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STATEMENT OF ACCOUNTS
2006/2007
CONTENTS
Statement of Accounts – Explanatory Foreword 3
Statement on the System of Internal Control 7
Statement of Responsibilities for the Statement of
Accounts 12
Independent Auditors’ Report to Northamptonshire Police
Authority 14
Changes to the Accounts for 2006/07 17
Accounting Policies 19
Core Financial Statements:
Income & Expenditure Account – objective version 23
Income & Expenditure Account – subjective version 24
Statement of Movement on the General Fund Balance 25
Statement of Total Recognised Gains and Losses 27
Balance Sheet 28
Cash Flow Statement 30
Police Pension Fund 31
Notes on the Core Financial Statements 32
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STATEMENT OF ACCOUNTS 2006/07
EXPLANATORY FOREWORD
This Statement of Accounts sets out the financial position of Northamptonshire Police
for the year ending 31 March 2007. It has been prepared in accordance with the
Accounts and Audit Regulations and the Code of Practice on Local Authority
Accounting.
BACKGROUND
Northamptonshire Police Authority was established in 1995 and is one of 43 police
authorities covering England and Wales. We have a total revenue and capital budget
of £119 million and provide policing services to a population of 661,000. The
Authority’s key duty is to ensure an efficient and effective police service; we provide
strategic direction for the Force, set the budget and the council tax and act as a
transparent link between the public and the police. The Authority is responsible for
managing overall expenditure within the budget, however responsibility for day-to-
day financial management is delegated to the Chief Constable, in accordance with the
financial framework agreed by the Authority.
Our revenue expenditure of £153.6 million includes the running expenses incurred
each year, with the largest element being the Force operational budget covering the
cost of day-to-day policing in Northamptonshire. Revenue expenditure is funded from
government grants, business rates and the local council tax, with a small element from
other sources such as interest, sponsorship, fees and charges and revenue reserves.
Our capital expenditure of £4.6 million is spent on assets, which have a life beyond
one year, mainly building improvement works, IT systems and vehicles. Capital
expenditure is funded from government grant, borrowing, capital receipts from the
sale of assets, funding from other external bodies and our capital reserves.
The Authority’s accounts are shown on pages 23 to 47. They consist of:
Revenue Account (income and expenditure) which covers expenditure on
services during the year and how this was financed
Statement of Movement on General Fund Balance which reconciles final
expenditure and the use of balances
Statement of Recognised Gains and Losses which shows the aggregate
increase or decrease in the Authority’s net worth
Balance Sheet setting out the Authority’s financial position at 31 March 2007
Cashflow Statement which summarises the movement of cash throughout the
year
Police Pension Fund account which shows the movement of funds relating to
officer pensions
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FINANCIAL PERFORMANCE FOR THE YEAR
Setting the Budget 2006/07
In February 2006, the Police Authority approved a net revenue budget of £105.398
million, an increase of 3.5% over 2005/06. The budget was set in a period of
uncertainty, with government proposals for a merged East Midlands force within a 2-
year timeframe being considered. However, the Authority’s budget strategy
continued to support the future development of policing in Northamptonshire rather
than focus on the short term.
The 2006/07 budget increase covered pay awards, general inflation and specific
service improvements including:
• an additional 56 police community support officers
• extra funding of £750,000 for DNA analysis
• further CCTV in custody units
• an additional Assistant Chief Constable post
• new funding for the Corby Sunflower centre
• increased spending on police probationer training (IPLDP)
The government formula grant increase of only 2.16% in 2006/07 and capping
constraints meant that budget cutbacks were also made in some areas, namely:
• a vacancy factor of 4 police officers
• a support staff vacancy factor increased to 1.25%, with 33 posts made
redundant
• a reduction in computer replacement
• the rationalisation of Force canteens
The overall impact on the police council tax for Northamptonshire was an increase of
4.99% taking the Band D council tax from £154.41 to £162.11 for 2006/07. The
Authority achieved the required 3% efficiency gains in budget during the year - a
process audited independently, realising efficiency savings of over £3 million. All
gains achieved through the redeployment of resources were redirected into operational
police services.
Revenue Expenditure 2006/2007
The budget, including carry forwards from previous year and specific government
grants, for revenue expenditure in 2006/07 was £112.552 million.
£m
Budget requirement 101.803
2005/06 underspend c/f 0.909
Specific government grants 6.277
Direct funding/other govt grant 3.563
Total base budget 2006/07 112.552
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At the end of 2006/07 the overall revenue position was expenditure of £153.575m, an
overspend of £1.315 million or 1.17% against the budget. The overspend was met by
a drawdown of £1.315 million from general balances, which was anticipated and
approved by the Police Authority, was to meet £1.033m on HQ Estates work,
£250,000 to support the base budget and £38,000 for NSPIS
Significant variances on the revenue budget, in percentage terms, were:
• an underspend of £0.288m on corporate development which was carried
forward
• an underspend on the pensions budget of £0.936m which was taken to the
pension reserve
• additional interest earnings of £0.286m, taken to balances
• savings of £0.234m on insurance taken to the insurance reserve
• an underspend of £80,000 on the police authority budget, taken to balances
In total the Force carried forward £1,535,000 of net underspent budget into 2007/08 to
meet specific projects that were unavoidably delayed or to meet one-off items of
expenditure. This figure represents the net outcome of both overspends and
underspends carried forward by individual areas and spending departments.
Capital Budget and Expenditure 2006/07
In February 2006 the Authority approved a capital budget of £7.116 million. Actual
expenditure for 2006/07 was £4.614 million representing an underspend of £2.5m
(35%). This relatively large variance against the original budget was largely caused
by the inability to acquire land to progress the new Criminal Justice Centre (£1
million) and underspends and slippage on other capital projects including Project
Global (£0.3m), Airwave (£0.6m) and ICT replacement (£0.4m).
The capital programme was monitored continuously throughout the year with the
Police Authority approving adjustments to project costs and timeframes within the
programme on a regular basis.
Major items of capital expenditure that took place in 2006/07 include the vehicle
replacement programme (£1.3m), ICT equipment (£1.3m), helicopter (£0.7m) and a
new electricity substation (£0.6m). Expenditure on a new CJC, with a forecast cost of
£13 million continues to be delayed due to the lack of a suitable available site for
acquisition and it is likely that slippage will continue in 2007/08 despite best
intentions to progress the project.
Reserves and Balances
At 31 March 2007 our general balances decreased from £6.125 million to £4.810
million with the decrease approved by the Police Authority. This reduction leaves
general balances around at 4.27% of our budget requirement, slightly above the
approved policy range of 2 - 4%. Any unused balances continue to be invested and
earn interest, which supports our revenue expenditure. The Police Authority regularly
monitors this position.
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A number of specific, earmarked reserves also exist, totalling £10.273 million at 31
March 2007, to fund commitments such as the capital programme, helicopter and
insurance. These are listed in full in Note 30 on page 45.
Financial Outlook for 2007/08
On 27 February 2007 the Police Authority approved a budget for 2007/08 of £110.306
million. This gave an increase of 4.66% over 2006/07, in line with RPI. We received
the floor increase in government formula grant of 3.6%, higher than the previous
year’s 2.16%. Our council tax increase was kept to 5% in line with anticipated
capping leading to a Band D council tax of £170.21.
Northamptonshire Police, along with all other police forces and authorities nationally,
has had to make difficult decisions regarding prioritisation of resources with very
limited flexibility or manoeuvrability, particularly over sources of funding. As grant
settlements are expected to decrease in the CSR period of 2008/09 to 2010/11,
possibility as low as 2%, we have drawn up a forward budget strategy which
recognises and can adapt to this, without an excessive burden on taxpayers or our
contingency balances.
Despite the failure of national plans for amalgamation of forces in 2006,
Northamptonshire continues to work closely with our 4 regional East Midlands forces
to drive out the benefits and savings of collaboration work. Locally, a Business
Review Team has been established to advise Chief Officers on the changes necessary
to maintain and improve effectiveness, taking account of the medium term financial
forecast, regional and national agendas, the expectations of collaboration and
partnership activity and developing national standards.
This is a demanding piece of work that will be crucial to sustaining Northamptonshire
Police as an improving force in the future.
Further information on the Authority’s finances can be obtained by:
• writing to the Treasurer at Northamptonshire Police Authority, 36 Billing
Road, Northampton NN1 5DQ
• e-mailing at rosemaryy@northants-pa.gov.uk
• viewing the Authority website at www.northantspoliceauthority.org.uk
Rosemary Yule BSc ACMA
Treasurer
Northamptonshire Police Authority
6
STATEMENT ON THE SYSTEM OF INTERNAL CONTROL
Publication of this Statement is a legal requirement along with the Annual Statement
of Accounts. It is intended to provide a summary of the Authority’s annual review of
effectiveness of its system of internal control.
1. Scope of Responsibility
Northamptonshire Police must ensure that its business is conducted legally and that
public money is safeguarded, properly accounted for and used economically,
efficiently and effectively.
In doing this the Force and the Authority are responsible for providing a sound system
of internal control, which enables Northamptonshire Police to operate effectively and
which includes arrangements for risk management.
2. The Purpose of the System of Internal Control
Any system of internal control is designed to manage risk to a reasonable level rather
than to eliminate all risk. It can only provide reasonable, and not an absolute,
assurance of effectiveness.
Our system of internal control is an ongoing process designed to:
• Identify and prioritise the risks to the achievements of Northamptonshire
Police’s policies, aims and objectives;
• Evaluate the likelihood of those risks;
• Evaluate the impact of those risks; and
• Manage them effectively, efficiently and economically.
The system of internal control has been in place at Northamptonshire Police for the
year ended 31 March 2007 and up to the date of approval of this Statement.
3. The Internal Control Environment
We deal with key aspects as follows:
Establishing and monitoring the achievement of Northamptonshire Police
objectives
For 2006/07, the Authority and the Force jointly agreed the 3-Year Strategic Plan for
Northamptonshire Police, which set out the medium and long-term strategy for
policing the area and the fundamental Vision and Core Values of Northamptonshire
Police. In addition, the Force and Authority published the annual Local Policing and
Performance Plan (LPPP), which focused on the year ahead (2006/07). For 2007/08
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these 2 documents were combined into 1 and launched as “Policing
Northamptonshire”
This document contains the policing objectives and targets for the forthcoming year
based on consultation with the community, the Force and the requirements of the
National Policing Plan. It also contains details of achievements against targets in the
previous year, incorporating both statutory (Best Value Performance Plan) and local
targets.
These high level plans are supported by operational plans, which cascade down
throughout managerial and supervisory levels of the Force. Monitoring within the
Force is through the Chief Officers’ Group and the supporting Process Groups and
sub-groups.
The Police Authority monitors objectives by receiving regular reports to the various
Committees, Boards and Panels, which exist within the Authority structure.
Policy and decision-making
Northamptonshire Police Authority reviewed and revised its committee structure and
terms of reference in 2006/07 to ensure more focused and effective policy and
decision-making. A new structure of Committees will commence following the AGM
in June 2007.
A structure of portfolio holders and work plans exists amongst Authority Members to
encourage greater involvement of members and areas of specialism.
A formal scheme of delegation exists for the Authority to the Force and for delegation
within the Force.
The Authority has played a key role in establishing governance arrangements for a
new police joint board to operate in the East Midlands region following the halting of
the national merger process in July 2006.
Corporate governance and risk management
Compliance with policies and procedures are covered by the review work of:
• Police Authority and its committees
• Her Majesty’s Inspectorate of Constabulary (HMIC)
• External audit (KPMG LLP)
• Internal audit (Bentley Jennison)
• Northamptonshire Police Force internal audit
• Independent Police Complaints Commission
• Police Standards Unit
• Health and Safety Executive
• Data Protection Registrar
• Miscellaneous bodies e.g. National Police Improvement Agency, Crown
Prosecution Service (CPS), Police Information Technology Organisation
(PITO) and employment tribunals.
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Risk management is embedded in the activities of the Force, and officers and staff are
encouraged to manage risk in a way appropriate to their duties. The Assistant Chief
Constable chairs the Risk Management Group and an evolving Force risk framework
and register is maintained. A revised strategy was approved in June 2006.
For the Police Authority, risk management arrangements have improved during
2006/07 with the set up of a risk register in February 2006 followed by a process of
training, scoring and enhancing with officers and members to embed it. The register
provided a basis for production of a risk-based internal audit plan for 2007/08 and is
also expected to shape priorities for the Police Authority’s Strategic Board in
2007/08.
Economic, effective and efficient use of resources
The Force and the Authority scrutinise budgets on a regular basis to ensure effective
use of capital and revenue resources. Market tendering, purchasing consortiums and
national framework agreements are used where appropriate in Force expenditure. The
potential for shared services and collaboration will continue to be explored and used,
for example the East Midlands helicopter purchase.
In 2006/07 significant work was carried out on the potential benefits and costs of
greater force collaboration in the East Midlands, following the collapse of the
government force merger proposals. This has resulted in 32 outline business cases
being pursued for both frontline operational aspects e.g. firearms teams, through to
back office shared services. These collaboration opportunities will be progressed
during 2007/08
HMIC carried out an annual Baseline Assessment at the Force, with results published
in October 2006 covering the year 2005/06. The assessment focused on 7 aspects of
performance with outcomes ranging from ‘poor’ to ‘good’ on delivery and ‘stable’ to
‘improved’ on direction of travel. Our Use of Resources was graded both ‘good’ for
delivery and ‘stable’ on the direction of travel.
For the first time in 200/07 we also received a new Police Use of Resources (PURE)
Assessment from our external auditors KPMG LLP. This assessed the Authority and
Force at level 2 – adequate performance.
An Efficiency Plan is published and audited annually to meet Home Office
requirements with the Force significantly exceeding the 3% efficiency targets for
2006/07.
Financial management
The system of internal financial control is based on a comprehensive framework of
regular management information, financial regulations and standing orders,
administrative procedures, including segregation of duties, management supervision,
and a system of delegation and accountability. Managers within the Force and the
Authority develop and maintain the system, along with external inspectors.
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For 2006/07 internal audit was provided by Bentley Jennison as the 4th year of a 5
year contract. Bentley Jennison methodology is consistent with government internal
audit standards, CIPFA’s Code of Practice and relevant CCAB standards and the
effectiveness of audit provision was reviewed formally by Resources Committee in
March 2007. In June 2007 Bentley Jennison gave an overall opinion for 2006/07
placing an adequate level of assurance on our risk management, internal control and
governance processes. A small number of (non-financial) issues were judged relevant
to this SIC, namely a) the need for formal procedures/guidance and a proactive
approach to monitoring internet usage and b) the need for comprehensive and fully
tested business continuity plans at the Force. The Force have accepted these and
agreed management action.
The Annual Audit Letter from KPMG LLP published in December 2006 contains
only 1 recommendation regarding financial management - that the Authority should
continue to keep the level of reserves under review. The KPMG LLP PURE score for
financial management is Level 3 – consistently above minimum requirements,
performing well.
Performance management
Performance management covers the system of objective setting, incentives and
safeguards to ensure good performance and to discourage or challenge poor
performance. For Northamptonshire Police it includes:
• Joint annual agreement by the Force and Authority of “Policing
Northamptonshire” performance targets;
• Operational and service targets set by the Chief Constable and Force managers
and cascaded down to all levels; and
• Monitoring and scrutiny by the Police Authority and its committees, including
the reporting of performance management.
In April 2007, a new committee structure was approved (see below) to help the
Authority focus more sharply on force performance and engagement with
communities. During 2006/07 we welcomed the news that performance and
management had improved to the level to allow “disengagement” by the government
Performance Standards Unit (PSU).
4. Review of Effectiveness
Northamptonshire Police Authority has responsibility for conducting, at least
annually, a review of the effectiveness of the system of internal control. This review is
maintained and informed by:
• The Police Authority, which meets 6 times a year to approve policy, budget
and provide a transparent link between the public and police. It also receives
inspection reports from HMIC;
• The Strategic Board which meets to consider the strategic direction of
Northamptonshire Police, guided by the risk management framework;
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• The Performance Monitoring Committee which monitors performance against
objectives;
• The Resources Committee which considers use of resources and acts as the
audit committee of the Authority, monitoring the operation of internal controls
and covering risk management issues;
• The Equalities and Engagement Committee which considers diversity and
consultation issues with the public and all stakeholders;
• The Partnerships and Collaboration Committee which reviews the
effectiveness of partnership activity, including relevant control issues;
• Regular reports from internal audit (Bentley Jennison) which includes an
annual opinion on the adequacy and effectiveness of internal control systems;
• Reports from external audit (KPMG LLP) including regarding the
effectiveness of the control environment including the audit of financial
statements, data quality, use of resources assessment and partnership working;
• The Force Chief Officer Group which meets weekly to review strategic and
operational issues;
• The work of the Force Risk Management Group, Authority Risk Register team
and Force audit team; and
• Individual portfolio holders within Police Authority Members.
5. Significant Internal Control Weaknesses
For 2006/07, and up to the date of this statement, as far as we are aware there are no
significant weaknesses in Northamptonshire Police’s system of internal controls,
which affected the achievement of its policies, aims and objectives.
_____________________________ Mrs Deirdre Newham
Chair of the Police Authority
Date:
_____________________________ Rosemary Yule
Treasurer to the Police Authority
Date:
_____________________________ Peter Maddison
Chief Constable
Date:
11
STATEMENT OF RESPONSIBILITIES FOR
THE STATEMENT OF ACCOUNTS
The Police Authority’s Responsibilities
The Police Authority is responsible for ensuring that financial management of the
police service is adequate and effective and that a sound system of internal control is
in place including arrangements for risk management. The Police Authority must
make arrangements for the proper administration of its financial affairs and to ensure
that one of its officers, namely the Treasurer, has the responsibility for that
administration.
From 1 April 2004 the Chair of the Authority also has a specific responsibility to sign
the Statement of Accounts following approval at the appropriate meeting.
The Treasurer’s Responsibilities
The Treasurer is responsible for the preparation of the Authority’s Statement of
Accounts in line with statutory best practice set out in the CIPFA/LASAAC Code of
Practice on Local Authority Accounting in Great Britain (“the Code”) and the
Accounts and Audit Regulations 2003.
The accounts are required to present fairly the financial position of the Authority at
the accounting date and its income and expenditure for the year ended 31 March
2007.
In preparing this Statement of Accounts, the Treasurer has:
• selected suitable accounting policies and applied them consistently;
• made judgements and estimates that were reasonable and prudent; and
• complied with the Local Authority SORP 2006.
The Treasurer has also:
• kept proper accounting records which are up to date; and
• taken reasonable steps for the prevention and detection of fraud and other
irregularities.
The Role of the Chief Constable
The Chief Constable, assisted and advised by the Force Director of Resources, is
responsible for day-to-day financial management of the Force and for ensuring that
the Force stays within its approved revenue and capital budgets, in accordance with
the financial framework agreed by the Police Authority.
12
Northamptonshire Police Financial Services staff under the supervision of, and with
the assistance of the Treasurer, carries out the preparation of the accounts and liaises
with the external auditors, KPMG LLP, during the audit process.
Treasurer’s Certificate
I certify that the Statement of Accounts presents fairly the financial position of the
Northamptonshire Police Authority as at 31 March 2007 and its income and
expenditure for the year then ended.
Rosemary Yule BSc ACMA
Treasurer to Northamptonshire Police Authority
Date:
Chair of the Police Authority Certificate
I certify that the Statement of Accounts have been approved by the Police Authority,
at a meeting on 26 June 2007, in accordance with Section 3 of the Accounts and Audit
Regulations 2003.
Councillor Mrs Deirdre Newham
Chair of Northamptonshire Police Authority
Date:
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INDEPENDENT AUDITORS’ REPORT TO MEMBERS OF
NORTHAMPTONSHIRE POLICE AUTHORITY
14
15
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CHANGES TO THE ACCOUNTS FOR 2006/07
In order to bring Local Government Financial Accounts more in line with practices in
the private sector the Chartered Institute of Public Finance and Accountancy (CIPFA)
have made major changes in 2006/07 to the Code of Practice on Local Authority
accounting in the UK: a Statement of Recommended Practice (SORP) especially how
financial performance is reported and how fixed assets and capital expenditure are
accounted for.
This has meant significant changes in the preparation of the 2006/07 Statement of
Accounts, including the re-statement of the previous year’s financial accounts for
2005/06 into the new format.
These changes include:
• Replacement of the consolidated revenue account with an income and
expenditure account and a Statement of the Movement on the general fund
balance – this means that this statement will now conform to UK Generally
Accepted Accounting Practice (GAAP).
• Replacement of the statement of total movements in reserves with a Statement
of Total Recognised Gains and Losses (STRGL) is intended to make this
statement more relevant to the movements in the year on the balance sheet.
• Removal of the requirement for capital charges / abolition of notional interest.
The removal of the requirement to make a Capital Financing Charge (also
known as notional interest) means that the Authority will no longer have to
charge notional interest on the balance sheet valuation of the assets.
• There is no longer a requirement to have an AMRA (Asset Management
Revenue Account), resulting in the charges previously shown within this
account being shown on the face of the income and expenditure account and
reconciliation to the general fund.
• Ordering of Financial Statements - There is a new requirement to group the
core financial statements together (i.e. Income and Expenditure Account,
Statement of Movement on the General Fund Balance, Statement of Total
Recognised Gains and Losses, Balance Sheet and Cash flow Statement)
followed by the notes of the core statements.
Therefore, in the 2006/07 Statement of Accounts, the Authority has adopted three
significant new accounting policies that impact on the comparative figures for
2005/06 in the Income and Expenditure Account.
• Capital financing charges for the use of fixed assets are no longer made to the
revenue accounts.
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• Credits for Government Grants Deferred are now posted to service revenue
accounts and support services rather than credited as a corporate item.
• Gains and losses on the disposal of fixed assets are recognised in the Income
and Expenditure Account.
These changes have had the following impact on the comparative figures for 2005/06
compared with those published in the 2005/06 Statement of Accounts:
Consolidated Removal of Relocation of Recognition of Other 2005/06
Revenue Capital Government gains and Changes Comparatives
Account Financing Grants losses on £’000 in Income &
2005/06 charges Deferred disposal £’000 Expenditure
£’000 £’000 £’000 Account £’000
Crime 56,546 (446) (433) (9,226) 46,441
Policing in the Community 60,531 (447) (435) (9,905) 49,744
Impact on Net Cost – General 118,150 (923) (898) (19,071) 97,258
Fund Services
Net (gain)/loss on disposal 0 0
Asset management revenue account (1,428) 923 898 (56) 337
(Interest Payable and Similar
Charges in 2006/07)
Loan Charges Grant (189) 189 0
Impact on Net Operating 145,947 0 0 0 (18,938) 127,009
Expenditure
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ACCOUNTING POLICIES
GENERAL PRINCIPLES
The accounts have been prepared in accordance with the Code of Practice on Local
Authority Accounting 2006 published by the Chartered Institute of Public Finance
and Accounting (CIPFA). Guidance notes issued by CIPFA on the application of
accounting standards to police authorities have in general been followed and any
exceptions to this are disclosed below.
1 Basis of Transactions
Transactions are recorded on an accruals basis, which means that income and
expenditure is accounted for in the year in which it becomes due regardless of
whether cash has actually been received or paid in the year. Sums payable to
the Authority at 31 March are included as debtors.
All sums payable or estimated to be payable, at 31 March in respect of work
done or goods received up to that date are included as creditors.
2 Government Grants and Contributions
Government grants and other contributions are accounted for on an accruals
basis and recognised in the accounting statements when the conditions for
their receipts have been complied with and there is reasonable assurance that
the grant or contribution will be received. Capital grants are amortised over
the life of the asset via the Deferred Government Grant Account.
3 Reserves and Provisions
The Police Authority maintains reserves to finance expenditure on projects
that will be carried out in future years and to protect the Authority against
unexpected events. In accordance with the Accounting Code of Practice, the
Authority has made provisions for liabilities or losses which are likely to be
incurred, or certain to be incurred, but with uncertain amounts or dates on
which they will arise, by charging expenditure to services in anticipation of
the liability having to be met.
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4 Fixed Assets
Land, operational properties and other operational assets are included in the
balance sheet at the lower of net current replacement cost or net realisable
value.
Non-operational assets are included in the balance sheet at net realisable value.
Vehicles, IT and Communication Equipment, and other equipment have been
valued at historic cost net of depreciation.
4a Capital Charges
The capital charge made to the Revenue Account is for depreciation.
4b Depreciation
The policy of the Authority is such that a charge is made for all fixed assets,
which have a finite useful life. Depreciation is calculated on a straight-line
basis as follows:
Land Nil
Operational Buildings 40 years
Vehicles Over the life of the asset (2-10 years)
IT 3 years
Software Over the life of the asset (3-5 years)
Other Plant & Equipment 5 years
Intangibles 3-5 years
It is the Authority’s policy to charge depreciation in the year of acquisition
and none is made in the year of disposal.
Assets have been valued on 31 March 2003 and are revalued at five yearly
intervals by Lambert Smith Hampton, Saddlers House, Cutter Lane, Cheapside
London.
5 Deferred Charges
Deferred charges represent expenditure which has been properly capitalised
but which does not result in tangible fixed assets in the ownership of the
Authority, e.g. building enhancements at a leasehold building.
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6 Redemption of Debt
Outstanding loan debt relating to police services was transferred to
Northamptonshire Police from Northamptonshire County Council on 1 April
1995. Instalments of principal are charged to revenue in accordance with the
statutory minimum revenue provision, calculated at 4% of this debt.
7 Capital Receipts
100% of capital receipts are available to support capital expenditure.
Individual receipts of less than £6,000 are credited to revenue income.
8 Capital Expenditure
Capital Expenditure is shown in the accounts on an accruals basis in line with
the requirements of FRS18.
9 Stocks and Stores
Stocks and stores are maintained covering such items such as vehicle spares,
uniforms, stationery, office equipment and provisions. Stocks are valued at the
lower of cost or net realisable value in line with the requirements of SSAP9.
10 Short-Term Investments
Investments are shown in the balance sheet at cost less any provision required
for loss in value.
11 Treatment of Grants
Net revenue expenditure is expressed before deducting Government grants in
support of the expenditure of the Authority.
12 Pensions
The Police Officer Pensions Scheme is unfunded and therefore net pension
payments are charged against the year in which they are made, rather than
being provided for by means of a pension fund. A new development this year
is that an employer’s contribution rate has been set and paid into a special
police pensions account along with employee contributions and other items.
All pension payments are met from this account with the Home Office paying
a grant if the account is in deficit, or receiving a payment if the account is in
credit. Over time, it is intended that, nationally, all police pension related
payments shall equal police pension contributions. This will be achieved by
adjusting the employer’s contribution rate. The rate has been fixed for the first
three years of the scheme so is not expected to change until the 2009/10
financial year. The police pensions account is included in these statements.
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The pension costs that are charged to the Authority’s accounts in respect of its
civilian employees are equal to the contributions paid to the funded pension
scheme for these employees. Further costs arise in respect of certain pensions
paid to retired employees on an unfunded basis.
These contributions have been determined on the basis of rates that are set to
meet 100% of the liabilities of the Pension Fund, in accordance with relevant
Government regulations. Following the 2004 valuation, increases were
required to the Authority’s contributions, however the employer’s contribution
rate for 2007/08 will remain the same as for 2006/07.
In assessing the liabilities for retirement benefits at 31 March 2006 for the
2005/2006 accounts a discount rate of 4.9% was used. For the 2006/2007
accounts a rate of 5.4% has been used. This has resulted in a decrease in
liabilities measured at today’s prices of £2.15m for the Local Government
Scheme and an increase of £21.35m for the Police Scheme.
Pensions are shown in the accounts in line with the requirements of FRS17,
which are now shown in the Income and Expenditure Account and further
details of the pension position are set out the notes to the accounting
statements.
13 Leasing
These accounts have been prepared in accordance with SSAP21. Rentals paid
under operating leases have been accrued and accounted for in the period to
which they relate.
14 Interest Charges
Interest on loans is charged to the Income and Expenditure account based on
the amount that is due and payable within the financial year.
15 Overheads
Central departments, such as finance, property services and ICT are fully
recharged to the operational areas by methods appropriate to the individual
overhead department. For example the cost of property services is recharged
on square metres used by the operational area.
22
INCOME AND EXPENDITURE
ACCOUNT
Objective Version
About this Account
This account summarises the resources that have been generated and consumed in providing
services and managing the authority during the last year. It includes all day-to-day expenses
and related income on an accruals basis, as well as transactions measuring the value of fixed
assets actually consumed and the real projected value of retirement benefits earned by
employees in the year.
Under the Best Value Accounting Code of Practice (BVACOP) this account is presented in a format
which allocates and apportions expenditure and income over a number of operational service headings.
Restated 2006/07
2005/06 Net Gross Gross Net
Expenditure Description Note Expenditure Income Expenditure
£000s £000s £000s £000s
46,441 Crime 3 63,873 (2,316) 61,557
49,744 Policing in the Community 3 63,733 (7,691) 56,043
0 National Police Services undertaken locally 0 0 0
0 Exceptional costs of legal settlements 0 0 0
854 Corporate and democratic core 4 855 (157) 698
219 Non distributed costs 406 0 406
97,258 Net Cost of Services 128,868 (10,164) 118,704
0 Loss on the disposal of fixed assets 0
204 Levies to national police services 214
337 Interest payable and similar charges 183
Contribution to the Police Pension Fund
Account in respect of the deficit on the Police
0 Pension Fund 2,691
(604) Interest and investment income (929)
Pensions interest cost and expected return on
29,814 pensions assets 32,712
127,009 Net Operating Expenditure 153,575
0 Non-specific grant - Police Pension Top-up (2,691)
(34,021) Precepts (36,153)
General government grants
(42,630) Police Grant (39,657)
(14,711) Revenue Support Grant (4,787)
(5,482) Specific Grants (6,243)
(10,442) Non-domestic rates distribution (24,801)
19,723 (Surplus)/deficit for the year 39,242
23
INCOME AND EXPENDITURE
ACCOUNT
Subjective Version
About this Account
This account summarises the resources that have been generated and consumed in providing
services and managing the authority during the last year. It includes all day-to-day expenses
and related income on an accruals basis, as well as transactions measuring the value of fixed
assets actually consumed and the real projected value of retirement benefits earned by
employees in the year
This account shows the day-to-day running costs of all resources acquired to undertake operations.
Restated 2006/07
2005/06 Net Gross Gross Net
Expenditure Description Note Expenditure Income Expenditure
£000s £000s £000s £000s
50,365 Police Pay and Allowances 5 72,893 0 72,893
32,747 Police Staff Pay and Allowances 5 35,064 0 35,064
1,559 Other Employee Expenses 6 1,810 0 1,810
84,671 Total Employee Costs 109,767 0 109,767
3,286 Premises Related Costs 2 3,512 0 3,512
2,743 Transport/Travel Costs 2,604 0 2,604
13,201 Supplies and Services 7 8,272 0 8,272
1,231 Agency Expenses (Third Party Payments) 1,763 0 1,763
232 Non distributed costs 406 0 406
2,467 Capital Financing Costs 2,543 0 2,543
(10,573) External Income 0 (10,164) (10,164)
97,258 Net Cost of Services 128,868 (10,164) 118,704
0 Loss on the disposal of fixed assets 0
204 Levies to national police services 214
337 Interest payable and similar charges 183
Contribution to the Police Pension Fund
Account in respect of the deficit on the Police
0 Pension Fund 2,691
(604) Interest and investment income (929)
Pensions interest cost and expected return on
29,814 pensions assets 8 32,712
127,009 Net Operating Expenditure 153,575
0 Non-specific grant - Police Pension Top-up (2,691)
(34,021) Precepts (36,153)
General government grants
(42,630) Police Grant (39,657)
(14,711) Revenue Support Grant (4,787)
(5,482) Specific Grants (6,243)
(10,442) Non-domestic rates distribution (24,801)
19,723 (Surplus)/deficit for the year 39,242
24
STATEMENT OF MOVEMENT ON THE
GENERAL FUND BALANCE
About this Account
The Income and Expenditure Account shows the authority's actual financial performance for the year,
measured in terms of the resources consumed and generated over the last twelve months. However, the
authority is required to raise council tax on a different accounting basis, the main differences being:
Capital investment is accounted for as it is financed, rather than when fixed assets are consumed.
Retirement benefits are charged as amounts become payable to pension funds and pensioners,
rather than as future benefits are earned.
This General Fund Balance compares the authority's spending against the council tax that it raised for the
year, taking into account the use of reserves built up in the past and contributions to reserves earmarked
for future expenditure.
This reconciliation statement summarises the differences between the outturn on the Income and
Expenditure Account and the General Fund Balance.
Restated
2005/06 Description 2006/07
£000s £000s
(Surplus)/deficit for the year on the Income and
19,723 Expenditure Account 39,242
Net additional amount required by statute and non-
statutory proper practices to be debited or (credited) to from
(20,081) the General Fund Balance for the year. page 26 (37,927)
(Increase)/decrease in the General Fund Balance for
(358) the year 1,315
(5,767) General Fund Balance brought forward (6,125)
(6,125) General Fund Balance carried forward (4,810)
25
NOTE OF RECONCILING ITEMS FOR THE
STATEMENT OF MOVEMENT ON THE GENERAL FUND BALANCE
Restated
2005/06 Description 2006/07
£000s £000s £000s
Amounts included in the Income and Expenditure Account
but required by statute to be excluded when determining the
Movement on the General Fund Balance for the year
(119) Amortisation of intangible fixed assets (204)
(5,897) Depreciation and impairment of fixed assets (4,244)
898 Government Grants Deferred amortisation 1,941
Write downs of deferred charges to be financed from capital
0 resources 0
0 Net loss on sale of fixed assets 0
Net charges made for retirement benefits in accordance with FRS
(21,947) 17 (59,103)
(27,065) (61,610)
Amounts not included in the Income and Expenditure
Account but required to be included by statute when
determining the Movement on the General Fund Balance for
the year
270 Minimum revenue provision for capital financing 386
2,072 Capital expenditure charged in-year to the General Fund Balance 1,346
Employer's contributions payable to the Pensions Account and
4,052 retirement benefits payable direct to pensioners 16,829
6,394 18,561
Transfers to or from the General Fund Balance that are
required to be taken into account when determining the
Movement on the General Fund Balance for the year
0 Voluntary revenue provision for capital financing 265
590 Net transfer to or (from) earmarked reserves 4,856
590 5,121
to
Net additional amount required to be (credited) or debited to page
(20,081) the General Fund Balance for the year 25 (37,927)
26
STATEMENT OF TOTAL RECOGNISED GAINS AND
LOSSES
About this Account
This statement brings together all the gains and losses of the authority for the year and shows the
aggregate increase or decrease in its net worth. In addition to the surplus or deficit generated on the
Income and Expenditure Account, it includes gains and losses relating to the revaluation of fixed assets
and re-measurement of the net liability to cover the cost of retirement benefits.
31st March 31st March
2006 Description 2007
£000s £000s
19,723 (Surplus)/deficit for the year on the Income and Expenditure Account 39,242
(303) (Surplus)/deficit arising on the revaluation of fixed assets (123)
97,273 Actuarial (gains)/losses on pension fund assets and liabilities (39,373)
(31) (Surplus)/deficit arising on Joint Venture Assets (153)
116,662 Total recognised (gains)/losses for the year (407)
27
BALANCE SHEET
About this Account
This account shows the overall financial position of Northamptonshire Police Authority
at 31 March 2007. It therefore differs from the other financial accounts shown in this
statement in that it deals with the position of the Authority at the end of the 2006/07
financial year instead of dealing with day-to day transactions within that financial year.
31st March 31st March
2006 Description Note 2007
£000s £000s £000s
Fixed Assets 11-16
156 Intangible Fixed Assets 312
Tangible Fixed Assets
Operational Assets
653 Police Houses 0
15,748 Land and Buildings 18,521
6,811 Vehicles, plant, furniture and equipment 6,646
0 Leased Assets 0
324 EMASU Joint Interest Asset - Helicopter 228
9 EMSOU Joint Interest Assets - Vehicles & Equipt 190
Non- operational assets
3,945 Assets under construction 16 309
0 EMASU Assets under construction - Helicopter 16 1,127
289 Deferred Charges 17 253
27,935 Total Fixed Assets 27,585
11 Long-term investments 11
0 Long-term debtors 18 0
27,946 Total long-term assets 27,596
Current Assets
413 Stocks 19 462
6,160 Debtors and prepayments 20 6,544
10,813 Short-term Investments 21 15,398
5,785 Cash and bank 75
72 EMASU Joint Interest Net Current Assets 97
13 EMSOU Joint Interest Net Current Assets 51
22,626
51,203 Total assets 50,222
Current Liabilities
(500) Short-term borrowing (1,200)
(12,924) Creditors 22 (9,412)
0 Bank overdraft (89)
(10,701)
37,779 Total assets less current liabilities carried forward 39,521
28
BALANCE SHEET (continued)
31st March 31st March
2006 Description Note 2007
£000s £000s
37,779 Total assets less current liabilities brought forward 39,521
(5,799) Long-term borrowing (capital) 23 (5,799)
(1,792) Provisions 24 0
(1,955) Government grants deferred 25 (1,011)
(47) EMASU Joint Interest Government grants deferred (1,169)
0 Deferred liabilities 26 0
(673,407) Liability related to defined benefit pension scheme 27 (676,358)
(645,222) Total assets less liabilities (644,816)
Financed by :-
3,247 Fixed Asset Restatement Account 28 2,184
13,025 Capital Financing Account 29 13,751
0 Useable Capital Receipts Reserve 0
0 Deferred Capital Receipts 0
(673,407) Pensions Reserve (676,358)
6,125 General Fund Balance 30 4,810
5,417 Earmarked Reserves 30-31 10,273
349 EMASU Joint Interest Reserve 283
22 EMSOU Joint Interest Reserve 241
(645,222) Total net worth (644,816)
29
CASH FLOW STATEMENT
About this Account
This statement shows the cash generation and cash absorption
movements during the year.
31st March 31st March
2006 Description Note 2007
£000s £000s £000s £000s
REVENUE ACTIVITIES
Cash Outflows:
99,225 Cash paid to and on behalf of Employees, including pensions 101,900
11,201 Other Operating Cash Payments 23,912
110,426 125,811
Cash Inflows:
(34,021) Council Tax Receipts (36,153)
(10,442) Non-Domestic Rates Receipts (24,801)
(14,711) Revenue Support Grant (4,787)
(42,630) Police Grants (39,657)
(6,217) Other Government Grants 34 (8,934)
(10,013) Other Receipts (10,164)
(118,034) (124,497)
(7,608) NET (INFLOW) OUTFLOW FROM REVENUE 32 1,315
Returns on Investments and Servicing of Finance:
319 Interest Paid 183
3 Interest Paid on Finance Lease 0
1 Debt Charges 0
(604) Interest Received (929)
(281) (746)
CAPITAL ACTIVITIES
Cash Outflows:
4,916 Purchase of Fixed Assets 4,614
Increase in Investments 33 4,585
Cash Inflows:
(635) Sale of Fixed Assets (1,332)
732 Capital Grants (1,937)
5,013 5,930
(2,876) NET (INFLOW) OUTFLOW BEFORE FINANCING 6,499
Financing:
0 New Loans Raised (700)
10 Capital Element of Finance Lease rentals 0
1,500 Repayments of amounts borrowed 0
1,510 (700)
(1,366) DECREASE/ (INCREASE) IN CASH 33 5,799
30
POLICE PENSION FUND ACCOUNT
About this Account
This statement shows movements of funds related to police officer pensions. The amounts that must be
debited and credited to the Pension Fund Account are specified by regulation. The main items of income
are employees and employers contributions. The main items of expenditure are pension payments to
retired officers and their dependants. Pensions are partly paid by an initial lump sum, called a
commutation because it reduces future regular payments, and by regular monthly payments.
Transfer Values received or paid are in respect of officers changing employer and taking their accrued
pension benefits with them.
The police pension scheme is non-funded, which means that there are no investment assets. The fund is
balanced to nil each year by receipt of pension top-up grant from the Home Office or by paying the
surplus to the Home Office.
The fund is administered and managed by Northamptonshire Police, who retain the services of
Northamptonshire County Council's pensions department to advise on aspects of its operation.
These accounting arrangements for police pensions came into force from 1st April 2006. There are no
equivalent figures for previous years, because the accounting arrangements were on a different basis.
2005/06 Description 2006/07
£000s £000s
Contributions receivable
- from employer
- normal (10,286)
- early retirements 0
- other - ill health capital equivalent payments (223)
- from members (4,577)
Transfers In
- individual transfers in from other schemes (234)
Benefits payable
- pensions 13,323
- commutations and lump sum retirement benefits 4,436
- lump sum death benefits 140
Payments to and on account of leavers
- refunds of contributions 18
- individual transfers out to other schemes 94
Sub-total for the year before transfer from the police
0 authority of an amount equal to the deficit 2,691
Additional funding payable by the police authority to
fund the deficit for the year (2,691)
0 Net amount payable/receivable for the year 0
31
NOTES ON THE CORE FINANCIAL STATEMENTS
1 Expenditure on Publicity
Expenditure on publicity as defined in Section 5 of the Local Government
Finance Act 1986 was:
2005/06 2006/07
£000 £000
576 Press and public relations staff 562
167 Recruitment/Adverts 62
53 Publications 28
75 Other 92
871 744
(3) Publications sponsorship income -
868 744
2 Leases
At 31 March 2007 the Authority held various properties on operating lease
arrangements as follows:
Land and Buildings Radio Sites
£000 £000
Charged in the current year 394 26
Amounts falling due
Within 12 months 412 26
Within 2 to 5 years 326 8
In 5 years and more 199 4
The Authority held one fixed asset under a finance lease, which expired in
March 2006. The finance lease payment for the year amounted to £nil
(2005/06 £2,609).
3 Re-organised Basic Command Units
The Force re-organised from 4 Basic Command Units (BCU – also known as
Areas) to 2 BCUs on 1st April 2006.
4 Force Mergers Income
The Corporate and Democratic Core income figure is exceptionally high in
2006/2007 due to grant income received in respect of work towards Force
Mergers in the sum of £98,700.
5 Employee Remuneration
32
2006/07
Police Police
2005/2006 Earnings Bands Total
Officers Staff
Employees
24 £50,001 to £60,000 26 5 31
11 £60,001 to £70,000 7 6 13
4 £70,001 to £80,000 4 0 4
1 £80,001 to £90,000 1 1 2
2 £90,001 to £100,000 2 0 2
0 £100,001 to £110,000 0 0 0
1 £110,001 to £120,000 1 0 1
43 Total 41 12 53
6 Member Allowances
During 2006/07 a total of £156,762 was paid in Allowances and
Reimbursement for Police Authority Members (2005/06 £170,866).
7 Forensic Science Service Costs
During the year 2006/07, the Authority paid the Forensic Science Service
£1.451m (2005/06 £1.980m).
8 Pensions
As part of the terms and conditions of employment of its officers and other
employees, the Authority offers retirement benefits. Although these benefits
will not actually be payable until the employees retire, the Authority has a
commitment to make the payments that needs to be disclosed at the time that
employees earn their future entitlement.
The Authority participates in two pension schemes, as follows:
The Local Government Pension Scheme for police staff employees,
administered by Northamptonshire County Council. This is a funded scheme,
meaning that the Authority and employees pay contributions into a fund,
calculated at a level intended to balance the pensions liabilities with
investment assets. The Actuary to the fund is Mercers Human Resource
Consulting.
The Police Pensions Scheme for police officers. This is an unfunded scheme,
meaning that there are no investment assets built up to meet the pensions
liabilities, and cash has to be generated to meet actual pensions payments as
they eventually fall due. The police scheme liabilities were assessed by the
Government’s Actuary Department (GAD). A new arrangement commenced
on 1st April 2006 that required a police pension account to be created and
credited with employer contributions. Any year end balance was to be paid to
the Home Office if a surplus, or met by the Home Office as a pensions top up
33
grant if a deficit. So for the first time in 2006/07, the table below shows
Employer’s contributions into the Police Pension Scheme.
Transactions Relating to Retirement Schemes:
We recognise the cost of retirement benefits in the Net Cost of Services when
employees earn them, rather than when the benefits are actually paid as
pensions. However, the charge we are required to make against the precept is
based on the cash payable in the year, so the real cost of retirement benefits is
reversed out in the Statement of Movement in the General Fund Balance. The
following transactions have been made in the Income and Expenditure
Account and Statement of Movement in the General Fund Balance during the
year:
Local Government Police Pension
Pension Scheme Scheme
£000 £000
2005/2006 2006/2007 2005/2006 2006/2007
Income and Expenditure Account
Net Cost of Services
Current service cost (3,331) (3,995) (20,620) (21,990)
Past service gain (cost) 1,439 (96) (1,220) (310)
Net Operating Expenditure
Interest Costs (3,140) (3,529) (29,070) (32,060)
Expected return on scheme assets 2,396 2,877 0 0
Net Charge to the Income and Expenditure (2,636) (4,743) (50,910) (54,360)
Account
Statement of Movement in the General
Fund Balance
Reversal of net charges made for retirement 2,636 4,743 50,910 54,360
benefits in accordance with FRS 17
Actual amount charged against the
Police Fund Balance for pensions in the
year
Employers contributions payable to the 2,875 3,056 0 10,286
scheme
Retirement benefits payable to pensioners 0 0 15,570 18,490
34
9 Related Party Transactions
The Police Authority is required to disclose material transactions with related
parties – bodies or individuals that have the potential to control or influence
the Authority or to be controlled or influenced by the Authority. Disclosure of
these transactions allows readers to assess the extent to which the Authority
might have been constrained in its ability to operate independently or might
have secured the ability to limit another party’s ability to bargain freely with
the Authority. This note has been completed in accordance with the Code of
Practice 2004 and FRS 8. All Members and staff are required to register any
interests. In 2006/07 there were no issues with respect to conflicts of interest.
During this year:
2005/06 2006/07 2006/07 2006/07
Net Receipts Payments Receipts Net Receipts
£ £ £ £
Northamptonshire County Council (2,295,483) 780,969 (2,467,751) (1,686,782)
Wellingborough Borough Council (3,573,750) 73,702 (3,907,672) (3,833,970)
Corby Borough Council (2,559,020) 54,483 (2,603,687) (2,549,204)
East Northamptonshire District (4,434,265) 59,019 (4,736,821) (4,677,802)
Council
Kettering Borough Council (4,420,549) 120,149 (4,854,930) (4,734,781)
South Northamptonshire District (4,970,461) 35,896 (5,333,822) (5,297,926)
Council
Northampton Borough Council (9,825,541) 644,045 (10,280,071) (9,636,026)
Daventry District Council (4,312,186) 37,812 (4,659,880) (4,622,068)
University College Northampton 1,758 135,984 (294) 135,690
Home Office:
General Grants
Police Grant (42,629,754) (39,657,024) (39,657,024)
Revenue Support Grant (14,710,945) (4,787,438) (4,787,438)
Non Domestic Rates (10,441,997) (24,800,805) (24,800,805)
Specific Grants
Loan Charges Grant (189,187) (234,690) (234,690)
Crime Fighting Fund (2,918,372) (2,560,404) (2,560,404)
Forensic Grant (466,600) (479,436) (479,436)
Capital Grant (1,286,000) (1,380,000) (1,380,000)
Rural Grant (357,968) (715,932) (715,932)
Neighbourhood Policing (296,961) (606,000) (606,000)
Special Priority Payments (722,808) (722,810) (722,810)
Basic Command Unit (529,994) (529,815) (529,815)
Probationers Grant 0 (237,000) (237,000)
Counter Terrorism Grant 0 (157,382) (157,382)
Police Pension Top-Up 0 (2,690,883) (2,690,883)
Total (110,940,083) 1,942,059 (118,404,547) (116,462,448)
35
10 Audit Costs
During the year the Authority incurred the following fees relating to external
audit and inspection:
Statutory 2005/06 2006/07
£ £
Audit of Accounts 58,000 66,000
Certification of grant - -
claims
Statutory inspection - -
Other services -
58,000 66,000
11 Valuation of Fixed Assets
The values for Land and Buildings were made in accordance with the
Appraisal and Valuation Manual published by the Royal Institute of Chartered
Surveyors. Assets have been valued by an external company, Lambert Smith
Hampton, Cheapside, London. The last valuation was undertaken on 31st
March 2003. The next valuation is due on 31st March 2008.
Vehicle information has been taken from the Vehicle Fleet Information
System and IT from the Communications Technology Department.
12 Future Capital Commitments
The Authority has plans for expenditure on the following capital projects:
2007/08 Criminal Justice Centre £1,919,000
Vehicle Purchases £1,021,000
IT Hardware £1,136,000
2008/09 Criminal Justice Centre £6,819,000
Vehicle Purchases £767,000
IT Hardware £572,000
2009/10 Criminal Justice Centre £4,417,000
Vehicle Purchases £685,000
IT Hardware £1,006,000
36
13 Statement of Physical Assets
An analysis of major fixed assets owned by the Authority is shown below:
31 March 2006 31 March 2007
Number £000 Number £000
Police Stations 37 15,748 35 18,521
Police Houses 6 653 0 0
Vehicles 400 2,714 428 2,497
Plant & Equipment - 4,106 - 4,339
Helicopter 1 324 1 228
Total N/A 23,545 N/A 25,585
No number has been placed in the Plant and Equipment box. This is because
the item covers a large number of different items including radio and
communication base stations, computer hardware including PCs, radio masts,
telephone chargers and miscellaneous equipment.
14 Movement of Fixed Assets
Plant
Land Vehicles IT Intangibles Furniture Leased EMSOU Helicopter Total
and Equipment & Asset Assets
Buildings Equipment
£000 £000 £000 £000 £000 £000 £’000 £000 £000
Cost or Value 18,359 5,044 6,213 813 10,633 75 12 480 41,629
at 31 March
2006
Additions in 3,492 815 1,995 360 819 218 7 7,706
the year
Disposals in (1,332) (73) (1,405)
the year
Revaluations 410 (533) (123)
Cost or Value 20,929 5,253 8,208 1,173 11,452 75 230 487 47,807
at 31 March
2007
Depreciation (1,958) (2,330) (4,327) (657) (8,422) (75) (3) (156) (17,928)
at 31 March
2006
Depreciation (534) (807) (1,873) (204) (889) (37) (103) (4,447)
in the year
Disposals in 84 381 465
the year
Revaluations
Depreciation (2,408) (2,756) (6,200) (861) (9,311) (75) (40) (259) (21,910)
at 31 March
2007
Net Book 18,521 2,497 2,008 312 2,141 0 190 228 25,897
Value at
31 March
2007
Net Book 16,401 2,714 1,886 156 2,211 0 9 324 23,701
Value at
31 March
2006
37
15 Summary Capital Account
Actual capital expenditure during the year and its sources of finance:
2005/06 2006/07
Description
£000 £000
Land and Buildings
- New Police Buildings -
372 Improvements and Adaptations 1,152
Vehicles and Equipment
1,225 Vehicles 1,319
1,864 ICT 1,016
1,262 Other Equipment 862
Intangibles
193 Software 265
4,916 Total 4,614
Financing of Expenditure
2,208 Capital Grants 1,936
636 Capital Receipts 1,332
1,735 Capital Reserve -
16 Direct Revenue Financing 13
321 General Reserves 1,333
4,916 Total 4,614
16 Assets Under Construction
Plant,
Land and IT Furniture & Intangible
Buildings Vehicles Equipment Equipment (Software) Helicopter Total
£000 £000 £000 £000 £000 £000 £000
Value at 31 March 2006 2,229 578 595 467 76 0 3,945
Value at 31 March 2007 50 132 72 5 50 1,127 1,436
38
17 Deferred Charges
Deferred charges are expenditure of a capital nature, which have been
capitalised but do not result in tangible fixed assets in the ownership of the
Authority.
£000
Balance at 1 April 2006 289
Expenditure this year -
Charge to revenue account (36)
Balance at 31 March 2007 253
18 Long Term Debtors
There were no long-term debtors in 2006/07 or 2005/06.
19 Stocks
31 March 2006 31 March 2007
£000 £000
Vehicle Fuel 72 79
Vehicle parts and operational equipment 126 144
Uniforms 114 143
Printing and stationery 38 46
Other 38 24
Northampton Area 13 26
Western Area 12 0
Total 413 462
20 Debtors
31 March 2006 31 March 2007
£000 £000
Home Office 693 1,777
Sundry Debtors 2,963 2,197
Her Majesty’s Customs & Excise 869 825
Provision for Bad Debt (61) (61)
Prepayments 1,696 1,806
Total 6,160 6,544
39
21 Investments
The Authority invests its surplus cash balances in external investments in
order to generate income by earning interest. Some of the surplus cash is
managed externally by an Investment Manager (Investec).
31 March 2006 31 March 2007
£000 £000
External Investment Manager 10,730 11,327
Short Term Deposits 83 4,071
Total 10,813 15,398
The interest earned on investments has been credited to and is disclosed in the
Income & Expenditure Revenue Account.
22 Creditors
31 March 2006 31 March 2007
£000 £000
Inland Revenue 2,016 2,152
Employees’ Pay Deductions 335 395
Receipts in Advance 973 1,771
Other Creditors 9,600 5,094
Total 12,924 9,412
23 Long Term Borrowing
Source of Loan 31 March 2006 31 March 2007
£000 £000
Public Works Loan Board 5,799 5,799
Total 5,799 5,799
These borrowings are repayable as follows:
31 March 2006 31 March 2007
£000 £000
Maturing 1-2 years 0 0
Maturing 2-5 years 0 0
Maturing 5-19 years 4,499 4,499
Maturing 10-20 years 0 0
Maturing in more than 20 years 1,300 1,300
5,799 5,799
40
24 Provisions
Provisions to meet specific items of future expenditure and income exist as
follows:
Balance at Movement Balance at
31 March 2006 £000 31 March 2007
£000 £000
Insurance 1,792 (1,792) 0
Total 1,792 (1792) 0
We have reviewed our provision and transferred the insurance provision to the
insurance reserve in the year. We will undertake a further review of our
insurance liability in 2007/08.
25 Deferred Government Grants and Contributions
£000
Balance at 31 March 2006 1,955
Grants received in year 1,936
Transfer to revenue (1,941)
Transfer to Capital Finance Account (939)
Balance at 31 March 2007 1,011
26 Deferred Liability
This represents the capital value of finance leases still outstanding in respect
of assets financed in this way. It is written down annually as annual payments
are made under the agreements.
The Authority has no outstanding liabilities as at 31 March 2007 (31 March
2006 £nil).
41
27 Pensions Liability
The underlying assets and liabilities for retirement benefits attributable to
the Authority at 31st March are as follows:
Local Government Police Pension Total
Pension Scheme Scheme
£m £m £m
At 31st March: 2006 2007 2006 2007 2006 2007
Estimated Liabilities
in the scheme (70) (73) (650) (655) (720) (728)
Estimated Assets
in the scheme 46 52 0 0 46 52
Net asset/(liability) (24) (21) (650) (655) (674) (676)
The liabilities show the underlying commitments that the authority has in the long run
to pay retirement benefits. The total liability of £676m has a substantial impact on the
net worth of the authority as recorded in the balance sheet, resulting in a negative
overall balance of £649m. However, statutory arrangements for funding the deficit
mean that the financial position of the authority remains healthy:
the deficit on the local government scheme will be made good by increased
contributions over the remaining working life of employees, as assessed by the
scheme actuary.
finance is only required to be raised to cover police pensions when the
pensions are actually paid.
Basis for Estimating Assets and Liabilities
Liabilities have been assessed on an actuarial basis using the projected unit method,
an estimate of the pensions that will be payable in future years dependent on
assumptions about mortality rates, salary levels, etc. The Police Scheme liabilities
were assessed by the Government Actuaries Department (GAD) and the Local
Government Pension Scheme by Mercer Human Resource Consulting Limited, an
independent firm of actuaries.
The main assumptions used in their calculations have been:
Local Government Police Pension
Pension Scheme Scheme
2005/06 2006/07 2005/06 2006/07
Rate of Inflation 2.9% 3.1% 3.2% 3.4%
Rate of increase in salaries 4.4% 4.6% 4.7% 4.9%
Rate of increase in pensions 2.9% 3.1% 3.2% 3.4%
Take up of option to convert annual
pension into retirement grant 50.0% 50.0% n/a n/a
Rate for discounting scheme liabilities 4.9% 5.4% 4.9% 5.4%
42
Changes to the Local Government Pension Scheme permit employees retiring on or
after 6 April 2006 to take an increase in their lump sum payment on retirement in
exchange for a reduction in their future annual pension. On the advice of our
actuaries we have assumed that 50% of employees retiring after 6 April 2006 will take
advantage of this change to the pension scheme. Our actuaries have advised that this
will reduce the value of the Authority’s pension liabilities and this has been included
within Non-Distributed Costs on the face of the Income and Expenditure Account.
The Police Pension Scheme has no assets to cover its liabilities. Assets in the County
Council Pension Fund are valued at fair value, principally market value for
investment, and consist of the following categories by proportion of the total assets
held by the Fund:
Long Term 31 March 2006 31 March 2007
Return
% % %
Equity Investments 7.50% 70.1% 70.3%
Gilts 4.70% 11.3% 12.6%
Other Bonds 5.40% 9.3% 7.1%
Property 6.50% 5.2% 7.1%
Cash and Liquidity 5.25% 4.1% 2.9%
Total Percentage 100.0% 100.0%
Actuarial Gains and Losses
The actuarial gain can be analysed into the following categories, measured as
absolute amounts and as a percentage of assets and liabilities. The actual
performance % is based on assets for that category, and on liabilities for actuarial,
demographic and net gain/(loss):
Local Government Pension Scheme
Differences between Differences between Changes in the Net Gain/ (Loss)
the expected and the actuarial demographic and
actual return on assumptions about financial £million and %
assets (and liabilities and actual assumptions used in
proportion of assets) experience estimate liabilities
2002/03 £m £7.26 £0.00 £0.00 £7.26
% 35.16% 0.00% 0.00% 35.16%
2003/04 £m £0.00 £4.10 £0.00 £4.10
% 0.00% 10.80% 0.00% 10.80%
2004/05 £m £1.82 (£1.45) (£11.70) (£11.33)
% 5.20% (2.60%) (20.70%) (18.10%)
2005/06 £m £6.40 (£2.00) (£6.50) (£2.10)
% 13.60% (2.90%) (9.20%) 1.50%
2006/07 £m (£0.58) £0.00 £4.40 £3.82
% (1.10%) 0.00% 6.00% 4.90%
43
Police Pension Scheme
Differences between Differences between Changes in the
the expected and the actuarial demographic and Net Gain/ (Loss)
actual return on assumptions about financial assumptions £million and %
assets (and liabilities and actual used in estimate
proportion of assets) experience liabilities
2002/03 £m £0.00 £11.86 £0.00 £11.86
% 0.00% 3.81% 0.00% 3.81%
2003/04 £m £0.00 (£79.22) £0.00 (£79.22)
% 0.00% (19.23%) 0.00% (19.23%)
2004/05 £m £0.00 £7.91 (£105.17) (£97.26)
% 0.00% 1.50% (19.60%) (18.10%)
2005/06 £m £0.00 £21.07 (£116.24) (£95.17)
% 0.00% 3.20% (17.82%) (14.62%)
2006/07 £m £0.00 (£10.15) £45.70 £35.55
% 0.00% (1.59%) 7.06% 5.47%
28 Fixed Asset Restatement Account
£000
Balance at 31 March 2006 3,247
Revaluation and restatement of Fixed Assets 342
Disposal of Fixed Assets (1,405)
Balance at 31 March 2007 2,184
29 Capital Financing Account
The capital financing account contains the amounts that are required by statute
to be set aside from the capital receipts for the repayment of external loans and
the amount of capital expenditure financed from revenue and capital receipts.
£000 £000
Balance at 31 March 2006 13,025
Capital Financing
- Usable capital receipts used 1,332
Less paid to EMASU (389) 943
- Direct revenue financing 1,046
Minimum revenue provision 386
Deferred Government Grants Amortised 1,941
Less Depreciation (4,447) (2,120)
Earmarked Capital Reserves 300
Less paid to EMASU (300) 0
Previous Year Projects over funded (82)
Transfer from Deferred Capital Grant 939
Balance at 31 March 2007 13,751
44
30 Financial Reserves
On 31 March 2007 total reserves stood at £15,083,000. This was made up as
follows:
31 March Transfers Transfers 31 March
2006 In Out 2007
£000 £000 £000 £000
Earmarked Revenue
Reserves:
Expenditure transferred 909 1,535 (909) 1,535
to future years
Insurance 635 2,026 0 2,661
Pensions 1,430 936 0 2,366
Copy Bureau 38 0 0 38
Helicopter Replacement 199 101 (300) 0
Police Authority 25 0 0 25
Safety Camera 294 0 (294) 0
3,530 4,598 (1,503) 6,625
Earmarked Capital
Reserves:
Future Capital Spending 668 2,980 0 3,648
Usable Receipts 1,219 1,332 (2,551) 0
1,887 4,312 (2,551) 3,648
Earmarked Reserves 5,417 8,909 (4,054) 10,273
General Fund Balances 6,125 0 (1,315) 4,810
Total 11,542 8,909 (5,369) 15,083
Northamptonshire Police Authority operates a devolved financial management
policy. Budget Holders are able to carry forward both underspends and
overspends against their budgets. At the end of 2006/07 a net £0.626m was
transferred to reserves giving a carry forward of £1,535,000.
The insurance reserve is required to meet potential future insurance claims.
The pensions reserve is maintained for those liabilities relating to Police
Officers pension payments that still fall to be met by the Authority. These
include one-off lump sum payments due when an officer retires on ill health
and payments of injury awards.
The reserve for future capital spending has been created from unused capital
grant and budget revenue contribution to capital, and exists to ensure the
Authority can continue to fund its capital programme at the planned levels.
45
31 Usable Capital Receipts Reserve
£000
Balance at 31 March 2006 1,219
Receipts in year 1,332
Used in year (1,332)
Transferred to Capital Reserve (1,219)
Balance at 31 March 2007 0
32 Cash Flow – reconciliation to the Income & Expenditure Account
2005/06 2006/07
£000 £000
(358) Net (surplus)/deficit for the year 1,315
Add back:
(2,072) Revenue contributions to capital (1,346)
- Repayment of debt -
- Increase/(decrease) in provisions 1,792
(590) Movements (to)/from reserves (4,856)
- Non-distributable Gain -
6,018 Capital charges to services 4,484
(898) Amortisation of Deferred Grant (1,941)
(321) External Interest Paid (183)
(13) Debt Management expenses -
(3) Interest on finance leases -
(3,931) Provision for depreciation (4,448)
189 Loan Charges Grant -
604 Interest Received 929
- Other (28)
(1,375) Operating (Profit)/Loss Before Interest (4,283)
- Joint Venture Profits -
(270) Capital Financing (386)
Movement:
- Increase in Investments 4,585
77 Stocks and work in progress (2,497)
(6,040) Net movement in debtors and creditors 3,896
(7,608) Net Outflow/(Inflow) from Revenue Activities 1,315
46
33 Cashflow - Movements in Liquid Resources
Balance at Movement in Balance at
1 April 06 the Year 31 March 07
£000 £000 £000
Bank 5,785 (5,799) (14)
Short term investments 10,813 4,585 15,398
16,598 (1,214) 15,384
Liquid resources represent funds managed, which can be realised within 24
hours.
34 Cashflow – Details of Other Government Grants
2005/06 2006/07
£000 £000
Loan Charges Grant 189,187 234,690
Crime Fighting Fund 2,918,372 2,560,404
Forensic Grant 466,600 479,436
Rural Grant 357,968 715,932
Basic Command Unit Grant 529,994 529,815
Special Priority Payments 722,808 237,000
Probationers Grant 0 722,810
Counter Terrorism Grant 0 157,382
Neighbourhood Policing 296,961 606,000
Police Pension Top-up Grant 0 2,690,883
Total - Other Government Grants 5,481,890 8,934,352
47
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