Contact: Jon Pittam, ext 7400

1. Summary

1.1 The following decision (s) are is sought:

2. Reason (s)

2.1

3. Other options considered and rejected

3.1 Not applicable.

4. Conflicts of interest declared by the decision maker or a member or officer consulted

4.1 Not applicable.

5. Dispensation granted by the Standards Committee

5.1 Not applicable.

6. Reason (s) for the matter being dealt with if urgent

6.1 Not applicable.

Approved by: (signature) Date: (date of decision)

Councillor T K Thornber

Contact: Jon Pittam, ext 7400

7. Introduction

7.1 Government regulations require the approval of the draft Statement of Accounts by the County Council within six months of the end of the financial year, though this deadline is being bought forward progressively so that by the end of 2005/06, approval will be required within three months of year end.

7.2 As Government departments have until 30 September to finalise the allocation of supplementary credit approvals, minor amendments are often made to the accounts previously reported to the Cabinet, in order to maximise the use of credit approvals. However no significant changes have been notified this year or are anticipated during September. This year when the accounts were reported to the Cabinet in June, information had not been received about a possible transfer of credit approval from Portsmouth City Council, though it was agreed that the County Council would accept any transfer of credit approval in 2002/03 to be repaid in 2003/04. Subsequently the City Council transferred a credit approval of £4m, which enabled the use of the capital reserve to finance capital expenditure in 2002/03 to be reduced. The reserve will instead be used in 2003/04 when the County Council will be required to return credit approvals to Portsmouth City Council of an equivalent value. Apart from this change only very minor changes have been made to the accounts previously reported to the Cabinet, so that a small underspending of £159,000 against the revised budget reported in June becomes £163,000 in the finalised accounts.

8. Statement of Accounts

8.1 The draft Statement of Accounts has been drawn up in the form prescribed in a Code of Practice which constitutes proper accounting practice for local authorities, as required by S66 of the Local Government and Housing Act 1989. The Code is updated each year to take into account changes in accounting standards.

8.2 Last year new disclosures were introduced related to pensions required by a new reporting standard on retirement benefits (FRS17). This year the disclosure has been extended to provide an analysis of the change in the value of the net pensions asset or liability during the course of the year, and next year FRS17 adjustments will be included in the statements themselves. Because of the continuing unfavourable investment climate in 2002/03, the County Council's share of the net liability of the Hampshire Pension Fund increased by £213.9m during 2002/03, of which £194.8m was the result of poorer returns on investment than expected. This is a liability which is both long-term and volatile and employer contribution rates, which have been increasing on a stepped basis since the March 2001 valuation, will be set following the March 2004 valuation, with the objective of restoring full funding over the longer term. There have been no other material changes to the Code of Practice this year.

8.3 The Statement of Accounts of the Pension Fund was reported to the County Council in July and the attached draft Statement of Accounts presented for approval therefore comprises the remaining financial statements, relating to the County Council. After final editing, the statement will be published once the external audit opinion has been obtained, which cannot be given in advance of the Council's approval.

Recommendation

That the Statement of Accounts 2002/03 be approved.

Section 100 D - Local Government Act 1972 - background papers

The following documents disclose facts or matters on which this report, or an important part of it, is based and has been relied upon to a material extent in the preparation of this report.

NB the list excludes:

Published works.

Documents which disclose exempt or confidential information as defined in the Act.

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