TRANSPORT COMMITTEE FOR LONDON by U38R1n

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									                             Appendix A




THE ASSOCIATION OF LONDON GOVERNMENT
TRANSPORT AND ENVIRONMENT COMMITTEE



                            STATEMENT OF
ACCOUNTS



                            YEAR ENDED 31 MARCH
2005
THE ASSOCIATION OF LONDON GOVERNMENT - TRANSPORT AND ENVIRONMENT COMMITTEE

CONTENTS

                                                                     Page


Explanatory Foreword                                                1 - 4
Statement of Responsibilities for the Statement of Accounts           5
Statement on Internal Control                                        6-8
Report of the Auditors                                              9-10
Statement of Accounting Policies                                    11-12
Revenue Account                                                      13
Notes to the Revenue Account                                       14- 19
Balance Sheet                                                        20
Notes to the Balance Sheet                                         21 - 22
Cash Flow Statement                                                  23
Notes to the Cash Flow Statement                                     24
THE ASSOCIATION OF LONDON GOVERNMENT - TRANSPORT AND ENVIRONMENT COMMITTEEPage
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EXPLANATORY FOREWORD

Introduction

The Association of London Government Transport and Environment Committee (ALG-
TEC) was formed on 1 April 2000 and first met on 20 June 2000 The
responsibilities of ALG-TEC are as follows:

In the field of accessible transport, ALG-TEC is responsible for:

    negotiating and operating London's concessionary fares scheme for elderly
     and disabled people, giving free travel on most of London's tube, train
     and bus services;
    operating the London Taxicard scheme (for 29 boroughs), which provides
     subsidised taxi travel for people with disabilities;
    providing general London-wide policies on accessible transport, including
     supporting the Commission
      on Accessible Transport which brings together funders for all types of
door-to-door transport.

In the field of traffic, ALG-TEC brings together a number of functions,
including:

    a statutory responsibility to set decriminalised parking penalties and
     other additional parking charges
      within London;
    a statutory responsibility to operate the Parking Appeals Service, which
     allows individuals to appeal to
      the independent parking adjudicator over decriminalised parking
penalties;
    the operating of the TRACE service, which provides 24 Hour information in
     the recovery of towed away
      cars;
    electronic link services between the London local authorities and the
     DVLA, County Court and Foreign
      & Commonwealth Office;
    training standards for parking control where the Committee is (together
     with SITO) the awarding body
      for a National Vocational Qualification;
    operation of the Health Emergency Badge scheme, giving front line medical
     staff parking privileges;
    general co-ordination of parking regulations and enforcement policies
     including the maintenance of a
      Code of Practice;
    provision of information on parking regulation and enforcement;
    operation and enforcement of the London night-time and weekend Lorry Ban
     (for 32 boroughs);

In the field of Environmental and Planning, ALG-TEC is responsible for co-
coordinating borough responses to issues concerning :

     land use planning;
     the environment and bio-diversity;
     consumer protection and trading standards; and
     waste.

Review of the Year

2004-05 has been another very busy year for the Committee.   In our direct
services a number of important changes have taken place.   During the year we
successfully negotiated a three year settlement with TfL over Freedom Pass,
thus securing the scheme until at least 2008.   We also completed the change
over of Freedom Passes to smart card technology, which has opened the way for
more detailed data for costing and also for additional benefits for card
holders such as top up payments.   As a result we are now investigation
different ways of apportioning the cost between boroughs for Freedom Pass to
better reflect actual costs.

In Taxicard we also successfully retendered the contract and have secured both
a more economical contract but one which, for the first time guarantees a high
standard of service to users.   The scheme continues to represent a successful
partnership between the boroughs and TfL.
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EXPLANATORY FOREWORD (Continued)

Operation Scrap-it, which enables boroughs to meet a 72 hour deadline for
dealing with abandoned, untaxed and other nuisance vehicles, was launched and
boroughs are successfully meeting their targets.   The year has seen more than
30,000 vehicles scrapped under the free take back scheme and a further 45,000
vehicles removed from London’s streets.

We successfully decriminalised the enforcement of the London Lorry Control
Scheme, providing a more streamlined mechanism for ensuring a high level of
compliance.   The scheme continues to be a central part of the London freight
strategy.

The Parking and Traffic Appeals Service handled more than 90,000 appeals
(including congestion charging) which is considerably higher than any previous
year.   While the backlog on congestion charging appeals has been substantially
reduced with the introduction of new adjudicators in the autumn of 2004, the
sudden growth in the number of parking appeals towards the end of the year has
led to a backlog there.   More adjudicators in this area are helping matters.
The adjudicators have also started to consider appeals in connection with the
London Local Authorities and Transport for London Act 2003.   This Act, which
decriminalised minor moving traffic offences, has been undergoing pilot trials
since the summer of 2004.

The policy unit successfully worked with TfL over the SR2004 review to secure a
significant improvement in government support for transport in London with a
fixed five year settlement.   Work with TfL also took place to support
boroughs’ production of Local Implementation Plans – an important new programme
– and also to promote further bus priority in London, a freight strategy for
London and coordinated traffic enforcement.

The Traffic Management Act gained Royal Assent in July 2004 and a considerable
effort was put into its implementation.   This included the process, led by the
Government Office for London, of designating a strategic road network for
London and understanding, with TfL how this was to be operated in practice.
The ALG also gave support to boroughs in their approach to their net6wolrk
management duty and to permitting of road and street works.

The policy team continued to work with the GLA over implementation of the
London Plan and, in particular, the role of sub-regional development
frameworks.   This work was also involved with the implementation of the new
planning framework in the Planning and Compulsory Purchase Act 2003.   This Act
has made radical changes to the planning system and, with ALG support, all
London boroughs have successfully completed the first stage.   In turn this
released additional funding to boroughs through the Planning Development Grant.

The unit has continued to put a lot of effort into improving the public realm.
The year saw a major conference – Liveable London – and Royal Assent given to
the London Local Authorities Act 2004, which has strengthened boroughs’ powers
in this area.   Indeed, a number of the provisions in this Act were adopted by
the Government in the Clean Neighbourhoods Act.   Further work is being
undertaken to make the Act work in practice, in particular, the enhanced powers
to combat graffiti.

Research into waste modeling has also been completed and more work is going
into this area with the introduction of stricter government targets for
recycling and the land-fill trading allowance system, which penalises excessive
land-fill for waste disposal.

The unit continued to work to support boroughs over the introduction of the
Licensing Act which transfers responsibility for alcohol licensing from the
magistrates’ courts to local councils.   There is particular concern over the
rigidity of the system prescribed by the Government and the level of fees,
which are intended to make the system self-financing.

Finally the ALG successful gained a contract from the Department for Trade and
Industry to operate Consumer Direct service in the London region.    This
service – a consumer equivalent of NHS direct, is being rolled out through the
country but London is unique in England in both using an association as a lead
body and in acquiring the service through competitive tender.    The ‘soft’
launch of the service was on March 15th 2005, with the formal launch taking
place in June.


THE ASSOCIATION OF LONDON GOVERNMENT   - TRANSPORT AND ENVIRONMENT COMMITTEE
     Page 3

EXPLANATORY FOREWORD (continued)

Looking forward to 2005/2006

Next year will see a number of significant challenges.   These will include
work on implementing and operating Consumer Direct in its full fashion and
rolling out the enforcement of moving traffic offences across London.   It is
clear that some issues will become more important during 2005/06 than they have
been previously.   The whole issue of decriminalised enforcement has become
more prominent and more work will be needed on this to make the scheme more
acceptable to the public.   Waste, also, is becoming more of an issue and a
debate over the future of waste collection and disposal will take place.   The
autumn of 2005/06 will see the full scale implementation of the Licensing Act,
which will stretch boroughs' resources and result in some issues being exposed.
The year will also see new work coming up including starting work on the relet
of our support contract for the Parking and Traffic Appeals Service.
The Chief Finance Officer has pleasure in presenting the Statement of Accounts
as set out on pages 13 to 24. The Statement of Accounts consist of the:

     Statement of Responsibilities for the Statement of Accounts - page 5.

     Statement of Internal    Control – pages 6-8.

     Consolidated Revenue Account - which covers income and expenditure on
      Committee Services - page 13.

     Balance Sheet - which sets out its financial position - page 20.

     Cash Flow Statement - which summarises Committee capital and revenue
      inflows and outflows of cash -
      page 23.

These accounts are supported by the Statement of Main Accounting Policies on
pages 11-12 and various notes.

Revenue expenditure

Set out below is a comparison between the actual income and expenditure     and
the approved budget for the year.

                                         Budget        Actual   Variation
                                          £'000         £'000       £'000
Net cost of services                        106       (1,234)     (1,340)
Interest Income                            (30)            76         106
Transfer from Reserves                    (118)         (178)        (60)
Surplus for the year
(42)                                    (1,336)       (1,294)
Transfer to Specific Reserve                  -             -          -
Adjusted Deficit                           (42)       (1,336)    (1,294)

There have been a number of areas of underspending and overspending during the
year which have offset each other to produce a provisional surplus of £1.336m
for the year. Additional income has been raised in other areas which has
offset the cost of increased expenditure, such as the payments to Northampton
County Court for the registration of parking debt and other parking service, in
particular in respect of Congestion Charging Appeals. Additional reserves of
£66,000 (excluding transfer from the Pensions Reserve) in excess of the
budgeted level have also been transferred to revenue to cover areas of
additional expenditure , although this relates to carried forward balances for
the TEC Research budget.




THE ASSOCIATION OF LONDON GOVERNMENT TRANSPORT AND ENVIRONMENT COMMITTEE
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EXPLANATORY FOREWORD (continued)
Budget for 2005/06
On 10 December 2004, the full TEC Committee approved a total expenditure budget
for 2005/06 of £34,983m, exclusive of the borough payment of £188.5m to
Transport for London (TfL) in respect of Concessionary Fares. Total income
sources were estimated to be £34.634m , with a balanced budget achieved after
the Committee approved the use of balances totaling £349,000, relating solely
to a transfer from TOFIR to offset to costs of the non-TfL element of the
Concessionary Fares Settlement for 2005/06.


FRS17

Following the adoption of FRS 17 Retirement Benefits principles in the SORP,
the ALG’s accounting policies for retirement costs have been revised
significantly in 2003/04. In previous years, the ALG treated the employer's
contributions amounts payable to the Local Government Pension Scheme as its
expenditure for the year and only accrued for amounts payable to the Fund that
had not been paid by 31 March.

The new policy is to recognise the full liability that the ALG has for meeting
the future cost of retirement benefits that will arise from years of service
earned by employees up to the balance sheet date, net of the contributions paid
into the Fund and the investment income they have generated. As a result, the
closing balance sheet for 2004/05 includes a pensions liability of £1.307m,
balanced by a pensions reserve of the same value.

Charges to service revenue accounts are now based on a share of current service
cost (the increase in future benefits arising from service earned in the
current year) rather than employer's contributions.
THE ASSOCIATION OF LONDON GOVERNMENT TRANSPORT AND ENVIRONMENT COMMITTEE     Page
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STATEMENT OF RESPONSIBILITIES FOR THE STATEMENT OF ACCOUNTS

The Committee's Responsibilities

The Committee is required:

     to make arrangement 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. In this Committee, that officer is
      the Chief Finance Officer;
     to manage its affairs to secure economic, efficient and effective use of
      resources and safeguard its assets;
      to approve the Statement of Accounts.

The Director of Finance and Administration's Responsibilities
The Director of Finance and Administration is responsible for the preparation
of the Committee's Statement of Accounts which, in terms of the CIPFA/LASAAC
Code of Practice on Local Authority Accounting in Great Britain ("the Code"),
is required to present fairly the financial position of the Committee at the
accounting date and its income and expenditure for the year.

In preparing this Statement of Accounts, the Director of Finance and
Administration has:

     selected suitable accounting policies and then applied them consistently;
     made judgements and estimates that were reasonable and prudent; and
     complied with the Code.

The Director of Finance and Administration has also:

     kept proper accounting records which were up to date; and
     taken reasonable steps for the prevention and detection of fraud and
      other irregularities.

Responsible Finance Officer's Certificate
 The Statement of Accounts is that upon which the auditor should enter his
certificate and opinion and has been prepared under the Local Government
Finance Act 1982.

It presents fairly the financial position of the Committee at 31 March 2005,
and its income and expenditure for the year then ended.



                                   2005


F Smith CPFA
Director of Finance and Administration
THE ASSOCIATION OF LONDON GOVERNMENT TRANSPORT AND ENVIRONMENT COMMITTEE   Page
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STATEMENT ON INTERNAL CONTROL

SCOPE OF RESPONSIBILITY

The Association of London Government (ALG) 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. In discharging this overall responsibility, the
ALG is also responsible for ensuring that there is a sound system of internal
control which facilitates the effective exercise of the ALG’s functions and
which includes arrangements for the management of risk.

THE PURPOSE OF THE SYSTEM OF INTERNAL CONTROL

The system of internal control is designed to manage risk to a reasonable level
rather than to eliminate all risk of failure to achieve policies, aims and
objectives; it 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 ALG’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 system of internal control has been in place at the ALG for the year ended
31 March 2005 and up to the date of approval of the accounts and, except for
the details listed under significant internal control issues, accords with
proper practice.

THE INTERNAL CONTROL ENVIRONMENT

The key elements of the internal control environment, include:

   Establishing and monitoring the achievement of the ALG’s objectives – each
    Division at the ALG currently produces a monthly update for discussion with
    the Chief Executive at their 1:1 meetings. A consolidated progress report is
    presented to the ALG’s Officer Management Team and to Elected Officers on a
    quarterly basis. The presentation of quarterly exception reports to Elected
    Officers, which started in October 2004, and highlighted significant
    achievements and reported on operational performance; the production of a
    key achievements document at year end; regular reports to Elected Officers
    on progress of the 50 tasks in the Corporate Improvement Plan

   The facilitation of policy and decision-making – the ALG’s officer
    Management Team, with input from other senior policy staff, discusses all
    areas of policy development as they arise and formulates draft responses to
    Central Government, the GLA and other bodies as appropriate. These responses
    are presented to elected members for approval prior to being made public. In
    accordance with the ALG’s Standing Orders and Financial Regulations, certain
    decision making functions have been delegated to the Chief Executive and/or
    the officer Management Team, which are exercised as appropriate;

   Ensuring compliance with established policies and procedures, laws and
    regulations – the ALG has comprehensive Financial Regulations and a
    comprehensive set of Human Resources Policies, which are reviewed at regular
    intervals. These arrangements ensure compliance with all applicable
    statutes, regulations and other relevant statement of best practice in order
    to ensure that public funds and properly safeguarded and are used
    economically, efficiently and effectively and in accordance with the
    statutory and other authorities that govern their use.

   Financial Management and Reporting - the ALG’s officer Management Team and
    the ALG’s Elected Officers receive regular financial management reports that
    monitor actual income and expenditure trends against approved budgets. This
    information is obtained from and reliance is, therefore, placed upon the
    Corporation of London’s accounting system. This system has adequate
    processes in respect of authorisation levels and hierarchical access
    controls and there is the necessary segregation of duties within the Finance
    Section at the ALG to complement these controls, although this will be
    further enhanced during 2005/06 when the additional staffing resources are
    in place.


THE ASSOCIATION OF LONDON GOVERNMENT TRANSPORT AND ENVIRONMENT COMMITTEE   Page
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STATEMENT ON INTERNAL CONTROL (Continued)

   In September2004, the ALG’s Elected Officers agreed to adopt a Risk
    Management Strategy, to be co-ordinated by the new Corporate Strategy and
    Performance (CSP) Division. The ALG’s officer Management Team subsequently
    delegated the responsibility for compiling the Divisional Risk Registers to
    the respective Director. This process in still evolving although it is a key
    aim of the ALG’s officer Management Team that Risk Management should become
    fully embedded in the Association’s procedures and practices during 2005/06.

REVIEW OF EFFECTIVENESS

The ALG has responsibility for conducting, at least annually, a review of the
effectiveness of the system of internal control. The review of the
effectiveness of the system of internal control is informed by the work of the
officer management team within the organisation who have responsibility for the
development and maintenance of the internal control framework, and of the
internal auditors. We have also taken account of comments made by the external
auditors and other review agencies in their annual audit letter and other
reports. We have also taken account of:

   The work of Internal Audit, now fully undertaken by the Corporation of
    London under a Service Level Agreement, and the annual opinion of the Chief
    Internal Auditor at the Corporation of London. Internal Audit plays a
    central role in providing the required assurance on internal controls
    through its comprehensive risk-based audit of all auditable areas within the
    five-year planning cycle, including the ALG, – with key areas being reviewed
    annually. This is reinforced by consultation with the ALG’s Management Team
    and Elected Officers on perceived risk and by a rigorous follow-up audit
    regime. The Internal Audit Section of the Corporation of London operates, in
    all aspects, in accordance with the CIPFA Code of Practice, and achieved the
    highest possible score as part of the Comprehensive Performance Assessment
    (CPA) process. External Audit relies upon the work of Internal Audit.

   The role of the ALG’s Elected Officers in acting as the ALG’s Audit
    Committee, following recommendations from the external auditors in the last
    three Annual Audit Letters, although it is accepted that a meeting of the
    Audit Committee has not been held during the period under review;
   The Corporate Improvement Plan, which arose from findings of the voluntarily
    undertaken self-assessment exercise against the Corporate Self Assessment
    standards contained within the Comprehensive Performance Assessment
    framework, from a staff survey and from a review of the ALG conducted by
    three borough Chief Executives, has continued to be implemented. At the last
    progress report to Elected Officers in June 2005, 28 out of the 50 action
    points had been completed and the remaining 22 were underway or have been
    classified as part of a continuous process.


SIGNIFICANT INTERNAL CONTROL ISSUES

Risk Management

The ALG’s risk management framework has progressed over the past 12 months but
is still being finalised before becoming fully embedded during 2005/06 to
provide the necessary evidence of an effective system of internal control. This
will include improvements to:

   Identification of risks on a divisional basis from which a corporate risk
    register will be complied, which will be monitored quarterly by the officer
    management team, in addition to the monitoring of the objectives/priorities
    which is being done at director, management team and elected officer level
    since October 2004;




THE ASSOCIATION OF LONDON GOVERNMENT TRANSPORT AND ENVIRONMENT COMMITTEE   Page
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STATEMENT ON INTERNAL CONTROL (Continued)

   Ensuring the economical, effective and efficient use of resources and for
    ensuring continuous improvement in the way the ALG’s functions are
    exercised. This process will be informed by, firstly, the two Best Value
    type Reviews that are underway (Communications and Public Affairs and the
    contract for European Services undertaken by Greater London Enterprise Ltd).
    Secondly, the ALG is committed to undertaking a Fundamental Review of the
    entire organisation during 2005/06 to provide members with options as to the
    future direction of the ALG after the May 2006 local elections.

Budget Monitoring

Improvement to the type of budget monitoring information that is presented to
the Grants Committee, TEC and LHUC will be introduced in relation to the first
quarter results for 2005/06.

Debt Management

The ALG’s debt management process has improved over the past 12 months, with
the level of outstanding debt owed to the ALG on the Corporation CBIS Accounts
Receivable ledger as at 31 March 2004 was £5.053m; at 31 March 2005 it was
£2.985m, a reduction of £2.068m. However, there is still room for considerable
improvement, particularly in the area of borough parking related debt and
effort will be concentrated on this particular area during 2005/06.             In
particular, all debts over 24 months should be either followed up               or
recommended for write off.

PATAS Management Control – Adjudicators’ Claims

Current management controls in respect of adjudicators’ monthly timesheets are
deficient as:

     The practice of disposing of calendar sheets in support of claims after a
      few months means that no permanent record for audit examination of
      certification procedures exists; and

     Due to the lack of cell protection on the EXCEL spreadsheet used to
      record adjudicators’ claims, input could be overwritten and information
      corrupted as a consequence.

      Adequate controls must be put in place as a matter of urgency to address
      these two fundamental issues.




                                                  2005

M.G.Pilgrim
Chief Executive




THE ASSOCIATION OF LONDON GOVERNMENT TRANSPORT AND ENVIRONMENT COMMITTEE Page 9

AUDITORS' REPORT TO THE ASSOCIATION OF LONDON GOVERNMENT TRANSPORT AND
ENVIRONMENT COMMITTEE

We have audited the Statement of Accounts on pages 13 to 24 which have been
prepared in accordance with the accounting policies applicable to local
authorities as set out on pages 11 and 12.

This report is made solely to The Association of London Government Transport
and Environment Committee in accordance with Part II of the Audit Commission
Act 1998 and for no other purposes, as set out in paragraph 54 of the Statement
of Responsibilities of Auditors and of Audited Bodies, prepared by the Audit
Commission.

Respective responsibilities of the Chief Financial Officer and   Auditors
As described on page 5, the Director of Finance and Administration is
responsible for the preparation of the Statement of Accounts in accordance with
the Code of Practice on Local Authority Accounting in the United Kingdom 2003.
Our responsibilities as    auditors, are established by statute, the Code of
Audit Practice issued by the Audit Commission and our profession's ethical
guidance.

We report to you our opinion as to whether the Statement of Accounts presents
fairly the financial position and results of operations of the Committee.

We review whether the statement on internal control on pages 6-8 reflects
compliance with CIPFA’s Guidance “The Statement on Internal Control in Local
Government: Meeting the Requirements of the Accounts and Audit Regulations
2003” published on 2 April 2004.      We report if it does comply with proper
practices    specified by CIPFA      or if the statement is misleading or
inconsistent with other information we are aware of from our audit of the
statement of accounts. We are not required to consider, nor have we considered,
whether the statement on internal    control covers all risks and controls. We
are also not required to form an opinion on the effectiveness of the
Committee’s corporate governance procedures or its risk and control procedures.
Our review was not performed for any purpose connected with any specific
transaction and should not be relied upon for any such purpose.

We read the other information published with the statement of accounts and
consider the implications for our report if we became aware of any apparent
misstatements or material inconsistencies with the statement of accounts. The
other information comprises only the explanatory foreword.

Basis of audit opinion

We conducted our audit in accordance with the Audit Commission Act 1998 and the
Code of Audit Practice      issued by the Audit Commission, which requires
compliance with relevant audit standards issued by the Auditing Practices
Board.

An audit includes examination, on a test basis, of evidence relevant to the
amounts and disclosures in the statement of accounts. It also includes an
assessment of the significant estimates and judgements made by the Committee in
the preparation of the statement of accounts and of whether the accounting
policies are appropriate to the Committee's circumstances, consistently applied
and adequately disclosed.

We planned and performed our audit so as to obtain all the information and
explanations which we consider necessary in order to provide us with sufficient
evidence to give reasonable assurance that the statement of accounts is free
from material misstatement, whether caused by fraud or other irregularity or
error. In forming our opinion we also evaluated the overall adequacy of the
presentation of information in the statement of accounts.

Opinion

In our opinion the statement of accounts presents fairly the financial position
of the ALG Transport and Environment Committee at 31 March 2005 and its income
and expenditure for the year then ended.
THE ASSOCIATION OF LONDON GOVERNMENT TRANSPORT AND ENVIRONMENT COMMITTEEPage 10

AUDITORS' REPORT TO THE ASSOCIATION OF LONDON GOVERNMENT TRANSPORT AND
ENVIRONMENT COMMITTEE

Certificate

We certify that we have completed the audit of accounts in accordance with the
requirements of the Audit Commission Act 1998 and the Code of Audit Practice
issued by the Audit Commission.




2005

PricewaterhouseCoopers LLP
Southwark Towers,
32, London Bridge Street
London,
SE1 9SY
THE ASSOCIATION OF LONDON GOVERNMENT TRANSPORT AND ENVIRONMENT COMMITTEEPage 11

STATEMENT OF ACCOUNTING POLICIES

A     General
      The Committee has adopted the following accounting policies which should
be read in conjunction with
      the statement of accounts set out on pages 13 to 24. The general
principles adopted in the preparation of
      these statement of accounts are those recommended by the Chartered
Institute of Public Finance and
      Accountancy (CIPFA) in the ‘Code of Practice on Local Authority
      Accounting in the United Kingdom:
      A Statement of Recommended Practice (SORP) 2003’ and are in accordance
      with the Accounts and Audit Regulations 2003. The only exception is that
      for capital accounting purposes, fixed assets are valued in the accounts
      at their historic cost, rather than their estimated current cost.

B     Income and expenditure
      Income and expenditure is accounted for on an accruals basis, except for
court fees received in respect
      of the London Wide Lorry Ban, which are dealt with on a cash basis, as
the penalties payable by lorry
      owners are at the discretion of the Court.

C     Fixed assets and depreciation
      All fixed assets are subject to a de minimis level of £1,000 for capital
      accounting purposes. Fixed Assets are depreciated on a straight line
      basis, starting the year after acquisition, over their useful economic
      lives:

      Leasehold Property – 10 years (period of lease);
      Furniture and Fittings – 5 years;
      Computer Equipment –

        o   Desktop Hardware – charged to revenue in year of purchase;
        o   Infrastructure Hardware – 3 years; and
        o   Software Licences – over the life of the licence.

D     Leased assets and obligations
      Where assets are financed by leasing agreements that give rights
approximating to ownership ("finance
      leases"), the assets are treated as if they had been purchased outright.
The amount capitalised is the
      present value of the minimum lease payments payable during the lease
term. The corresponding leasing
      commitments are shown as obligations to the lessor.

      Depreciation on the relevant assets is charged to the consolidated
revenue account.
      Lease payments are treated as consisting of capital and interest
elements, and the interest is charged to
      the consolidated revenue account using an approximation to the annuity
method.

      All other leases are "operating leases", and the annual rentals are
charged to the consolidated revenue
      account on a straight line basis over the lease term.
E     Debtors and creditors
      The accounts of the Committee are maintained on an accruals basis. Sums
due to or from the Committee
      during the year are included whether or not the cash was actually
received or paid in the year.
THE ASSOCIATION OF LONDON GOVERNMENT TRANSPORT AND ENVIRONMENT COMMITTEEPage 12

STATEMENT OF ACCOUNTING POLICIES (continued)

F     Provisions and Reserves
      The Committee sets aside provisions for specific liabilities which are
recognised but the amount or
          timing of cannot yet be determined accurately. A provision is
recognised when the Committee has a
      present obligation as a result of a past event and it is probable that
the obligation will be settled by a
      transfer of economic benefits and a reliable estimate can be made of the
amount of the obligation. Money
         prudently held as a general sum against future need is classed as a
reserve and payments to it do not count
         as service expenditure. Money held in reserve is transferred back to
revenue to meet needs as they arise.

G     Interest income
      Interest is credited to the accounts based on average cash balances held
by the Corporation of London
      and invested in the London Money Markets.

H    Pension costs - pension funds

     The 2003 Code of Practice on Local Authority Accounting   requires Local
     Authorities to fully reflect the requirements of FRS 17   in their accounts
     for 2004/05. These requirements represent a substantial   change in the way
     that retirement benefits are accounted for. The policy    detailed below
     complies with the requirements of FRS 17.

     As part of the terms and conditions of employment of its officers and
     employees, the Association of London Government offers retirement
     benefits. Although these will not actually be payable until employees
     retire, the ALG has a commitment to make the payments in the future. This
     commitment is accounted for in the year that the employee earns the right
     to receive a pension in the future.

I    Allocation of Income

     Income, where possible, has been apportioned to expenditure in accordance
     with the levies and charges due from boroughs in respect of specific
     service areas. Income that is not directly attributable to a particular
     service is apportioned to other expenditure categories based on budgeted
     expenditure for the year.

J    Apportionment of Overheads

      Central overhead costs incurred by the ALG are apportioned to the
     Grants, TEC and LHUC funding streams as
       follows:

        o   Salary Costs - in accordance with the budgetary provision set aside
            for such costs in the funding stream budget for the years of
            account; and
        o   Non-salary costs - where expenditure has been identified as directly
            attributable to a particular funding stream, it has been allocated
            in full to that funding stream. Where such costs are not directly
attributable, they have been allocated in accordance with the number
of desk spaces used by the funding streams.
THE ASSOCIATION OF LONDON GOVERNMENT TRANSPORT AND ENVIRONMENT COMMITTEEPage 13

REVENUE ACCOUNT FOR THE YEAR ENDED 31 MARCH 2005

                                       2004/2005                2004/2005
2004/2005      2003/2004

Expenditure            Income                                    Net Expenditure

Note                                 £'000         £'000         £'000        £'000
Direct Revenue Expenditure:
Payments to operators                                               1a20,347(20,519)
                                     (172)         (263)
Vivista services                                                                1b3,816
                                  (3,816)             -              -
Parking adjudication                                                  1c      1,485
                                 (1,485)               -             -
Payments to Northampton County Court          1d   4,534       (4,534)            -   -
Reimbursement of parking penalty notices
to boroughs                                                                     1e26(26)
                                       -             -
Total Direct Revenue Expenditure 30,208       (30,380)           (172)        (263)

Administration and other expenditure:
Staff costs                                                                       42,192
                                 (2,394)           (202)          (88)
Premises                                                                          3829
                                   (905)          (76)             (29)
Central Support Services           7,421       (8,174)            (753)          74
Consultancy                           342        (373)             (31)          86
Total Administration and Other Expenditure      10,784         (11,846)     (1,062) 43

Net Revenue Cost of Services         40,992   (42,226)         (1,234)        (220)

Interest and Investment income              5                                    85 7
Net Return on Pension Scheme (Assets)/Liabilities          4                       (9) 18

Net revenue expenditure to be met from
sources of finance                                             (1,158)        (195)

Transfer from Earmarked Reserve                                               (118)349

Transfer from Revenue Reserve                                     (66)        (915)
Transfer to Pensions Reserve                                         6         (16)
NET (SURPLUS)/DEFICIT FOR THE YEAR                             (1,336)        (777)




F Smith CPFA                                                                      2005
THE ASSOCIATION OF LONDON GOVERNMENT TRANSPORT AND ENVIRONMENT COMMITTEEPage 14

NOTES TO THE REVENUE ACCOUNT FOR THE YEAR ENDED 31 MARCH 2005

1       Terminology

                 Due to the unique nature of the Committee's activities, a
brief description of some of the main headings
                 contained in the consolidated revenue account are detailed
below:

      a)   Payments to Operators - Amounts paid to transport operators under
the Concessionary Fare and
           Taxicard agreements.
      b)   Vivista Services - payments to the contractors who provided the
           parking facilities
                      management contract in 2004/2005.
      c)   Parking Adjudication - direct cost of the Parking and Traffic
           Appeals Service and Congestion Charging Appeals Service, including
           payment to    adjudicators, adjudicators training and purchase of
           instructional materials.
      d)   Payments to Northampton County Court - payments made to the court
for the registration of the
           debt of persistent evaders of the payment of parking penalties. The
£5 unit charge is recharged
           direct to the boroughs.
      e)   Reimbursement of parking penalty notices - reimbursements to
boroughs in respect of parking
           penalties collected at New Zealand House.


2       Leases

                 The Committee uses leased properties under the terms of
operating leases. The amounts paid under these
      arrangements during the year amounted to £360,000 (2003/04: £360,000).
     These payments relate to the occupation of the premises at New Zealand
     House, the lease to which expires in February 2009.

        The future annual cash payments under leases are:


Properties

£'000

                 Due within one year
360
                 Due within two-five years
360

                 No assets were acquired during the year through finance leases.
3       Pension costs – FRS17

        Employees of Association of London Government (ALG) may participate in
        the London Pensions Fund Authority (LPFA) Pension Fund, part of the Local
        Government Pension Scheme (LGPS), a defined benefit statutory scheme. The
        Fund is administered by LPFA in accordance with the LGPS Regulations
        1997, as amended. On 1 May 2000, all ALG-TEC staff transferred to the
        LPFA scheme as the ALG was granted Admitted Body status. The accumulated
        benefits of staff from the Corporation of London pension scheme have not
        yet been transferred to the LPFA scheme, as the actuarial valuation of
        the transfer values for each of the former schemes is currently being
        finalised.




THE ASSOCIATION OF LONDON GOVERNMENT TRANSPORT AND ENVIRONMENT COMMITTEEPage 15

NOTES TO THE REVENUE ACCOUNT FOR THE YEAR ENDED 31 MARCH 2005 (continued)

    4   Pension costs (continued)

     Employees are eligible to contribute to the scheme at the rate of 6% of
pensionable pay, which is a fully funded
     defined benefits scheme. In accordance with statutory regulations, a
triennial valuation of the Pension fund as
      at 31 March 2004 was completed by the Fund's actuary Hymans Robertson,
with the next formal valuation
     due as at 31 March 2007. The certified employers contribution rate
expressed as a percentage of pensionable
     pay for the ALG for the period 1 April 2005 to 31 March 2008 is 15.4%.
The advised rate may vary further once
     the bulk transfer of accumulated benefits from previous funds has been
completed.

In 2004/05, the employer's contribution to the Fund amounted to £168,110, which
equates to 7.9% of the
                employees pensionable pay . In 2003/2004, the comparable
figures were 11.2% of pensionable pay
     amounting to £146,311.

        Following the adoption of FRS 17 Retirement Benefits principles in the
        SORP, the ALG’s accounting policies for retirement costs have been
        revised significantly in 2003/04. In previous years, the ALG treated the
        employer's contributions amounts payable to the Local Government Pension
        Scheme as its expenditure for the year and only accrued for amounts
        payable to the Fund that had not been paid by 31 March.

        The new policy is to recognise the full liability that the ALG has for
        meeting the future cost of retirement benefits that will arise from years
        of service earned by employees up to the balance sheet date, net of the
        contributions paid into the Fund and the investment income they have
     generated. As a result, the opening balance sheet for 2004/05 includes a
     pensions liability of £384,000, balanced by a pensions reserve of the
     same value (which reflects the fact that the ALG is not required to raise
     ALG subscriptions to cover the liability).

     The replacement of employers contributions by the current service cost
     has resulted in an increase in the net cost of services of £3,000 and the
     inclusion of £9,000 income relating to the net return on pension scheme
     assets and liabilities for 2004/05. A transfer of £6,000 has been made to
     the pensions reserve in 2004/05, resulting in an unchanged deficit.

     The LPFA, as administering authority to the LPFA Pension Fund provided
     Hymans Robertson, an independent firm of qualified actuaries with scheme
     membership information as at 31 March 2004 for all employees within ALG.
     This membership data contained details of any transferred in service.
     Hymans included this service when valuing ALG's liabilities as at 31
     March 2004. Assets were allocated within the LPFA Pension Fund based on
     these
     calculated liabilities. This position was then the starting point for
     the ‘roll forward' FRS17 valuations. In order to assess the actuarial
     value of the LPFA Pension Fund’s liabilities as at 31 March 2005
     attributable to the ALG, scheme liabilities have been assessed by Hymans
     on an actuarial basis using the projected unit method, and estimate of
     pensions that will be payable in future years dependent on assumptions
     about mortality rates, salary levels etc.

     As the actual pension contributions for ALG-TEC staff of £168,110 for
     the year equated to 21.84% of the total actual pension contribution made
     by the ALG in 2004/05, all assets, liabilities, charges, return and
     other costs have been allocated in accordance with this proportion to
     give an estimate of the affect on these accounts.




THE ASSOCIATION OF LONDON GOVERNMENT TRANSPORT AND ENVIRONMENT COMMITTEEPage 16

NOTES TO THE REVENUE ACCOUNT FOR THE YEAR ENDED 31 MARCH 2005 (continued)

4        Pension costs (continued)

     The financial assumptions used for the purposes of the FRS17 calculations
as at 31 March 2005 are as follows:

      Assumptions as at:          31 March 2005    31 March 2004
                                  (% per annum)    (% per annum)
      Price Increases                  2.9%             2.9%
      Salary Increases                 4.4%             4.4%
      Pension Increases                2.9%             2.9%
      Discount Rate                    5.4%             6.5%
     The accounts are prepared in accordance with CIPFA guidance and therefore
     a discount rate for scheme liabilities of 6.5% pa has been used. This
     represents a 3.5% pa real discount rate as required by the Code of
     Practice
     on Local Authority Accounting in the United Kingdom 2003 - A statement of
Recommended Practice 2003.

     The assets of the whole of the LPFA Pension Fund and the expected returns
     on those assets, as at 31 March 2005 and 31 March 2004 were as follows:

        Asset        Long     Value as      Long      Value at
        Class        term       at 31       term      31 March
                    rate of     March      rate of      2004
                    return      2005       return       £000
                   expected     £000      expected
                    (% per                 (% per
                    annum)                 annum)
                   as at 31               as at 31
                     March                  March
                     2005                   2004
      Equities       7.7%     1,215,800     7.7%      1,134,500
      Bonds          4.8%      166,500      5.1%       166,800
      Property       5.7%      109,800      6.5%       80,400
      Cash           4.8%      51,700       4.0%       23,700
      Total          7.1%     1,543,800     7.3%      1,405,400


     As at 31 March 2005, the fair value of the pension scheme assets and
     liabilities attributable to the Transport and Environment Committee were
     as follows:

      Net Pension Asset                   At 31 March       At 31 March 2004(£000)
                                           2005(£000)
      Estimated Market Value of              2,323                  1,744
      Assets
      Present Value of Scheme               (3,585)                (2,113)
      Liabilities
      Present Value of Unfunded              (14)                   (16)
      Liabilities
      Total Present Value of                (3,599)                (2,129)
      Liabilities
      Net Pension Asset                     (1,276)                 (385)




THE ASSOCIATION OF LONDON GOVERNMENT TRANSPORT AND ENVIRONMENT COMMITTEEPage 17

NOTES TO THE    REVENUE ACCOUNT FOR THE YEAR ENDED 31 MARCH 2005 (continued)
4        Pension costs (continued)

                 The analysis of the amount charged to the Revenue Account for
the year ended 31 March 2005 is
                 as follows:

     Amount Charged to          Year to 31 March 2005    Year to 31 March 2005
     Consolidated Revenue               (£000)               (% of Payroll)
     Account
     Service Cost                        171                     14.7%
     Past Service Costs                   -                        -
     Curtailment and                      -                        -
     Settlements

     Total Operating Charge              171                     14.7%
     (A)

     Amount Credited to Other    Year to 31 March 2005   Year to 31 March 2005
     Finance Income                     (£000)               (% of Payroll)
     Expected Return on                   116                    10.0%
     Employer Assets
     Interest on Pension                 (107                   (9.2%)
     Scheme Liabilities
     Net Return (B)                        9                    (0.8%)
     Net Revenue Cost (A)-(B)             162                   13.9%


              The analysis of the amount recognised in the Statement of   Total
Movement in Reserves (STMR) is as follows:

      Actual Return less expected return on pension                62
      scheme assets
      Experience gains and losses arising on the                 (271)
      scheme liabilities
      Changes in financial assumptions underlying the
      present value of the scheme liabilities                    (714)
      Actual gain/ (loss) in pension plan                        (923)

      Actual gain/(loss) recognised in STMR                      (923)

     The following tables show the movement in the surplus/deficit over the
     year and the history of experience gains and losses, expressed as a
     percentage of assets and/or liabilities.
THE ASSOCIATION OF LONDON GOVERNMENT TRANSPORT AND ENVIRONMENT COMMITTEEPage 18

NOTES TO THE REVENUE ACCOUNT FOR THE YEAR ENDED 31 MARCH 2005 (continued)

4         Pension costs (continued)

      Movement in Surplus/Deficit During the Year         Year to 31 March 2005
                                                                  (£000)
      Surplus/(Deficit) at the beginning of the year              (384)
      Current Service Cost                                        (171)
      Employer Contributions                                       167
      Contributions in respect of Unfunded Benefits                 1
      Other Income                                                  -
      Other outgo (e.g. expenses etc)                               -
      Past Service Costs                                            -
      Impact of Settlements and Curtailments                        -
      Net Return on Assets                                          9
      Actuarial Gains/(Losses)                                    (293)
      Surplus/(Deficit) at end of the year                       (1,301)

      History of Experience Gains and Losses              Year to 31 March 2005
                                                                  (£000)
      Difference between the expected and actual                    62
      return on assets
      Values of Assets                                            2,323
      Percentage of Assets                                        2.67%
      Experience gains/(losses) on liabilities                    (271)
      Present Value of Liabilities                                3,599
      Percentage of the present value of liabilities             (7.53%)
      Actuarial gains/losses recognised in STMR                   (923)
      Present value of Liabilities                                3,599
      Percentage of the Present Value of Liabilities             (25.65%)

5       Interest and investment income
                                                       2004/2005 2003/2004
                                                           £'000     £'000
           Bank interest received                           (85)       (7)

6       Officers emoluments

           The number of employees whose remuneration, excluding pension
contributions, was £50,000 or more
           in bands of £10,000 was:

          Remuneration Band                               Number of Employees

                                                       2004/2005 2003/2004
         £50,000-£59,999                                       4         6
         £60,000-£69,999                                       6         2
         £70,000-£79,999                                                     2
0
         £80,000-£89,999                                                     2
                           0
         £90,000-£99,999                                                    1
                        3
         £100,000 - £109,999                                                2
               -




THE ASSOCIATION OF LONDON GOVERNMENT TRANSPORT AND ENVIRONMENT COMMITTEEPage 19

NOTES TO THE REVENUE ACCOUNT FOR THE YEAR ENDED 31 MARCH 2005 (continued)

7      Publicity expenditure
          The Committee is required by provision of the Local Government Act
1986 to keep three separate accounts of
          expenditure and income on publicity. The total net expenditure for
the year was £451,000; the difference is
          attributable to the fact there was not a Concessionary Fares Freedom
Pass reissue during 2004/05 and the publicity
          costs associated with Operation Scrap-IT . The expenditure is
analysed as follows:
                                                     2004/2005 2003/2004
                                                         £'000      £'000
      Publicity                                            347        309
      Recruitment Advertising                               42         49
      Surveys                                               62        280
                                                           451        638
8       Members allowances
          The elected representative from each of the 33 London boroughs do not
receive any allowances from the
          Committee. Reimbursement of expenses, if appropriate, are made direct
by the London boroughs.


9       Audit Fees
          The amount charged to the Consolidated Revenue Account for the year
in respect of external audit fees was
          £26,658, compared with £19,090 for 2003/04.
THE ASSOCIATION OF LONDON GOVERNMENT TRANSPORT AND ENVIRONMENT COMMITTEE
                                                            Page 20

BALANCE SHEET 31 MARCH 2005

                           Notes          2004/2005                 2003/2004
                                          £'000 £'000               £'000 £'000


Current assets

Debtors                     1           5,603               5,357
Cash at bank and in hand                3,194                   -
                                                    8,797                  5,357
Total assets                                        8,797                  5,357

Current liabilities

Cash Overdrawn                               -                        (375)
Creditors                  2                                           (6,810)
(6,810)                (4,147)           (4,522)


Total assets less current liabilities                                           1,987
                             835
(excluding Pensions Liability)

Pension Liability                                   (1,301)             (384)

Total Assets less Liabilities
(including Pensions Liability)                                                     686
                           451


Reserves                    3
General                                                  1,638
368
Specific                                                       349
467
Pensions Reserve                                   (1,301)
(384)
                                                        686
451




F Smith CPFA

                             2005
THE ASSOCIATION OF LONDON GOVERNMENT TRANSPORT AND ENVIRONMENT COMMITTEE
                                                   Page 21

NOTES TO THE BALANCE SHEET AS AT 31 MARCH 2004



1       Debtors:

                                                       31 March       31 March
                                                         2005           2004
                                                        £'000          £'000
     Levies and charges due from Boroughs               2,028          2,005
     Other debtors                                      3,707          3,599
     Prepayments                                         174            278
     Bad debt provision                                 (306)          (525)
     Total                                              5,603          5,357

2       Creditors:

                                                       31 March       31 March
                                                         2005           2004
                                                        £'000          £'000
     Amounts due to Boroughs                            1,507          1,905
     Other Creditors                                    4,612          2,127
     Receipts in Advance                                  3              91
     Accruals                                            688             24
     Total                                              6,810          4,147


3.     Reserves
      The position of the reserves as at 31 March 2005 is as follows:


                                       General      Specific      Pensions
                                       Reserve       Reserve      Reserve        Total
                                        £000          £000          £000         £000
       Balance as at 1st April 2004        368            467         (384)           451
       Transfer to Revenue Account        (66)          (118)             -         (184)
       Transfer from Revenue                 -               -            6             6
       Account
       Movement on Pension Fund                -            -        (923)         (923)
       Reserve
       (refer CRA Note 3)
       Surplus for the year                 1,336           -            -         1,336
       Balance as at 31 March 2005          1,638         349      (1,301)           686
THE ASSOCIATION OF LONDON GOVERNMENT TRANSPORT AND ENVIRONMENT COMMITTEEPage 22

NOTES TO THE BALANCE SHEET AS AT 31 MARCH 2005 (continued)

     The transfer of £184,000 to the revenue account was in respect of the
     following activities:

                                                                             £000
     General Reserve
               Research Projects
                                                                      66


     Specific Reserve
     Concessionary Fares Subsidy
     118
     Total
                    184


     The Transport Operators Fares Increase Reserve (TOFIR) is a specific
     reserve established during 1999/2000 to offset the likely above-inflation
     increase   expected  to   arise   out  of   future   Concessionary  Fares
     negotiations. This reserve will be used to solely offset the liability of
     boroughs to any future increases from transport operators in respect of
     the Concessionary Fares Scheme.

     The balance on the reserve is applied to offset the cost of future years
     settlements and can be increased by further contribution identified by
     the Committee.

4     Related party transactions
      This disclosure note has been prepared in accordance with FRS8 and its
applicability to the public sector,
      utilising current advice and guidance. On the basis that the Committee
comprises of one councillor from
      each of London's 33 local authorities, reliance has been placed on the
Registers of Members' Declarations
      of Interest that exist at each of the individual boroughs. Based on that
reliance, there are no declarable
      related party transactions with chief officers, members, or their related
parties.
      All transactions with London Boroughs were conducted at arms length
within the ordinary course of
      business.

5     Costs relating to the Euro
      The Committee transactions are undertaken in pounds sterling and,
therefore, there have been no costs
      relating to the introduction of the Euro. There is expected to be no
expenditure in 2005/2006.

6     Post Balance Sheet Events
      There are no significant events during 2005/06 which materially effect
the activities of the Committee.

7    Consolidated Accounts
     These accounts form part of the consolidated accounts for the new ALG
     from 1 April 2000. A copy of the consolidated accounts for 2003/04 can be
obtained from the Director of Finance and Administration, 59½ Southwark
Street, London, SE1 0AL.
 THE ASSOCIATION OF LONDON GOVERNMENT TRANSPORT AND ENVIRONMENT COMMITTEE
                                                 Page 23

CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 MARCH 2005

                                             2004/2005       2003/2004

£'000                                                        £'000
REVENUE ACTIVITIES

Cash Outflows
Payments to Transport Operators             (19,296)        (12,720)
Cash paid to and on behalf of employees      (2,178)          (1,876)
Other operating cash payments               (16,852)        (11,504)
                                            (38,326)        (26,100)
Cash Inflows
Borough levies and income                     41,980              26,618
Revenue activities net cash flow (note 1)      3,654                    518

SERVICING OF FINANCE

Cash Inflows
Interest received                               (85)         (7)
SERVICING OF FINANCE NET CASH FLOW              (85)         (7)


(DECREASE)/INCREASE IN CASH (Note 2)           3,569        511
THE ASSOCIATION OF LONDON GOVERNMENT TRANSPORT AND ENVIRONMENT COMMITTEEPage 24

NOTES TO THE CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2005

1       Reconciliation of surplus to revenue
        activities net cash flow             2003/2004               2002/2003

                                             £'000    £'000      £'000     £'000

                        Revenue surplus/(deficit)                1,336               777


                        Adjustments for:

                        Earmarked reserve
                        Transfer to/(from) reserves             (184)
(566)
         Depreciation

                     Debtors:
         (Increase)/Decrease in Debtors (350)                   (1,925)
         (Increase)/Decrease in prepayments104                    (216)
                                                      (246)                (2,141)
                     Creditors:
         (Decrease)/Increase in   Receipts in Advance                   (88)
          91
         (Decrease)/Increase in   amounts due to
          boroughs                         2,751                1,576
         (Decrease)/Increase in   other creditors
              753
         (Decrease)/Increase in   accruals
             2,663                             21   2,441
                                                    3,569                      511
                        Interest income classified separately                  85
              7
                                                      3,654                    518

2       Analysis of decrease in cash       At 31March 2005 Cash -Flow      At 1 April
2004
                                                      £'000     £'000      £'000
        Cash at bank and in hand                      3,194     3,569      (375)


3       The liquid resources held by the ALG Transport and Environment         Committee
        as at 31 March 2005 comprise solely
        of cash.

								
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