Archived decisions


Notes to the core financial statements

1	Prior period adjustments

	Adjustments to the information within the 2007/08 statements have been made to reflect the change in accounting policy for non-distributed costs, the valuation of pension fund assets and the treatment of revenue expenditure funded by capital under statute, previously treated as deferred charges.



	Non-distributed costs
	From 2008/09 the costs associated with surplus assets held for disposal became a material amount, principally as a result of asset value reductions to reflect market conditions. In 2007/08, £977,336 relating to surplus assets has been transferred from cultural, environmental and planning services to non-distributed costs to match the treatment in 2008/09.




	Valuation of pension fund assets
	Under the 2008 SORP, the council has adopted the amendment to FRS 17. As a result, quoted securities held as assets in the Local Government Pension Scheme (LGPS) are now valued at bid price rather than mid-market value. The effect of this change is that the value of scheme assets at 31 March 2008 has been restated from £1,055.4 million to £1,054.0 million, a decrease of £1.4 million, resulting in an increase of the pension fund deficit of £1.4 million. This decrease is offset by the Pension Reserve. The expected return on assets included in the 2007/08 income and expenditure account has reduced from £72.62 million to £72.5 million and increases the deficit for the year by £0.12 million. This change is also adjusted in the Statement of Movement on the General Fund Balance so that there is no impact on the General Fund for council tax setting purposes.









	Revenue expenditure funded from capital under statute

	Legislation allows some expenditure such as grants to external organisations for capital purposes and spending on buildings not owned by the County Council, e.g. foundation schools, to be funded from capital resources. Such expenditure is not carried on the balance sheet and is charged to the income and expenditure account in the year it is incurred. On the cash flow statement such expenditure is included as a revenue activity. Previously it had been included as a capital activity and the 2007/08 cash flow statement has been adjusted to reduce capital cash outflow and increase revenue cash outflow by £10 million.






2	Disclosure of deployment of Dedicated Schools Grant

	The Council's expenditure on schools is funded by grants from the Department for Children, Schools and Families, primarily the Dedicated Schools Grant (DSG).


	DSG is ring-fenced and can only be applied to meet expenditure properly included in the Schools Budget. The Schools Budget includes central expenditure covering education provision and a restricted range of services provided on an authority-wide basis and the Individual Schools Budget, which is divided into a budget share for each school. Overspends and underspends on the two elements must be accounted for separately.



		45
	Details of the deployment of DSG receivable for 2008/09 are as follows:

				Individual
			Central	Schools	Total
			expenditure	Budget
			£'000	£'000	£'000

	Original grant allocation to schools budget for		99,924	571,076	671,000
	the current year

	Adjustment to finalised grant allocation		582	-	582

	DSG receivable for the year		100,506	571,076	671,582

	DSG applied in the year		97,603	571,076	668,679

	Expenditure below 2008/09 DSG		2,903	-	2,903

	Carry Forward from 2007/08		6,442	-	6,442

	Unapplied grant carried forward to 2009/10		9,345	-	9,345


3	Non-distributed costs
	Some costs cannot be attributed to individual services and are described as non-distributed costs. They include past service costs relating to pensions which arise from decisions taken in the current year, but whose financial effect is derived from years of service earned in earlier years. Further details of pension costs are included in note 7. Non-distributed costs also include the costs associated with surplus assets held for disposal.




		46


4	Change in provisions
																				31 March							Change in 2007/08										31 March
																				2007							Central					Service					2008
																											Provision					Provision
																				£'000							£'000					£'000					£'000
	Insurance claims																			-4,285							3,624					-3,576					-4,237
	Contract terminations																			-177							-					-85					-262
	Other																			-31							-					5					-26
																				-4,493																	-4,525
	Provision for doubtful debts (included																			-1,662							-607					-19					-2,288
	with debtors in the Balance Sheet)
																											3,017					-3,675


																				31 March							Change in 2008/09										31 March
																				2008							Central					Service					2009
																											Provision					Provision
																				£'000							£'000					£'000					£'000
	Insurance claims																			-4,237							0					-688					-4,925
	Contract terminations																			-262							-					0					-262
	Other																			-26							-					-2					-28
	Provisions identified in the Balance Sheet																			-4,525																	-5,215
	Provision for doubtful debts (included																			-2,288							0					-3,207					-5,495
	with debtors in the Balance Sheet)
																											0					-3,897

	The insurance provision represents an assessment of the likely cost of liability claims known to the County Council at 31 March 2009. The risks covered are as follows:


	Liabilities
	Employer's liability, public liability and professional indemnity up to an aggregate loss of £14 million in any one year. Should this limit ever be exceeded the maximum liability for any one claim would be £5 million.



	Property
	Reinstatement of buildings for loss or damage as a result of fire, lightning, explosion and (for schools only) major storm and flood. This applies to buildings owned by the County Council and those leased to it where the lease allowes.



	Contents owned by the County Council for loss or damage as a result of fire, lightning, explosion and theft, all risk cover for IT equipment in the computer suite, and for cash on premises and in transit (limits depending on location).



	Additional cover
	Personal accident of staff on duty
	Fidelity guarantee
	Vessels

	Council departments currently continue to perform services on contract where functions have been transferred from the Council. The contract termination provision recognises that the Council is likely to incur certain costs when these arrangements eventually end.


																				47


5	Internal trading accounts

	The trading units had an overall surplus of £3,432,000 (2007/08 overall surplus
	of £1,897,000) as follows:
																																2007/08					2008/09
																																£'000					£'000
	Former Direct Services Organisation
	- provides catering and cleaning services																			Income												-25,266					-25,930
	to schools and some non-educational																Expenditure															25,061					25,553
	sites in Hampshire and supplies vehicles																Surplus(-)															-205					-377
	to departments of the County Council.

	Education Business Units
	- provide support services principally																Income															-36,457					-40,805
	to schools but also to other																Expenditure															34,664					39,093
	departments and other local authorities.																Surplus(-)															-1,793					-1,712

	Information Technology Services
	- provided to County Council																Income															-32,289					-36,920
	departments and some other local																Expenditure															32,753					35,823
	authorities.																Deficit/Surplus(-)															464					-1,097

	County Supplies
	- operate the central purchasing																Income															-10,134					-10,389
	warehouse and arrange direct delivery																Expenditure															9,960					10,184
	and other contracts for County																Surplus(-)															-174					-205
	Council departments, other local authorities
	and voluntary organisations.

	Hampshire Printing Services
	- provide printing and reprographic																Income															-2,410					-2,765
	services to County Council																Expenditure															2,349					2,692
	departments.																Surplus(-)															-61					-73

	Six other smaller trading units
	- including a deficit of £94,000																Income															-1,750					-1,580
	(£76,000 surplus in 2007/08) on the																Expenditure															1,622					1,612
	management of the River Hamble.																Surplus(-)deficit															-128					32
																	Total surplus(-)															-1,897					-3,432

																				48
6	Interest

	The Income and Expenditure Account includes interest receivable and payable as follows:


																						2007/08								2008/09
																						£'000								£'000
	Interest receivable:
	Loans and receivables financial instruments																					-8,148								-11,041
	Statutory debtors relating to transferred services																					-2,486								-1,998

																						-10,634								-13,039

	Interest payable:
	Financial liabilities at amortised cost																					21,192								20,392

	Net interest payable																					10,558								7,353

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7	Pensions

	As part of the terms and conditions of employment of its staff, the County Council provides retirement benefits. These will be paid only when employees retire but (in accordance with Financial Reporting Standard (FRS)17) the Council must account for the commitments at the time that employees earn their future entitlement.




	The County Council participates in two pension schemes:

	a) The Teachers' Pension Scheme for teachers
	b) The Local Government Pension Scheme (LGPS) for other employees

7a	Teachers' Pension Scheme

	This is a defined benefit scheme administered by the Department for Children, Schools and Families (DCSF). The scheme is unfunded, which means the pensions of past employees are paid out of current revenues. Scheme liabilities cannot be attributed to individual local authorities on a consistent reasonable basis. So, in accordance with FRS17, pension costs are recorded as if the scheme was a defined contribution scheme. The DCSF has established a notional fund as the basis of calculating the employers' contribution. Contributions were at the rate of 14.1% of pensionable pay for 2008/09 (for 2007/08 it was 14.1%)






	In 2008/09 total employer's contributions were £48.27 million (£46.55 million in 2007/08)

7b	Local Government Pension Scheme (LGPS)

	This is a funded, defined benefit scheme, administered by the County Council. Employers and employees pay contributions into a fund at a level estimated to balance pension liabilities with investment assets. The Council has discretion to award enhanced pensions e.g. compensatory added years pensions to all staff including teachers. These are described as unfunded benefits as they are not funded by the assets of the pension fund, but are funded by the Council when they are paid. In 2008/09, pension fund assets and liabilities have been included in the Balance Sheet based on a formal actuarial valuation for 31 March 2007. This valuation has been updated using the assumptions shown overleaf. The same assumptions were used to value the unfunded LGPS and teachers' benefits at 31 March 2009.








											50
	Principal financial assumptions
																								2007/08										2008/09
																								% per year										% per year

	Rate of discount for scheme liabilities																							6.8										6.7
	Rate of increase in salaries																							5.2										4.9
	Rate of increase in pensions in payment																							3.7										3.4
	Rate of increase in deferred pensions																							3.7										3.4
	Proportion of employees opting to take
	a commuted lump sum:
	for pre 2009 service																							25.0										25
	for post 2009 service																							75.0										75
	Rate of inflation																							3.7										3.4

	Principal demographic assumptions

	Post retirement mortality																							2007/08										2008/09
	Males
	Base table in 2007 - PNMA00 with allowance for MC improvement factors to 2007
	Scaling to above base table rates																							110%										110%
	Cohort improvement factors from 2007																							100% of MC										80% of LC
	Minimum underpin to improvement factors																							1.00%										1.25%
	Future lifetime from age 65 (currently aged 65)																							21.3										22.2
	Future lifetime from age 65 (currently aged 45)																							23.2										24.5

	Females
	Base table in 2007 - PNFA00 with allowance for MC improvement factors to 2007
	Scaling to above base table rates																							110%										110%
	Cohort improvement factors from 2007																							100% of MC										60% of LC
	Minimum underpin to improvement factors																							0.50%										1.25%
	Future lifetime from age 65 (currently aged 65)																							23.4										24.2
	Future lifetime from age 65 (currently aged 45)																							24.6										26.4

	Expected return on assets
	Hampshire County Council employs a building block approach in determining the rate of return on Fund assets. Historical markets are studied and assets with higher volatility are assumed to generate higher returns consistent with widely accepted capital market principles. The assumed rate of return on each asset class is set out below. The overall expected rate of return on assets is derived by aggregating the expected return for each asset class over the actual asset allocation for the Fund at 31 March 2009.






																								2007/08										2008/09
																								% per year										% per year
	Rate of return on equities (shares)																							7.6										7
	Rate of return on Government bonds																							4.6										4
	Rate of return on property																							6.6										6
	Rate of return on other assets																							6										1.6
	Average long-term expected rate of return																							6.7										5.7
											51

7c	Charges to the Income and Expenditure Account

	Current Service Cost

	The current service cost is an estimate, at today's prices, of the true economic cost of employing people in a financial year, earning years of service that will eventually entitle them to a lump sum and pension when they retire. This is included in the net cost of services in the Income and Expenditure Account. However, the charge met by taxpayers is based on employer's contributions payable in the year. This is achieved by adjusting the Income and Expenduture account balance in the General Fund reconciliation on page 41.





	The LGPS fund's actuary has advised that the current service cost of pensions in 2008/09 is £45.72 million (£60.35 million in 2007/08).In 2008/09 the County Council paid an employer's contribution of £57.93 million into the Hampshire County Pension Fund (£51.5 million in 2007/08).This was 18.1% of pensionable pay (17.7% in 2007/08).




	The contribution rate is determined by the Pension Fund's actuary (Hewitt Associates Limited), based on valuations every three years. The actuarial valuation of the Fund as at 31 March 2007 resulted in the actuary recommending a phased increase in the employers' rate. The rate was increased to 18.1% of pensionable pay in 2008/09, rising to 18.6% in 2009/10, and 19.1% in 2010/11.




	Past service cost of pensions
	Past service costs arise from decisions taken in the current year, but whose financial effect is derived from years of service earned in earlier years. This includes enhanced early retirements (formerly added years) for all staff including teachers as the County Council is responsible for all pension payments relating to added years awarded by the County Council and for meeting the additional cost cost of early retirement. It also includes the effect of the new benefit structure introduced in the LGPS from 1 April 2008 which affects the value of benefits earned up to 31 March 2009 and benefits to be earned in the future.







	The actuary has advised that the past service cost in 2008/09 is:
																								2007/08										2008/09
																								£'000										£'000
	Early retirements:
	LGPS funded																							850										820
	LGPS unfunded																							0										10
	Teachers unfunded																							430										590
	Arising from April 2008 scheme																							13,230										0
																								14,510										1,420

											52

	Past service costs are included in non-distributed costs in the Income and Expenditure Account in accordance with BVACOP. A charge of £0.8 million (£14.1 million in ) has been made after adjusting for the difference between actuarial assumptions and actual cashflow in 2008/09.



	The past service cost for early retirements in previous years is assessed by the actuary at £37.31 million in respect of teachers' pensions (£36.28 million in 2007/08) and £27.02 million in respect of unfunded benefits to former employees in the LGPS (£26.77 million in 2007/08). This is added to the pension liability in the Balance Sheet. However, as for current service costs, the charge for council tax-setting purposes is based on the cash paid in the year.





	In 2008/09 contributions paid to cover the cost of early retirements were:

																																		2008/09
																		LGPS						Teachers										Total
																		£'000						£'000										£'000

	Early retirements in 2008/09														843									214										1,057
	Early retirements in previous years
	for which payments are still being made														2,059									2,363										4,422
	Total payments in 2008/09														2,902									2,577										5,479

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7d		Adjustments to the Income and Expenditure Account

		In accordance with FRS 17 adjustments to the Income and Expenditure Account are set out below:

																							2007/08												2008/09
																							£'000												£'000
		Included in the Income and Expenditure Account:

		Current service cost of funded LGPS pensions																					60,350												45,720
		Charge to non-distributed costs for early
		retirement in the year:																					14,146												823
		Interest cost on pension liabilities (note i)
				LGPS funded liabilities																			85,610					97,750
				LGPS unfunded liabilities																			1,490					1,750
				Teachers' unfunded liabilities																			2,040					2,400
																																			101,900
		Expected return on Pension Fund assets (note ii)																					-72,500												-69,960
																							91,136												78,483

		Excluded from the Income and Expenditure Account:

		Employers' contributions to the																					-51,548												-57,934
		Local Government Pension Scheme

		Added years and early retirement cashflows																					-5,598												-5,479
		in the year
																							-57,146												-63,413

		note i -		Interest cost is the amount needed to unwind the discount applied in calculating the current service cost. As members of the scheme are one year older and one year closer to receiving their pension, the provisions made at present value in previous years for their retirement costs need to be uplifted by a year's discount to keep pace with current values



		note ii -		The expected return is a measure of the return (income from dividends, interest etc.) expected in the long-term on the investment assets held by the scheme for the year.


															54

7e		Assets and liabilities relating to retirement benefits

		An independent actuary (Hewitt Associates Limited) assessed the share of the assets and liabilities of the Hampshire LGPS attributable to the County Council and also the unfunded benefits of teachers and LGPS members. This assessment took account of a number of staff who joined the County Council on 1 April 2008 from the Local Authority Waste Disposal Company (LAWDC) Pension Fund in respect of the Connexions transfer. The actuary estimated that the following overall assets and liabilities for pension costs should be included in the Balance Sheet.





							31 March								31 March								31 March					31 March							31 March
							2005								2006								2007					2008							2009
							£'000								£'000								£'000					£'000							£'000
		Present value of
		liabilities in the scheme:
		LGPS funded					-1,298,650								-1,500,790								-1,601,250					-1,431,240							-1,523,940
		Unfunded Liabilities:
		LGPS					-27,240								-28,610								-29,050					-26,770							-27,020
		Teachers					-37,130								-38,620								-39,540					-36,280							-37,310
							-1,363,020								-1,568,020								-1,669,840					-1,494,290							-1,588,270
		Fair value of
		assets in the scheme					778,620								979,200								1,059,280					1,053,980							860,700
		Deficit					-584,400								-588,820								-610,560					-440,310							-727,570

		The net deficit on the LGPS will be made good by increased contributions over the remaining working life of employees, as assessed by the scheme actuary.


		In accordance with paragraph 77(o) of FRS17 (as revised), the assets for the current period and previous two periods are measured at current bid price. Asset values previously measured at mid-market value for periods ending 2008 and 2007 have been re-measured for this purpose. Asset values for periods ending 2006 and 2005 are shown at mid-market value and have not been re-measured as permitted by FRS17 (as revised). The proportion of assets by category is shown below:





																							31 March												31 March
																							2008												2009
																							%												%

		Equities																					61.9												55.2
		Government bonds																					26.6												27.4
		Property																					5.8												7.3
		Corporate bonds																					0												3.9
		Other assets																					5.7												6.2
																							100.0												100.0

															55

7f		Changes to the present value of liabilities during the accounting period

		Period ended 31 March 2008													LGPS								LGPS					Teachers'							Total
															funded								Unfunded					Unfunded
															£'000								£'000					£'000							£'000

		Opening present value of liabilities													-1,601,250								-29,050					-39,540							-1,669,840
		Current service cost													-60,350								0					0							-60,350
		Interest cost													-85,610								-1,490					-2,040							-89,140
		Contributions by participants													-18,200								0					0							-18,200
		Actuarial gains/(losses) on liabilities													297,240								1,850					3,190							302,280
		Net benefits paid out (note i)													51,010								1,920					2,540							55,470
		Past service cost													-14,080								0					-430							-14,510
		Closing present value of liabilities													-1,431,240								-26,770					-36,280							-1,494,290


		Period ended 31 March 2009													LGPS								LGPS					Teachers'							Total
															funded								Unfunded					Unfunded
															£'000								£'000					£'000							£'000

		Opening present value of liabilities													-1,431,240								-26,770					-36,280							-1,494,290
		Current service cost													-45720								0					0							-45,720
		Interest cost													-97750								-1750					-2400							-101,900
		Contributions by participants													-21490								0					0							-21,490
		Actuarial gains/(losses) on liabilities													17820								-450					-760							16,610
		Net benefits paid out (note i)													55260								1960					2720							59,940
		Past service cost													-820								-10					-590							-1,420
		Closing present value of liabilities													-1,523,940								-27,020					-37,310							-1,588,270

		note i consists of net cash-flow out of the fund in respect of the employer, excluding contributions and any death in service lump sums paid, and including an approximate allowance for the expected cost of death in service lump sums of £1.47m for the period ended 31 March 2009.



															56

7g		Changes to the fair value of assets during the period

																							31 March												31 March
																							2008												2009
																							£'000												£'000

		Opening fair value of assets																					1,059,280												1,053,980
		Expected return on assets																					72,500												69,960
		Actuarial gains/(losses) on assets																					-98,040												-288,800
		Contributions by employer																					53,050												59,330
		Contributions by participants																					18,200												21,490
		Net benefits paid out (note i)																					-51,010												-55,260
		Net increase in assets from
		disposals and acquisitions																					0												0
		Settlements																					0												0
		Closing fair value of assets																					1,053,980												860,700


		note i consists of net cash-flow out of the fund in respect of the employer, excluding contributions and any death in service lump sums paid, and including an approximate allowance for the expected cost of death in service lump sums of £1.47m for the period ended 31 March 2009.



															57
7h	Net actuarial gain/(loss) on pensions

	The actuarial gains identified as movements on the Pensions Reserve in 2008/09 can be analysed into the following categories, measured in absolute amounts and as a percentage of assets or liabilities at 31 March 2009:



					2004/05			2005/06									2006/07										2007/08						2008/09
					£'000			£'000									£'000										£'000						£'000
																											as restated
	Difference between				27,240			130,120									-1,420										-98,040						-288,800
	expected and actual				3.4%			13.3%									-0.1%										-9.3%						-33.6%
	return on assets

	Difference between actuarial assumptions about liabilities and actual experience

	LGPS funded																										29,220						-5,870
																											2.0%						-0.4%
	LGPS unfunded																										-430						-220
																											-1.6%						-0.8%
	Teachers unfunded																										-						-400
																											-						-1.1%
	TOTAL				65,530			1,470									-3,280										28,790						-6,490
					4.7%			0.1%									-0.2%										1.9%						-0.4%

	Changes in assumptions underlying the present value of pension liabilities

	LGPS funded																										268,020						23,690
																											18.7%						1.6%
	LGPS unfunded																										2,280						-230
																											8.5%						-0.9%
	Teachers unfunded																										3,190						-360
																											8.8%						-1.0%
	TOTAL				-252,180			-109,380									7,400										273,490						23,100
					-18.1%			-7.0%									0.4%										18.3%						1.5%


	Net actuarial gain				-159,410			22,210									2,700										204,240						-272,190

	In accordance with paragraph 79 of FRS17 (as revised), the unfunded liabilities are disclosed separately for periods beginning on or after 6 April 2007. The above history has not been re-stated for periods 2004/05, 2005/06 and 2006/07 and includes the experience relating to unfunded liabilities.




								58

7i	Movement on Pensions Reserve

	The movement in the net pension liability for the year is as follows:

																	31 March										31 March
																	2008										2009
																	£'000										£'000

	Net deficit at beginning of year																-610,560										-440,310

	Movements in the year:
	current service cost																-60,350										-45,720
	past service cost																-14,510										-1,420
	contributions																57,510										64,010
	expected return on pension assets																72,500										69,960
	interest on pension liabilities																-89,140										-101,900
	actuarial (loss)/gain																204,240										-272,190

	Net deficit at 31 March																-440,310										-727,570

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8	Net loss/gain on disposal of assets
																					2007/08							2008/09
																					£'000							£'000

	Sale proceeds																				-63,875							-2,405
	Less net book value of assets sold																				57,402							10,508
	Costs of sale																				43							2

	gain in 2007/08 net loss in 2008/09																				-6,430							8,105

9	Government grants and contributions deferred
																					2007/08							2008/09
																					£'000							£'000

	Balance at 1 April																				-383,986							-428,652
	Financing of expenditure in the year																				-66,431							-78,450
	Release of grants resulting from the
	depreciation of assets																				21,765							33,984
	Release of grants resulting from the
	disposal of assets																				0							0

	Balance at 31 March																				-428,652							-473,118

	This account contains contributions and external grants that have been used to finance capital expenditure. It is adjusted for depreciation (written down) to offset depreciation charges generated by the relevant assets, and when these assets are sold.




														60

10	Soft loans

	One interest-free loan was advanced in 2007/08 to enable a foster carer to purchase a larger house. The amount was £247,597 repayable in monthly instalments within 30 years. In accordance with Financial Reporting Standard 26 (FRS 26), the Income and Expenditure Account has been credited in 2008/09 with an amount for the effective interest calculated at the market rate prevailing when the loan was advanced (£10,909). The Local Authorities (Capital Financing and Accounting) (Amendment) (England) Regualtions 2007 allow this to be transferred to a financial instrument adjustment account so that it does not impact on the General Fund.







11	Statutory provision for the repayment of debt

	In accordance with accounting policies for 2008/09, the County Council's
	provision to repay external debt is 4% of the capital financing requirement at the
	beginning of the year for supported borrowing. For unsupported borrowing incurred
	after 1 April 2008, minimum revenue provision is made on an equal instalment basis
	that reflects the life of the related asset, using a period that is no longer than used to
	calculate the corresponding depreciation provision.
														61

12a			Fixed assets

			The movements in fixed assets during the year were as follows:

						Other land				Vehicles,									Infra-							Community			Non-							Assets				Total
						and				plant and									structure							assets			operational							under
						buildings				equipment																			properties							construction
						£'000				£'000									£'000							£'000			£'000							£'000				£'000
Movement in 2006/07
Gross book value (GBV)						3,290,736				101,441									478,767							11,424			67,170							59,084				4,008,622
at 31 March 2008
Less accumulated
depreciation/impairment						-220,682				-44,597									-82,525							-1			-728							-				-348,533

Net book value (NBV) of fixed assets
at 31 March 2008						3,070,054				56,844									396,242							11,423			66,442							59,084				3,660,089

Movement in 2008/09
Additions						80,011				8,548									38,397							296			4,559							29,550				161,361
Transfers to other classes						4,775				290									27,392							194			7,126							-46,720				-6,943
Transfers to foundation schools						-90,743				-									-							-			-							-				-90,743
Depreciation on transfers						6,858				200									-23							-			-92							-				6,943
Disposals
Write-off of accumulated																																								-
depreciaton						980				18									-							-			-							-				998
Write-off GBV						-7,034				-18									-							-			-4,454							-				-11,506
Revaluations
Write-off of accumulated
depreciaton						70,412				-									-							-			155							-				70,567
Change in certified valuations						113,714				-									-							-			-955							-				112,759
Adjustments to prior year revaluations						-386				-									-							-			-58							-				-444
Depreciation on CAA adjustments						30				-									-							-			-							-				30
Impairment losses due to consumption						-373,282				-									-							-			-7,830							-				-381,112
of economic benefit										-									-							-			-							-				-
Depreciation on impairments						-				-									-							-			-							-				-
Depreciation for year						-53,336				-8,896									-15,902							-			-							-				-78,134

Net book value
at 31 March 2009						2,822,053				56,986									446,106							11,913			64,893							41,914				3,443,865
						=SAP!E15				=SAP!(E6+E20)									=SAP!E25							=SAP!E29			=SAP!E35							=SAP!E31				=SAP!H36


Gross Book Value at 31 March 2009						3,017,791				110,261									544,556							11,914			65,558							41,914				3,791,994
Accumulated depreciation/Impairment						-195,738				-53,275									-98,450							-1			-665							-				-348,129
Net Book Value at 31 March 09						2,822,053				56,986									446,106							11,913			64,893							41,914				3,443,865

There was a net decrease in asset values of £216.2 million in 2008/09. This was the result of additions in the year of £161.4 million, and a net increase from revaluations of £183.3 million offset by depreciation and impairments of £459.2 million, disposals of £10.5 million adjustments to prior year revaluations of -£0.4 million and transfers to foundation schools £90.7 million.




										62

			Foundation schools
			The fixed assets of foundation schools are vested in the governing bodies of the schools, so the value of the assets has not been included in this Balance Sheet.


			On 31 March 2009 there were 26 foundation schools (21 in 2007/08).

			Aided schools
			The fixed assets of Aided schools are vested in the governing bodies of the schools, so the value of the assets has not been included in this Balance Sheet.


			On 31 March 2009 there were 56 aided schools (56 in 2007/08).

12b			Valuation of assets

			The freehold and leasehold properties of the Council's property portfolio have been valued, under a rolling programme, by the Estates Services of the Property, Business and Regulatory Services Department of the County Council.



			FRS15 requires the dates and amounts of valuations to be analysed across each of the classes of assets carried at current value. No analysis is required for assets valued at historic cost.


						Other land				Vehicles,									Infra-							Community			Non-
						and				plant and									structure							assets			operational
						buildings				equipment																			properties
			Valuation			£'000				£'000									£'000							£'000			£'000

			Valued at historic cost							56,986									446,106							11,913

			Pre 04/05			800																							451
			2004/05			107,736																							3,478
			2005/06			282,252																							9,917
			2006/07			255,984																							8,132
			2007/08			499,669																							7,562
			2008/09			1,675,612																							35,354

			Total			2,822,053				56,986									446,106							11,913			64,894

										63

12c	Fixed assets held at 31 March																														2008							2009

	Land
	Total land holding (acres)																														16,799							16,800
	Buildings
	Area of all buildings (million sq. metres)																														2							2
	Floor area of net usable office space (000s sq metres)																														61							61
	Number of buildings
	Early Years centres																														3							3
	Primary schools																														369							367
	Secondary schools																														55							51
	Special schools																														26							26
	Education centres																														7							8
	Activity centres																														5							5
	Print works																														1							1
	Stores warehouses																														2							2
	Central and area offices																														62							62
	Waste disposal sites and recycling centres																														28							28
	Libraries																														54							54
	Museums																														19							18
	Countryside sites																														83							83
	Record Office																														1							1
	Arts centres																														4							3
	Residential homes - Adult Services																														37							37
	Residential homes - Children's Services																														11							11
	Day centres - Adult Services																														22							23
	Day centres - Children's Services (Children's Centres)																														16							60
	County road length (km)																														8,580							8,567
	Vehicles and plant
	Hampshire Transport Management																														19							19

	Community assets not accounted for in the Balance Sheet comprise: museum exhibits, pieces of art, historic records held by Hampshire Record Office, and historic monuments.


64

13	Capital financing
																															2007/08							2008/09
																															£'000							£'000
	Capital spending on fixed assets																														166,564							161,361
	Revenue expenditure funded by capital under statute																														9,968							32,223

																															176,532							193,584
	funded by:
	Capital receipts																														-58,151							-2,405
	Grants and other income																														-66,431							-78,450
	Loans																														-35,640							-61,275
	Revenue
	- main contribution																														-15,302							-39,082
	- reserves																														-1,008							-12,371

																															176,532							193,584

	Commitments for major contracts entered into up to 31 March 2009 are estimated at £30.4 million (£64 million in 2007/08). This comprises £8.4 million (£8 million in 2007/08) for highways and £22 million(£56 million in 2007/08) for buildings.



14	Contribution from other authorities

	These are principal repayments of debt charges relating to former County Council services that have transferred to other authorities.


65
15	Financial Instruments

	In accordance with Financial Reporting Standard 26 (FRS 26), Financial Instruments: Recognition and Measurement, the Balance Sheet includes the following categories of financial instruments:


																						Long-term							Current
																						31 March							31 March
																see						2009							2009
																note						£'000							£'000
	Loans and receivables:
	Long-term debtors															15a						1,121
	Debtors															15b													61,772
	Short-term investments															15c													195,209
	Payments in advance																												8,573
	Loans and receivables																					1,121							265,554

	Financial liabilities at amortised cost:
	Long-term borrowing															15d						-336,996
	Short-term borrowing															15e													-99,841
	Deposits															15h													-1,811
	Creditors															15i													-146,694
	Receipts in advance															15j													-62,627
	Developers' contributions															15g						-32,706
	Financial liabilities at amortised cost																					-369,702							-310,973

15a	Long-term debtors
																						31 March							31 March
																						2008							2009
																						£'000							£'000

	Car loans to staff																					676							731
	Home Computer Salary Sacrifice Scheme																					236							11
	Other																					451							379
																						1,363							1,121

	Transferred debt																					41,435							39,667
																						42,798							40,788

	Transferred debt represents amounts of capital advances due to be repaid after statutory transfers of former services to independent bodies. These are not financial instruments and are shown at the book value of the amount outstanding. £37.3 million remains to be repaid by the cities of Portsmouth and Southampton, and £2.3 million by Hampshire Police Authority.





													66

	The other long-term debtors, £1.1 million (£1.4 million in 2007/08) are classified as loans and receivable financial instruments.


	By value, the majority of these loans are for a period of less than five years and
	attract a market rate of interest. Their amortised cost in the Balance Sheet is a
	reasonable assessment of fair value. One loan made in 2007/08 is interest-free. The
	amortised cost has been reduced to a fair value based on market interest rates at the
	time of the loan. Further detail is included in note 10. All loans are expected to be
	repaid in full, so a reduction for impairment is not considered necessary.

15b	Debtors

	Debtors, classified as loans and receivable financial instruments, are due within one year without interest and as such, the fair value of these receivables equals the original invoice amount.



																						31 March							31 March
																						2008							2009

																						£'000							£'000

	Government departments																					11,222							8,143
	Other local authorities																					9,718							8,247
	Sundry debtors																					42,250							45,382
																						63,190							61,772

													67

	The total amount due has been reduced by £5.5 million (£2.3 million in 2007/08) to take account of debts that are likely to be uncollectable. This reduction has been calculated and accounted for in accordance with the FRS 26 requirements for impairment.



									Outstanding																Individually							Collectively							Total
									balance																assessed							assessed							Provision
									at 31 March 2009																impairment							impairment
									£'000																£'000							£'000							£'000

	Outstanding debt raised in 2006/07								2,107																4,038							335							4,373
	and 2007/08
	Outstanding debt raised before 06/07								1,143																250							872							1,122
																																							5,495
15c	Short-term investments

	Surplus cash balances are lent to borrowers on the County Council's approved list. The level of short-term investments includes the effect of the pooling of surplus Hampshire Pension Fund and Hampshire Police Authority cash for treasury management purposes, which is reflected in the level of borrowing repayable within one year.



	Investments are typically for periods of up to three months and as such the loan amount is a reasonable assessment of fair value.


	Credit risk
	Credit risk arises from deposits with banks and financial institutions. The Authority's Treasury Management Policy allows deposits to be placed with banks and financial institutions with a minimum Moody's credit rating of A2 in respect of UK financial institutions, Aa1 for foreign financial institutions and Aaa for money market funds.




	As a result of the global banking crisis during 2008/09, the criteria for selection of counterparties and for determining the duration of deposits have been subject to regular review. The list is currently restricted to the major UK clearing banks, such as Lloyds TSB, Royal Bank of Scotland, Barclays, HSBC and Abbey, the larger building societies and AAA-rated money market funds and, if necessary for security, the Government's Debt Management Office.




	The Authority strictly applies credit limits in respect of all of the above financial institutions to ensure that deposits are spread across a number of its approved counterparties. Limits are also placed on the duration of deposits. The current policy is to lend for no longer than 364 days.



	No credit limits were exceeded during 2008/09 and the Authority does not expect any losses from non-performance by any of its counterparties in relation to deposits.


									68
	Interest-rate risk
	The Authority is exposed to risk in terms of its exposure to interest rate movements on its investments. For example, a rise in interest rates would have the following effects:

	* investments at variable rates -
	the interest income credited to the Income and Expenditure Account will rise
	* investments at fixed-rates -
	the fair value of investments will fall. Where fixed rate investments have short maturities, the effect will be similar to that for variable-rate investments, as the replacement investments will generate more income to the Income and Expenditure Account.


	The Authority has a number of strategies for managing interest rate risk. Interest rate movements are monitored on a daily basis and the Authority seeks to lengthen the duration of the investment portfolio when it perceives that a financial advantage can be achieved. The Authority also aims to manage its investment maturity profile to ensure that no single month exposes the Authority to a substantial re-investment requirement when interest rates may be relatively low.

	Foreign exchange risk
	The Authority has no financial assets denominated in foreign currencies and thus has no exposure to loss arising from movements in exchange rates.


15d	Long-term borrowing

	Long-term borrowing is carried in the Balance Sheet at amortised cost. The fair value can be assessed by calculating the present value of the cash flows that will take place over the remaining term of the instruments, using premature repayment interest rates from the Public Works Loan Board (PWLB).




									69


						31 March 2008							31 March 2009
						carrying		Fair					Carrying				Fair
						amount		value					amount				value
						£'000		£'000					£'000				£'000
	Public Works Loan Board					250,748		277,282					262,963				307,461
	Lender's option/borrower's option loans					74,034		75,884					74,033				78,340
						324,782		353,166					336,996				385,801

	In accordance with the Code of Practice, from 2007/08, accrued interest is added to the value of the long-term loans outstanding, depending upon the maturity date of the loans, even though interest is payable within a year. The fair value is more than the carrying amount because the Authority's portfolio of loans includes a number of fixed-rate loans where the interest rate payable is higher than the rates that would be applied to calculate the premiums if the loans were repaid on the Balance Sheet date. This commitment to pay interest above the current market rates increases the amount that the Authority would have to pay if it repaid the loans early.






15e	Borrowing repayable within one year

	These loans are due to be repaid within a year and as such, their amortised cost in the Balance Sheet is a reasonable asessment of their fair value.

													31 March				31 March
													2008				2009

													£'000				£'000

	Long-term borrowing repayable within one year												-4,108				-4,008
	Temporary deposits by Hampshire Pension Fund												-52,440				-84,746
	and Hampshire Police Authority
	Other short-term borrowing												-9,381				-11,087
													-65,929				-99,841

	In accordance with the Code of Practice, from 2007/08, accrued interest is added to the value of the loans outstanding.


						70
15f	Liquidity risk

	As the Authority has ready access to borrowing through the Public Works Loan Board, there is no significant risk that it will be unable to raise finance to meet its commitments under financial instruments. Instead, the risk is that the Authority will be bound to replenish a significant proportion of its borrowings at a time of unfavourable interest rates.




	The Authority mitigates this risk by its policy of taking out its long-term borrowing requirements reasonably evenly from one year to the next.


													31 March				31 March
													2008				2009
	An analysis of loans by maturity is:												£'000				£'000

	Maturing between one and two years												-3,871				-8,919
	Maturing between two and five years												-17,894				-14,887
	Maturing between five and 10 years												-39,653				-35,608
	Maturing between 10 and 15 years												-29,524				-37,680
	Maturing between 15 and 20 years												-44,855				-44,743
	Maturing between 20 and 25 years												-60,947				-70,997
	Maturing in 25 or more years												-128,038				-124,162
													-324,782				-336,996

	Interest-rate risk
	The Authority is exposed to risk in terms of its exposure to interest-rate movements on its borrowings. The Authority has £74 million of lender's option/borrower's option (LOBOs) loans with banks at interest rates ranging between 3.89% and 5.0%. Under this arrangement, the banks have the option to increase the interest rate on specified call dates. If the banks increase the interest rate, the Authority has the right to repay the loan without penalty. If the banks did exercise their option, it is likely that the Authority would have to pay a higher rate of interest if it chose to replace the loan.






	The remainder of the Authority's borrowing consists of fixed-rate PWLB debt at interest rates ranging between 3.59% and 9.875%. Borrowings are not carried at fair value, so nominal gains and losses on fixed rate borrowings will not affect the Income and Expenditure Account. In real terms, the value of the debt will be substantially eroded through the rest of its term by inflation.




	Foreign exchange risk
	The Authority has no financial liabilities denominated in foreign currencies and thus has no exposure to loss arising from movements in exchange rates.


						71
15g	Developers' contributions

	Developers' contributions arise mainly as a result of agreements under Section 278 of the Highways Act 1980. If a development derives special benefit from highway works, developers can be required to contribute towards the costs. Before being applied, deposits are credited with interest on the basis of market rates. Therefore the carrying amount is a reasonable assessment of the fair value of the financial liability.




				2007/08					2008/09
		Highways		Other			Total		Highways			Other		Total
		£'000		£'000			£'000		£'000			£'000		£'000
	Balance at 1 April	-31,382		-16			-31,398		-31,599			0		-31,599
	Income	-9,229		-			-9,229		-7,391			0		-7,391
	Contributions applied	9,012		16			9,028		6,284			0		6,284
	Balance at 31 March	-31,599		0			-31,599		-32,706			0		-32,706

				72

15h	Deposits
										31 March					31 March
										2008					2009
										£'000					£'000

	NHS nursing care contribution									-468					-385
	Other capital deposits and unapplied contributions									-1,302					-919
	Other									-1,026					-507
										-2,796					-1,811

15i	Creditors

	The Authority's policy is to pay creditors within 30 days of the date shown on the invoice. Therefore, the invoice amount is a reasonable assessment of the fair value of the financial liability.


										31 March					31 March
										2008					2009

										£'000					£'000

	HM Revenue and Customs and Government									-28,757					-28,308
	departments
	Other local authorities									-9,473					-16,668
	Sundry creditors									-95,118					-101,718
										-133,348					-146,694


15j	Receipts in advance									31 March					31 March
										2008					2009
										£'000					£'000

	Education Standards Fund and devolved capital grants									-40,524					-31,185
	Other receipts and contributions									-25,103					-31,442
										-65,627					-62,627

			73

16	Stocks and work in progress
											31 March					31 March
											2008					2009
											£'000					£'000
	Stocks
	Catering stock										369					384
	County Supplies general										1,245					1,314
	Recreation and Heritage sales stocks										249					261
	Other (including landfill allowances)										315					282
											2,178					2,241
	Work in progress
	Highway rechargeable works										1,134					962
	Other										50					42
											1,184					1,004
	Total stocks and work in progress										3,362					3,245

	Closing stock valuations have been assessed using the latest purchase price. This does not accord with the Statement of Standard Accounting Practice (SSAP) 9 - stocks and long-term contracts that requires stock to be valued at the lower of the original purchase price and current value but the differences in the valuations are not material.




17	Cash in hand										31 March					31 March
											2008					2009
											£'000					£'000
	The balance shown comprises:
	- Schools' local bank accounts										5,218					4,704
	- Petty cash										854					887
											6,072					5,591

	Schools' local bank accounts include the balances held by 20 schools (19 in 2007/08) that have elected to have separate bank accounts. Petty cash includes 867 imprest accounts (822 in 2007/08) for minor day-to-day expenses held by establishments, including schools across the whole county.



18	Cash overdrawn

	This is the ledger balance of the main bank account and is almost entirely represented by payments drawn but not presented at the bank by the end of the year. The actual bank balance is managed on a daily basis to very modest limits, usually less than £100,000.



					74

19 Movement on Reserves


	Balance	Net	Balance
	1 April	Movement	31 March
	2008	in the year	2009
	£'000	£'000	£'000	see
Reserve				note
Revaluation reserve	-273,073	-160,278	-433,351	19a
Capital Adjustment Account	-2,413,572	460,369	-1,953,203	19b
Financial Instrument Adjustment Account	109	-11	98	10
Capital receipts unapplied	-5,724	3,434	-2,290
Pensions reserve	440,310	287,260	727,570	7i
Earmarked reserves	-154,633	-5,462	-160,095	19c
General Fund	-23,300	-11,212	-34,512
	-2,429,883	574,100	-1,855,783

19a Revaluation reserve

This reserve represents a collection of net gains on the revaluation of individual fixed assets written down by the excess of current value depreciation over historic cost depreciation.

Upon disposal, the balance on the revaluation reserve for the individual asset is written off to the capital adjustment account. The reserve is not cash backed as it relates to unrealised asset gains. The movement in the account is analysed below:


	2007/08	2008/09
	£'000	£'000

Balance brought forward 1 April	0	-273,073
Net gain on valuation of fixed assets	-304,707	-183,326
Excess of current value depreciation over historic cost dep'n	-	12,732
Write off net gains for assets transferred to foundation schools	-	9,345
Write off net gains for assets disposed of during the year	31,634	971
Balance at 31 March	-273,073	-433,351

19b Capital adjustment account

This account contains expenditure financed from revenue and capital receipts together with the statutory amount required to provide for the repayment of external loans less the amounts included for depreciation, impairment and revenue expenditure financed by capital under statute and the historic cost of asset disposals. The reserve is not cash backed. The movement in the account is analysed below:


	2007/08	2008/09
	£'000	£'000

Balance brought forward 1 April	-284,595	-2,413,572
Balance brought forward from
fixed asset restatement account	-2,168,507	-
Revenue contributions	-16,310	-51,453
Capital receipts applied	-58,151	-2,405
Minimum revenue provision	-23,538	-23,643
Depreciation and impairment	85,112	459,246
Revenue expenditure funded from capital under statute	36,264	32,223
Assets transferred to foundation schools	-	90,743
Deferred government grants and contributions released	-21,765	-33,984
External contribution to minimum revenue provision	1,887	1,768
Adjustment to prior year revaluations	10,263	414
Asset disposals current value	57,402	10,508
Excess of current value depreciation over historic cost dep'n	-	-12,732
Write off net gains for assets transferred
to foundation schools	-	-9,345
Write out revaluations on asset disposals	-31,634	-971
Balance as at 31 March	-2,413,572	-1,953,203

19c Earmarked reserves

Specific amounts are set aside as reserves for future policy purposes or to cover contingencies. Schools reserves are made up of net underspendings on budgets managed by governors as adjusted for advances made under the school balances loan scheme. They are not available to other services. The opening and closing balances for each reserve is shown below:


	31 March	Net	31 March
	2008	movement	2009
		in the year
	£'000	£'000	£'000

Schools	-43,448	6,015	-37,433
Capital	-13,868	4,969	-8,899
Landfill allowances	-3,958	-1,800	-5,758
Local Public Service	-3,347	-427	-3,774
Agreement Reward Grant
Insurance	-7,722	-1,670	-9,392
Designated underspendings	-11,160	-5,547	-16,707
Grant equalisation	-26,150	1,245	-24,905
Equal Pay	-36,426	-2,772	-39,198
Trading accounts	-7,590	-3,059	-10,649
Invest-to-save	-665	-1,696	-2,361
Other	-299	-720	-1,019
	-154,633	-5,462	-160,095

Reconciliation of Income and Expenditure Account deficit to

net cash inflow from revenue activities

2007/08

2008/09

£'000

Net surplus (-) deficit (+) on the Income and Expenditure Account

37,682

481,550

Net cash outflow from servicing of finance activities

-4,838

-6,022

Variation in stocks

468

-117

Variation in deposits

-516

518

Variation in debtors

-6,195

8,103

Variation in long-term debtors

-321

-242

Variation in payments in advance

-490

2,046

Variation in creditors

-5,556

-13,063

Variation in receipts in advance

-25,640

3,000

Variation in provisions

-32

-690

Variation in interest accruals on borrowing

-3,778

-42,060

-403

Non-cash transactions

Transfers to reserves

-45,026

-5,462

Variation in doubtful debts provision

-627

-3,207

Interest on developer contributions

-1,781

-1,197

Provision for loan and lease repayments

-23,539

-23,643

Financial Instruments Adjustment Account

109

-11

Contribution to capital outlay

-16,310

-51,453

-87,174

-84,973

Net additional amount required by statutory and non-statutory proper practices to be credited to the general Fund Balance

-44,240

-492,762

Adjustment to Revenue Expenditure funded by capital under statute

9,968

32,222

Net cash inflow from revenue activities

-130,662

-70,388

Analysis of capital grants

(Revenue grants are analysed in the Income and Expenditure Account)

2007/08

2008/09

£'000

Capital grants

Department for Children, Schools and Families

31,090

56,550

Department of Health

1,302

1,762

Department for Transport

16,305

8,645

Department for Communities and Local Government

950

Other Bodies

713

49,733

67,670

Movement in net debt

at 1 April

at 31 March

Movement

2008

2009

in the year

£'000

Cash

Cash in hand

6,072

5,591

-481

Cash overdrawn

-17,382

-16,682

700

Short-term investments

162,794

195,209

32,415

Cash inflow

151,484

184,118

32,634

Financing

Borrowing repayable within one year

-65,793

-99,683

-33,890

Long term borrowing

-321,140

-333,416

-12,276

Total borrowing

-386,933

-433,099

-46,166

Net debt

-235,449

-248,981

-13,532

Reconciliation of movement in net debt to cash flow statement

2007/08

2008/09

£'000

Cash inflow/(-) outflow

84,941

32,634

Repayment of amount borrowed

26,000

New loans

-50,140

-12,276

Net reduction/increase in

19,540

-33,890

temporary borrowing

80,341

-13,532

Leases - Operating leases - Authority as lessee

Some vehicles, items of equipment and property are financed under operational leases. The annual sum payable for leased vehicles and items of equipment is £3.1 million (£3.3 million in 2007/08). For property it is £3.7 million (£3.7million in 2007/08).

The amount paid in 2008/09 is shown below. The amount payable in 2009/10 is also shown together with an analysis of the year of expiry.

Paid

Payable

Expires

Expires in

Expires

in that

second to

in over

2008/09

2009/10

year

fifth year

five years

£'000

Other land and

3,688

3,199

685

471

2,043

buildings

Vehicles, plant and

3,136

2,820

310

2,342

168

equipment

6,824

6,019

995

2,813

2,211

Future obligations under operational leases payable in 2008/09 and subsequent years total £50 million (£45 million in 2007/08).

Authority as lessor

The annual rent received from leased properties is £3.7 million (£3.4 million in 2007/08).

The value of assets held for use in operating leases is shown below:

31 March

2008

2009

£'000

Gross book value

15,662

11,193

Accumulated depreciation

-899

-97

Net book value

14,763

11,096

Under the home computer salary sacrifice scheme, in 2004/05 the County Council bought

assets to the value of £984,000 which were leased to staff. Net of repayments in the year the deferred debtor amount is, £11,000 at 31 March 2009 (£236,000 at 31 March 2008).

Finance leases

At 31 March 2009 there were no outstanding obligations on finance leases.

Related party transactions

During the year, transactions with related parties arose as follows:

2007/08

2008/09

Central Government Receipt of

£'000

Government Grants

- Revenue

940,958

1,006,963

- Capital

49,733

66,233

990,691

1,073,196

Levy paid to the Environment Agency

512

547

The County Council administers the Hampshire Pension Fund on behalf of its non-teaching employees, those of other local authorities in the county area and 224 other scheduled and admitted bodies (222 in 2007/08).

The Pension Fund pools its surplus cash balances with the County Council's to gain the benefits of scale. Interest was paid to the Pension Fund in 2008/09 at the average monthly seven-day rate.

The County Treasurer is also the appointed Treasurer of the Hampshire Police Authority and Hampshire Fire and Rescue Authority.

These two authorities also pool surplus cash balances with the County Council and are paid interest at the average monthly seven-day rate.

Transactions with these related parties are shown below:

2007/08

2008/09

£'000

Pension Fund

Interest paid

2,973

1,836

Temporary borrowing 31 March

-52,440

-70,939

Administration charge

1,792

1,873

Hampshire Police Authority

Interest paid

725

497

Temporary investment/borrowing 31 March

2,120

-13,807

Hampshire Fire and Rescue Authority

Interest paid

Temporary investments 31 March

5,111

5,950

There were 46 related party transactions totalling £62,000 arising from disbursements from members' devolved budgets. All such payments were countersigned by a member other than the budget-holding member.

There were no other related-party transactions involving members or chief officers of the Council.

26 Related companies

The County Council does not have a controlling or dominant influence in any company under the terms of the Local Government and Housing Act 1989. A dominant influence means that the company operates in accordance with the Council's wishes. The Council does not consider that group accounts are required to accord with the criteria in the Accounting Code of Practice.

27 Members' allowances

The total of members' allowances paid in the year was £1,285,000 (£1,281,000 in 2007/08).

28 Officers' emoluments

The number of employees whose remuneration was £50,000 or more, in bands of £10,000, is shown below. Remuneration includes all amounts paid to an employee, including the taxable value of expenses.


				Number of employees
	2007/08			2008/09
	Schools	Other	Total	Schools	Other	Total

£50,000 - £59,999	367	240	607	411	278	689
£60,000 - £69,999	78	99	177	106	117	223
£70,000 - £79,999	33	30	63	34	37	71
£80,000 - £89,999	20	19	39	19	16	35
£90,000 - £99,999	3	4	7	5	10	15
£100,000 - £109,999	6	5	11	1	3	4
£110,000 - £119,999	1	4	5	3	1	4
£120,000 - £129,999	-	1	1	1	2	3
£130,000 - £139,999	-	-	-	-	3	3
£140,000 - £149,999	-	1	1	-	-	-
£150,000 - £159,999	-	2	2	-	1	1
£160,000 - £169,999	-	2	2	-	1	1
£170,000 - £179,999	-	-	-	-	1	1
£180,000 - £189,999	-	1	1	-	-	-
£190,000 - £199,999	-	-	-	1 *	-	1
£200,000 - £209,999	-	-	-	-	-	-
£209,999 - £219,999	-	-	-	-	1	1
	508	408	916	581	471	1,052

* Including a termination payment

29 Publicity account

Section 5 of the Local Government Act 1986 requires local authorities to keep a separate account of expenditure on publicity, which includes staff advertising. Spending on staff advertising in 2008/09 was £2.4 million (£2.5 million in 2007/08), of which £1.3 million was spent on school staff advertising and £1.1 million on non-school staff advertising. Spending on other publicity in 2008/09 was £2.4 million (£2.2 million in 2007/08, restated to include Fostering Services). Total spending on publicity and staff advertising in 2008/09 was £4.8 million (£4.8 million in 2007/08).


		2007/08	2008/09
		£'000	£'000
Staff Advertising
	Schools	1,420	1,281
	Other	1,136	1,114
		2,556	2,395
Other publicity
Corporate Communications Team		771	858
Promotion of tourism		102	105
Publicising public transport services		273	287
Road safety publicity		183	302
School crossing patrol		93	129
Promotion of economic development and investment in Hampshire		80	81
Early Education publicity		104	79
Fostering Services		208	184
Waste management publicity		122	127
Business Services Group		56	44
Planning policy promotion		56	13
Other		151	189
		2,199	2,398

30 Pooled Budgets

The County Council is a partner in two pooled budget arrangements.

The County Council is a partner in Hampshire's Comprehensive CAMHS Commissioning Trust. The Trust's purpose is to develop integrated commissioning of Child and Adolescent Mental Health Services in Hampshire under Section 75 of the National Health Service Act 2006.

The partner bodies are:

Hampshire County Council (host partner) and Hampshire Primary Care Trust (PCT)

	2007/08	2008/09
	£'000	£'000

Gross income	-2,347	-3,629
Expenditure	1,526	3,118
Surplus	-821	-511
Council's Contribution	999	2,132

The County Council is a partner in the Mid Hampshire Mental Health Services pooled budget. Its objective is to promote the independence of adults with severe mental-health problems.

The partner bodies are:

Hampshire County Council (host partner) and Hampshire Primary Care Trust (PCT)

	2007/08	2008/09
	£'000	£'000

Gross income	-820	-786
Expenditure	742	785
Surplus	-78	-1
Councils Contribution	67	64

31 External Audit fees

Fees charged by the Audit Commission to the County Council can be analysed as follows:


	2007/08	2008/09
	£'000	£'000

Code of Audit Practice	252	252
Grant Claims	-	15
Inspection	92	17
National Fraud Initiative	1	1
	345	285

32 Local Authorities (Goods and Services) Act 1970

Services are provided to other local authorities and public bodies under the Local Authorities (Goods and Services) Act 1970. In 2008/09 income from this source was £13 million (£11 million in 2007/08), which covered the costs involved.

33 Contingent liabilities

The County Council self-insures and therefore handles all its own liability claims. The liabilities are uncertain but to cover them a provision is maintained for known liability claims, assessed at £4.2 million at 31 March 2009 (see note 4).

The County Council has set aside a reserve of £39.2 million at 31 March 2009 for transitional costs for non-schools staff of implementing the single status agreement to reflect the outcome of the job evaluation undertaken as part of the Pay and Benefits review, mainly to recognise potential equal pay compensation costs. To date, 1136 equal pay claims have been lodged in the employment tribunal. A total of 1172 grievances have been received. It is unlikely that any claims will be resolved until later in 2009/10, so it is not possible to quantify the liability associated with equal pay compensation reliably.

34 Euro IT costs

No significant IT costs will be incurred if the euro is adopted, as new financial and related business systems have been introduced that will be fully euro-compliant.

35 Post Balance Sheet events

As at 17 June 2009, when the accounts were reported by the County Treasurer, there were no material post Balance Sheet events that required disclosure.

36 Discretionary expenditure

The County Council used to rely on Section 137 of the Local Government Act 1972 for the power to incur expenditure of up to £1.90 per head of population on activities or projects "in the interests of the area or some of its inhabitants" which are not specifically authorised in other powers. Most of this power was repealed and replaced with a 'well-being' power in the Local Government Act 2000 with effect from 18 October 2000. Section 137 remains as a power only for contributions to charities and not-for-profit bodies.

In 2008/09 spending under section 137 amounted to £83,004 or 6.5p per head (£88,293 or 7p per head in 2007/08).

Most was spent on grants to voluntary organisations which could not be made under any other statutory power.

37 Trust funds

The Council acts as sole trustee for 25 trust funds (28 in 2007/08) and as administrator for 13 other trust funds (13 in 2007/08). They include educational prize funds, funds for financing improvements in education, social care and museum establishments, and musical and sports scholarship funds. The trusts are mainly invested in specialist pooled funds for charities and cash held on deposit with the County Council.

	Balance at			Transfer	Balance at
	31 March	Income	Expenditure	of	31 March
	2008			Trust	2009
	£'000	£'000	£'000	£'000	£'000
Sole trustee funds
Educational trusts
Butlocks Heath/Netley Abbey School	290	17	-20	-	287
Dayas Music Scholarship	85	6	-2	-	89
Michael Austin Harlick Memorial	256	15	-12	-	259
Shipton Bellinger School	41	1	-1	-41	-
Mace Educational Trust	113	7	-7	-	113
Spitfire Mitchell Memorial	203	8	-	-211	-
Other	24	1	-	-	25
Total	1,012	55	-42	-252	773
Social Services trusts
Hampshire Mentally Handicapped Persons
Holiday Organisation	42	1	-	-	43
Hampshire Old Industrial and Reformatory Schools	64	4	-3	-	65
Green Meadows Older Persons Home	16	1	-1	-	16
Total	122	6	-4	-	124
Museums trusts
Allen Curtis Museum Trust	24	4	-4		24
The Flora Twort Trust	41	2	-	-43	-
Red House Museum Trust	50	5	-5		50
Total	115	11	-9	-43	74
Libraries trust
Julian Davies Foundation	2	-	-		2
Other
Hillier Arboretum trust	8	7	-2		13
Total - sole trustee trusts	1,259	79	-57	-295	986
Administrator funds
The Eggars Grammar School Alton Site Foundation	1,770	70	-3		1,837
Hampshire Foundation for Young Musicians	69	5	-5		69
Other	27	1	-		28
Social services trusts	6	-	-		6
Total administrator trusts	1,872	76	-8	-	1,940

Total trust funds	3,131	155	65	-295	2,926

38 Undischarged obligations

Project Integra

Project Integra is being implemented as the long-term solution to household waste management in Hampshire. It is a partnership between the County Council, the unitary and district councils in Hampshire and the private contractor Veolia Environmental Services Hampshire (VESH). The partnership is underpinned by a long-term contract with VESH which is jointly administered by the County Council and Portsmouth and Southampton unitary authorities. The contract began in January 1996 and will run until 2024/25. At 31 March 2009 the payments remaining under the contract are estimated to be £1,354 million (£1,604 million at 31 March 2008) of which £1,054 million will be charged to the County Council.

Hampshire Public Service Network

A seven year contract for a new integrated voice and data network was entered into with Unisys at the end of 1999. This has now been extended to November 2009. At 31 March 2009 the payments remaining under the contract are estimated at £2.4 million (£8.8 million at 31 March 2008).

Enterprise Licence

During 2006/07 the County Council entered into an agreement with IBM to implement an IBM Enterprise Licence. The implementation programme is expected to take up to five years and will deliver a range of benefits including improved security, a fully integrated information management system and integration of the wide variety of corporate IT systems hosted on Hantsnet.

The payments remaining under the contract are £1.41 million at 31 March 2009 (£2.38 million at 31 March 2007) with approximately 2.5 years remaining.

Schools Broadband

The County Council has a five year contract with Synetrix to provide Broadband lines to schools, which expires in April 2010.

The payments remaining under the contract are £3.37 million at 31 March 2009 (£2.8 million at 31 March 2008).

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Notes to the core financial statements