responsible for the Strategic and Operational Management of West Dunbartonshire Council’s sports and leisure facilities. Community facilities, Sports development, Active Schools and Events. 2020/21 2021/22 £000 £000 209,049 Revenue Grants Received 214,812 25,839 Capital Grants Received 5,272 54,895 Other Grants Received 54,833 2,489 Capital Grants Balance due at 31 March 2022 480 751 Other Grants Balance due at 31 March 2022 1,554
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 65 Notes to the Financial Statements The Council has representation on the Board of Trustees, with three of the nine Trustees being Council elected members. The related transactions with comparison to previous year are as detailed below: Clydebank Property Company The company is owned by the Council which holds 100% of the issued share capital. The Council holds an investment within its Balance Sheet and has full representation on the Board of Directors, with each of the three Directors of the company being senior officers within the Council. The company paid a dividend to the Council in 2021/22. Related transactions with comparison to previous year are as detailed below: Clydebank Municipal Bank Clydebank Municipal Bank was established in 1921 to provide basic banking to residents of West Dunbartonshire. The Council has full representation on the Board with the Chair and the Directors being Elected Members of the Council, and both the Bank Manager and the Company Secretary to the Board being council officers. Banking staff are employed by the Council. West Dunbartonshire Energy LLP An Energy Services Company established in May 2021, and is a Limited Liability Partnership (LLP) which relates to the running and expansion of a local District Heating Network. The service is delivered within a partnership between the Council and Vital Energi (the Network Operator). The Council owns 99.9%, with Clydebank Property Company (a wholly owned subsidiary of the Council) owning 0.1%. The Members of the partnership (LLP) are the Council and the Clydebank Property Company related transactions are noted below: Associates Associates are bodies which the Council has significant influence over, but do not meet criteria of subsidiaries. The following associates have been identified in the financial year 2021/22 and are included in the wider group accounts pages 108-117. 2020/21 2021/22 £000 £000 5,128 Contribution to Leisure Trust 5,706 (81) Income from Leisure Trust (71) 2020/21 2021/22 £000 £000 273 CPC Investment held 273 (50) Dividend Received from CPC (50) 2020/21 £000 2021/22 £000 51 Costs charged to the Bank 62 1,306 Balance due from the Council 1,306 65 Balance due to the Council 84 2020/21 2021/22 £000 £000 0 Balance due to the Council 397
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 66 Notes to the Financial Statements Strathclyde Passenger Transport (SPT) SPT is the statutory body responsible for formulating the public transport policy on behalf of the 12 local authorities in the West of Scotland. The Council make a contribution to SPT with comparison to previous year figures as detailed below: Strathclyde Concessionary Travel Scheme Strathclyde Concessionary Travel Scheme Joint Board oversees the operation of the concessionary fares scheme for public transport on behalf of the 12 local authorities in the West of Scotland. The Council made a contribution with comparison to previous year figures as detailed below: West Dunbartonshire Health & Social Care Partnership The Council is also a partner in the West Dunbartonshire Health and Social Care Partnership (HSCP).The HSCP was established in July 2015 as a partnership between the Council and NHS Greater Glasgow & Clyde. It is responsible for planning and overseeing the delivery of a full range of community health and social work/social care services, including those for older people, adults, children and families. People in the Criminal Justice System and allied health professionals. The Council made a contribution to the HSCP relating to the integrated and social care functions, with comparison to previous year figure as detailed below: Dunbartonshire and Argyll and Bute Valuation Joint Board (DABVJB) DABVJB was formed in 1996 at local government re-organisation by an Act of Parliament. The Board maintains the electoral, council tax and non-domestic rates registers for the three councils of West Dunbartonshire, East Dunbartonshire and Argyll and Bute. The Board’s running costs are met by the three authorities, with surpluses and deficits on the Board’s operations also shared between the councils. The Council made a contribution to DABVJB with comparison to previous year figure as detailed below: Joint Ventures The following Joint ventures in which the Council is a joint venture were identified. 2020/21 2021/22 £000 £000 2,186 Contribution from Council 1,421 2020/21 2021/22 £000 £000 162 Contribution from Council 164 2020/21 £000 2021/22 £000 70,873 Contribution from Council 74,925 2020/21 £000 2021/22 £000 714 Contribution from Council 736
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 67 Notes to the Financial Statements Joint Boards The Joint Boards are independent public bodies formed by an Act of Parliament. All local government functions that relate to these bodies have been delegated from the constituent councils that comprise the area of each Board. The members of each Board are elected Councillors and are appointed by the councils in proportions specified by legislation. As well as being included under the wider definition of “Associates”. The council is also a member of the following joint boards of which the related transactions are detailed above under Associates. Strathclyde Passenger Transport Strathclyde Concessionary Travel Dunbartonshire Argyll and Bute Valuation Joint Board West Dunbartonshire Health & Social Care Partnership. Key Management Within the Council’s Management Team, the Chief Officer of the HSCP is employed by the Council. Details of remuneration are included within the Council’s Remuneration Statement pages 31 to 38. Other Related Parties Voluntary Sector The following voluntary organisations received over £50,000 in grant funding from the Council during 2021/22: The Council has no shareholdings or investments in any of these organisations. There were no outstanding balances at the year end. Strathclyde Pension Fund The Council is an admitted body to the local government pension scheme and has made payments as shown in Note 13 Defined Benefit Pension Schemes. The related transaction with comparison to previous year is shown below: 2020/21 2021/22 £000 £000 355 West Dunbartonshire Citizens Advice Bureau 349 106 Independent Resource Centre 216 185 Y-Sort It Youth Information Project 156 180 The Environment Trust 177 159 Dumbarton Women's Aid 177 165 Clydebank Women's Aid 187 2020/21 2021/22 £000 £000 1,966 Balance owed by the Council at 31st March 2022 2,006
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 68 Notes to the Financial Statements Senior Officers Senior Officers have control over the Councils financial and operating policies. The remuneration paid to these individuals is as listed in the remuneration statement pages 31 to 38. Officers are required to follow a Code of Conduct and are require to declare an interest if he or she believes that there may be a perception that their decision making may be influenced in any way by a personal interest. Should this situation arise, the senior officer does not take part in any discussion or decision in relation to that interest. There are no significant related party transactions with senior officers of the Council. Note 9 – Agency Services Transactions whereby the Council provides a service on behalf of external organisations are noted below. The Council also received a number of grants from the Scottish Government in 2021/22 related to COVID, whereby the Council acted as an agent on behalf of the Government. These grants are listed below and the effect of these have been removed from the Comprehensive Income and Expenditure Statement. Where expenditure was less than income a creditor has been raised within the Council’s Balance Sheet. Organisation Description 2021/22 Receipts 2021/22 Payment (Debtor)/ Creditor at 31.03.22 £000 £000 £000 Scottish Water Water and sewerage charges collected by Council and paid over 0 14,604 225 Scottish Government Non Domestic Rates (76,850) 0 (2,599) 2020/21 2021/22 £000 £000 8,055 Strategic Framework 4,998 0 Scottish Child Bridging Payment Fund 1,748 0 Low Income Pandemic Payments 1,508 788 Taxi and Private Hire Support 1,305 0 COVID-19 Discretionary Business Grant 1,125 0 Self Isolation Fund 1,053 0 Social Care thank you payments 986 0 Hospitality Fund 978 0 Teacher payments 212 0 Route Map Extension Restrictions Fund 138 113 Self Isolation Grant Payments 0 14,634 COVID-19 Support for Businesses 0 174 Newly Self-Employed Hardship fund 0 243 Break Restrictions Fund 0 145 Contingency Fund 0 119 ELC Transitional Support Fund 0 277 Other (under £0.100m) 233 24,548 14,284
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 69 Notes to the Financial Statements Note 10 – Grant Income The Council credited the following grants and other contributions to Taxation and Non-specific Grant Income within the Comprehensive Income and Expenditure Statement in 2021/22, including general grant funding in relation to COVID received through redeterminations: The Council credited the following grants to Services within the Comprehensive Income and Expenditure Statement in 2021/22, including service specific general grant funding in relation to COVID: 31 March 2021 31 March 2022 £000 £000 209,049 Revenue Support Grant/ Non-Domestic Rates 214,812 0 Levelling Up Fund 1,992 1,190 Sustrans - Connecting Clydebank 972 4,439 New House Build 909 169 Cycling, Walking, Safer Streets 682 16,384 General Services Capital Grant 629 0 Housing Buy Backs 481 629 Exxon City Deal 444 137 Strathclyde Passenger Transport 344 0 Spaces for People 279 123 Levengrove 259 0 Place Based Investments 139 0 CO2 Monitors in Schools 122 0 District Heating 120 0 Nature Restoration Fund 102 2,083 Early Year Funding 0 552 Town Centre Fund 0 170 Transport Scotland - Electrical Charging Points 0 334 Grants under £0.100m 272 235,259 222,558 31 March 2021 31 March 2022 £000 £000 34,262 Housing Benefit Subsidy 34,111 9,932 NHS Resource Transfer 10,083 8,597 Early Learning 9,247 2,550 Pupil Equity Fund 2,917 2,057 Criminal Justice 2,229 848 Scottish Attainment Challenge Scotland Fund 979 1,196 Scottish Attainment 901 580 Business Gateway 580 111 Young Person's Guarantee 569 0 Vaccination Centres (COVID) 534 364 Private Sector Housing 446 370 Care Experienced Children and young People 413 324 Asylum Seekers 349 0 Mental Wellbeing 308 770 Education additional staff support ( COVID) 287 382 Education Maintenance Allowance 280 0 Parental Employability Support Fund 229 6,671 Social Care Funding 0 5,880 Social Care Funding (COVID) 0 632 Free School Meals and Community Food (COVID) 0 594 Winter Plan for Social Protection 0 400 Interim Care Funding 0 237 Funding to Administer Temp Restrictions 0 168 Discretionary Housing payment additional (COVID) 0 132 Worthy Causes - Free School Meals (COVID) 0 128 Scottish Government - ERO 0 100 No-one Left Behind 0 493 Grants under £0.100m 454 77,778 64,916
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 70 Notes to the Financial Statements The Council has received a number of grants that have yet to be recognised as income as they have conditions attached to them that will require the monies or property to be returned to the giver. The balances at the year end are as follows: In addition, some COVID grants received from the Scottish Government during 2021/22 which were identified as agency transactions are detailed within Note 9. Note 11 – Operating Leases Council as Lessee The council occupies a number of properties by way of an operating lease. The future minimum lease payment due under non-cancellable leases in future years are: The expenditure charged to the appropriate service lines in the Comprehensive Income and Expenditure Statement during the year in relation to these leases was £0.769m (2020/21 £0.775m). The Council has acquired vehicles and equipment by entering into operating leases. The future minimum lease payment due under non-cancellable leases in future years are: The expenditure charged to the appropriate service lines in the Comprehensive Income and Expenditure Statement during the year in relation to these leases was £0.290m (2020/21 £0.380m). Council as Lessor The Council leases out property under operating leases for the following purposes: 31 March 2021 31 March 2022 £000 £000 0 Place Based Investment 641 0 Exxon City Deal 192 593 Town Centre Fund 142 0 Bonhill Gaps sites 128 0 Queen Quay District Heating 120 0 Pappert New Builds 119 0 Knowes Nature Reserve 102 331 Digital Inclusion 41 159 Early Years Funding 0 180 Grants under £0.100m 608 1,263 2,093 31 March 2021 31 March 2022 £000 £000 765 Not later than one year 731 2,363 Later than one year and not later than five years 2,019 2,036 Later than five years 2,036 5,164 4,786 31 March 2021 31 March 2022 £000 £000 273 Not later than one year 236 410 Later than one year and not later than five years 336 0 Later than five years 0 683 572
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 71 Notes to the Financial Statements For the provision of community services, such as sports facilities, tourism services and community centres; and For economic development purposes to provide suitable affordable accommodation for local businesses. The future minimum lease payment due under non-cancellable leases in future years are: The minimum lease payments receivable do not include rents that are contingent on events taking place after the lease was entered into, such as adjustments following rent reviews. In year, £1.431m contingent rents were receivable by the Council (2020/21 £2.812m). Finance Leases - The Council does not have any assets or liabilities under a finance lease, either as Lessee or Lessor. Note 12 – Termination Benefits The Council did not terminate the contracts of a number of employees in year (2020/21 liabilities incurred £0.065m). Note 13 – Defined Benefit Pension Schemes As part of the terms and conditions of employment of its officers and other employees, the council offers retirement benefits. Although these benefits will not actually be payable until employees retire, the Council has a commitment to make the payments that needs to be disclosed at the time that employees earn their future entitlement. The Council participates in the following pension schemes: The Local Government Pension Scheme, which is a defined benefit statutory scheme, operated as Strathclyde Pension Fund, and administered by Glasgow City Council in accordance with the Local Government Pension Scheme (Scotland) Regulations 1998. This is a funded scheme, meaning that the Council and employees pay contributions into a fund, calculated at a level intended to balance the pensions liabilities with investment assets. The employer’s contribution rate is set by the Fund actuaries following valuation. The employer contribution rate for 2021/22 was 19.3%, and 2022/23 is set at 19.3%. In 2021/22, the Council paid an employer’s contribution of £19.851m (2020/21 £19.558m). The Teachers’ Pension Scheme (Scottish Teachers’ Superannuation Scheme (STSS) which is a defined benefit scheme administered by the Scottish Public Pension Agency. The scheme is technically a multi-employer defined benefit scheme but is unfunded and the Scottish Government used a notional fund as the basis for calculating the employers’ contribution rate paid by local authorities. Due to the type of scheme, the Council is not able to identify its share of the underlying financial position and performance of the scheme with sufficient reliability for accounting purposes. For the purpose of this Statement of accounts, it is accounted for on the same basis as a defined contribution scheme. 31 March 2021 31 March 2022 £000 £000 3,627 Not later than one year 3,583 11,442 Later than one year and not later than five years 11,249 134,633 Later than five years 127,729 149,702 142,561
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 72 Notes to the Financial Statements The employer pays a set contribution rate of 23% which is effective from 1 September 2019, prior to this it was 17.2%. This is charged directly to the revenue account for the Education service. The amount paid over in respect of employer’s contribution was £10.291m (2020/21 £10.216m) in respect of expenditure for teachers added years, £0.039m payments were made (2020/21 £0.040m). The scheme is unfunded and all contributions (payable by members or employers) are paid to the Scottish Government, and the Scottish Government then meets the costs of all the benefits. A specific amount is held by the Scottish Government for this purpose. As a proportion of the total contributions into the Scottish Teachers Superannuation Scheme 2021/22, the Council’s own contribution equates to 1.57%. The Council is not liable to the scheme for any other entities obligations under the plan. 1) Local Government Pension Scheme Councils are also required to disclose the capital cost of discretionary increases in pension payments agreed by the Council. In 2021/22 the capitalised costs that would have arisen from the early retiral of the Council employees and from predecessor authorities were as follows: The Council fully complies with the International Accounting Standard (IAS 19) concerning the disclosure of information on the pension. IAS 19 states that although the pension benefits will not be paid until the employee retires, the Council has a commitment to make these payments and must disclose the cost of this in its accounts at the time employees earn their full entitlement. The Council therefore recognises the cost of the pension commitment within the Comprehensive Income and Expenditure Account when the employees earn their pension entitlement rather than when the benefits are paid as pensions. However, the cost to the taxpayer is calculated on the basis of pension contributions paid in the year, the cost of retirement benefits under IAS19 is reversed out, to ensure there is no impact on the overall cost to be funded by council tax and government grants. The following transactions have been made in the Comprehensive Income and Expenditure Account and Movement in Reserves Statement during the year: £000 2021/2022 (4,888) In earlier years 58,282 Total 53,394
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 73 Notes to the Financial Statements The underlying assets and liabilities for retirement benefits attributable to the council as at 31 March are as follows: 1) Local Government Pension Scheme The liabilities show the underlying commitments that the Council has in the long run to pay post- employment (retirement) benefits. The total liability of £55.690m has a substantial negative impact on the net worth of the Council as recorded in the Balance Sheet, resulting in an overall balance of £421.596m. However, the statutory arrangements for funding the deficit, means the financial position of the Council remains healthy. The deficit on the local government scheme will be made good by increased contributions over the remaining working life of employees (i.e. before payments fall due) as assessed by the scheme actuary. Finance is only required to be raised to cover discretionary benefits when the pensions are actually paid. The fair value of plan assets have increased by £77.859m. This is due to asset returns being more favourable than anticipated. The estimated liabilities have decreased by £30.106m, due to financial assumptions as at 31 March 2022 being more favourable than they were at 31 March 2021. 2020/21 2021/22 £000 £000 Net cost of services 35,717 Current service cost 51,324 74 Past service cost 0 35,791 51,324 Financing and investment Income and Expenditure 3,379 Net interest expense 3,557 39,170 Total post employment benefit charged to the Surplus or Deficit on the provision of Services 54,881 (181,163) Expected return on assets (55,488) (30,778) Actuarial gains and losses arising from changes in demographic assumptions (7,291) 232,640 Actuarial gains and losses arising from changes in financial assumptions (78,984) (7,765) Actuarial gains and losses arising from experience assumptions 1,722 52,104 Total post employment benefit charged to the comprehensive income and expenditure statement (85,160) Movement in Reserves Statement (39,170) Reversal of gross charges made to surplus or deficit for post employment benefits (54,881) 22,566 Actual amount charged against the General Fund balance in the year - employer contributions payable to Scheme 22,765 (16,604) Reversal of gross charges made to surplus or deficit for post employment benefits (32,116) 2020/21 2021/22 £000 £000 974,343 Fair value of plan assets 1,052,202 (1,079,676) Present value of defined benefit obligations (1,054,498) (105,333) Net assets in the Strathclyde Pension Fund (2,296) Present Value of Unfunded Liabilities (27,955) LGPS Unfunded (25,835) (24,265) Teachers’ pensions (22,386) (6,062) Pre Local Government Reorganisation (5,173) (163,615) Net pension asset/(liability) (55,690)
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 74 Notes to the Financial Statements 2) Pension Assets and Liabilities Liabilities have been valued on an actuarial basis using the projected unit method which assesses the future liabilities of the fund discounted to their present value. The liabilities have been assessed by Hymans Robertson, an independent firm of actuaries, contracted by Glasgow City Council to provide all IAS19 calculations on behalf of the councils within the Strathclyde Pension Fund. The funded obligation is noted below: The movement during the year on the defined obligation is noted as: The movement during the year on the fair value of the employer’s assets is: % Active Members 58.4% Deferred Members 9.4% Pensioner Members 28.3% Pre-Local Government Re-organisation Members 3.9% 100% 2020/21 2021/22 £000 £000 928,731 Opening balance 1,137,958 35,717 Current service cost 51,324 21,675 Interest cost 23,072 6,075 Contributions by Members 6,137 (30,778) Actuarial gains/losses – change in demographic assumptions (7,291) 232,640 Actuarial gains/losses – change in financial assumptions (78,984) (29,214) Actuarial gains/losses – other experience 1,722 74 Past service costs/(gains) 0 (3,008) Estimated unfunded benefits paid (2,914) (23,954) Estimated benefits paid (23,172) 1,137,958 Closing Balance as at 31 March 1,107,852 2020/21 2021/22 £000 £000 794,654 Opening balance 974,343 181,163 Expected return on assets 55,488 (21,449) Actuarial gains/ losses - othe experience 0 18,296 Interest Income 19,515 6,075 Contributions by Members 6,137 19,558 Contributions by employer 19,851 3,008 Contributions in respect of unfunded benefits 2,914 (3,008) Estimated unfunded benefits paid (2,914) (23,954) Estimated benefit paid (23,132) 974,343 Closing Balance as at 31 March 1,052,202
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 75 Notes to the Financial Statements The Council’s share of the pension fund asset at 31 March 2022 comprised: Assets are now held at bid value. Asset and Liability Matching Strategy (ALM) The main fund of Strathclyde Pension Fund does not have an asset and liability matching strategy (ALM) as this is used mainly by mature funds. The Fund does match, to the extent possible, the types of assets invested to the liabilities in the defined benefit obligation. As is required by the pensions and investment regulations, the suitability of various types of investment has been considered, as has the need to diversify investments to reduce the risk of being invested into narrow a range. The Fund invests in equities, bonds, properties and in cash. The Fund has now taken account of the national change to the Local Government Pension Scheme in Scotland such as the new career average revalued earning scheme (CARE) for future accruals. The actuarial valuation states that assets held on the valuation date were sufficient to cover 95% (2020/21 85.6%) of accrued liabilities at that date. The principal actuarial assumptions used at the Balance Sheet date are as follows: Quoted prices in Active Markets Prices not quoted in Active Market Total Asset Category Quoted prices in Active Markets Prices not quoted in Active Market Total £000 £000 £000 £000 £000 £000 227,564 1,048 228,612 Equity Securities 231,344 501 231,845 0 0 0 Debt Securities 0 0 0 0 174,272 174,272 Private Equity 0 205,983 205,983 0 78,943 78,943 Real Estate 0 88,736 88,736 9,170 466,813 475,983 Investment funds and unit trusts 5,837 493,028 498,865 176 0 176 Derivatives 0 0 0 15,697 660 16,357 Cash and Cash Equivalent 26,418 355 26,773 252,607 721,736 974,343 Totals 263,599 788,603 1,052,202 2021/222020/21 31/03/2021 31/03/2022 2.85% Pension increase rate 3.20% 3.55% Salary Increase rate 3.90% 2.00% Discount rate 2.70% Mortality Based on these assumptions, the average future life expectancies at the age of 65 are: 19.8 Current pensioners – Men 19.6 22.6 Current pensioners - Women 24.4 21.2 Future pensioners – Men 21.0 24.7 Future pensioners - Women 24.5 Long term expected return on assets
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 76 Notes to the Financial Statements The above excludes any net pension liability that the Council may have to contribute to in respect of the Joint Boards of Partnership for Transport and Valuation. These costs are shown within each Joint Board’s Balance Sheet and the Council may be required to make an increased constituent contribution in the years when the liability fails to be met. The principal risks to the Council of the scheme are the longevity assumptions, statutory changes to the scheme, structural changes to the scheme (i.e. large-scale withdrawals from the scheme), changes to inflation, bond yields and the performance of the equity investments held by the scheme. These are mitigated to a certain extent by the statutory requirements to charge to the General Fund and Housing Revenue Account the amounts required by statute as described in the accounting policies note. Sensitivity Analysis In order to quantify the impact of a change in the financial assumptions used, the actuaries have calculated and compared the value of the scheme liabilities as at 31 March 2022 on varying bases. The approach taken is consistent with that adopted to derive at the IAS19 figures provided. To quantify the uncertainty around life expectancy, the actuaries have calculated the difference in cost to the employer of a one year increase in life expectancy. For sensitivity purposes, this is assumed to be an increase in the cost of benefits of around 3% to 5%. In practice the actual cost of a one year increase in life expectancy will depend on the structure of the revised assumption (i.e. if improvements to survival rates predominately apply at younger or older ages). The figures have been derived based on the membership profile of the Employer as at the date of the most recent actuarial valuation. The estimation of defined benefit obligation is sensitive to the actuarial assumptions .The sensitivity regarding the principal assumptions used to measure the schemes liabilities are set out below: The total contribution expected to be made to the Local Government pension scheme for 2022/23 is £19.851m. Note 14 – External Audit Costs In 2021/22 the Council incurred £0.281m (2020/21 £0.277m) in respect of its external audit services on behalf of the Council and £0.002m (2020/21 £0.002m) on behalf of the Trust Funds, undertaken in accordance with the Code of Audit Practice. The appointed auditors, Audit Scotland, provided no other services to the Council in the year. Note 15 – Expenditure and Funding Analysis The analysis of income and expenditure on the face of the comprehensive income and expenditure statement is that specified by the Service Reporting Code of Practice. However decisions about resource allocation are taken by the Council on the basis of reports that are prepared on a different basis from the accounting polices used in the financial statements. In particular: Approximate monetary Amount £000 Real Discount Rate (0.5% decrease ) 2% 21,239 1 year increase in the member life expectancy 4% 44,316 Salary Increase Rate (0.5% increase) 0% 2,807 Pension Increase Rate (0.5% increase) 2% 18,250 Approximate % increase to Employer Liability
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 77 Notes to the Financial Statements no charges are made in relation to capital expenditure (whereas depreciation, revaluation and impairment losses in excess of the balance on the revaluation reserve and amortisations are charged to services in the comprehensive income and expenditure statement); and the cost of retirement benefits is based on cash flows (payments of employer’s pensions contributions) rather than current service cost of benefits accrued in the year. The service expenditure noted as ‘net rechargeable to the General Fund and the HRA’ can also be compared to the service spend noted in the Council’s revenue budget monitoring table in the Management Commentary, except where there are items in the Comprehensive Income and Expenditure Statement that are reported below the net cost of service line. The council’s income and expenditure as noted on the comprehensive income and expenditure statement analysis can also be given by nature of spend and is analysed as follows: A further breakdown of fees, charges and other service income by segmental analysis is noted below: 2020/21 2021/22 £000 £000 Expenditure 214,249 Employee benefits expenses 237,304 253,323 Other service expenses 266,430 3,894 Support service recharges 3,962 39,268 Depreciation, amortisation, impairment 32,756 22,558 Interest payments 21,422 2,339 Precepts and levies 2,517 883 Loss on the disposal of assets 998 536,514 Total Expenditure 565,389 Income (261,583) Fees, charges and other service income (262,551) (165) Interest and investment income (81) (92,728) Income from council tax and non-domestic rates (119,615) (179,296) Government grants and contributions (141,150) (533,772) Total Income (523,397) 2,742 (Surplus) / Deficit on the Provision of Services 41,992 2020/21 2021/22 £000 £000 (42,105) Corporate Services (38,346) (17,593) Education (15,424) (17,814) Infrastructure, Regeneration and Economic Development (16,032) (32,922) Housing and Communities (31,853) (43,354) Housing Revenue Account (44,675) (6,117) Miscellaneous Services (8,501) (101,678) Health and Social Care Partnership (107,720) (261,583) Total Fees, Charges and other service income (262,551)
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 78 Notes to the Financial Statements The income and expenditure of the Council’s principal committee reporting structure recorded in the budget reports for the year is as follows: Net Chargeable to the General Fund and HRA Balance Adjustments between Funding and Accounting Basis Net Expenditure in the Comprehensive Income and Expenditure Statement Net Chargeable to the General Fund and HRA Balance Adjustments between Funding and Accounting Basis Net Expenditure in the Comprehensive Income and Expenditure Statement £000 £000 £000 £000 £000 £000 20,549 5,332 25,881 Corporate Services 25,095 7,756 32,851 90,513 8,506 99,019 Education 98,757 11,421 110,178 29,934 20,061 49,995 Infrastructure, Regeneration and Economic Development 33,659 15,324 48,983 2,062 2,099 4,161 Housing and Communities 3,660 4,118 7,778 (22,944) 13,593 (9,351) Housing Revenue Account (20,106) 14,092 (6,014) 5,179 (2,699) 2,480 Miscellaneous Services 690 (2,170) (1,480) 69,865 5,718 75,583 Health and Social Care Partnership 74,017 10,487 84,504 2,339 0 2,339 Requisitions 2,517 0 2,517 197,497 52,610 250,107 Net Cost of Services 218,289 61,028 279,317 0 883 883 (Gain)/Loss on disposal of Fixed Assets 0 998 998 (245,814) (26,210) (272,024) Taxation and Non-specific Grant Income (253,019) (7,746) (260,765) 40,283 (16,507) 23,776 Finance / Investment Income and Expenditure 41,451 (19,009) 22,442 (8,034) 10,776 2,742 (Surplus) or Deficit on Provision of Service 6,721 35,271 41,992 (13,319) MIR Opening General Fund and HRA Balance as at 1 April 2021 (22,392) (4,241) MIR (Surplus) or Deficit on Provision of Service (General Fund) 2,396 (3,793) MIR (Surplus) or Deficit on Provision of Service (HRA) 4,325 (1,039) MIR Transfer to/from other statutory reserves (2,083) (22,392) MIR Closing General Fund and HRA Balance as at 31 March 2022 (17,754) 2021/222020/21
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 79 Notes to the Financial Statements Both the Movement in Reserves (page 40) and note 6 (page 60) total the adjustments between funding accounting basis and funding basis under regulations relating to the General Fund balance (£40.825m net deductions) and HRA balance (£5.554m net additions) and this matches the total adjustments above of £35.271m. Adjustments for Capital Purposes Net Change for the Pension Adjustment Other differences Total Adjustments for Capital Purposes Net Change for the Pension Adjustment Other differences Total £000 £000 £000 £000 £000 £000 £000 £000 2,853 2,479 0 5,332 Corporate Services 3,204 4,552 0 7,756 5,553 2,807 146 8,506 Education 5,640 5,738 43 11,421 17,088 2,973 0 20,061 Infrastructure, Regeneration and Economic Development 9,549 5,775 0 15,324 14 2,085 0 2,099 Housing and Communities 13 4,105 0 4,118 12,959 637 (3) 13,593 Housing Revenue Account 12,958 1,169 (35) 14,092 2 (2,673) (28) (2,699) Miscellaneous Services 312 (2,187) (295) (2,170) 800 4,918 0 5,718 Health and Social Care Partnership 1,080 9,407 0 10,487 0 0 0 0 Requisitions 0 0 0 0 39,269 13,226 115 52,610 Net Cost of Services 32,756 28,559 (287) 61,028 883 0 0 883 Other Operating Expenditure 998 0 0 998 (26,210) 0 0 (26,210) Taxation and Non-specific Grant Income (7,746) 0 0 (7,746) (19,879) 3,378 (6) (16,507) Finance / Investment Income and Expenditure (22,551) 3,557 (15) (19,009) (5,937) 16,604 109 10,776 3,457 32,116 (302) 35,271 2020/21 2021/22
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 80 Notes to the Financial Statements Adjustment for Capital Purposes This column adds in depreciation, impairment and revaluation gains and losses in the services line, and for: Other operating expenditure – adjusts for capital disposals with a transfer of income on disposal of assets and the amounts written off for those assets; Financing and investment income and expenditure – the statutory charges for capital financing and other revenue contributions are deducted from other income and expenditure as these are not chargeable under generally accepted accounting practices; and Taxation and non-specific grant income and expenditure – capital grants are adjusted for income not chargeable under generally accepted accounting practices. Revenue grants are adjusted from those receivable in the year to those receivable without conditions or for which conditions were satisfied throughout the year. The Taxation and Non Specific Grant Income and Expenditure line is created with capital grants receivable in the year without conditions or for which conditions were satisfied in the year. Net Change for the Pension Adjustments Net change for the removal of pension contributions and the addition of IAS19 Employee Benefits pension related expenditure and income: For services, this represents the removal of the employers contributions made by the Council as allowed by statute and the replacement with current service costs and past service costs; and For financing and investment income and expenditure, the net interest on the defined benefit liability is charged to the Comprehensive Income and Expenditure Statement. Other Differences Other differences between amounts debited or credited to the Comprehensive Income and Expenditure Statement and amounts payable or receivable to be recognised under statute: For services an adjustment is made for the accrual of holiday pay and other similar entitlements, this is required under generally accepted accounting principles but the impact on the General Fund and the HRA is mitigated by statute which allows the impact to be reversed out through the Movement in Reserves; and For Financing and investment income and expenditure, the ‘other differences’ column recognises adjustments to the General Fund for the timing differences for premiums and discounts.
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 81 Notes to the Financial Statements Note 16 – Property, Plant and Equipment 1) Movements in 2021/22 Council dwellings Other Land & buildings Industrial Units Vehicles & Plant Infrastructure Community Surplus Assets Assets Under Construction Property Plant & Equipment £000 £000 £000 £000 £000 £000 £000 £000 £000 Cost/Valuation at 1 April 2021 591,116 404,959 45,002 30,903 118,339 8,463 6,336 99,822 1,304,940 Additions 28,080 9,129 0 3,056 10,016 575 0 12,730 63,586 Revaluations: - To Revaluation Reserve 0 4,671 0 0 0 0 0 0 4,671 - To Net cost of Service 0 284 0 0 0 0 (183) 0 101 Disposals 0 (229) 0 0 0 0 0 0 (229) Assets reclassified to/from Held for Sale 0 0 0 0 0 0 0 0 0 Adjustments - assets at nil NBV 0 (80) (772) (2,448) (772) 0 (139) 0 (4,211) Adjustments - change in asset type 35,306 18,096 0 0 0 0 0 (53,502) (100) As at 31 March 2022 654,502 436,830 44,230 31,511 127,583 9,038 6,014 59,050 1,368,758 Depreciation/Impairment at 1 April 2021 (86,648) (48,121) (1,673) (11,463) (43,636) (2,032) (140) 0 (193,713) Depreciation charge (12,683) (9,667) (410) (3,884) (5,313) (422) (1) 0 (32,380) Depreciation: - To Revaluation Reserve 0 (360) 0 0 0 0 0 0 (360) - To Net Cost of Service 0 0 0 0 0 0 0 0 0 Impairments: - To Revaluation Reserve 0 0 0 0 0 0 0 - To Net Cost of Service 0 (151) 0 0 0 0 0 0 (151) Adjustments - assets at nil NBV 0 80 772 2,448 772 0 139 0 4,211 Adjustments - change in asset type 0 0 0 0 0 0 0 0 0 As At 31 March 2022 (99,331) (58,219) (1,311) (12,899) (48,177) (2,454) (2) 0 (222,393) Net Book Value at 31 March 2021 504,468 356,838 43,329 19,440 74,703 6,431 6,196 99,822 1,111,227 Net Book Value at 31 March 2022 555,171 378,611 42,919 18,612 79,406 6,584 6,012 59,050 1,146,365
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 82 Notes to the Financial Statements 2) Movements in 2020/21 Council dwellings Other Land & buildings Industrial Units Vehicles & Plant Infrastructure Community Surplus Assets Assets Under Construction Property Plant & Equipment £000 £000 £000 £000 £000 £000 £000 £000 £000 Cost/Valuation at 1 April 2020 505,069 380,219 45,034 26,712 123,206 5,475 9,594 104,814 1,200,123 Additions 19,466 7,218 15 4,658 11,239 1,646 135 46,886 91,263 Revaluations: - To Revaluation Reserve 48,706 126 0 0 0 0 0 0 48,832 - To Net cost of Service 0 (5,243) 0 0 0 0 (1,510) 0 (6,753) Disposals 0 0 (90) 0 0 0 (1,476) 0 (1,566) Assets reclassified to/from Held for Sale 0 0 0 0 0 0 (357) 0 (357) Adjustments - assets at nil NBV 0 (884) (7) (9,337) (16,374) 0 0 0 (26,602) Adjustments - change in asset type 17,875 23,523 50 8,870 268 1,342 (50) (51,878) 0 As at 31 March 2021 591,116 404,959 45,002 30,903 118,339 8,463 6,336 99,822 1,304,940 Depreciation/Impairment at 1 April 2020 (73,974) (39,364) (1,269) (17,626) (54,658) (1,566) (140) 0 (188,597) Depreciation charge (12,106) (9,613) (411) (3,174) (5,352) (466) 0 0 (31,122) Depreciation: - To Revaluation Reserve (568) (28) 0 0 0 0 0 0 (596) - To Net Cost of Service 0 0 0 0 0 0 0 0 0 Impairments: - To Revaluation Reserve 0 0 0 0 0 0 0 0 0 - To Net Cost of Service 0 0 0 0 0 0 0 0 0 Disposals 0 0 0 0 0 0 0 0 0 Adjustments - assets at nil NBV 0 884 7 9,337 16,374 0 0 0 26,602 Adjustments - change in asset type 0 0 0 0 0 0 0 0 0 As At 31 March 2021 (86,648) (48,121) (1,673) (11,463) (43,636) (2,032) (140) 0 (193,713) Net Book Value at 31 March 2020 431,095 340,855 43,765 9,086 68,548 3,909 9,454 104,814 1,011,526 Net Book Value at 31 March 2021 504,468 356,838 43,329 19,440 74,703 6,431 6,196 99,822 1,111,227
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 83 Notes to the Financial Statements 3) Capital Commitments As at 31 March 2022, the Council has commitments on capital contracts for the construction or enhancement of property, plant and equipment for non housing and housing projects in 2021/22 budgeted to cost £8.335m (2020/21 £17.910m) and £1.477m (2020/21 £22.109m) respectively. The main commitments are: 4) PPP and DBFM Assets Included in Property, Plant and Equipment 5) The Council measures its surplus assets at fair value at each reporting date (the Council does not hold investment properties). The fair value of surplus assets have been based on the market value approach using current market conditions and recent sales prices and other relevant information for similar assets in the West Dunbartonshire area together with evidence across the wider West of Scotland. Market conditions are such that similar properties are marketed, purchased and sold actively and the level of observable inputs are sufficient, leading to the properties being categorised at Level 2 in the fair value hierarchy. There were no transfers between Levels 1 and 2 during the year and there have been no changes in the valuation techniques used during the year for surplus assets General Services £000 Local Economic Development & Regeneration - various projects 5,048 Posties Park 1,032 OLSP Changing Facility 341 Renton Campus (part of Schools Estate Improvement Plan) 254 Construction of Pitches St Mary's Primary School & Our Lady of Loretto 224 HRA £000 New Build Housing 767 External Wall Insulation 340 Structural Repairs Drumry 250 Restated 2020/21 2021/22 £000 £000 Cost or Valuation 114,219 At 1 April 2021 114,219 Revaluations 0 To Revaluation Reserve 0 0 Additions 0 114,219 At 31 March 2022 114,219 Accumulated Depreciation and Impairment (5,052) At 1 April 2021 (7,578) (2,526) Depreciation Charge (2,526) Depreciation written out 0 To revaluation reserve 0 0 To NCS 0 (7,578) At 31 March 2022 (10,104) 109,167 Opening Net Book value 106,641 106,641 Closing Net Book value 104,115
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 84 Notes to the Financial Statements Note 17 – Intangible Assets Expenditure on non-monetary assets that do not have physical substance but are controlled by the Council as a result of past events (e.g. computer software and/or software licences) is capitalised when it is expected that future economic or service benefits will flow from the asset to the Council. The Council accounts for its software as intangible assets, to the extent that the software is not an integral part of a particular IT system and accounted for as part of the hardware item of property, plant and equipment. The intangible assets include purchased licences. Where appropriate, the carrying amount of intangible assets is amortised on a straight line basis. The amortisation of £0.040m charged to revenue in 2021/22 was charged to Information Services. The charge to Information Services is then absorbed as an overhead across all the service headings in the Net Cost of services. It is not possible to quantify exactly how much of the amortisation is attributable to each service heading. The movement on intangible asset during the year was as follows: Note 18 – Assets Held for Sale Assets held for sale are those where the carrying amount will be recovered principally through a sale transaction rather than through continued use. Before an asset can be classified as held for sale, the following conditions must be met: the asset must be available for immediate sale in its present condition; the sale must be highly probable and an active programme to locate a buyer and complete the plan must have been initiated; the asset must be actively marketed for sale at a price that is reasonable in relation to its current fair value; and the sale should be expected to qualify for recognition as a completed sale within one year of the date of classification. The Council measures its non-current assets held for sale at fair value at each reporting date. The fair value of non-current assets held for sale have been based on the market value approach using current market conditions and recent sales prices and other relevant information for similar assets in the West Dunbartonshire area together with evidence across the wider West of Scotland. Market conditions are such that similar properties are marketed, purchased and sold actively and the level of observable inputs are sufficient, leading to the properties being categorised at Level 2 in the fair value hierarchy. There were no transfers between Levels 1 and 2 during the year and there have been no changes in the valuation techniques used during the year for non-current assets held for sale. 2020/21 2021/22 £000 £000 Balance at 1 April 2021 546 Gross carrying amount 667 (371) Accumulated amortisation (396) 175 Net carrying amount at start of year 271 121 Acquisitions in year 400 (25) Amortisation for period (40) 96 Net carrying amount at 31 March 2022 631 Comprising: 667 Gross Carrying amounts 1,067 (396) Accumulated amortisation (436) 271 631
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 85 Notes to the Financial Statements The movement on assets held for sale during the year was as follows: *All assets values listed are in respect of Property, Plant and Equipment Note 19 - Heritage Assets Heritage assets are both tangible and intangible assets with historic, artistic, scientific, technological, geographical or environmental qualities, which are held and maintained primarily for their contribution to knowledge and culture.The authority holds heritage assets of six main types: Models of Ships; Works of Art; Silver and Commemorative Ware; Civic Regalia (Robes and Chains); Sewing Machine Collections; and Listed Buildings and Scheduled Ancient Monuments. The valuation of these assets held on the balance sheet as detailed below: The models of ships, works of art, silver and commemorative ware, civic regalia and sewing machine collections are the responsibility of the Libraries and Museums Service and accounts for approximately 90% of the overall collection with the remaining 10% being recorded and accessioned into the collection on a regular basis in line with museum accreditation. These works are held at the following locations: Collections Store, Poplar Road Collections Store, Stanford Street; and Clydebank Town Hall. Models of Ships - include MV Rangitane, MV Essex and HMS Vanguard. Works of Art - there are 474 paintings within the works of art collection. Civic Regalia - predominately relates to the collection of provost robes and chains of office. It would be relatively rare for the authority to purchase, or dispose of, items of civic regalia. 2020/21 2021/22 £000 £000 8,053 Balance at 1 April 2021 7,755 11 Acquisitions 0 312 Assets previously ommitted 339 Assets newly classified as held for sale:- 357 Property, Plant and Equipment 83 (1,078) Revaluation Losses (71) 702 Revaluation Gains 50 (602) Disposals (3,039) 0 Assets declassified as held for sale* 0 7,755 As at 31 March 2022 5,117 2020/21 2021/22 £000 £000 1,406 Balance at 1 April 2021 1,406 0 Additions/ Disposals / Newly Classified 79 1,406 Balance at 31 March 2022 1,485
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 86 Notes to the Financial Statements Sewing Machine Collection - there are 813 sewing machines (of various models) included within the sewing machine collection. Listed Buildings and Scheduled Ancient Monuments - the Council holds and maintains listed buildings and ancient monuments of historic significance, many of which are tributes to the war dead. As well as memorial structures and buildings, the Council maintains statues and fountains. Note 20 – Capital Expenditure and Capital Financing The total amount of capital expenditure incurred in the year is shown in the following table (including the value of assets acquired under finance leases and PPP contracts), together with the resources that have been used to finance it. Where capital expenditure is to be financed in future years by charges to revenue as assets are used by the Council, the expenditure results in an increase in the capital financing requirement (CFR), a measure of the capital expenditure incurred historically by the Council that has yet to be financed. The CFR is analysed in the second part of this note. Note 21 – Impairment Losses Assets are assessed at the end of each financial year for evidence in impairment or a reduction in value. Where indications exist and any possible differences are estimated to be material, the recoverable amount on the asset is estimated and where this is less than the carrying amount of the asset, an impairment loss is recognised for the shortfall. During 2021/22, the Council has recognised impairment losses of £0.221m (2020/21 £1.232m) relating to non-value adding enhancement of various assets. These impairment losses have been charged as appropriate within the Comprehensive Income and Expenditure Statement and the Revaluation Reserve. 31-Mar-21 31-Mar-22 £000 £000 600,739 Opening Capital Financing Requirement 646,190 Capital Investment 91,392 Property, Plant and Equipment 64,219 91,392 64,219 Less Sources of Finance 1,284 Receipts from Sale of Assets (2,270) 26,210 Government Grants and other Contributions 7,746 (1,284) Transfer to Capital Fund/ Capital Receipts Fund 2,270 8,911 Revenue Contributions 13,247 10,820 Loan Fund Principal Repayments 9,303 45,941 30,296 646,190 Closing Capital Financing Requirement 680,113 0 Increase in Underlying Need to Borrow (Supported) 0 45,451 Increase in Underlying Need to Borrow (Unsupported) 33,923 45,451 Movement in Capital Financing Requirement 33,923
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 87 Notes to the Financial Statements Note 22 – Private Finance Initiatives and Similar Contracts Schools PPP Scheme and Long Term Liability (Design, Build, Finance and Maintain (DBFM) Scheme) 2021/22 was the thirteenth year of a thirty year public private partnership for provision of three secondary schools and one primary school in Clydebank and Alexandria. 2021/22 was the fifth year of a twenty-five year DBFM partnership for the provision of one secondary school in Dumbarton. The Council has rights to use the schools for core educational purposes between agreed hours. The contract specifies minimum standards for the services to be provided by the contractor, with deductions from the fee payable being made if facilities are unavailable or performance is below the minimum standards. The partnership agreement was for the design, build, finance and operation of the schools which means that the contractor took on the obligation to construct the schools and maintain them in a minimum acceptable condition and to procure and maintain the plant and equipment need to operate the schools. When the agreement ends, after thirty years, unrestricted use and operation of the buildings will be handed back to the Council at nil cost. The Termination rights are in line with the market norms reflected in the Scottish Standard Schools Contract, as approved by the Scottish Government, prior to financial close. Property, Plant and Equipment The school buildings are recognised on the Council’s balance sheet within property, plant and equipment balance. Movements in their value over the year are detailed in the analysis of the movement on the Property, Plant and Equipment balance in note 14. Payments The amounts payable to the PPP and DBFM operators each year is analysed into five elements: fair value of the services received during the year; finance cost – an interest charge on the outstanding Balance Sheet liability; contingent rent – increases in the amount to be paid for the property arising during contract; payment towards the liability – applied to write down the Balance Sheet liability towards the PPP contractor; and lifecycle replacement costs – proportion of the amounts payable posted to the Balance Sheet as a prepayment and then recognised as additions to property, plant and equipment when the relevant work is carried out. Payments remaining to be made under the PPP and DBFM contracts at 31 March 2022 (excluding any estimation of inflation and availability/performance deductions) are as follows: Repayment of Liability Interest Charges Operating Costs Lifecycle Replacement Total Unitary Payment £000 £000 £000 £000 £000 Less than 1 year 3,370 6,657 3,207 1,332 14,566 2-5 years 15,754 24,083 14,291 5,708 59,836 6-10 years 21,548 23,143 21,410 12,443 78,544 11-15 years 29,911 14,088 25,950 13,001 82,950 16-20 years 20,751 3,194 14,444 7,851 46,240 21-25 years 1,151 36 241 0 1,428 PPP Contractual Liability as at 31.03.22 92,485 71,201 79,543 40,335 283,564
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 88 Notes to the Financial Statements Although the payments made to the contractor are described as unitary charge payments, they have been calculated to compensate the contractor for the fair value of the services they provide, the capital expenditure incurred and interest payable whilst the capital expenditure remains to be reimbursed. The liability outstanding to be paid to the contractor for capital expenditure incurred is as follows: Note 23 – Debtors * A further breakdown in relation to local taxation is noted below: Note 24 - Common Good Fund The Council administers the Dumbarton Common Good Fund Account. The Fund is applied for the benefit of the people of Dumbarton. The figures below summarise the income and expenditure for the year as well as the assets and liabilities as at 31 March 2022. The fund does not represent assets of the Council and has not been included within the Balance Sheet on page 41. 2020/21 2021/22 £000 £000 99,942 Opening Balance 96,292 0 New Liabilities 0 (3,650) Repayments (3,807) 96,292 Closing Balance 92,485 2020/21 2020/21 2021/22 2021/22 £000 £000 £000 £000 Central government bodies 2,222 Grant Income 4,005 3,840 VAT Recoverable 4,717 4,588 10,650 Other Debtors 2,805 11,527 353 Other local authorities 448 9,364 NHS Bodies 13,867 0 Public Corporations and trading funds 8 Other Entities and individuals 16,430 Arrears of local taxation * 18,026 29,824 46,254 Other Debtors 27,311 45,337 66,620 71,187 Gross debtor before impairment Impairment Net Debtor after impairment Gross debtor before impairment Impairment Net Debtor after impairment £000 £000 £000 £000 £000 £000 5,336 1,673 3,663 Under 1 year 4,709 1,499 3,210 39,180 26,413 12,767 Over 1 year 42,138 27,322 14,816 44,516 28,086 16,430 Total 46,847 28,821 18,026 2020/21 2021/22
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 89 Notes to the Financial Statements Income and Expenditure Account 2020/21 2021/22 £000 Expenditure £000 82 Payments to Other Bodies 109 35 Bellsmyre Digital 36 50 Denny Tank 50 40 WD Citizen's Advice Bureau 40 25 General Expenditure 25 232 260 Income (314) Rent – Sites and Offices (320) (1) Other Income 0 (315) (320) (83) Net (surplus)/deficit for year (60) (83) In Year Usable Gain/ (Loss) (60) 0 In Year Un-usable Gain/ (Loss) 0 (83) (60) (438) Balance brought forward (521) (83) In Year Usable Gain (60) (521) Balance carried forward (581) Balance Sheet as at 31 March 2022 2020/21 2021/22 £000 Fixed Assets £000 3,487 Investment properties 3,487 Current Assets 534 Investments – West Dunbartonshire Council 586 3 Debtors 3 Current Liabilities (16) Creditors falling due within one year (8) 4,008 Total assets 4,068 Funds 3,487 Capital Adjustment Account 3,487 521 General Fund 581 4,008 4,068 Note 25 – Trust Funds The Council acts as sole or custodian trustee for a number of trust funds, which may be used for various purposes depending on the terms of the Trust. In all cases, the funds do not represent assets of the Council and they have not been included within the Balance Sheet on page 38. Under the provisions of the “2005 Act” and the “Accounts Regulations” above, all registered charities in Scotland are required to prepare financial statements which must be externally scrutinised. The trust funds below are registered, under one registration, with the Office of the Scottish Charity Regulator. Management has reviewed the current arrangements for the trust funds to ensure the current arrangements reflect the needs of the Council and ensure that all obligations are met. Responsibility for the compliance with the new regulations was delegated to the Chief Officer - Resources.
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 90 Notes to the Financial Statements Receipts and Payments Account Statement of Balances as at 31 March 2022 The Trust Funds hold no liabilities. Note 26 – Cash and Cash Equivalents Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are investments that mature in three months or less from date of acquisition and that are readily convertible to known cash amounts, with insignificant risk of change of value. The investments comprise solely of short term lending of surplus funds to a limited number of pre- approved UK banks and other local authorities. All deposits are held in sterling. The carrying amount is the outstanding principal receivable. Bank balances are included in the Balance Sheet at the closing balance in the Council’s ledger and include cheques payable not yet cashed. *A further breakdown of the bank account is noted below: (Surplus)/ (Surplus)/ Receipts Payments Deficit Receipts Payments Deficit £000 £000 £000 £000 £000 £000 0 0 0 Dunbartonshire Educational Trust Scheme 1962 0 0 0 Endowments amalgamated to form trust 0 0 0 McAuley Prize for Mathematics 0 0 0 Provide prizes for those studying maths & computing (2) 0 (2) Alexander Cameron Bequest (2) 0 (2) To encourage and support one-off community activities in Clydebank 0 0 0 Dr A K Glen Fund 0 19 19 Provide outings for Pensioners resident in Dumbarton 0 0 0 UIE Award 0 0 0 For students studying apprenticeships or training in industry (2) 0 (2) Total (2) 19 17 2020/21 2021/22 Balance as at 1/4/21 (Surplus)/deficit for year Balance as at 31/3/22 £000 £000 £000 Bank and Cash Dunbartonshire Educational Trust Scheme 1962 (90) 0 (90) McAuley Prize for Mathematics (22) 0 (22) Alexander Cameron Bequest (118) (2) (120) Dr A K Glen Fund (24) 19 (5) UIE Award (25) 0 (25) Total (279) 17 (262) 31-Mar-21 Movement 31-Mar-22 £000 £000 £000 Net Bank Current Account* (5,234) (4,068) (9,302) Short term deposits with UK banks 17,475 (6,033) 11,442 Net Cash and Cash equivalents 12,241 (10,101) 2,140 31-Mar-21 31-Mar-22 £000 £000 1,289 Bank Current Accounts in balance 805 (6,523) Bank Current Accounts in overdraft (10,107) (5,234) Net Bank Current Account* (9,302)
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 91 Notes to the Financial Statements Note 27 – Financial Instruments 1) Types of Financial Instrument Accounting regulations require the “financial instruments” (investment, lending and borrowing of the Council) shown on the Balance Sheet to be further analysed into various defined categories. The investments, lending and borrowing disclosed in the Balance Sheet are made up of the following categories of “financial instruments”: The Council does not have any of the following types of investments or borrowings: available for sale financial assets; unquoted equity investments at cost; financial assets at fair value through profit and loss; or financial liabilities at fair value through profit and loss. The Council has considered the Code requirements for accounting for financial instruments and the following events have not taken place in 2021/22: reclassification of financial assets carrying value between fair value and amortised cost; transfer of financial assets where part or all of the financial assets does not qualify for de- recognition; pledging of financial assets as collateral or liabilities or contingent liabilities, as a result no carrying or fair value exists; recording of impairment losses in a separate account which would require a reconciliation of changes during the year; default on any loans payable during 2021/22; breaches of long term loan agreements resulting in the liability being classed as current; or offsetting of financial assets and liabilities where a legally enforceable right exists and intent to settle is on net basis. The Council has considered the Code requirements for accounting for financial instruments and the following disclosures are consistent with the Code: current liabilities are recognised as such even if refinanced post balance sheet or original term greater than twelve months; and if the Council has the discretion (contractually) and expects to roll forward current liabilities for over twelve months, then the obligation can be treated as long term. 2) Fair Value of Assets and Liabilities carried at Amortised Cost Financial assets (represented by lending and receivables) and financial liabilities (represented by borrowings) and are carried in the Balance Sheet at amortised cost. Fair values have been calculated with reference to the following: 31-Mar-21 31-Mar-22 31-Mar-21 31-Mar-22 £000 £000 £000 £000 Debtors Loans and receivables 22 21 68,955 65,401 Borrowing Financial liabilities at amortised cost 284,842 307,485 270,383 281,030 Other long term liabilities PPP and finance leases 92,615 89,115 3,677 3,370 Creditors Financial liabilities at contract amount 0 0 72,858 78,362 Long-term Current
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 92 Notes to the Financial Statements Financial Liabilities PWLB Loans (Level 2) - For loans from the PWLB, premature repayment rates from the PWLB in force on 31 March 2022 have been applied to provide the fair value under PWLB debt redemption procedures. As the Debt Management Office provides a transparent approach allowing the exit cost to be calculated without undertaking a repayment or transfer it is appropriate to disclose the exit price. As an alternative, we have assessed the cost of taking a new loan at PWLB new loan rates applicable to existing loans on Balance Sheet date (which could be viewed as a proxy for transfer value). Non-PWLB loans (Level 2) - For non-PWLB loans payable, the fair value of market loans are calculated using estimated interest rates of 1.50% which is the average discount rate applied to market loans for calculation of premature repayment. The fair value of local council loans are calculated using estimated interest rates of 0.70% which is the average discount rate applied to local council loans for calculation of premature repayment. Discount rates have been applied to provide the fair value under PWLB debt redemption procedures. PFI/Finance leases (Level 3) – These are not the liability of the Council as the debt is held by the PFI/lease provider. Fair value have been calculated at level 3 on a simple proxy basis. The same NPV methodology has been applied as for PWLB and non-PWLB debt. Financial Assets Fixed or variable short term deposits of less than a year (including MMF's) – Where an instrument has a maturity of less than 12 months or is a trade or other receivable the fair value is taken to be the carrying amount or the billed amount. Policy Type Assets Long term debtors – Level 2. Creditors The fair value of trade and other receivables is taken to be the invoiced or billed amount. Transfers between Levels of the Fair Value Hierarchy There were no transfers between input levels 1 and 2 or transfers in or out of level 3 during the year. Changes in the Valuation Technique There has been no change in the valuation technique used during the year for the financial instruments: The fair value is equal to the carrying amount because all loans and receivables are either short term or at a fixed interest rate or a variable rate linked to base rate without significant transaction costs. The Council does not hold any equity investments in an unquoted market and, therefore, this type of investment is excluded from the above table. Carrying Amount Fair Value Carrying Amount Fair Value £000 £000 Debtors £000 £000 68,977 68,977 Loans and Receivables 65,422 65,422 31-Mar-21 31-Mar-22 Carrying Amount Fair Value Carrying Amount Fair Value £000 £000 £000 £000 Borrowing 555,225 736,964 Financial liabilities 588,515 648,513 Other Long Term Liabilities 96,292 153,981 PPP and Finance Lease Liabilities 92,485 136,477 Creditors 72,858 72,858 Financial liabilities at contract amount 78,362 78,362 31-Mar-21 31-Mar-22
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 93 Notes to the Financial Statements The fair value is higher than the carrying amount because the Council’s portfolio of loans includes a number of fixed rate loans where the interest rate payable is higher than the rates available for similar loans at the balance sheet date. The commitment to pay interest above current market rates increases the amount that the Council would have to pay if the lender requested or agreed to early repayment of the loans. A further breakdown of types of borrowing held by the Council as at 31 March 2022 is noted below: 3) Gains and Losses on Financial Instruments The gains and losses recognised in the Comprehensive Income and Expenditure Account in relation to financial instruments are made up as follows: * Interest/Expense has been calculated on an EIR basis where appropriate for market instruments. There has been no gain/loss on either of the following classes of financial instruments, as the Council does not own them: available for sale financial assets; and financial assets or liabilities at a fair value through profit and loss. 4) Nature and Extent of Risks arising from Financial Instruments The Council’s management of treasury risks actively works to minimise the Council’s exposure to the unpredictability of financial markets and implementing restrictions to minimise these risks. The procedures for risk management are set out through a legal framework in the Local Government (Scotland) Act 2003 and the associated regulations. During 2021/22 these required the Council to comply with the CIPFA Prudential Code, the CIPFA Treasury Management in the Public Services Principal outstanding Accrued interest / EIR adjustment Carrying amount Principal outstanding Accrued interest / EIR adjustment Carrying amount 31-Mar-21 31-Mar-21 31-Mar-22 31-Mar-22 £000 £000 £000 £000 £000 £000 485 1,119 1,604 PWLB 11,091 1,289 12,380 0 754 754 Mortgage loans 0 761 761 260,000 322 260,322 Local Authority 257,000 135 257,135 1,181 0 1,181 Other 631 16 647 261,666 2,195 263,861 Short Term Loans 268,722 2,201 270,923 204,365 0 204,365 PWLB 226,268 0 226,268 77,600 1,652 79,252 Mortgage loans 77,600 1,637 79,237 0 0 0 Local Authority 0 0 0 1,181 0 1,181 Other 1,980 0 1,980 283,146 1,652 284,798 Long Term Loans 305,848 1,637 307,485 Financial Assets: Loans & receivables Financial Liabilities: amortised cost Total Financial Assets: Loans & receivables Financial Liabilities: amortised cost Total £000 £000 £000 £000 £000 £000 Interest (investment) 165 0 165 81 0 81 Interest payable and similar charges Interest/expense* 0 (19,180) (19,180) 0 (17,865) (17,865) (Gain)/Loss on de-recognition 0 6 6 15 15 Net (Gain)/loss in year 0 (19,174) (19,174) 0 (17,850) (17,850) 31-Mar-21 31-Mar-22
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 94 Notes to the Financial Statements Code of Practice and the Local Government Investments (Scotland) Regulations 2010. Overall these procedures require the Council to manage risk in the following ways: (i) by formally adopting the requirements of the Code of Practice; (ii) by the adoption of a Treasury Policy Statement and treasury management clauses within its financial regulations/standing orders; (iii) by approving annually in advance prudential and treasury indicators for the following three years in limiting: The Council’s overall borrowing; Its maximum and minimum exposures to fixed and variable rates; Its maximum and minimum exposures regarding the maturity structure of debt; and Its maximum annual exposure to investments maturing beyond a year. (iv) by approving an investment strategy for the forthcoming year setting out its criteria for both investing and selecting investment. These are required to be reported and approved prior to the start of the year to which they relate. These items are reported with the annual treasury management strategy which outlines the detailed approach to managing risk in relation to the Council’s financial instrument exposure. Actual performance is reported to Members to assess the effectiveness of controls established. The 2021/22 annual Treasury Management Strategy which incorporates the prudential indicators was approved by Council on 22 March 2021 amd updated through the mid-year Strategy by Council on 22 December 2021 and is available on the Council website. The key issues within the strategy were: the authorised limit for 2021/22 was set by Council at that meeting at £855.288m and updated during the year to £829.832m. This is the maximum limit of external borrowing; the operational boundary was expected to be £774.848m when reported to Council at that meeting and updated during the year to £760.680m. This is the expected level of debt during the year; the maximum amounts of fixed and variable interest rate exposure were set at 100% and 50% based on the Council’s net debt; and the maximum exposures to the maturity structure of debt is detailed with refinancing and maturity risk. The Council has fully adopted all required CIPFA Codes and statutory regulation currently in force, and maintains written principles for overall risk management, as well as written policies and procedures covering specific areas such as credit risk, liquidity risk, refinancing/maturity risk and market risk. Credit Risk Credit risk arises from the short-term lending of surplus funds to banks, building societies and other local authorities as well as credit exposures to the Council’s customers. It is the policy of the Council to place deposits only with a limited number of pre approved UK banks and building societies whose credit rating is independently assessed as sufficiently secure by the Council’s treasury advisers and to restrict lending to a prudent maximum amount for each institution. The Council’s maximum exposure to credit risk in relation to investments in banks and building societies of £11.442m cannot be assessed on a general basis as the risk of any institution failing to make interest payments or repay principle sums is specific to each individual institution, however, recent experience has shown that the institutions invested in at the year end are unlikely to default on their commitments. A risk of irrecoverability applies to all of the Council’s deposits but there was no evidence at 31 March 2022 that this was likely to happen. The following analysis summarises the Council’s maximum exposure to credit risk on other financial assets, based on past experience and current market conditions.
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 95 Notes to the Financial Statements The Council does not hold any of the following in relation to financial assets: collateral as security in case of default of investment; or financial assets that would otherwise be past due or impaired but have been renegotiated. The council does not generally allow credit for customers, however currently £11.652m is past its due date for payment. The past due amount can be analysed by age as follows: In general, provisions are made in accordance with Code Guidance, whereby a judgement is made regarding the probability of collection for each category of debt. This judgement is based upon the past experience of collecting each category of debt to calculate the appropriate percentage of each debt that may not be eventually recovered. Due consideration has been taken to current position caused by COVID, however this continues to be monitored. It should be noted that due to the limitations on the available age analysis of rent arrears, the bad debt provision of this debt is based on the total value of the debt by tenant, and not by age past due. No financial assets have been individually determined to be impaired and no collateral is held on past due or impaired financial assets, therefore the Council has not obtained financial or non financial assets during the financial year by taking possession of any collateral or calling on other credit enhancements. Liquidity risk The Council manages its liquidity position through the risk management procedures noted above (i.e. the setting and approval of prudential indicators and the approval of the treasury and investment strategy reports), as well as through a comprehensive cash flow forecast management system, as required by the CIPFA Code of Practice. This seeks to ensure that cash is available when it is needed. The Council has ready access to borrowing from the Money Markets to cover any day to day cash flow need if required. The Council is required to provide a balanced budget through the Local Government Finance Act 1992, which ensures that sufficient funds are raised to cover annual expenditure. On review, at this time there has been little effect on the availability of borrowings due to COVID. There is, therefore, no significant risk that the Council will be unable to raise finance to meet its commitments under financial instruments. Amount at 31.03.22 Historical experience of non- payment adjusted for market conditions at 31.03.22 Estimated maximum exposure to default and uncollectibility £000 % £000 Customers and other income 54,980 11.98 1,804 Total £000 Less than three months 2,032 Three to six months 277 Six months to one year 1,287 More than one year 8,056 11,652
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 96 Notes to the Financial Statements Refinancing and Maturity Risk The Council maintains a significant debt portfolio and whilst the cash flow procedures above are considered against the refinancing risk procedures, longer term risk to the council relates to managing the exposure to replacing financial instruments as they mature. This risk relates to the maturing of longer term financial liabilities. The approved treasury indicator limits for the maturity structure of debt are the key parameters used to address this risk and the central treasury team address the operational risks within the approved parameters. This includes: monitoring the maturity profile of financial liabilities and amending the profile as appropriate through either new borrowing or the rescheduling of the existing debt; and monitoring the maturity profile of investments to ensure that sufficient liquidity is available for the Council’s day to day cash flow needs. The Council has safeguards in place to ensure that a significant proportion of its borrowing does not mature for repayment at any one time in the future to reduce the financial impact of re-borrowing at a time of unfavourable interest rates. No more than 50% of borrowings are due to mature within any financial year or within any rolling five-year period. The maturity analysis of financial liabilities is as follows: Market risk Changes in market interest rates influence the interest payable on borrowings and on interest receivable on surplus funds invested. For example, a rise in interest rates would mean an increase in the interest charges on borrowing at variable rates and an increased cost to the taxpayer. An increase in interest rates would also mean an increase in the income received on lending at variable rates and a reduction in cost for the taxpayer. Changes in market rates also affect the notional “fair value” of lending and borrowing. For example, a rise in interest rates would reduce the fair value of both lending and borrowing at fixed rates. Changes in the fair value of lending and borrowing do not impact upon the taxpayer and are confined to prescribed presentational aspects in the Accounts. The Council has a variety of strategies for managing the uncertainty of future interest rates and the financial impact on the Council: it is the policy of the Council to limit its exposure to variable rate borrowing to a maximum of 50% of what it borrows; during periods of falling rates and where it is economically advantageous to do so, the Council will consider the repayment and restructuring of fixed interest rate debt; the Council takes advice from its specialist treasury advisers and actively monitors changes in interest rates to inform decisions on the lending of surplus funds, new borrowings and restructurings of existing borrowings; and any potential for a financial impact on the Council is also significantly limited by the Scottish Government’s grant distribution mechanism that automatically adjusts for changes in interest rates in the government grant support the Council receives for “loan charges”. The interest rate profile of the Council’s borrowing is as follows: Creditors PPP Borrowing Total £000 £000 £000 £000 Less than one year 78,362 3,370 281,030 362,762 Between one and two years 0 3,138 56 3,194 Between two and five years 0 12,616 30,407 43,023 More than five years 0 73,361 277,022 350,383 78,362 92,485 588,515 759,362
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 97 Notes to the Financial Statements To illustrate the impact of changes in interest rates upon the Council, the following table shows the financial effect if rates had been 1% higher at 31 March 2022, with all other variables held constant: The impact of a 1% fall in interest rates would be as above but with the changes being reversed. Foreign Exchange Risk The Council does not lend or borrow in foreign currencies and has no exposure to gains or losses arising from movements in exchange rates. Note 28 – Creditors Note 29 – General Fund and HRA – Reserves and Earmarked Balances The Council holds reserves on the Balance Sheet in respect of General Fund and HRA brought forward surpluses: (1) The General Fund balance stands at £15.020m on 31 March 2022, of which £11.524m is earmarked for ringfenced purposes, leaving an unearmarked balance of £3.496m (prudential target £3.123m). The main earmarked income held for future specific purposes: £000 % Fixed Interest Debt 578,408 98.3 Variable Interest Debt 10,107 1.7 588,515 £000 Impact on tax payers and rent payers Increase on interest payable on variable debt borrowings 1 Increase in interest receivable on variable rate investments (81) Increase in government grant receivable for ‘loan charges’ (41) Impact on Income and Expenditure Account (121) Share of overall impact due credited to the HRA (33) Other accounting presentational changes Decrease in fair value of fixed rate investments: 0 Decrease in fair value of fixed rate debt borrowings (disclosure confined to notes to the core financial statements) (74,167) 2020/21 2021/22 £000 £000 13,050 Central government bodies 12,201 25,492 Other local authorities 23,882 920 NHS Bodies 205 0 Public Corporations and trading funds 0 33,396 Other Entities and individuals 42,074 72,858 78,362
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 98 Notes to the Financial Statements *the earmarked COVID related funding is detailed below: (2) The HRA balance is currently £2.734m as at 31 March 2022, of which £1.794m is earmarked for ring fenced purposes, leaving an unearmarked balance of £0.940m. The earmarked balance held for future specific purposes is:- Note 30 – Other Reserves Reserves are created by appropriating amounts from the General Fund balance in the Movement in Reserves Statement. When expenditure is financed from a reserve, it is charged to the appropriate service to score against the Surplus or Deficit on the Provision of Services in the Comprehensive Income and Expenditure Statement. The reserve is then appropriated back into the General Fund balance in the Movement in Reserve Statement so that there is no net effect on council tax. Certain reserves are kept to manage the accounting processes for non-current assets, financial instruments and retirement benefits and that do not represent usable resources for the Council. Usable reserves Usable reserves are those that the Council is able to apply to fund expenditure or reduce taxation and comprise of both capital and revenue reserves. Movement in the revenue reserves during the year are outlined in the Movement in Reserves Statement, however, a summary is shown below: £000 Covid related funding* 6,648 Change Fund 1,257 2022/23 budget commitment 1,034 2020/21 Budget growth items 185 Young person guarantee 1,018 Set aside for historic abuse cases 150 HR/ Legal commitments 210 Social Welfare Fund 129 Other Committed Spend (< £0.100m) 893 11,524 £000 General COVID Funding Unspent general COVID funding 3,302 Service Specific COVID Funding Financial Insecurity 25 Welfare / social support 48 Tenant Grant Fund 54 Winter Support Fund 55 Low Income Pandemic Payment 81 Free School Meal (Easter 2022) 90 Parental Employee Support Fund 114 Winter Hardhsip Fund 125 Local Self Isolation Assistance 182 Scottish Child Payment Bridging Payment 422 Education Recovery 2,150 6,648 £000 Service Improvements 994 Welfare Reform Resilience Reserve 800 1,794
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 99 Notes to the Financial Statements General Fund Revenue Reserve The General Fund is held for services provided by the Council through Revenue Support Grant funded through the Scottish Government and council tax. It excludes the Housing Revenue Account. This reserve holds funds not yet spent. Housing Revenue Account Revenue Reserve The Council is required by the Local Government and Housing Act (Scotland) 1987 to keep a Housing Revenue Account (HRA) which records all revenue expenditure and income relating to the provision of council dwellings and related services. This reserve holds funds not yet spent. Capital Receipts Reserves Capital receipts from asset sales are retained within this Reserve and used to fund planned capital expenditure. Capital Grant and Reserves Unapplied Reserve Grants and other contributions given to the Council are retained within this Reserve until all conditions agreed by the grant provider are satisfied. This Reserve is also used to fund transformational projects from capital receipts. Capital Items Replacement Fund (Other) This reserve holds funds which are retained and used for the renewal or repair of school non-current assets. Capital Reserve This reserve holds funds which are retained for the funding of the Public Private Partnership (PPP) unitary charge for schools regeneration on a specific annual phased amount (also known as the Schools Regeneration Sinking Fund). Unusable reserves Unusable reserves are those that the Council is not able to utilise to provide services and comprise of:- Capital Adjustment Account The capital adjustment account absorbs the timing difference arising from the different arrangements for accounting for the consumption of non current assets and for financing the acquisition, construction or enhancement of those assets under statutory provisions. The account is debited with 31-Mar-21 31-Mar-22 £000 £000 15,028 General Services 15,020 7,364 Housing Revenue Account 2,734 0 Capital Receipts Reserve 30 42 Capital Grants and Receipts Unapplied 42 1,469 Capital Reserve 759 308 Other Reserves 468 24,211 Total Usable Reserves 19,053 31-Mar-21 31-Mar-22 £000 £000 281,297 Capital Adjustment Account 283,933 193,287 Revaluation Reserve 189,840 (163,615) Pension Reserve (55,690) (4,388) Employee Statutory Adjustment Account (4,100) (12,163) Financial Instruments Adjustment Account (11,440) 294,418 Total Unusable Reserves 402,543
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 100 Notes to the Financial Statements the cost of acquisition, construction or enhancement as depreciation, impairment losses and amortisations are charged to the comprehensive income and expenditure statement (with reconciling postings to the revaluation reserve to convert fair value figures to a historical cost basis). The account is credited with the amounts set aside by the Council as finance for the costs of acquisition, construction and enhancement. The account contains revaluation gains accumulated on property, plant and equipment before 1 April 2007, the date that the revaluation reserve was created to hold such gains. The movement in reserve statement provides detail of the source of all the transactions posted to the account. Revaluation Reserve The revaluation reserve contains the gains made by the Council arising from increases in the value of its property, plant and equipment (and intangible assets). The balance is reduced when assets with accumulated gains are: re valued downwards or impaired and the gains are lost; used in the provision of services and the gains are consumed through depreciation; or disposed of and the gains are realised. The reserve contains only revaluation gains accumulated since 1 April 2007, the date that the reserve was created. Accumulated gains arising before that date are consolidated into the balance on the capital adjustment account. Pension Reserve The pension reserve absorbs the timing differences arising from the different arrangements for accounting for post employment benefits and for funding benefits in accordance with statutory provisions. The Council accounts for post employment benefits in the comprehensive income and expenditure as the benefits are earned by employees accruing years of service, updating the liabilities recognised to reflect inflation, changing assumptions and investment returns on any resources set aside to meet the costs. However statutory arrangements requires benefits earned to be financed as the Council makes employer’s contributions to pension funds or eventually pays any pension for which it is directly responsible. 2020/2021 2021/2022 £000 £000 267,117 Opening Balance 281,297 (31,146) Depreciation (32,418) (7,974) Impairment (337) 9,012 Increase in Depreciation Caused by Revaluation 7,746 426 Write off Revaluation Reserve Balance re Disposals 617 (2,167) Disposal of Fixed Assets (3,268) 26,299 Government Grants Applied 7,746 8,911 Capital Financed by Current Revenue 13,247 10,819 Long Term Debt Payment 9,303 281,297 Closing Balance 283,933 2020/2021 2021/2022 £000 £000 153,331 Opening Balance 193,287 63,012 Unrealised Gains on Revaluation of Assets 5,381 (13,618) Impairments and Losses on Revaluation of Assets (465) (426) Write off Revaluation Reserve Balance re Disposals (617) (9,012) Depreciation due to Revaluation of Assets (7,746) 193,287 Closing Balance 189,840
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 101 Notes to the Financial Statements The debit balance on the pensions reserve therefore shows a substantial shortfall in the benefits earned by past and current employees and the resources the Council has set aside to meet them. The statutory arrangements will ensure that funding will have been set aside by the time the benefits come to be paid. Employee Statutory Adjustment Account The Employee Statutory Adjustment Account absorbs the differences that would otherwise arise on the general fund balance from accruing for compensated absences earned but not taken in the year, e.g. annual leave entitlement carried forward at 31 March. Statutory arrangements require that the impact on the general fund balance is neutralised by transfers to or from this account. Financial Instruments Adjustment Account The financial instruments adjustment account absorbs the timing difference arising from the different arrangements for accounting for income and expenses relating to certain financial instruments and for bearing losses or benefiting from gains per statutory provisions. The Council uses the account to manage premiums paid on the early redemption of loans. Premiums are debited to the comprehensive income and expenditure statement when they are incurred, but reversed out of the general fund balance to the account in the movement in reserves statement. Over time, the expense is posted back to the general fund balance in accordance with statutory arrangements for spreading the burden on council tax. In the Council’s case, this period is the unexpired term that was outstanding on the loans when they were redeemed. As a result, the balance on the account as at 31 March 2022 will be charged to the General Fund over the next thirty-six years. 2020/2021 2021/2022 £000 £000 (13,020) Opening Balance (12,163) 851 Annual Write off of Premiums and Discounts 708 0 New Premiums and Discounts 0 6 Annual EIR Adjustment to Stepped Interest Instruments 15 (12,163) Closing Balance (11,440) Note 31 – Contingent Assets and Contingent Liabilities A contingent asset arises where an event has taken place that gives the Council a possible asset whose existent will only be confirmed by the occurrence or otherwise of uncertain future events not wholly within the control of the Council. Contingent assets are not recognised in the Balance Sheet but disclosed in a note to the accounts where it is probable that there will be an inflow of economic benefits. 2020/2021 2021/2022 £000 £000 (134,077) Opening Balance (163,615) (12,934) Actuarial (Loss)/Gain 140,041 22,566 Employer Contributions 22,765 (39,170) Reversal of IAS19 Entries (54,881) (163,615) Closing Balance (55,690) 2020/2021 2021/2022 £000 £000 (4,273) Opening Balance (4,388) (115) Staff Accrual Movement 288 (4,388) Closing Balance (4,100)
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 102 Notes to the Financial Statements A contingent liability arises where an event has taken place that gives the Council a possible obligation whose existence will only be confirmed by the occurrence or otherwise of uncertain future events, not wholly within the control of the Council. Contingent liabilities also arise in circumstances where a provision would otherwise be made but either it is not probable that an outflow of resources will be required or the amount of the obligation cannot be measured reliably. Contingent liabilities are not recognised in the Balance Sheet but are disclosed as a note to the accounts, unless the possibility of an outflow of resources embodying economic benefits or service potential is remote. The Council has a residual contingent liability relating to those workers who have yet to settle their pay protection claims. The Council has a potential contingent liability relating to paid holiday entitlement, with approximately 400 live cases. Following an EU ruling UK employers are bound by employment law in relation to the definition of paid holiday entitlement. Case law has clarified that all pay elements intrinsically linked to the performance of a contract of employment should be included in the calculation of holiday pay, including payments made for additional working. The Council adjusted the method of calculation in August 2014 (backdated in line with the leave year to April) and has included on-going costs within the long term financial strategy. The legal position remains subject to challenge however, given the action taken, any potential claim by employees for any retrospective payments is likely to be minimal. As a result, whilst recognising there may be such a requirement, it is not possible to quantify such. The Limitation (Childhood Abuse) (Scotland) Act 2017 Section 1 removes the limitation period for actions of damages in respect of personal injuries resulting from childhood abuse. At this stage the extent of any potential liability is unknown. The Council provided West Dunbartonshire Leisure Trust with a letter of comfort to confirm the Council’s commitment to the ongoing financial sustainability of the Trust, on a joint planning approach in relation to future service provision through the recovery and beyond. At this stage the extent or likelihood of any potential liability is unknown. A legal ruling in relation to the Goodwin equal treatment case in the Teachers’ Pension Scheme may have an impact across other public service pension schemes. Scheme rules are to be amended to ensure the pension entitlement of male survivors within opposite-sex marriages and civil partnerships are treated in the same way as survivors of same-sex marriages and civil partnerships. The consequences may impact on future pension contributions rates but initial indications suggest that any impact would be immaterial. The Council is not aware of any other contingent assets or liabilities which may be outstanding. Note 32 – Financial Guarantee In terms of West Dunbartonshire Leisure Trust’s admission to the Strathclyde Pension Scheme, the Council has guaranteed to accept liability for any unfunded pension costs should they cease to exist, withdraw from the Scheme or become unable to meet any unfunded liability. The Council has not quantified the possible liability. The Clydebank Municipal Bank is a company limited by shares with the Council funding any annual losses incurred.
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 103 Movement on the Housing Revenue Account Statement This statement shows the movement in the year on the Housing Revenue Account reserve. The surplus or (deficit) on the housing revenue account income and expenditure statement is reconciled to the surplus or deficit for the year on the housing revenue account balance, calculated in accordance with the Housing (Scotland) Act 1987. 2020/21 2021/22 2021/22 £000 £000 £000 (3,924) Balance on the Housing Revenue Account at the End of the Previous Year (1) (7,364) (8,297) Total Comprehensive Income and Expenditure (2) (1,229) (637) Pension Scheme Adjustments (1,169) 3 Financial Instruments Adjustment 7 3 Holiday Pay Adjustment 35 (8,521) Reversal of entries included in the Surplus/Deficit on the Provision of Services in relation to capital expenditure (11,989) (9,152) Adjustments to the revenue resource (3) (13,116) 0 Net gain or loss on sale of non-current assets 0 5,019 Statutory Repayment of Debt (Loans Fund Advances) 5,495 8,637 CFCR 13,175 13,656 Adjustments between Revenue and Capital Resources (4) 18,670 4,504 Total Statutory Adjustments (5)=(3)+(4) 5,554 353 Transfers (to)/from Other Statutory Reserves (6) 305 (3,440) (Increase)/Decrease in Year (7)=(2)+(5)+(6) 4,630 (7,364) Balance on the Housing Revenue Account at the end of the Current Year (8)=(1)+(7) (2,734)
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 104 Housing Revenue Account Income and Expenditure Statement The HRA income and expenditure statement shows the economic cost in the year of providing housing services in accordance with generally accepted accounting practices rather than the amount to be funded from rents and government grants. The Council charges rents to cover expenditure in accordance with regulations; this may be different from the accounting cost. The increase or decrease in the year, on the basis of which rents are raised, is shown in the Movement on the HRA Statement. 2020/21 2021/22 2021/22 £000 £000 £000 Income (41,544) Dwelling Rents (net of voids) (42,850) (253) Other Rents (251) (1,556) Other Income (1,574) (43,353) (44,675) Expenditure 8,860 Repairs and Maintenance 12,750 11,750 Supervision and Management 12,680 12,959 Depreciation and Impairment 12,958 433 Other Expenditure 273 34,002 38,661 (9,351) Net Cost of Service as Included in the Council Comprehensive Income and Expenditure Statement (6,014) HRA Share of the Operating Income and Expenditure Included in the Comprehensive Income and Expenditure Statement (4,439) Recognised Capital Income (Grants, Contributions and Donations) (969) 0 Gain or Loss on the Sale of HRA Non Current Assets 0 4,953 Interest Payable and Similar Charges 4,717 611 Impairment Loss - Debtors 1,048 (71) HRA Interest and Investment Income (11) 1,054 4,785 (8,297) (Surplus)/Deficit for the year on HRA Services (1,229)
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 105 Notes to the Housing Revenue Account Income and Expenditure Statement Note 1 - The number and types of dwellings in the Council’s stock The Council was responsible for managing 10,378 dwellings during 2021/22 (10,153 in 2020/21). The following shows an analysis of these dwellings by type. Note 2 – Dwelling Rents The £44.223m noted in the Income and Expenditure Statement is the total rental income less voids chargeable for the year of £1.373m (2020/21 £0.895m). It excludes irrecoverables and bad debts. Average rents were £82.88 per week in 2021/22 (£81.50 per week in 2020/21). Note 3 –Other Rents This is the total income received from travelling person site rentals, lock-ups and shops less voids chargeable for the year, but excludes irrecoverables and bad debts. Lost rents from lock-ups in 2021/22 were £0.072m (£0.068m in 2020/21). Note 4 - Rent arrears As at 31 March 2022, total rent arrears amounted to £4.027m (2020/21 £3.621m as at 31 March 2021). This is 9.11% of the total value of rents due at 31 March 2022. It should be noted that the total arrears do not all relate to 2021/22 and the year on year movement in value of arrears is an increase of £0.406m. Note 5 - Provision for Bad Debts In the financial year 2021/22, the rental bad debt provision has been increased by £0.216m (£0.453m decrease 2020/21). The provision to cover loss of rental income stands at £2.444m as at 31 March 2022 – equivalent of 62.36% (61.55% 2020/21) of the total value of rents due at that date. 2020/21 2021/22 Number at 31.03.21 Average weekly rent Number at 31.03.22 Average weekly rent £ £ Type of Dwelling 2,640 78.05 Two-apartment 2,728 79.47 4,585 80.39 Three-apartment 4,676 81.71 2,583 85.49 Four-apartment 2,616 86.89 330 92.53 Five-apartment 338 94.25 10 106.71 Six-apartment 14 109.23 1 85.69 Seven-apartment 2 86.98 2 94.08 Eight-apartment 2 95.49 2 94.08 Nine-apartment 2 95.49 10,153 Total 10,378
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 106 Council Tax Account Council Taxpayers: £38.207m (2020/21 £36.765m) The Council Tax Income Account (Scotland) shows the gross income raised from council tax levied and deductions made under Statute. 2021/22 represents the ninth year of operation of the Council Tax Reduction Scheme in Scotland. The Council Tax Reduction Scheme represents a discount introduced across Scotland following the abolition of Council Tax Benefits as part of the UK government’s welfare reform programme. The resultant total net income within the Council Tax Account is transferred to the Comprehensive Income and Expenditure Statement. The calculation of the council tax base The nature and actual amount of each charge fixed Discounts, Reliefs and Exemptions A council tax bill is reduced by 25% where a property has only one occupant or 50% where the property is empty. For council tax purposes certain students are not regarded as occupants. Certain properties may also qualify for relief if the property has been adapted for a disabled person. Properties undergoing major renovation or held pending demolition may be awarded exemption from council tax. *Council Tax Benefit has been replaced by Revenue Support Grant received from the Scottish Government. The result of which has been to reduce the Council Tax Income due by use of a Council Tax Discount Mechanism. 2020/21 2021/22 £000 £000 53,813 Gross council tax 54,277 Less: (8,884) Council Tax Reduction Scheme Discount* (8,674) (6,660) Other discounts and reductions (6,745) (718) Provision for bad and doubtful debts (559) (786) Adjustments for prior years (92) 36,765 Transfer to General Fund 38,207 Band No of Dwellings No of Exemptions Disabled Relief Discounts 25% Discounts 50% CTRS Discount Total Dwellings Ratio to Band D Band D Equivalent A(Disabled) 0 0 21 8 0 11 29 200/360 16 Band A 7,537 389 41 4,338 150 3,996 8,521 240/360 5,680 Band B 16,911 614 (12) 7,950 201 6,174 18,217 280/360 14,169 Band C 7,682 216 0 3,014 37 1,958 7,987 320/360 7,100 Band D 6,108 122 19 2,008 26 736 5,965 360/360 5,965 Band E 4,793 51 (46) 1,096 18 253 4,571 473/360 6,006 Band F 1,755 13 (14) 251 6 24 1,694 585/360 2,753 Band G 840 7 (7) 110 5 3 810 705/360 1,587 Band H 66 0 (2) 5 8 61 882/360 148 43,424 (432) 42,992 Provision for bad debt Council Tax Base 2020/21 2021/22 Gross Charges £ per year £ per year Dwellings fall within a valuation band between ‘A’ to ‘H’ which is determined by the Assessor. The council 862.37 Band A 862.37 tax charge is calculated using the council tax base 1,006.09 Band B 1,006.09 i.e. band D equivalents. This charge is then decreased/ 1,149.82 Band C 1,149.82 increased dependent on the band. The band D charge 1,293.55 Band D 1,293.55 for 2021/22 was £1,293.55. 1,699.58 Band E 1,699.58 2,102.02 Band F 2,102.02 2,533.20 Band G 2,533.20 3,169.20 Band H 3,169.20
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 107 Non Domestic Rates Account Non-Domestic Rates Income £81.408m (2020/21 £55.963m) The Non Domestic Rate Account (Scotland) is an agent’s statement that reflects the statutory obligation for billing authorities to maintain a separate Non Domestic Rates account. The statement shows the gross income from the rates and deductions made under Statute. The net income is paid to the Scottish Government as a contribution to the national non-domestic rate pool. Non-Domestic Rates are pooled for Scotland as a whole and redistributed to authorities on a basis which reflects population. The Council received £81.408m (2020/21 £55.963m) from the national pool. The Council’s allocation from the pool now reflects the Council’s duty to collect Scottish Gas utilities on behalf of all Scottish councils and this equates to £56.554m in year (£56.515m 2020/21). The Council’s Revenue Support Grant has been adjusted to compensate for this change. In 2012/13 the Scottish Government introduced Business Rates Incentivisation Scheme (BRIS), to incentivise councils to grow their potential business rates tax base and as a result increase rates income, a proportion of which is to be retained by councils. Following a review of the original BRIS by a joint Scottish Government/COSLA Review Group the original scheme was suspended and a revised scheme was introduced in 2014/15. The amount of revised BRIS local targets will be linked only to the buoyancy element of the total estimated NDRI for any one year. This ensures that each council will have the ability to influence their own local tax base. Indications suggest the Council should not receive any additional income for the year 2021/22. The amount deemed to be collected locally was £76.850m (2020/21 £72.684m). Due to COVID there were more reliefs awarded to businesses, thereby reducing the amount collectable. The sum actually collected locally and contributed to the pool was £77.258m (2020/21 £70.647m), made up as follows: The non-domestic rates pool operates on a cash accounting basis and as such the non-domestic rate income account within the Council is calculated on a similar basis. 2020/21 2021/22 £000 £000 95,490 Gross rates levied 94,019 Less: (20,223) Reliefs and other deductions (14,830) (955) Provision for bad and doubtful debts (940) 74,312 Net non-domestic rate income 78,249 (3,706) Adjustments for prior years (1,801) 96 Adjustments for prior years - bad debt 810 70,702 Total Non Domestic Rate Income (before retention) 77,258 (55) Non Domestic Rate Income Retained by the Council (BRIS) 0 70,647 Contribution to National Non Domestic Rate Pool 77,258 55,963 Distribution from National Non Domestic Rate Pool 81,408 14,684 Net contribution to/(from) National Non Domestic Rate Pool (4,150) 55,963 Net Non Domestic Rate Income to Comprehensive Income & Expenditure Statement 81,408 An explanation of the nature and amount of each rate fixed £ 184,544,712 (736,797) 183,807,915 743,050 1,500,925 181,563,940 Basic Property Rate for 21/22 - £0.49 Intermediate Property Rate - £0.503 Higher Property Rate - £0.516 The national non-domestic rate poundage set by the First Minister for Scotland for 2021/22 was: The amount paid for non-domestic rates is determined by the rateable value placed on the property by the Assessor multiplied by the rate per £ announced each year by the government.
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 108 Group Accounts Introduction The Code of Practice on Local Council Accounting in the United Kingdom (the Code) requires local authorities to consider their interests in all types of entities. This includes other local authorities or similar bodies defined in section 106 of the Local Government (Scotland) Act 1973, including statutory bodies such as Valuation and Concessionary Travel Joint Boards. Authorities are required to prepare a full set of group accounts in addition to their own council’s accounts where they have a material interest in such entities. TheCouncil has accounted for its interests in each associate and joint venture using the equity method of accounting. Combining Entities The Group Accounts consolidate the results of the Council with seven other entities: Dunbartonshire and Argyll & Bute Valuation Joint Board (VJB); West Dunbartonshire Health and Social Care Partnership (HSCP); Strathclyde Partnership for Transport (SPT); Strathclyde Concessionary Travel Joint Board (SCT); West Dunbartonshire Leisure Trust (WDLT); Clydebank Property Company (CPC); and West Dunbartonshire Energy Limited Liability Partnership (WDE LLP). In addition to these entities, the Dumbarton Common Good and Sundry Trust Funds have also been consolidated. The accounting period for all entities is 31 March 2022. The Council would class an entity as an associate if they have significant influence over the financial and operating policies of the entity. The Council would class an entity as a subsidiary if they have control of the entity. The Council would class an entity as a joint venture where it has contractually agreed to share control with another party, such as significant decisions require unanimous consent and the joint ventures have rights to the net assets of the arrangement. Under accounting standards, the Council includes the results of three of these organisations as ‘associates’ because it has a significant influence over their financial and operating policies (namely VJB, SPT and SCT). The Council has no shares in, nor ownership of any of these organisations which are entirely independent of the Council. The Joint Boards are independent public bodies formed by an Act of Parliament. All local government functions that relate to these bodies have been delegated from the constituent councils that comprise the area of each Board. The members of each Board are elected Councillors and are appointed by the councils in proportions specified by legislation. The WDLT, CPC, WDE LLP and the Common Good and Trust Funds have been included as subsidiaries. HSCP has been included as a joint venture. Basis of Combination and Going Concern The combination has been accounted for on an acquisition basis using the equity method – that is, the Council’s share of the net assets and liabilities of each entity is incorporated and adjusted each year by the Council’s share of the entities’ results (recognised in the Group Income and Expenditure Account), and its share of other gains and losses. For one of the seven entities, the Council has a share in a net asset. The negative balances on WDE LLP due to first year losses.
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 109 Group Accounts The effects of inclusion of these entities and the Common Good and Trust Funds on the Group Balance Sheet is to increase reserves and Net Assets by £48.600m – representing the Council’s share of net assets in these entities. The Code requires councils to prepare financial statements on a going concern basis. A transfer within public services does not negate the presumption that these bodies are still a going concern. Thus all entities consider it appropriate that their Financial Statements should follow the ‘going concern’ basis of accounting. Statutory arrangements with the constituent local authorities for the deficit of the Valuation Joint Board means that the financial position of the Board is assured. Whilst the Balance Sheet of some entities show negative total assets, this relates primarily to defined benefit scheme pension liabilities in these entities. The financial statements of all individual group entities have been prepared on a going concern basis and, as such, the group accounts have also been prepared on this basis.
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 110 Group Accounts Group Comprehensive Income and Expenditure Statement This statement shows the accounting cost in year, of providing services in accordance with relevant International Financial Reporting Standards, rather than the amount to be funded from taxation. The council raises taxation to cover expenditure in accordance with regulations; this may be different from the accounting cost. The taxation position is shown in the Movement in Reserves Statement. Restated Restated Restated 2020/21 2020/21 2020/21 2021/22 2021/22 2021/22 Gross Gross Net Gross Gross Net Expenditure Income Expenditure Expenditure Income Expenditure £000 £000 £000 £000 £000 £000 Service 67,474 (42,014) 25,460 Corporate Services 71,094 (38,250) 32,844 116,417 (17,591) 98,826 Educational Services 125,228 (15,424) 109,804 63,443 (17,620) 45,823 Infrastructure, Regeneration and Economic Development 60,331 (15,742) 44,589 37,070 (32,922) 4,148 Housing and Communities 39,614 (31,853) 7,761 34,003 (43,354) (9,351) Housing Revenue Account 38,661 (44,675) (6,014) 8,611 (6,117) 2,494 Miscellaneous Services 7,035 (8,501) (1,466) 177,250 (101,678) 75,572 Health and Social Care Partnership 192,216 (107,720) 84,496 2,339 0 2,339 Requisitions 2,517 0 2,517 4,743 (1,269) 3,474 Subsidiaries 7,763 (2,991) 4,772 511,350 (262,565) 248,785 Net Cost of Service (1) 544,459 (265,156) 279,303 883 (Gain) / loss on Disposal of Fixed Assets 998 883 Other Operating Expenditure (2) 998 (36,765) Council Tax (38,207) (55,963) Non-Domestic Rates (81,408) (153,086) Revenue Support Grant (133,404) (26,210) Recognised Capital Income (Grants, Contributions & Donations) (7,746) (272,024) Taxation and Non-specific Grant Income (3) (260,765) (115) Interest Earned (31) 19,177 External Interest Payable / Similar Charges 17,868 1,383 Impairment Loss - Debtors 1,101 3,393 Pension Interest Cost/Expected Return on Pension Assets 3,635 23,838 Finance/Investment Income and Expenditure (4) 22,573 1,482 (Surplus)/Deficit on Provision of Services 42,109 (5) = (1)+(2)+(3)+(4) (7,207) Share of other Comprehensive Income and Expenditure of Associates and Joint Ventures (6,614) (49,793) (Surplus)/Deficit arising from revaluation of property, plant and equipment (4,932) 0 (Surplus)/Deficit on revaluation of available for sale assets 0 15,220 Actuarial (gains)/losses on pension fund assets and liabilities (145,788) (41,780) Other Comprehensive (Income) and Expenditure (6) (157,334) (40,298) Total Comprehensive (Income) and Expenditure (5)+(6) (115,225)
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 111 Group Accounts Group Movement in Reserves Statement This statement shows the movement in the year on the different reserves held by the group, analysed into ‘usable reserves’ (i.e. those that can be applied to fund expenditure or reduce local taxation) and other reserves. The surplus or (deficit) on the provision of services line shows the true economic cost of providing the group’s services, more details of which are shown in the Comprehensive Income and Expenditure Statement. These are different from the statutory amounts required to be charged to the General Fund balance and the Housing Revenue Account for council tax setting and dwelling rent setting purposes. The net increase/decrease before transfer to earmarked reserves line shows the statutory general fund balance and housing revenue account balance before any discretionary transfers to or from earmarked reserves undertaken by the Council. *The transfer of statutory reserves is in relation to dividends paid to the Council by Clydebank Property Company. WDC Usable Reserves Group Usable Reserves Total Usable Reserves WDC Unusable Reserves Group Unusable Reserves Total Unusable Reserves Total Reserves £000 £000 £000 £000 £000 £000 £000 2021/22 Opening Balance at 1 April 2021 (24,211) (22,542) (46,753) (294,418) (14,064) (308,482) (355,235) Restatement due to % share in 2020/21 0 99 99 0 166 166 265 Restatement Opening Balance 1 April 2021 (24,211) (22,443) (46,654) (294,418) (13,898) (308,316) (354,970) Movement in reserve 2021/22 (Surplus) or deficit on provision of services 42,042 67 42,109 (144,958) (5,435) (150,393) (108,284) Other Comprehensive Expenditure and Income (37,541) (6,693) (44,234) 37,541 (248) 37,293 (6,941) Net Increase/(Decrease) before Transfers to Other Statutory Reserves 4,501 (6,626) (2,125) (107,417) (5,683) (113,100) (115,225) Transfers to/from other statutory reserves * 658 46 704 (708) 4 (704) 0 Closing Balance at 31 March 2021 (19,052) (29,023) (48,075) (402,543) (19,577) (422,120) (470,195) 2020/21 (Restated) Opening Balance at 1 April 2020 (15,834) (13,986) (29,820) (269,078) (16,039) (285,117) (314,937) Movement in reserve 2020/21 (Surplus) or deficit on provision of services 2,792 (1,310) 1,482 (36,459) 9,709 (26,750) (25,268) Other Comprehensive Expenditure and Income (11,971) (7,221) (19,192) 11,971 (7,809) 4,162 (15,030) Net Increase/(Decrease) before Transfers to Other Statutory Reserves (9,179) (8,531) (17,710) (24,488) 1,900 (22,588) (40,298) Transfers to/from other statutory reserves * 802 (25) 777 (852) 75 (777) 0 Closing Balance at 31 March 2021 (24,211) (22,542) (46,753) (294,418) (14,064) (308,482) (355,235) Usable Reserves Unusable Reserves
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 112 Group Accounts Group Balance Sheet The balance sheet shows the value, as at the balance sheet date, of the assets and liabilities recognised by the group. The net assets (assets less liabilities) are matched by the reserves held. Reserves are reported in two categories (page 41 provides a further explanation). The unaudited Financial Statements were authorised for issue on 30 June 2022 Laurence Slavin Chief Officer - Resources West Dunbartonshire Council 30 June 2022 Restated 2020/21 2021/22 £000 £000 1,115,834 Property, Plant and Equipment 1,150,922 282 Intangible Assets 637 28,860 Investment in associates 37,189 22 Long Term Debtors 21 3,703 Long term Investments 3,699 1,406 Heritage Assets 1,485 1,150,107 Total Long Term Assets 1,193,953 7,755 Asset Held for Sale 5,117 1,355 Inventories 1,311 66,490 Short Term Debtors 70,230 15,735 Cash and Cash Equivalents 5,987 91,335 Current Assets 82,645 (3,677) PPP & Finance Lease Liabilities (3,370) (53) Donated Inventories (76) (73,107) Short Term Creditors (78,367) (263,105) Short Term Borrowing (269,917) (339,942) Current Liabilities (351,730) 901,500 Total Assets less Current Liabilities 924,868 (288) Liabilities in Associates 0 (284,798) Long Term Borrowing (307,485) (92,615) PPP & Finance Lease Liabilities (89,115) (459) Provision for liability (463) (166,842) Net Pensions Liability (55,517) (1,263) Capital Grants Receipts in Advance (conditions) (2,093) (546,265) Long Term Liabilities (454,673) 355,235 Total Assets Less Liabilities 470,195 Represented by: 46,753 Usable Reserves 48,075 308,482 Unusable Reserves 422,120 355,235 Total Reserves 470,195
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 113 Group Accounts Group Cashflow Statement The cash flow statement shows the changes in cash and cash equivalents of the group during the reporting period. The statement shows how the group generates and uses cash and cash equivalents by classifying cash flows as operating, investing and financing activities. The amount of net cash flows arising from operating activities is a key indicator of the extent to which the operations of the authority are funded by way of taxation and grant income or from the recipients of services provided by the authority. Investing activities represent the extent to which cash outflows have been made for resources which are intended to contribute to the Council’s future service delivery. Cash flows arising from financing activities are useful in predicting claims on future cash flows by providers of capital (i.e. borrowing) to the group. The incorporation of the associates and subsidiaries within the group cash flow statement is immaterial, therefore, no cash flow statement is noted within the Group Accounts. The Council’s cashflow is noted on page 42.
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 114 Group Accounts Notes to the Group Accounts Note 1 - Details of combining entities The notes required for the Financial Statements of the Council are disclosed separately in the preceding pages. For Strathclyde Partnership for Transport and Concessionary Travel Scheme, although the Council holds less than 20% voting rights, it has a significant influence on the bodies. The organisations have voting allocations over 11 other local councils, with no one council holding majority shares, which ensures that all 12 councils can influence decisions. The following notes provide material additional amounts and details in relation to the other combining entities. Associates and Joint Ventures Strathclyde Partnership for Transport is the statutory body responsible for formulating the public transport policy on behalf of the 12 local authorities in the West of Scotland. In 2021/22, the Council contributed £2.188m (2020/21 £2.186m restated) or 3.97% of the Board’s estimated running costs and its share of the year end net asset of £19.187m (2020/21 £17.817m) is included in the Group Balance Sheet. Copies of its accounts may be obtained from the Treasurer to the Strathclyde Partnership for Transport, 131 St Vincent Street, Glasgow G2 5JF. Strathclyde Concessionary Travel Scheme Joint Board oversees the operation of the concessionary fares scheme for public transport on behalf of the 12 local authorities in the West of Scotland. The costs of the scheme are funded through requisitions from the 12 councils and by the Scottish Executive via a ‘section 70’ grant. In 2021/22, the Council contributed £0.328m (2020/21 £0.162m), 4.03% of the Board’s estimated running costs and its share of the year end net asset of £0.185m (2020/21 £0.139m) is included in the Group Balance Sheet. Copies of its accounts may be obtained from the Treasurer to the Strathclyde Partnership for Transport, 131 St Vincent Street, Glasgow G2 5JF. Dunbartonshire and Argyll and Bute Valuation Joint Board was formed in 1996 at local government re-organisation by an Act of Parliament. The Board maintains the electoral, council tax and non-domestic rates registers for the three councils of West Dunbartonshire, East Dunbartonshire and Argyll and Bute. The Board’s running costs are met by the three authorities, with surpluses and deficits on the Board’s operations also shared between the councils. In 2021/22, the Council contributed £0.738m (2020/21 £0.714m) or 25.93% of the Board’s estimated running costs and its share of the year end net asset of £0.537m (2020/21 £0.288m net liability) is included in the Group Balance Sheet. Copies of its accounts may be obtained from the Treasurer to the Valuation Joint Board, 16 Church Street, Dumbarton G82 1QL. The West Dunbartonshire Health & Social Care Partnership - the Public Bodies (Joint Working) Act (Scotland) 2014 sets out the arrangements for the integration of health and social care across the country. The Scottish Government-approved the Integration Scheme for West Dunbartonshire which details the ‘body corporate’ arrangement by which NHS Greater Glasgow & Clyde Health Board and the Council agreed to formally delegate health and social care services for adults and children (including criminal justice, social work services) to a third body, which is described in the Act as an Integration Joint Board. The Integration Joint Board for West Dunbartonshire is known as the West Dunbartonshire Health & Social Care Partnership Board (HSCP Board) and started operations on 1 July 2015. The Board’s running costs are met by the two bodies mentioned above, with surpluses and deficits on the Boards operations also shared between them. In 2021/22, the Council contributed £74.925m (2020/21 £70.873m) towards estimated running costs and its share of the year end net asset of £17.280m (2020/21 £10.904m) is included in the Group Balance Sheet. Copies of its accounts may be obtained from the Chief Financial Officer to the Integration Joint Board, 16 Church Street, Dumbarton G82 1QL.
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 115 Group Accounts The Council’s share of its associates and joint ventures are as follows: Subsidiaries West Dunbartonshire Leisure Trust was formed in December 2011 and started trading on 5 April 2012. The Trust is a charitable company registered in Scotland and provides leisure facilities within the West Dunbartonshire area to the general public and operates sports centres, leisure centres, swimming pools, halls and community education centres owned by the Council. The Trust is paid a management fee by the Council for the provision of these services. The Trust’s net asset at 31 March 2022 was £3.464m (2020/21 £0.036m net asset) and its surplus for the year was £0.099m (2020/21 £1.034m). The accounts of the Trust are published separately and can be obtained from the Manager, Leisure Trust Headquarters, Alexandria CE Centre, Alexandria, G83 0NU which is also the company’s principal place of business. Clydebank Property Company was part of a group organisation previously known as Clydebank Rebuilt which was a pathfinder urban regeneration organisation, limited by guarantee and included a commercial letting company (industrial units) and a registered charity (the Titan Trust). On 11 August 2014, following the transfer of the Titan Crane to the Property Company, the Council bought the commercial letting company with a view to continuing its regeneration objective. The Company’s net asset at 31 March 2022 was £3.904m (2020/21 £3.861m) and its surplus for the year before payment of a dividend was £0.097m (2020/21 £0.699m). The accounts of the Company are published separately and can be obtained from the Company’s Headquarters, Titan Enterprise, 1 Aurora Avenue, Queen’s Quay, Clydebank G81 1BF which is also the Company’s principal place of business. West Dunbartonshire Energy Limited Liability Partnership is a company established in April 2022 and was Scotland’s first large-scale water source heat pump district heating scheme. The ESCo is a Limited Liability Partnership (LLP) structure and is 99.9% controlled by WDC, with 0.1% being owned by Clydebank Property Company. Following its first year of inception, the Company has a net liability at 31 March 2022 of £0.397m funded as working capital advance from the Council. Its deficit for the year was £0.209m. The accounts of the Company are published separately and can be obtained from the Company’s Headquarters, 16 Church Street, Dumbarton G82 1QE. Dumbarton Common Good is held in Trust by the Council. Although the council does not contribute to this fund financially, it has been included within the Council’s Group through materiality by nature. Net usable income in 2021/22 was £0.060m (2020/21 £0.083m net usable spend). Strathclyde Partnership for Transport Strathclyde Concessionary Travel Scheme Joint Board Dunbartonshires and Argyll and Bute Valuation Joint Board West Dunbartonshire Health & Social Care Total £000 £000 £000 £000 £000 2021/22 Surplus/ (Deficit) on Operating Activities 285 (46) (63) 6,377 6,553 Non Current Assets 12,767 0 296 0 13,063 Current Assets 7,192 207 258 17,364 25,021 Non Current Liabilities 0 0 0 0 0 Current Liabilities (772) (22) (17) (84) (895) Restated 2020/21 Surplus/ (Deficit) on Operating Activities 350 (110) (60) 6,872 7,052 Non Current Assets 11,438 0 166 0 11,604 Current Assets 7,283 147 233 10,904 18,567 Non Current Liabilities 0 0 (629) 0 (629) Current Liabilities (904) (8) (58) 0 (970)
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 116 Group Accounts Trust Funds are held in Trust by the Council. Although the Council does not contribute to these funds financially, they have been included within the Council’s Group through materiality by nature. The net increase in funds of £0.017m (2020/21 £0.002m) for the Trust Funds. For the purposes of the Group Accounts, two Trust Funds managed by the Council (Dunbartonshire Educational Trust and McAulay Prize for Mathematics Trust) have been included pro rata to the Council’s share. Copies of the accounts may be obtained from West Dunbartonshire Council, 16 Church Street, Dumbarton G82 1QL. The Council’s subsidiaries year end results are as follows: Note 2 – Non-Material Interest in Other Entities The Council has an interest in a number of other organisations. The Council’s share of their net assets or liabilities is not material to the fair understanding of the financial position and transactions of the Council. Accordingly, the Group Accounts do not include these organisations. Under Accounting Regulations, the Council is required to disclose the business nature of each organisation. Scotland Excel is a joint committee established through Section 57 of the Local Government (Scotland) Act 1973. The main purpose of the committee includes co-ordination of collaborative buying initiatives, representation of interests in public sector contracts, and the development and operation of a centre of procurement expertise for Local Government in Scotland. Clydebank Municipal Bank is a company limited by shares set up based upon the Companies Act 1908 and 1913. It acts as banker for a number of private individuals/organisations. The Council provides services to the bank and funds any annual losses incurred. The bank’s year end is 5 April. The principal business of the Municipal Bank is to accept deposits from private account holders and to invest funds with the Council. The chairman and directors of the bank are Elected Members of the Council. As per the bank’s unaudited financial statements at 31 March 2022, 2,475 accounts were held with the bank (2020/21 2,474), with a total amount on deposit of £1.658m (2020/21 £1.733m), with £1.306m being invested with the Council (2020/21 £1.306m). Interest paid by the Council to the bank in the year was £0.034m (2020/21 £0.034m). Hub West of Scotland is a public private Joint Venture development organisation established in 2012. They work with the public sector partners to plan, design, build, and fund and maintain buildings in the most efficient and effective manner delivering better value for money and ultimately improving public services. Hub West of Scotland comprises: Hub West Territory Participants, Scottish Futures Trust and The Wellspring Partnership. West Dunbartonshire Leisure Trust Clydebank Property Company WD Energy LLP Common Good Trust Funds Total £000 £000 £000 £000 £000 £000 2021/22 Surplus/ (Deficit) on Operating Activities 99 63 (209) 60 (17) (4) Non Current Assets 360 4,376 0 3,487 0 8,223 Current Assets 4,970 391 123 589 184 6,257 Non Current Liabilities 0 (736) (329) 0 0 (1,065) Current Liabilities (1,866) (127) (3) (8) 0 (2,004) 2020/21 Surplus/ (Deficit) on Operating Activities 1,034 194 0 83 2 1,313 Non Current Assets 245 4,373 0 3,487 0 8,105 Current Assets 4,908 415 0 537 201 6,061 Non Current Liabilities (3,227) (732) 0 0 0 (3,959) Current Liabilities (1,962) (195) 0 (16) 0 (2,173)
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 117 Group Accounts Business Loans Scotland Ltd was formed in March 2017 with 27 Scottish local authorities full members, including the Council, and the remaining five Scottish local authorities becoming associate members. In this respect, each member local council provides a level of loan finance for companies in their area under Phase 1, augmented in Phase 2 by Scottish Growth Scheme and European Regional Development Funding (ERDF). Note 3 – Financial Impact of Consolidation The effect of inclusion of the entities on the Group Balance Sheet is to increase reserves and net assets by £48.600m (2020/21 £36.606m net asset) respectively representing the Council’s share of the realisable surpluses/deficits in these organisations. This leaves the group account with an overall net asset of £470.195m (2020/21 £355.235m). Note 4 – Analysis of Material Amounts in Income and Expenditure Account The following table provides an analysis of the council’s share of the material amounts as a result of the inclusion of the associates and subsidiaries. Contribution to Group Income and Expenditure Reserve: Note 5 - Group Accounting Policies: Disclosure of differences with main Statement of Accounting Policies The financial statements in the Group Accounts are prepared in accordance with the accounting policies set out in Note 1 on pages 43 to 56 with additions and exceptions noted below: Group Income and Expenditure Account Proceeds from disposal of fixed assets – profits and losses from the disposal of fixed assets are credited or debited to the Group Income and Expenditure Account within the net cost of services. The proceeds are then appropriated out after net operating expenditure. For those proceeds associated with the disposal of the Council’s assets, appropriation is to the Group Reserves. For those proceeds associated with the disposal of associates’ assets, appropriation is to the Group Income and Expenditure Reserve. Group Balance Sheet Inventories – valuation methods vary slightly across the Group. The Council uses cost price basis. The difference in valuation methods does not have a material impact on the results of the group given the levels of stock held within the organisations; and Restated 2020/21 2021/22 £000 £000 17,817 Partnership for Transport 19,187 139 Concessionary Travel Board 185 (288) Valuation Joint Board 537 10,904 West Dunbartonshire Health & Social Care 17,280 (36) West Dunbartonshire Leisure Trust 3,464 3,861 Clydebank Property Company 3,904 0 WD Energy LLP (209) 4,008 Common Good 4,068 201 Trust Funds 184 36,606 Total 48,600
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 118 Group Accounts Pensions – West Dunbartonshire Leisure Trust complies with the Financial Reporting Standard FRS102 concerning the disclosure of information on pensions. There is no difference in the Profit and Loss Account by using this method in comparison with IAS19 (which is used by other group entities) therefore there is no impact on the results of the group.
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 119 Glossary of Terms While much of the terminology used in this report is self explanatory, the following additional definitions and interpretation of the terms used are provided for assistance. The Glossary of Terms does not comprise part of the audited financial statements. 1. Employee benefit expenses This includes salaries, wages, overtime, bonus, enhancements, pensions, employer’s national insurance, travelling and subsistence expenses and other staff allowances. 2. Other service expenses This includes: property costs (e.g. rent, rates, insurance, repairs and maintenance, upkeep of grounds, heating and lighting); supplies and services (e.g food, materials, books, uniforms and protective clothing, purchase/ maintenance of equipment); transport costs (e.g. fuel, repairs and maintenance, tyres, licences, insurance and procurement of transport for school children); administration costs (e.g. printing and stationery, advertising, postages, telephone costs); Payments to Other Bodies (e.g. grants and payments to individuals, organisations and agencies providing services complementing or supplementing the Council’s work. 3. Specific Government Grants This includes grants received from Central Government in respect of a specific purpose or service, usually calculated as a predetermined percentage of the expenditure actually incurred e.g. National Priority Action Fund, Benefits Administration. 4. General Income This includes the charges to persons and bodies for the direct use of council services. 5. Capital Expenditure This is expenditure incurred in creating, acquiring or improving assets where the expenditure is normally financed by borrowing over a period of years, finance leases, or utilising the income from the sale of existing assets. 6. Capital Financed from Current Revenue This is expenditure incurred in creating, acquiring or improving assets where that expenditure is charged directly to the revenue account. 7. Deferred Asset The deferred asset represents the net value of the premium paid/discounts received by the Council on the early repayment of external long term loans. 8. Useable Capital Receipts Reserve The Useable Capital Receipts Reserve represents the capital receipts available to finance capital expenditure in future years, after setting aside the statutory amounts for the repayment of external loans. 9. Pension Interest Cost The expected increase during the period in the present value of the scheme liabilities because the benefits are one year closer to settlement 10. Expected Return of Pension Assets The average rate of return expected over the remaining life of the related obligation on the actual assets held. 11. CIPFA Chartered Institute of Public Finance and Accountancy 12. LASAAC Local Council (Scotland) Accounts Advisory Committee 13. Budget The original revenue budget as set by Members at an appropriate Council meeting. 14. Intangible Assets Expenditure on assets such as software licences that do not have physical substance but are identifiable and controlled by the Council. 15. Revaluation Reserve This fund is a store of gains on the revaluations of fixed assets. It is a reserve held for technical accounting purposes and is not available for distribution.
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West Dunbartonshire Council Draft Statement of Accounts for the Year Ended 31 March 2022 120 Glossary of Terms 16. Capital Adjustment Account (CAA) This fund is a store of capital resources set aside to meet past expenditure. It is an account held for technical accounting purposes and is not available for distribution. 17. Financial Instrument Adjustment Account (FIAA) This account is used to balance for differences in statutory requirements and proper accounting practices for borrowing and lending. It is an account held for technical accounting purposes and is not available for distribution. 18. Associate Body An entity other than a subsidiary or a joint venture in which the Council has an interest and over who’s operating and financial policies the Council is able to exercise significant influence. 19. Entity A body that is delivering a service or carrying on a business. It should have a separate legal personality and is legally obliged to prepare its own financial statements. 20. Statutory Additions Additional charges levied for late payment of council tax and non domestic rates. 21. Capital Items Replacement Fund Reserve earmarked for specific purposes within Education 22. Available for Sale Reserve Assets that have a quoted market price and/or do not have fixed or determinable payments. 23. Current Service Costs (Pension) This relates to the real cost of benefit entitlement earned by employees. 24. Past Service Costs/Gains (Pension) This relates to posts/gains from years prior to the current year and arise from decisions made in year. This relates to the capitalised cost of early retirals on efficiency grounds. 25. Curtailments (Pension) Used to reduce the number of expected years of future service for employees. In year this relates to the capitalised cost of early retirals on efficiency grounds. 26. Interest Cost (Pensions) The amount needed to unwind the discount applied in calculating current service cost. 27. Expected Return on Assets (Pensions) A measure of the return on the investment assets held by the scheme for the year. 28. Public Private Partnership (PPP)/Public Finance Initiative (PFI) A contract between the Council and a private organisation for the provision of new Educational buildings maintenance and related facilities. 29. Available for Sale Assets These assets are in relation to Financial Instruments and include: Equity investments; and Other investments traded in an active market. 30. Heritage Assets An asset with historical, artistic, scientific, technological, geophysical or environmental qualities which is held for its contribution to knowledge and culture. 31. PPE Property, Plant and Equipment.