Explanatory Foreword_________________________________________________________

1. Introduction

1.1 This foreword gives:

· a summary of the various statements which make up the 2005/06 accounts

· a broad picture of where the money comes from and what it is spent on

· a summary of the revenue expenditure on services and capital expenditure on new assets over the course of the year.

2. Summary of Statement of Accounts

2.1 The accounts for 2005/06 are set out on pages 4 - 6 and 18 - 39. They consist of:

· statement of accounting policies

· summary revenue account - this covers income and expenditure on the service

· balance sheet - this sets out the financial position on 31 March 2006

· cash flow statement - this summarises cash coming in or going out from

transactions with others for revenue and capital purposes

· statement of total movements in reserves - this sets out how reserves have changed and been used during the year.

3. Where the money comes from

3.1 On 1 April 2004 the Authority moved to a precept status. The Authority's income now comes from general Government grants, a share of national business rates and the council tax. In addition specific Government grants are received for certain services and fees are charged to customers for some services. Interest is also earned on day to day balances.

The proportion of the Council's income from these sources is as follows:

	2004/05	2005/06
	%	%
Council tax	50.9	51.1
National business rates	26.4	31.0
General Government grants	18.9	14.9
Fees, charges & interest	2.2	1.8
Specific Government grants	1.6	1.2
	100	100

4. What the money is spent on

4.1 The Authority spent its money as follows:

Explanatory Foreword_________________________________________________________

5. Overview of the year - revenue account

5.1 The Authority set its budget requirement at £60,265,000 which was 3.25% more than the original budget for 2004/05.

The main components of the 2005/06 budget and actual income and expenditure are set out below.

5.2 At the end of the year net expenditure totalled £59,821,000 which was £190,000 lower than the budget requirement.

Explanatory Foreword_________________________________________________________

6. Overview of the year - capital expenditure

6.1 In 2005/06 the Authority spent £2,814,000 on capital projects:

7. Debt

7.1 The Authority currently has thirteen loans totalling £5.1m.

On a day to day basis the Authority is able to lend to and borrow from Hampshire County Council.

8. Changes

8.1 There were no major changes in 2005/06.

9. Further information

9.1 Further information can be obtained about the accounts from the Treasurer to the Fire and Rescue Authority at the County Treasurer's Department, Hampshire County Council, The Castle, Winchester, Hampshire, SO23 8UB, telephone (01962) 847518, or e-mail [email protected].