BROXTOWE BOROUGH COUNCIL

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					   BROXTOWE BOROUGH COUNCIL
  ANNUAL STATEMENT OF ACCOUNTS
            2003/2004

                                CONTENTS

                                               Page

Statement of Responsibilities                     2


Statement on the System of Internal Control     3-7


Explanatory Foreword                           8 - 12


Statement of Accounting Policies              13 - 16


Consolidated Revenue Account                  17 - 22


Housing Revenue Account                       23 - 26


Collection Fund                               27 - 28


Consolidated Balance Sheet                    29 - 36


Statement of Total Movements in Reserves      37 - 39


Cash Flow Statement                           40 - 43


Auditors Report                                   44
Broxtowe Borough Council                                                          Annual Statement of Accounts

                     STATEMENT OF RESPONSIBILITIES FOR THE
                           STATEMENT OF ACCOUNTS
The Authority’s Responsibilities

The authority is required:

       to make arrangements 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 authority, that officer is the
        Director of Finance,

       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’s Responsibilities

The Director of Finance is responsible for the preparation of the authority’s statement of accounts in
accordance with proper practices as set out in the CIPFA/LASAAC Code of Practice on Local Authority
Accounting in the United Kingdom (‘the Code of Practice’).

In preparing this statement of accounts, the Director of Finance has:

       selected suitable accounting policies and then applied them consistently;

       made judgements and estimates that were reasonable and prudent;

       complied with the Code of Practice

The Director of Finance has also:

       kept proper accounting records which were up to date

       taken reasonable steps for the prevention and detection of fraud and other irregularities




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Broxtowe Borough Council                                                      Annual Statement of Accounts


             STATEMENT ON THE SYSTEM OF INTERNAL CONTROL

Scope of Responsibility

Broxtowe Borough Council 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. The Council also has a duty under the Local Government Act 1999 to
make arrangements to secure continuous improvement in the way in which its functions are exercised having
regard to a combination of economy, efficiency and effectiveness. In discharging this overall responsibility the
Council is also responsible for ensuring that there is a sound system of internal control which facilitates the
effective exercise of the Council’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 Council’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 for the year ended 31 March 2004 and up to the date of
approval of the Statement of Accounts.

The Internal Control Environment

Establishing and Monitoring Council Priorities and Objectives

The Council reviews its internal control environment on an ongoing basis. Up to October 2003, achievement of
Council policies and objectives was monitored through the establishment of key tasks, service standards and
performance measures for all services. At the cabinet meeting of 14 October 2003 the Council adopted a new
performance management framework. This included re-statement of the five corporate objectives that underpin
the Council’s Community Strategy together with a fourteen-point improvement plan, prepared following the
Council’s comprehensive performance assessment. Twenty-three service plans have been developed covering
all services to contribute towards the achievement of the corporate objectives. These are supported by the
Council’s communications strategy and the developing procurement strategy.

Four actions within the improvement plan are subject to cabinet monitoring. The relevant select committee
monitors the remaining ten actions. These link with select committee monitoring of service plans.

This framework will be developed further during 2004/05 through the integration of service and financial
planning.

Policy and Decision-making

The Council publishes a Forward Plan detailing all key decisions to be taken in the following six months. The
Council’s decision-making process is defined in the Constitution and can be summarised as follows:

        Policy is decided by Council
        Cabinet is allocated authority by Council to deliver policy
        Cabinet works to a Forward Plan of forthcoming decisions for the six months ahead
        The work of the cabinet is scrutinised by Select Committees
        Select Committees develop their own work programmes for the review of Council services in addition
         to scrutinising the work of the cabinet
        Separate committees exist for Development Control, Licensing and Appeals, Standards and Crime
         and Disorder Reduction
        Regular meetings take place between the Chief Executive, Chief Officers, the Leader of the Council,
         cabinet members and committee chairs to discuss, develop and propose Council policy



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Broxtowe Borough Council                                                       Annual Statement of Accounts


Compliance
Policies, Procedures, Laws and Regulations

The Council’s statutory officers are the Chief Executive, the Section 151 Officer and the Monitoring Officer.
They are responsible for ensuring that the Council acts within the law and in accordance with established
policies and procedures. The Section 151 Officer is specifically responsible for the proper discharge of
financial arrangements and must advise the Council where any proposal might be unlawful or where
expenditure is likely to exceed resources.

Chief Officers are responsible for ensuring that legislation and policy relating to service delivery and health and
safety are implemented in practice.

Compliance
Risk Management

The Council’s risk management policy and strategy statement were approved at the cabinet meeting of 15
April 2003. The Council subsequently developed a Strategic Risk Register which is held on the Council’s
website and updated with changes to risks and action taken to mitigate risks. The Council has both a Strategic
and an Operational Risk Management Group with representation from all directorates.

All key decision reports submitted to cabinet contain a risk assessment, which are used to update the Strategic
Risk Register. All action points within service plans are required to be risk assessed.

Further work is being carried out to integrate risk management fully into the Council’s working practices and to
co-ordinate risk management with the work of the internal audit division.

Continuous Improvement

Each year the Council publishes its Corporate Performance Plan showing how it performed against national
and local performance indicators and detailing performance targets for the next three years. The Performance
Plan also sets out the Council’s improvement priorities.

The Council has a programme of best value reviews, which is designed to ensure that all services are
subjected to a fundamental review within a specified time period. Action points arising from best value reviews
feed into the Council’s service planning process.

There is member representation on best value review teams. A cross-departmental officer-working group
monitors progress in completing reviews and in achieving performance targets.

Financial Management

The Council’s financial management framework is summarised as follows:

       Three-year revenue Medium Term Financial Strategy
       Three-year Capital Strategy
       Detailed Annual Budget Strategy
       Co-ordination of revenue and capital budget strategies with Treasury Management Strategy,
        Investments Strategy and Prudential Indicators
       Financial management exercised under the umbrella of the Council’s Financial Regulations and
        Standing Orders
       Monthly monitoring of capital budgets undertaken by Chief Officers and Members
       Quarterly monitoring of revenue budgets by Chief Officers with reference of significant variances on to
        cabinet
       Annual out-turn position reported to cabinet.

Performance Management

At the cabinet meeting of 14 October 2003 the Council implemented a new performance management
framework to measure the achievement of the Council’s objectives. Details are given under Council policies
and objectives above.


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Broxtowe Borough Council                                                      Annual Statement of Accounts


Review of Effectiveness

The Council 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
internal auditors and the Chief Officers within the authority, who have responsibility for the development and
maintenance of the internal control environment, and also by comments made by the external auditors and
other review agencies and inspectorates.

The Council

The Council sets and reviews all policy under which the authority operates. The Council approves:

       The Constitution
       The Performance Management Framework
       The Performance Improvement Plan
       The annual Corporate Performance Plan
       The Community Strategy
       The Crime and Disorder Reduction Strategy
       The Housing Strategy
       The annual budget and council tax levels

The Cabinet

The cabinet enacts policy set by the Council and facilitates decision-making through all party membership. The
cabinet:

       Implements and reviews corporate governance arrangements
       Recommends the Council’s corporate objectives and key priorities
       Sets the performance management framework necessary to measure success against key priorities
       Links all decision-making to the Council’s key priorities
       Monitors the Council’s ‘top four’ priorities
       Oversees Strategic Risk Management
       Approves the Statement of Accounts and the Statement on Internal Control
       Establishes Working Groups to review and recommend policy
       Reviews the structure and establishment of employees

Scrutiny Committees

The Council’s four scrutiny committees; Planning and Community Development, Technical and Works,
Resources and Housing, Health and Leisure review decisions made by the cabinet. Cabinet members attend
the meetings to answer questions on decisions made and provide information on forthcoming issues to be
considered at cabinet meetings. In addition, scrutiny committees set their own work programmes for future
meetings.

The Resources Committee performs the function of an Audit Committee and receives reports from the
Council’s Internal Audit Division.

Scrutiny Committees receive details of the Council’s risk management processes through the monitoring of
service delivery plans.

Chief Officers

Chief Officers are responsible for ensuring proper standards of internal control within their departments.
Ongoing reviews are undertaken throughout the year. At the end of the financial year Chief Officers are
required to confirm that they have reviewed the system of internal control and identify any areas where
improvements are necessary.




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Broxtowe Borough Council                                                      Annual Statement of Accounts

Internal Audit

Internal Audit is responsible for the review of the systems of internal control and for giving an opinion on both
the corporate and service specific standards in place. The three-year Audit Strategy covers all activities of the
Council at a level and frequency determined using a risk management methodology.

An annual Audit Plan governs each year’s activity and at the completion of each audit, a report is produced for
management with recommendations for improvement. Half-yearly reports covering the previous six months
activity are submitted to the Resources Select Committee for scrutiny. The Resources Select Committee can
request further audit review to be undertaken.

External Audit

The external auditors review the Council’s arrangements for:

        Preparing accounts in compliance with statutory and other relevant requirements
        Ensuring the proper conduct of financial affairs and monitoring their adequacy and effectiveness in
         practice
        Managing performance to secure economy, efficiency and effectiveness in the use of resources

The auditors give an opinion on the Council’s accounts, corporate governance and performance management
arrangements. The Council takes appropriate action where improvements need to be made.

Comprehensive Performance Assessment

The Comprehensive Performance Assessment, carried out in July 2003 scored the Council as ‘Fair’. The
Council has prepared a Performance Improvement Plan to respond to issues highlighted in the assessment.
This Improvement Plan has been agreed with the Council’s Relationship Manager and is the primary document
to which this Statement on Internal Control is linked.

Significant Internal Control Issues

The review of the system of internal control, undertaken throughout 2003/04 and up to the date of the approval
of the annual accounts has identified that the following improvements are necessary in order to create and
maintain an internal control environment consistent with the requirements of the Accounts and Audit
Regulations 2003.

1.       Update Performance Improvement Plan and Council priorities to ensure that they remain relevant

2.       Implement stage 2 of the Council’s new performance management framework by linking service and
         financial planning

3.       Determine priority-spending areas, match resources to priorities and prepare a sustainable Medium
         Term Financial Strategy

4.       Fully embed risk management into the Council’s decision-making processes through integration of
         internal audit work with the Strategic Risk Register and the development of arrangements for
         identifying and managing operational risks.

5.       Undertake a best value review of the benefits service with a view to improving performance in this area
         and working towards the standards of the Benefit Fraud Inspectorate.

6.       Further develop the scrutiny function through the ongoing development of work programmes for Select
         Committees.

7.       Introduce corporate procedures        for   monitoring   the   implementation   of   Cabinet/Committee
         recommendations/resolutions

8.       Develop a more structured approach for the review of the system of internal control by chief officers

9.       Implement the Council’s procurement strategy to ensure that the Council is achieving best value from
         its purchasing activities

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Broxtowe Borough Council                                                   Annual Statement of Accounts


We have been advised on the implications of the result of the review of effectiveness of the Council’s system
of internal control by the cabinet, Resources Select Committee and the Director of Finance and a plan to
address weaknesses and ensure continuous improvement of the system is in place.




M Brown                                                                         M Radulovic
Chief Executive                                                                 Leader of the Council
July 2004                                                                       July 2004




                                                      7
Broxtowe Borough Council                                                     Annual Statement of Accounts


                                 EXPLANATORY FOREWORD
1. Introduction
The Council’s accounts for the year 2003/04 are set out on pages (17) to (43). They consist of:

       the Consolidated Revenue Account - the summary revenue account, covering income and expenditure
        on all services and showing how they have been financed.

       the Housing Revenue Account - which shows income and expenditure on Council housing.

       the Collection Fund - which includes income received by the fund from council tax payers, business
        rate payers and central government and the payments made by the fund to Broxtowe Borough
        Council, Nottinghamshire County Council, Nottinghamshire Police Authority and Parish/Town
        Councils.

       the Consolidated Balance Sheet - which sets out the financial position of the Council on 31 March
        2004.

       the Statement of Total Movements in Reserves - which summarises the movements in the various
        reserve accounts.

       the Cash Flow Statement - which summarises the total movement of the Council’s funds.

These accounts are supported by the Statement of Accounting Policies, which follows this foreword, and
various notes to the accounts. The accounts for 2003/04 are presented in a form that is based upon the best
accounting practices recommended by the Chartered Institute of Public Finance and Accountancy (CIPFA).

Accordingly, this authority has fully complied with a revised version of the CIPFA Code of Practice on Local
Authority Accounting in the United Kingdom, which was introduced with effect from 1 April 2003, together with
relevant accounting bulletins issued by the Local Authority Accounting Panel.




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Broxtowe Borough Council                                                       Annual Statement of Accounts

2. Revenue 2003/04
This Section provides a brief explanation of the financial aspects of the Council’s activities and draws attention
to the main characteristics of the Council’s financial position.


                        WHERE THE MONEY COMES FROM
                                                                                 Government Grants

                                   7.9%   1.4%                                   Fees & Charges
                       10.0%                                        37.0%
                                                                                 Net Rents

                                                                                 Collection Fund

                     10.5%                                                       NNDR

                                                                                 RSG
                                14.2%                    19.0%
                                                                                 Interest



The largest single item is income received from direct government grants. These grants help to meet the costs
incurred by the Council on housing benefits and council housing. When the total income from Grants, Fees
and Charges, Net Rents and Interest has been determined, the balance required to finance the Borough’s
services is met from Revenue Support Grant (RSG), business ratepayers and council tax payers via the
Collection Fund.


                              WHAT THE MONEY IS SPENT ON
                                                                                    Employee Costs


                        29.3%                                        38.8%
                                                                                    Financing Costs


                                                                                    Housing Benefit


                                                                 3.8%               Other Operating
                                          28.1%
                                                                                    Costs



Other operating expenses such as maintaining buildings, operating vehicles and the purchase of supplies and
services take up 29.3% of the total expenditure. Financing costs (3.8%) relate to the payment of external
interest on loans.


                                        SERVICES PROVIDED
                                                                               Central Services (incl
                                                                               Benefits)
                                                                               Cultural & Related
                                           2.1%                                Services
                                                                 30.1%         Environmental Services

                      37.1%                                                    Planning & Development

                                                                               Highw ays

                                                                        9.5%   Council Housing

                                           8.1%   3.8%       9.3%
                                                                               Housing (General Fund)




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Broxtowe Borough Council                                                       Annual Statement of Accounts


The major areas of expenditure are Council Housing and Central Services which includes housing and council
tax benefits, the cost of collecting council tax and business rates and corporate management costs. Cultural
and Related Services includes parks, leisure centres and sports development. Environmental Services
includes refuse collection, recycling and environmental health.


3. Comparison with Budget 2003/04


                                                 Revised
        General Fund                                               Actual     Difference
                                                 Budget
                                                  £'000            £'000        £'000
        Gross Expenditure on Services               29,443          29,569          126
        Income                                     (17,713)        (17,931)        (218)

        Net Expenditure on Services                 11,730          11,638          (92)


        Financed by:
        Interest on Loans & Investments               (455)           (477)         (22)
        Collection Fund                             (3,924)         (3,924)           -
        Revenue Support Grant                       (2,954)         (2,954)           -
        Business Rates Pool                         (3,750)         (3,750)           -
                                                   (11,083)        (11,105)         (22)

        Net Balance for Year                           647             533         (114)
        Transfer from Other Reserves                  (647)           (533)         114
        Balance Brought Forward                     (1,335)         (1,335)           -
        Balance Carried Forward                     (1,335)         (1,335)             -




The main savings against the revised budget resulted from:-

       the sum set aside to meet revenue contingencies was not fully utilised in the year.

       additional investment interest.

       rating refunds for two of the Council’s leisure centres.

       additional income from Recycling Credits.

       additional rent income for Beeston Square.

       delays in completing various projects resulting in budgets being carried forward to 2004/05.

These were offset by:-

       a higher than anticipated usage of the Council’s insurance provision, resulting in additional
        contributions being made at the year-end to provide for the cost of possible future claims.

       an increase in the net cost of council tax benefits and rent allowances.

       a reduction in income from highway supervision fees and cemeteries.

       a reduction in the amount of capital financing costs paid by the housing revenue account.




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Broxtowe Borough Council                                                    Annual Statement of Accounts


                                                  Revised
         Housing Revenue Account                                      Actual       Difference
                                                   Budget
                                                    £'000                £'000          £'000
         Gross Expenditure on
                                                   17,650            17,809              159
         Services
         Income                                   (10,670)           (10,688)            (18)
         Appropriations                            (3,643)            (3,668)            (25)
         Net Expenditure on Services                3,337              3,453             116

         Financed by:
         Housing Revenue Account
                                                    (3,127)           (3,413)           (286)
         Subsidy
         Interest                                      (53)              (59)             (6)
                                                    (3,180)           (3,472)           (292)

         Net Balance for Year                         157                 (19)          (176)
         Balance Brought Forward                     (680)               (680)             -
         Balance Carried Forward                     (523)               (699)          (176)


The net underspending at the year end was mainly due to the following:

      delays in completing various projects resulting in budgets being carried forward to 2004/05.

      additional rent income resulting from the effects of council house sales and void properties being less
       than anticipated.

      a net benefit from housing revenue account subsidy reflecting the difference between the actual cost
       of rent rebates and the subsidy received.

      a reduction in the amount of the Council’s capital financing costs paid by the housing revenue account
       due to a lower year-end notional debt figure.


4. Capital 2003/04
In 2003/04 the Council spent £7.221m on its own capital projects. This compares with a budget of £7.931m
after taking account of items carried forward from 2002/03. The net underspending of £0.710m was mainly
due to expenditure on schemes being carried forward into the following year.

The Council’s capital spending was on items which are of use beyond the year being accounted for such as
improvements to council dwellings, housing renovation grants, improvements to recreation grounds,
environmental improvements, vehicles and plant, computer equipment and industrial development.

In 2003/04, £1.042m of capital receipts were used to finance capital expenditure, the balance of the
expenditure being matched by funding from the housing revenue account major repairs allowance (£2.979m),
new loans (£1.179m), leasing (£0.062m), government and other grants and contributions (£1.709m) and
internal funds (£0.250m).

Total loans repayable to external parties at 31 March 2004 for capital spending amounted to £15.662m.


5. Accounting Policies
The accounting policies adopted by the Council comply with the relevant recommended accounting practices.
The Council’s policies are explained fully in the notes to the accounts set out from page (13) onwards.


6. Further Information
Further information about the accounts is available from the Director of Finance, Council Offices, Beeston.
This is part of the Council’s policy of providing full information about the Council’s affairs.


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Broxtowe Borough Council                                                    Annual Statement of Accounts


7. Certificate of the Director of Finance and the Leader of the Council
This 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
authority at 31st March 2004 and its income and expenditure for the year then ended.




M Staley C.P.F.A.                                                                Councillor M Radulovic
Director of Finance                                                              Leader of the Council
July 2004                                                                        July 2004




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Broxtowe Borough Council                                                       Annual Statement of Accounts


                        STATEMENT OF ACCOUNTING POLICIES
1. General
The accounts have been drawn up in accordance with the 2003 Code of Practice on Local Authority
Accounting in the United Kingdom, issued by the Chartered Institute of Public Finance and Accountancy
(CIPFA), which is recognised by statute as representing proper accounting practices, regulation 7 of the
Accounts and Audit Regulations 2003 and Sections 41 and 42 of the Local Government and Housing Act
1989.

The accounts have also been prepared in accordance with guidance notes issued by CIPFA on the application
of Accounting Standards (SSAPs) and Financial Reporting Standards (FRSs), which have been adopted in
Statements of Recommended Practice (SORPs) issued by the Accounting Standards Board and are also
subject to recent bulletins issued by CIPFA’s Local Authority Accounting Panel.

The main changes introduced by the 2003 Code of Practice include:

       Full implementation of Financial Reporting Standard number 17 ‘Retirement Benefits’. This accounting
        standard requires the financial statements to reflect, at fair value, the assets and liabilities underlying
        the Council’s obligations relating to retirement benefits. Transactions during the year are reflected in
        the Consolidated Revenue Account on page 17, with further details being given in note 7 to this
        account on page 20. The Council’s pensions liability is reflected in the Consolidated Balance Sheet on
        page 29 and movements in this liability are detailed in the Statement of Movements in Reserves on
        page 37. The liability is matched by an equivalent pensions reserve.

       The introduction of a requirement to produce a Statement on the System of Internal Control. This
        statement is given on page 3.

       The requirement to disclose audit fees. The relevant disclosure is given in note 16 to the Consolidated
        Revenue Account on page22.

2. Fixed Assets
From 1 April 1994 all expenditure on the acquisition, creation or enhancement of fixed assets has been
capitalised on an accruals basis.

Fixed assets are valued on the basis recommended by the Chartered Institute of Public Finance and
Accountancy and in accordance with the Statements of Asset Valuation Principles and Guidance Notes issued
by the Royal Institution of Chartered Surveyors. Fixed assets are classified into the groupings required by the
2003 Code of Practice on Local Authority Accounting. The balances have been stated on the following basis:

       Land, operational properties and other operational assets are included in the balance sheet at the
        lower of net current replacement cost and net realisable value in existing use.

       Non-operational assets are included in the balance sheet at the lower of net current replacement cost
        and net realisable value.

       Infrastructure and community assets are included in the balance sheet at historical cost, net of
        depreciation.

Surpluses or deficits arising from the valuation of fixed assets have been reflected in the fixed asset
restatement reserve. Revaluations of fixed assets are planned at five yearly intervals although material
changes to asset valuations will be adjusted in the interim period as they occur.

The Council operates a de minimis level in valuing assets.         Any assets valued at less than £5,000 are
excluded from balance sheet values.




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Broxtowe Borough Council                                                          Annual Statement of Accounts

3. Depreciation
Depreciation is provided for on all fixed assets with a finite useful life according to the following policy:

       Land is not depreciated.

       Following the introduction of FRS 15 and resource accounting for the housing revenue account,
        buildings are depreciated as follows:-

        Council Dwellings                           40 years
        Temporary Buildings                         20 years
        Pavilions                                   30 years
        Leisure Centres                             40 years
        General Properties                          40 years
        Cemetery Buildings                          60 years
        Council Offices                             60 years

       All newly acquired assets are depreciated in the year of acquisition although assets in the course of
        construction are not depreciated until they are brought into use.

       For infrastructure assets and vehicles, plant and equipment, depreciation is provided over the following
        periods. New specialist vehicles also have an additional depreciation provision made in the year of
        acquisition.

        Infrastructure assets                 40 years
        Major Computer Equipment               5 years
        Leisure Centre Equipment               5 years
        Vehicles and Plant                  5-10 years

Impairment losses arising from physical damage or a deterioration in the quality of the service provided by the
asset are charged to the appropriate service within the Consolidated Revenue Account with an opposite entry
being made in the asset management revenue account. Such losses are identified by examining records of
insurance claims made during the year for damage to Council properties together with a review of asset usage
and values by the Estates Officer.

Impairment losses resulting from a general fall in prices are charged to the fixed asset restatement reserve and
do not pass through service revenue accounts.


4. Leasing
The Council has acquired a variety of assets, ranging from vehicles to computer equipment, by means of
finance leases. Some vehicles and equipment used by the Council are rented from companies via operating
leases. Under leasing arrangements, the title to the assets is not transferred to the Council. In accordance
with the Accounting Code of Practice, the amounts outstanding in respect of finance and operating leases are
disclosed in Note 15 to the Consolidated Revenue Account. Rentals are charged to revenue when payable
and no provision is made for outstanding lease commitments. All assets acquired through finance leases were
fully written down at the balance sheet date.


5. Deferred Charges
Deferred charges are payments of a capital nature where no fixed asset is created, e.g. renovation grants.
Deferred charges in respect of renovation and other grants are written off in the year following that in which
expenditure is incurred. Outstanding premiums resulting from the early repayment of loans are also included
under this heading. The Housing Revenue Account proportion of these premiums is written off over the
remaining period of the repaid loans or ten years, whichever is the lower, whilst the General Fund proportion is
written off over the average loan period of the replacement loans.


6. Charges for Capital
The capital charges made to service revenue accounts, central support services and trading accounts equate
to the sum of depreciation plus a capital financing charge determined by applying a specified notional rate of
interest to net asset values. The notional rates of interest used are 3.5% for those assets included in the
balance sheet at current value and 4.625% for infrastructure and community assets which are included in the

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Broxtowe Borough Council                                                      Annual Statement of Accounts

balance sheet at historical cost. This is a change from previous years when an interest rate of 6% was applied
to all types of assets. The charge made to the housing revenue account is an amount equivalent to the
statutory capital financing charges. All these charges are made through the asset management revenue
account, details of which are shown in Note 5 to the Consolidated Revenue Account. The asset management
revenue account ensures that the capital charges have no overall effect on council tax or housing rent levels.

Part IV of the Local Government and Housing Act 1989, requires that certain minimum sums be set aside from
revenue in respect of the repayment of principal on outstanding debt. This is known as the minimum revenue
provision. These sums are 2% of the Authority’s credit ceiling on the Housing Revenue Account and 4% of the
Authority’s credit ceiling on the General Fund. Overall, in 2003/04, service accounts were charged with sums
equivalent to the minimum revenue provision by making an appropriate adjustment to the overall depreciation
charge levied.

The Council is responsible for the management of loan debt in respect of assets transferred to other authorities
after reorganisation in 1974. Repayments are made to the Council by the relevant other authorities on the
basis of a 5% increase in principal per annum.


7. Debtors and Creditors
The revenue accounts of the Council are maintained on an accruals basis in accordance with the Code of
Accounting Practice. That is, sums due to or from the Council during the year are included whether or not the
cash has actually been received or paid in the year. An exception to this principle relates to electricity and
other similar quarterly payments which are charged at the date of meter reading rather than being apportioned
between financial years. This policy is consistently applied each year and therefore does not have a material
effect on the year’s accounts.


8.   Stocks and Work In Progress
Stocks held at the year end are included in the accounts at the lower of cost or net realisable value as required
by SSAP 9. Work in Progress on uncompleted jobs is valued at the lower of cost or net realisable value
including an allocation of relevant overheads.


9. Costs of Support Services
Administration and management costs are allocated to all identified services to reflect the appropriate
percentage of time spent by staff on that service.

The costs of administrative buildings are apportioned where applicable on the basis of occupancy of the
relevant buildings.

Computer department costs are allocated on the basis of staff time apportionment and machine usage. Costs
in respect of the unutilised capacity on the mainframe and UNIX equipment have been held centrally within
non distributed costs and not recharged to service users. The cost of past service pension contributions is
similarly included within non distributed costs. Appropriate contributions towards these costs have been made
by the Housing Revenue Account.

Corporate Management refers to the costs incurred in managing the services as a result of being a multi-
purpose authority. Such costs include democratic representation and management and the corporate
democratic core which have been more specifically defined as part of the Best Value Accounting Code of
Practice.

10. Provisions
The Council sets aside provisions for specific future expenses which are likely or certain to be incurred but
uncertain as to the amounts or the dates they will arise. The main provisions are for insurance and trading
account losses. Details of these provisions are contained in Note 11 to the Consolidated Balance Sheet.




                                                        15
Broxtowe Borough Council                                                     Annual Statement of Accounts

11. Reserves
Since 1 April 1994, the system of capital accounting has required the establishment of two reserve accounts in
the Consolidated Balance Sheet.

       the fixed asset restatement reserve, which represents principally the balance of the surpluses or
        deficits arising on the periodic revaluation of fixed assets.

       the capital financing reserve, which represents amounts set aside from revenue resources or capital
        receipts to finance expenditure on fixed assets or for the repayment of external loans and certain other
        capital financing transactions.


12. Government Grants
Government grants are accounted for on an accruals basis and income has been credited, in the case of
revenue grants, to the appropriate revenue account, or, in the case of capital grants, to a government grants
deferred account. Amounts are released from the government grants deferred account to offset any provision
for depreciation charged to the revenue account in respect of assets to which the grants relate.


13. Pensions
In 2003/04 the Council made a contribution equivalent to 14.9% of pensionable pay into the Nottinghamshire
County Council Pension Fund which provides members with defined benefits related to pay and service. The
contribution rate is determined by the Pension Fund’s Actuary based on an actuarial valuation every three
years, the last review being as at 31 March 2001. In accordance with Financial Reporting Standard number
17, amounts charged to services are based on current service costs as notified by the Actuary (equivalent to
12.2% of pensionable pay). The difference between the current service cost and actual payments is
represented by past service costs, interest costs, the expected return on assets and appropriations to and from
the pensions reserve. Details are given in the Consolidated Revenue Account and Consolidated Balance
Sheet on pages 17 and 29 respectively.


14. Trading Accounts
The Council maintains trading accounts for all services operating in a competitive environment. This mainly
relates to former DLO/DSO activities. The overall performance of these trading accounts is shown in note 3 to
the Consolidated Revenue Account. The financial objective of each trading account remains as aiming to at least
break even after meeting capital charges, based on 3.5% of asset values plus associated depreciation.
Surpluses and deficits have been redistributed to client services and are therefore included within ‘net cost of
services’ within the Consolidated Revenue Account. In addition, trading accounts are maintained for Building
Control and Industrial Units.




                                                        16
Broxtowe Borough Council                                                                    Annual Statement of Accounts

                                 CONSOLIDATED REVENUE ACCOUNT
                                                                   2003/04                       2002/03
                                                Gross                            Net               Net
                                              Expenditure       Income       Expenditure       Expenditure   Notes
                                                 £'000           £'000          £'000             £'000
EXPENDITURE ON SERVICES                                                                                        1
CONTINUING OPERATIONS
Central Services to the Public                    2,050               694       1,356              1,303

Cultural and Related Services                     4,565             2,313       2,252              2,275

Environmental Services                            4,477               985       3,492              2,866

Planning and Development Services                 1,805               763       1,042              1,083

Highways                                          3,877             2,976        901                939

General Fund Housing Services                       990               129        861                661

Housing and Council Tax Benefits                 10,335             9,529        806                975

Corporate and Democratic Core                     1,877               107       1,770              1,591

Non Distributed Costs                              280                33         247                 78

NET COST OF GENERAL FUND
SERVICES                                         30,256            17,529      12,727             11,771

Housing Revenue Account                          17,844            14,136       3,708              6,499

NET COST OF SERVICES                             48,100            31,665      16,435             18,270
Precepts paid to parish/town councils                                           1,051             1,050        2
Total net (surplus)/deficit from former DLO/DSO Trading Accounts                    0                  0       3
Total net (surplus)/deficit from other Trading Undertakings                       (20)                 5       4
Transfer to /(from) Asset Management Revenue Account                            (4,089)           (7,026)      5
Gains and losses on the repurchase or early settlement of borrowing               228                 68       6
Interest and Investment Income                                                    (477)             (555)
Pensions Interest Cost and Expected Return on Pensions Assets                     859                 (9)      7
NET OPERATING EXPENDITURE                                                      13,987             11,803
Surplus/ (deficit) transferred to/ (from) HRA Balances                              19               117
Contribution to/ (from) Earmarked Reserves:
- Trading Accounts                                                                   0                 0
- Other Reserves                                                                  (420)             (165)
Contribution to/ (from) Capital Reserves:
- Financing of Capital Expenditure                                                469                507
- Provision for Repayment of External Loans                                     (1,331)              (948)     8
Contribution to/(from) Major Repairs Reserve                                      (396)              (526)
Contribution to/(from) Pensions Reserve                                           (599)               420      7
Deferred Charges                                                                  (459)              (431)
Government Grants Deferred                                                        408                 190
AMOUNTS TO BE MET FROM GOVERNMENT                                              11,678              10,967
GRANTS AND LOCAL TAXATION
SOURCES OF FINANCE
Precepts demanded from the Collection Fund                                      (4,952)            (4,831)
Transfer from the Collection Fund                                                  (22)              (30)
Revenue Support Grant                                                           (2,954)           (1,496)
Contribution from Non-Domestic Rates Pool                                       (3,750)           (4,610)
NET GENERAL FUND (SURPLUS)/DEFICIT                                                      0              0
BALANCE ON GENERAL FUND BROUGHT FORWARD                                         (1,335)           (1,335)
BALANCE ON GENERAL FUND CARRIED FORWARD                                         (1,335)           (1,335)



                                                                      17
Broxtowe Borough Council                                                     Annual Statement of Accounts


             NOTES TO THE CONSOLIDATED REVENUE ACCOUNT

1. Expenditure on Services
The expenditure on services reflects the revised service expenditure analysis as required by the Best Value
Accounting Code of Practice. The figures for 2002/03 have been restated to provide comparable figures to
2003/04 in accordance with the requirements of Financial Reporting Standard number 17, Retirement Benefits.


2. Beeston Area and Stapleford Area (Special Expenses)
The Council charges separately for Parks, Recreation Grounds and Allotments in the Beeston area and Parks
and Recreation Grounds in the Stapleford area.

In the remainder of the borough, the charge for these services is included within the appropriate Parish/Town
Council Precept. The separate accounts for Beeston and Stapleford prevent a duplication of charge to the
taxpayers in the Parish/Town Council areas.

                                                Beeston       Stapleford
                                                  £'000            £'000
           (Surplus) / Deficit Brought
                                                      (2)            (18)
           Forward
           Income
           Collection Fund                         (339)            (165)
           Borough Council Grant                   (107)             (52)
                                                   (446)            (217)
           Less Expenditure
           Allotments                                 15               0
           Parks                                     419             209
                                                     434             209
           (Surplus) / Deficit Carried
                                                    (14)             (26)
           Forward


3. Trading Accounts - Former DLO/DSO Services
The Council maintains trading accounts for former DLO/DSO services. The performance of these trading
services in 2003/04 was as follows:


                                                                                   (Surplus)/
                                                  Expenditure          Income
                                                                                      Deficit
                                                            £'000         £'000        £'000
           Building Maintenance                             1,574       (1,574)             0
           Grounds Maintenance                              1,564       (1,650)          (86)
           Highways & Sewer Maintenance                     1,318       (1,389)          (71)
           Other Cleansing                                    547         (565)          (18)
           Refuse Collection                                1,370       (1,514)         (144)

                                                            6,373       (6,692)        (319)



The net surplus of £319,000 has been returned to the various client accounts and is therefore included within
‘Net Cost of Services’ within the Consolidated Revenue Account.




                                                      18
Broxtowe Borough Council                                                      Annual Statement of Accounts

4. Other Trading Undertakings

Building Control Account
The Building Control (Local Authority Charges) Regulations 1998 require the building control service to break
even. Performance for the last three years has been as follows:

                                             2003/04            2002/03                2001/02
                                               £’000              £’000                  £’000
     Employee Expenses                           141                126                    104
     Supplies and Services                         5                  6                      6
     Administration                               93                 80                     61
     Total Expenditure                           239                212                    171

     Income                                     (250)              (233)                 (206)
     Surplus                                     (11)               (21)                  (35)


Industrial Units
The performance in respect of Industrial Units for 2003/04 was as follows:

                                             2003/04
                                               £’000
     Expenditure                                 143
     Income                                    (152)
     Net Expenditure                              (9)

     Total Trading Undertakings                   (20)



5. Transactions on the Asset Management Revenue Account


                                                                £'000         £'000
Income
Capital Charges - General Fund                                               (1,875)
Capital Charges - Housing Revenue Account                                    (6,905)
Capital Charges - Trading Accounts                                             (386)
Transfer from Government Grants Deferred Account                               (408)
                                                                             (9,574)
Expenditure
Finance Lease Charges                                               0
Provision for Depreciation                                      4,334
External Interest Charges                                       1,151         5,485
Balance to Consolidated Revenue Account                                      (4,089)




                                                         19
Broxtowe Borough Council                                                     Annual Statement of Accounts


6. Gains / Losses on the repurchase or early settlement of borrowing
Between 1998/99 and 2003/04 the Council repaid various loans in advance of their normal maturity dates.
This has resulted in total premiums and discounts of £3,640,263 and £199,455 respectively. The premiums
and discounts have been apportioned between the Housing Revenue Account (HRA) and the General Fund
based on the opening credit ceilings in the year of repayment. The HRA elements are amortised over the
unexpired period of the repaid loans or 10 years, whichever is the lower. General Fund elements associated
with a rescheduling exercise are charged or credited to the Consolidated Revenue Account over the period of
the replacement loans. In previous years, General Fund elements relating to direct repayments have been
charged or credited to the Consolidated Revenue Account in full in the year of repayment. However, in
2003/04, these premiums were charged to the Provision for Credit Liabilities. The outstanding balances are
shown as deferred charges and deferred credits in the Consolidated Balance Sheet.

7. Pensions
Financial reporting standard number 17 and the 2003 Code of Practice on Local Authority Accounting in the
United Kingdom requires the services within the Consolidated Revenue Account to reflect the true economic
cost of employing people in a financial year (the current service cost), ignoring any adjustments for previous
years or for pension fund surpluses or deficits. Amounts are then included for past service costs, interest
payments and the return on assets. A final adjustment is then made to reconcile these items back to the actual
sums paid to the Nottinghamshire County Council Pension Fund such that financial reporting standard number
17 has no impact on council tax levels.

The Nottinghamshire County Council superannuation scheme is a defined benefit scheme.

Movements are detailed below.

                                                                    2003/04                   2002/03
                                                            £'000         £'000       £'000       £'000
 Current service cost                                                    1,260                    1,194
 Past service cost (included within Non                                    166
                                                                                                      0
 Distributed Costs)
 Interest cost                                            2,791                       2,641
 Expected return on assets                              (1,932)            859      (2,650)          (9)

                                                                          2,285                   1,185
 Actual charges to revenue                                              (1,686)                 (1,605)
                                                                            599                   (420)
 Contribution to/(from) Pensions Reserve                                  (599)                     420

The Consolidated Balance Sheet on page 29 and the Statement of Movements in Reserves on page 37 show
a net reduction in the Pensions Liability and Pensions Reserve as at 31 March 2004 of £2,841,000. This is
made up of an actuarial gain, represented by an increase in the value of pension fund assets of £3,440,000,
offset by the above contribution of £599,000. Further details of pension fund movements are given in the notes
to these statements on page 35 and 39 respectively.


8. Provision for Repayment of External Loans

                                                                        £000’s
               Non-housing amount (4% of credit ceiling)                  402
               Housing amount (2% of credit ceiling)                      129
               Adjustment re commutation                                 (531)
               MINIMUM REVENUE PROVISION                                    0

               Less: Amount charged as Depreciation                     (4,334)
               Depreciation charged to Major Repairs Reserve             3,003
               Excess of Depreciation over M.R.P                        (1,331)
               Balance to Consolidated Revenue Account                  (1,331)




                                                       20
Broxtowe Borough Council                                                       Annual Statement of Accounts

9. Publicity
To comply with the requirement contained in Section 5 of the Local Government Act 1986, as applied by the
Local Authorities’ (Publicity Account) (Exemption) Order 1987, a separate account of expenditure on publicity
has been kept. Expenditure in 2003/04 amounted to £94,827 (2002/03 - £98,734) and relates to Recruitment
Advertising and the publication of the Council’s Annual Report.

10. Agency Services
The Council carries out certain works on an agency basis and receives full reimbursement for works costs
together with a contribution towards administration expenses. As highways agent for Nottinghamshire County
Council, the Acting Director of Technical and Works Services supervises work carried out on the Borough’s
highways including footway repairs and street lighting maintenance. The funds received for the work carried
out under agency arrangements in 2003/04, excluding administration contributions, were £2,617,355, (2002/03
£2,539,793). The net cost of these arrangements to Broxtowe was £229,268, (2002/03 £252,462).

The expenditure and income relating to highway agency services is included under Highways in the
Consolidated Revenue Account.

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

                                                       Number of employees
                                                 2003/04              2002/03
           £50,000 - £59,999                        6                    6
           £60,000 - £69,999                        1                    -
           £70,000 - £79,999                        -                    1
           £80,000 - £89,999                        1                    -


12. Related Party Transactions
Most significant transactions with Related Parties are disclosed elsewhere in the Statement of Accounts, as
follows:

       Payments to and from Central Government            Cash Flow Statement, pages 40 to 43
        (revenue items)
       Capital Grants from Central Government             Consolidated Balance Sheet (CBS), note 1, page 31
       Precepts from other Local Authorities              Collection Fund Accounts, page 27 and 28
       Agency Arrangements                                Consolidated Revenue A/C (CRA) note 10, page 21
       Superannuation Contributions                       CRA note 7, page 20
       Members’ Allowances                                CRA note 13, page 22
       Chief Officer’s Leased Cars                        Included within CRA note 11, page 21
       Partners in Capital Projects (contributions)       CBS note 1, page 31
       SGCS Business Park                                 CBS note 8, page 33

Other transactions with Related Parties, not included above were as follows:

                                                                     Receipts      Payments
                                                                        £’000          £’000
           Grants to Parishes                                               0            267
           Bramcote Crematorium Joint Committee                           120              0

The Council maintains a register of Members’ interests together with a record of interests declared at
Committee and Council meetings. Material transactions with organisations included in these registers were as
follows:

                                                                     Receipts      Payments
                                                                        £’000          £’000
           Eastwood & District Citizen’s Advice Bureau                      0             17
           Nottingham Playhouse                                             0              6
           Eastwood Volunteer Bureau                                        0              4
           Bramcote & Stapleford Golden Jubilee Group                       0              3

                                                          21
Broxtowe Borough Council                                                    Annual Statement of Accounts


Details of outstanding debtors and creditors in respect of Related Parties are included within Notes 7 and 9 to
the Consolidated Balance Sheet, on pages 33 and 34.


13. Members’ Allowances
In 2003/04 allowances were paid to members which totalled £187,297, (2002/03 - £168,911).


14. Local Authority (Goods and Services) Act 1970
The Council is empowered by this Act to provide goods and services to other public bodies. The various
Trading Services provide services to a number of public bodies in the area. Income received from these
services amounted to £61,804 (2002/03 - £198,666) whilst related expenditure totalled £58,506 (2002/03 -
£189,734).


15. Leases
No assets were acquired under finance leases in 2002/03 or 2003/04. There were no outstanding obligations
in respect of finance leases as at 31 March 2003 or 31 March 2004. Rentals paid during the year in respect of
such leases totalled £350 (2002/03 - £350).

The capital value of assets acquired under operating leases in 2003/04 was £68,851 (2002/03 - £28,826).
Outstanding obligations for operating leases at 31 March 2004 totalled £284,176 (31 March 2003 - £305,667).
Rentals paid during the year totalled £159,854 (2002/03 - £159,878).



16. Audit and Inspection Fees
The following amounts have been paid in respect of audit and inspection fees.


                                                                 2003/04         2002/03
                                                                  £'000           £'000
 Fees payable for external audit services carried out by the
 appointed auditor under the Audit Commission’s Code of
 Audit Practice in accordance with section 5 of the Audit             87               68
 Commission Act 1998

 Fees payable to the Audit Commission in respect of
 statutory inspection under section 10 of the Local
                                                                      16               15
 Government Act 1999

 Fees payable for the certification of grant claims and
 returns by the appointed auditor under section 28 of the             22               16
 Audit Commission Act 1998.
                                                                     125               99




                                                        22
Broxtowe Borough Council                                          Annual Statement of Accounts

                              HOUSING REVENUE ACCOUNT

                                                       2003/04    2002/03    Notes
                                                         £'000      £'000
INCOME
Dwelling Rents (gross)                                 (10,073)   (10,163)
Non-Dwellings Rents (gross)                               (151)      (157)
Charges for Services and Facilities                        (91)       (97)
Contributions towards Expenditure                         (408)          0      3
Housing Revenue Account Subsidy Receivable              (3,413)    (3,505)      9
Total Income                                           (14,136)   (13,922)

EXPENDITURE
Repairs and Maintenance                                  2,410      2,162
Supervision and Management                               3,034      2,802
Rents, Rates, Taxes and Other Charges                        4          6
Rent Rebates                                             5,437      5,321
Increased Provision for Bad or Doubtful Debts               35         17     10
Cost of Capital Charge                                   3,901      6,879      6
Depreciation and Impairment of Fixed Assets              3,003      3,209    7&8
Debt Management Costs                                       20         25
Total Expenditure                                       17,844     20,421

NET COST OF SERVICES                                     3,708      6,499

Transfer to/(from) Asset Management Revenue Account     (3,590)    (6,360)      6
Amortised Premiums and Discounts                            190        157
Investment Income                                          (60)       (63)

NET OPERATING EXPENDITURE                                  248        233

Contribution to Minimum Revenue Provision                  129        176
Transfer to/(from) Major Repairs Reserve                 (396)      (526)       4


Deficit/ (Surplus) for the Year                           (19)      (117)
Balance Brought Forward                                  (680)      (563)
Transfer to Housing Repairs Account                          0          0
Balance Carried Forward                                  (699)      (680)




                               HOUSING REPAIRS ACCOUNT

                                                       2003/04        2002/03
                                                         £’000          £’000
Balance Brought Forward                                  (150)          (150)
Contribution from Housing Revenue Account                   0              0
Balance Carried Forward                                  (150)          (150)




                                                  23
Broxtowe Borough Council                                                       Annual Statement of Accounts

                    NOTES TO THE HOUSING REVENUE ACCOUNT
1. Housing Stock
The Council was responsible for managing an average stock of 4,829 dwellings during 2003/04 (2002/03 -
4,957).

The stock at 31 March 2004 was made up as follows:

                  Houses                                                           1,853
                  Flats                                                            2,240
                  Bungalows                                                          667
                  Multi-Occupied Dwellings                                             4
                  Total                                                            4,764


The change in stock can be summarised as follows:

                                                                  2003/04        2002/03
                  Stock at 1 April                                  4,893          5,021
                  Less Sales                                        (128)          (134)
                  Net Transfers/Other Disposals                        (1)             6
                  Stock at 31 March                                 4,764          4,893

Net transfers/Other Disposals in 2003/04 represents the demolition of one property which was structurally
defective and beyond economic repair.


2. Value of the Housing Stock
The value of the Council’s housing stock at 31 March 2004 was £108,875,999 (£111,470,158 at 31 March
2003). The dwellings were valued on the basis of existing use value for social housing. The vacant
possession value of dwellings at 31 March 2004 was £175,606,450. The difference between the vacant
possession value and the balance sheet value, amounting to £66,730,451, represents the economic cost to
government of providing council housing at less than open market rents.


3. Contributions towards Expenditure
The Supporting People regime was introduced on 1 April 2003. This requires the cost of providing warden’s
services to be separately accounted for and for charges to be levied to the recipients of the service. The
housing revenue account receives Supporting People grant to cover the charges for those tenants in receipt of
benefit. For 2003/04 the Council gave transitional protection to all other tenants. Transitional protection for new
tenants (after 1 April 2003) is paid to the housing revenue account from the general fund. Amounts are as
follows:

                                                                  2003/04        2002/03
                                                                    £’000          £’000
                  Supporting People Grant                           (388)              0
                  Contribution from General Fund                      (20)             0
                                                                    (408)              0


4. Major Repairs Reserve
The movements in the major repairs reserve during the year were as follows:


                                                                                    £'000
         Balance at 1 April 2003                                                    (492)
         Depreciation Charge to Housing Revenue Account                           (3,003)
         Appropriation to Housing Revenue Account                                     396
         Expenditure Financed from Major Repairs Allowance                          2,978

         Balance at 31 March 2004                                                   (121)

                                                         24
Broxtowe Borough Council                                                      Annual Statement of Accounts

5. Capital Expenditure and Capital Receipts
Capital expenditure on dwellings within the Housing Revenue Account, together with the sources of financing
can be summarised as follows:

                                                               2003/04       2002/03
                                                                 £'000         £'000

                 Capital Expenditure                                 3,542      3,203

                 Financed By:
                 Basic Credit Approvals                                749        857
                 Government / Other Grants                              90         17
                 Major Repairs Allowance                             2,978      2,191
                 External Contributions                                  0          9
                 Capital Creditors (Net)                             (275)        129
                                                                     3,542      3,203


Proceeds from the sale of dwellings within the Housing Revenue Account amounted to £4.908m for 2003/04
(£4.010m for 2002/03).


6. Capital Charges
The cost of capital charge is calculated as 3.5% of the value of HRA operational assets, in accordance with the
HRA item 8 determination and guidance on stock valuation published by the former Department of the
Environment, Transport and the Regions in May 2000. This is a change from previous years when a charge of
6% was applied. The charge is adjusted to equal the HRA’s share of actual external interest payable
(£311,000 in 2003/04 and £520,000 in 2002/03) through the transfer from the asset management revenue
account.


7. Depreciation
The Council’s Estates Officer has determined that a 40 year depreciation period should be applied to Council
dwellings. Adjustments are made for improvement expenditure and sales ocurring during the year. The total
depreciation charge for council dwellings in 2003/04 was £3,003,000 (2002/03 - £3,209,000).


8. Impairment and Deferred Charges
Impairment charges are identified by examining records of insurance claims made during the year for damage
to Council dwellings together with a review of asset values by the Estates Officer. No impairment charges were
necessary for 2002/03 or 2003/04. Equally, there were no deferred charges attributable to the Housing
Revenue Account in either of these years.


9. Housing Revenue Account Subsidy Receivable
The Housing Revenue Account Subsidy Receivable is made up as follows:

                                                         2003/04         2002/03
                                                            £'000           £'000
       Management and Maintenance                           4,540           4,392
       Major Repairs Allowance                              2,607           2,683
       Charges for Capital                                  1,220           1,366
       Interest on Receipts                                   (21)            (30)
       Guideline Rent Income                             (10,472)        (10,244)
       Sub-total - Housing Element                        (2,126)         (1,833)
       Rent Rebate Element                                  5,515           5,345
       Sub-total - Current Year Subsidy                     3,389           3,512
       Adjustment for Previous Year                             24             (7)
       Subsidy Receivable                                   3,413           3,505




                                                       25
Broxtowe Borough Council                                                      Annual Statement of Accounts

10. Rent Arrears
The arrears at the end of the year were as follows:
                                                                    2003/04       2002/03
                                                                     £‘000         £’000
                Rent arrears at 31 March                              309           263



During the year 2003/04, rent arrears as a proportion of gross rent income have increased from 2.6% of the
amount due to 3.1%.

The provision for doubtful debts is £121,134 (2002/03 - £86,133).


11. Exceptional Items and Prior Year Adjustments
There were no exceptional items or prior year adjustments in 2002/03 and 2003/04.




                                                       26
Broxtowe Borough Council                                                   Annual Statement of Accounts

                                COLLECTION FUND
                        INCOME AND EXPENDITURE ACCOUNT


                                                              2003/04         2002/03      Notes
                                                               £'000           £'000
EXPENDITURE
Precepts and Demands                                            42,908          38,762       3
Business Rates - Payments to National Pool                      16,970          16,993       2
Business Rates - Cost of Collection Allowances                     113             114       2
Bad Debts Written Off                                              134             120
Transfer to Broxtowe Borough Council                                22              30       4
Transfer to Nottinghamshire County Council                         140             195       4
Transfer to Nottinghamshire Police Authority                        13              16       4
Net movement in the provision for bad or doubtful debts           (127)            (71)
                                                                60,173          56,159

INCOME
Council Tax Payers                                              (34,345)       (31,398)      1
Council Tax Benefits                                             (4,495)        (4,071)      1
Council Tax Discounts                                            (4,212)        (3,759)
Business Rates                                                  (17,083)       (17,107)      2
                                                                (60,135)       (56,335)

Deficit/ (Surplus) for year                                          38           (176)
Balance at Beginning of Year                                       (373)          (197)
Balance at End of Year                                             (335)          (373)




                           NOTES TO THE COLLECTION FUND
1.      In 1993/94 the system of local taxation was changed from Community Charge to Council Tax.
        Adjustments in respect of previous years’ Community Charge transactions, if any, are separately
        identified within the accounts. The Collection Fund Balance Sheet has been incorporated into the
        Consolidated Balance Sheet shown elsewhere in these accounts.

2.      The total Non Domestic Rateable value at the year-end amounted to £45.147m (31 March 2003 -
        £45.764m) and the Non Domestic Rate Multiplier for the year was 44.4p in the pound (2002/03 –
        43.7p). The figures show the amounts collected by Broxtowe Borough Council on behalf of the Rates
        Pool, net of reliefs and allowances and the amount payable to the Pool after deduction of the
        allowance for the cost of collection.

3.      Precepts and Demands on the Collection Fund were as follows:

                                                             2003/04           2002/03
                                                              £'000             £'000
               Nottinghamshire County Council                 34,196            31,021
               Nottinghamshire Police Authority                3,760             2,910
               Parish/Town Councils                              547               549
               Broxtowe Borough Council                        3,901             3,781
               Special Expenses                                  504               501
                                                              42,908            38,762




                                                      27
Broxtowe Borough Council                                                  Annual Statement of Accounts


                NOTES TO THE COLLECTION FUND (continued)

4.    Under the Collection Fund Regulations, the estimated surplus or deficit on the Collection Fund arising
      from Community Charge is transferred to the General Fund of the Billing Authority (Broxtowe Borough
      Council). The estimated surplus or deficit arising from Council Tax is distributed between
      Nottinghamshire County Council, Nottinghamshire Police Authority and Broxtowe Borough Council
      pro-rata to their demands on the fund.


5.    COUNCIL TAX BASE

                                  NUMBER OF DWELLINGS                RATIO TO
                    BAND          (BAND D EQUIVALENTS)                BAND D
                      A                    8,209.65                     6/9
                      B                    8,254.47                     7/9
                      C                    8,179.22                     8/9
                      D                    5,376.94                     1
                      E                    2,744.27                    11/9
                      F                      989.19                    13/9
                     G                       627.12                    15/9
                      H                       19.70                    18/9
                                          34,400.56

      The Band D equivalent figures are derived by multiplying the number of dwellings in each band
      (adjusted for discounts) by the ratios shown above.




                                                     28
Broxtowe Borough Council                                                            Annual Statement of Accounts

           CONSOLIDATED BALANCE SHEET AS AT 31 MARCH 2004

                                                                     2003/04               2002/03    Notes
                                                                   £'000         £'000       £'000
      Fixed Assets -                                                                                  1&2
      Operational Assets
      - Council Dwellings                                        108,876                   111,470
      - Other Land and Buildings                                  15,205                    14,571
      - Vehicles, Plant & Equipment                                3,931                     2,925
      - Infrastructure Assets                                      1,089                     1,000
      - Community Assets                                           2,153                     2,019
      Non-Operational Assets                                       5,782                     3,345
                                                                               137,036     135,330
      Deferred Charges                                                           2,973       2,146     3
      Long Term Debtors -
      Mortgages                                                                    241         347     4
      Other                                                                      1,179       1,270     5
      Total Long Term Assets                                                   141,429     139,093
      Current Assets -
      Cash in Hand                                                     6                         0
      Stocks & Work in Progress                                      294                       302     6
      Debtors                                                      4,694                     4,585     7
      Payments in Advance                                            431                       472
      Investments                                                  6,030                     8,350     8
                                                                                11,455      13,709
      Current Liabilities -
      Borrowing repayable within 12 months                            (2)                       (2)
      Temporary Loans                                               (307)                     (280)
      Creditors                                                   (4,720)                   (4,249)    9
      Receipts in Advance & Deposits                              (1,240)                     (986)
      Cash Overdrawn                                                    0                     (364)
                                                                                (6,269)     (5,881)
      Total Assets Less Current Liabilities                                    146,615     146,921

      Long Term Borrowing                                        (15,660)                  (19,912)    10
      Provisions                                                    (479)                     (510)    11
      Liability related to Defined Benefit Pension Scheme        (14,543)                  (17,384)    12
      Government Grants Deferred                                  (5,049)                   (3,952)    13
      Deferred Capital Receipts                                     (243)                     (349)    14
      Deferred Credit                                                (77)                      (89)    15
                                                                               (36,051)    (42,196)
      Total Assets Less Liabilities                                            110,564     104,725

      Fixed Asset Restatement Reserve                                          (85,094)    (85,232)
      Capital Financing Reserve                                                (32,566)    (29,587)
      Usable Capital Receipts Reserve                                           (2,343)     (1,345)
      Unapplied Capital Contribution                                              (101)           0    16
      Pensions Reserve                                                           14,543      17,384    12
      Capital Reserve                                                             (843)     (1,376)
      Major Repairs Reserve                                                       (121)       (492)
      Revenue Balances
      - General Fund                                                            (1,335)     (1,335)
      - Housing Revenue Account                                                   (849)       (830)
      - Collection Fund                                                           (335)       (373)
      Specific Revenue Reserves
      - Former Direct Labour / Service Organisations                            (923)         (923)
      - Renewals Reserve                                                        (403)         (465)
      - Other Balances                                                          (194)         (151)
      Total Equity                                                          (110,564)     (104,725)


M Staley C.P.F.A.
Director of Finance
July 2004
                                                            29
                                         NOTES TO THE CONSOLIDATED BALANCE SHEET
     1. Fixed Assets

     Movements in fixed assets during the year were
     as follows:
                                                                                                                                 Non-
                                          Council         Other Land &    Vehicles, Plant       Infrastructure   Community
                                                                                                                              Operational       Total
                                         Dwellings         Buildings       & Equipment              Assets         Assets
                                                                                                                                Assets
                                                                                                                                                            Broxtowe Borough Council




                                                                                                                                                  £’000
                                              £’000              £’000              £’000                £’000        £’000          £’000

     Valuation as at 1 April 2003           119,923             15,301              4,835                1,090        2,185          3,601      146,935

     Accumulated Depreciation                (8,453)              (730)            (1,910)                (90)        (166)          (256)      (11,605)

     Net Book Value as at 1 April 2003      111,470             14,571              2,925                1,000        2,019          3,345      135,330

     Movement in 2003/04:




30
     Additions/Improvements                   3,542                329              1,783                 118            9            397         6,178

     Revaluations & Restatements                      -            692                      -                -         161           2,154        3,007

     Transfers                                        -            (32)                     -                -          23                  9           -

     Disposals                               (3,133)               (12)                     -                -            -                 -    (3,145)

     Depreciation                            (3,003)              (343)             (777)                 (29)         (59)          (123)       (4,334)

     Net Book Value as at 31 March
                                            108,876             15,205              3,931                1,089        2,153          5,782      137,036
     2004
                                                                                                                                                            Annual Statement of Accounts
Broxtowe Borough Council                                                         Annual Statement of Accounts


1. Fixed Assets (continued)
The following table shows details of capital expenditure in 2003/04 and how it was financed:


Expenditure                                     £’000      Financing                            £’000

Operational Assets
Environmental Improvements                        118      Direct Revenue Financing               469
Leisure Centre Improvements                       189
Parks & Recreation Grounds                        112      Government Grants                    1,550
Waste & Recycling                                 654
Replacement Vehicles                              433      Other Contributions                    159
IT Equipment                                      536
Housing – Refurbishment                         3,542      Major Repairs Allowance              2,978
Other Schemes                                     197
                                                           Basic Credit Approvals               1,007

                                                5,781
                                                           Supplementary Credit Approvals          31

Non-Operational Assets                            397      Unsupported Credit Approvals           141

Deferred Charges
Disabled Facilities Grants                        356      Usable Capital Receipts              1,042
Other Deferred Charges                            625
                                                           Capital Creditors (Net)              (218)
                                                  981
                                                7,159                                           7,159

The following significant capital contracts had been entered into by the Council at 31 March 2004. Expenditure
in respect of these contracts is shown in the accounts only to the extent that it was incurred before 31 March
2004.

                                           Total Project     Of which spent by
                                              Value           31 March 2004
                                              £’000                £’000
       Pasture Road Pavilion                   336                  316
       Drainage Works to Sports                100                   89
       Pitches
       Council Offices Lighting                 60                     26


An analysis of fixed assets at 31 March:

                                                      2004            2003
         Council Dwellings                           4,764           4,893
         Town Hall                                       1               1
         Offices                                         2               2
         Depots, Civic Amenity Site                      2               2
         Multi-Storey Car Park                           1               1
         Off-Street Car Parks                           28              29
         Leisure Centres & Pools                         4               4
         Museums                                         1               1
         Craft Workshops                                 1               1
         Industrial Premises                             6               6
         Cemeteries                                      4               4
         Recreation Grounds                             19              19
         Other Properties                               31              27



                                                        31
Broxtowe Borough Council                                                         Annual Statement of Accounts


2. Fixed Asset Valuation
The authority’s fixed assets are revalued at five yearly intervals although material changes to asset valuations
will be adjusted as they occur. Properties are valued by R Hewitson BSc Hons MRICS, a Chartered Surveyor
employed by the Council, in accordance with the Statement of Asset Valuation Practice and Guidance Notes of
the Royal Institution of Chartered Surveyors.

All Council dwellings were revalued with effect from 1 April 2000 in accordance with the requirements of
resource accounting for the housing revenue account. The dwellings were valued on the basis of existing use
value for social housing. Valuations were based on beacon properties which were then multiplied by the total
stock for each category of dwelling.

Operational properties of a specialised nature are valued on the basis of open market value for the existing
use, or where this cannot be assessed because there is no market for the asset concerned, the depreciated
replacement cost. Operational properties of a non-specialised nature are valued by reference to the open
market value of equivalent assets of a similar type and condition, as evidenced by recent market transactions,
and on the assumption that they will continue in their existing use. Non-operational properties are valued on
the basis of open market value.

Plant and machinery is included in the valuation of the buildings.

The valuation figures incorporated in the accounts are the aggregate of separate valuations of parts of the
portfolio, not a valuation of the portfolio valued as a whole.

Details of the depreciation policies for fixed assets are provided in note 3 of the accounting policies on page 14.


3. Deferred Charges

                                   Improvement          Other            Bramcote           Losses on     TOTAL
                                      Grants            Grants          Crematorium         Borrowing
                                          £’000             £’000              £’000              £’000      £’000
Balance as at 1 April 2003                  262               197                  0              1,687      2,146
Expenditure                                 152               625                264              1,323      2,364
Amounts written off                       (262)             (197)                  0            (1,078)    (1,537)
Balance as at 31 March 2004                 152               625                264              1,932      2,973

Expenditure on improvement grants is shown net of grants received by the Council of £204,000. The
£264,000 in respect of Bramcote Crematorium represents 50% of the cost of constructing a second chapel.
Construction costs were fully paid for by Erewash Borough Council. Broxtowe is liable for 50% of these costs,
which will be repaid to Erewash over a three-year period commencing on 1 April 2004.



4. Mortgages
As at 31 March:
                                                                      2004          2003
                                                                     £’000         £’000
                    Debtors                                            243           349
                    Provision for Doubtful Debts                        (2)           (2)
                                                                       241           347


5. Other Long Term Debtors
Other Long Term Debtors consists of debt administered by Broxtowe Borough Council for assets transferred to
other authorities (£1.035 million), and car loans to employees, which had more than one year remaining at 31
March 2004 (£0.144 million), (31 March 2003, £1.122 million and £0.148 million respectively).




                                                          32
Broxtowe Borough Council                                                  Annual Statement of Accounts

6. Stocks & Work in Progress
As at 31 March:

                                                           2004         2003
                                                           £'000        £'000
           Stocks -
           Central Stores                                   183           188
           Sports Centres                                    19            21
           DH Lawrence Museum / Durban House                 17            23
           Wheeled Bins                                       0             1
           Bus Tokens and TV Stamps                          24            22
           Crime Reduction                                    3            15
                                                            246           270
           Work in Progress -
           Trading Accounts                                  48            32

           Total                                            294           302


7. Debtors
As at 31 March:


                                                            2004         2003
                                                           £'000        £'000
             HM Customs and Excise                           364          440
             Government Departments                          585          524
             Other Authorities                             1,100        1,133
             Housing Rents                                   236          202
             Interest Receipts                                37           31
             Sundry Debtors                                  757          742
             Beeston Central Area                            275          250
             Car Loans to Employees                           11            8
             Miscellaneous                                   255          270
             Car Leasing to Employees                         67           64
             Council Tax Payers                            1,577        1,615
             Business Ratepayers                             367          352
                                                           5,631        5,631

             Provision for Doubtful Debts:
             Rents                                         (121)          (86)
             Sundry Debtors                                  (1)           (1)
             Industrial Development                          (9)           (9)
             Court Costs                                    (32)          (44)
             Housing Benefits                              (170)         (180)
             Legal Fees                                     (25)          (20)
             Council Tax Payers                            (454)         (581)
             Business Ratepayers                           (125)         (125)
                                                           (937)       (1,046)

             TOTAL                                         4,694        4,585



8. Investments
The amount invested at 31 March 2004 was £5.98m (31 March 2003 - £8.3m).

Broxtowe Borough Council has a 10% interest in the SGCS Business Park. Income received for the year
2003/04 was £20,000, (2002/03 £45,000). In addition, a sum of £50,000 is invested in offices now used by the
Local Government Association.



                                                      33
Broxtowe Borough Council                                                             Annual Statement of Accounts

9. Creditors
As at 31 March:


                                                                     2004        2003
                                                                    £’000       £’000
           Government Grants                                            0         646
           Other Authorities                                          688         576
           Inland Revenue                                             254         243
           H M Customs & Excise                                       231         191
           Sundry Creditors                                         2,206       2,045
           Interest                                                   304         410
           NNDR Pool                                                  703           0
           Bramcote Crematorium                                       264           0
           Other                                                       70         138
           Total                                                    4,720       4,249


10. Long Term Borrowing

Source of Loan                       Range of Interest
                                                                     Total Outstanding 31 March
                                          Rates
                                         Payable
                                            %                                 2004             2003
                                                                             £’000            £’000
Long Term Loans                             5.45 – 7.70                      6,000            6,000
Public Works Loan Board                    4.75 – 13.75                      9,660           13,912

                                                                            15,660           19,912
An analysis of long term loans by maturity is:

Maturing in 1 – 2 years                                                          2                2
Maturing in 2 – 5 years                                                      4,009            4,007
Maturing in 5 – 10 years                                                     2,271            3,519
Maturing in more than 10 years                                               9,378           12,384
                                                                            15,660           19,912


11. Provisions

                             Balance at                                 Payments in       Balance at
                                             Receipts in Year
                                 1.4.03                                       Year           31.3.04
                                   £'000                  £'000               £'000            £'000
   Trading Account                    10                        -                (4)              6
   Insurance                         500                   708                 (735)            473
                                     510                   708                 (739)            479


A provision for trading losses has been made for possible costs in respect of remedial works relating to
contracts carried out prior to 31 March 2004.

The insurance provision has been established under local act powers and is used to cover excesses on claims
and certain small risks. The objective is to minimise premiums while providing sufficient insurance cover. The
balance represents potential liabilities arising from claims still being settled. The provision includes £48,000 in
respect of an outstanding liability claim relating to cover provided by the Independent Insurance Company
Limited (see note 17, page 36).

Provisions for bad debts are deducted from debtors.



                                                           34
Broxtowe Borough Council                                                      Annual Statement of Accounts

12. Pensions Assets/Liabilities
Financial reporting standard number 17 requires the Council to include its net asset/liability in the
Nottinghamshire County Council Pension Fund in the Council’s balance sheet. The net liability as at 31 March
2004 was £14.543 million (£17.384 million at 31 March 2003).

The Nottinghamshire County Council superannuation scheme is a defined benefit scheme. The last actuarial
valuation of the pension fund was undertaken as at 31 March 2001.

The net liability is made up as follows:

                                                   at 31 March 2004           at 31 March 2003
                                                       £’000                       £’000

       Market Value of Assets                                   34,973                        29,104
       Liabilities                                            (49,516)                      (46,488)

       Net Liability                                          (14,543)                      (17,384)

The Council does not expect the deficit shown above to impact upon reserves or revenue funding
requirements in the short term but the Council’s annual contribution to the fund may be changed at the next
actuarial valuation as a result of prevailing market conditions. The liability is matched by a negative Pensions
Reserve in the balance sheet.




       Analysis of Investments (Assets)           at 31 March 2004              at 31 March 2003
                                                     £’000            %             £’000              %


       Equities                                    21,998          62.9%         17,026            58.5%
       Government Bonds                             4,232          12.1%            4,104          14.1%
       Other Bonds                                  2,763           7.9%            2,823              9.7%
       Property                                     3,917          11.2%            3,958          13.6%
       Other                                        2,063           5.9%            1,193              4.1%
                                                   34,973        100.0%          29,104           100.0%



Assumptions used by the Actuary in valuing the fund are given in the table below:

                                                   at 31 March 2004        at 31 March 2003
            Financial Assumptions
            Rate of inflation                           2.80%                   2.50%
            Rate of increase in salaries                4.30%                   4.00%
            Rate of increase in pensions                2.80%                   2.50%
            Discount rate                               6.30%                   6.00%

            Expected Rate of Return on
            Assets
            Equities                                    7.50%                   7.50%
            Government Bonds                            4.70%                   4.50%
            Other Bonds                                 5.50%                   5.40%
            Property                                    6.50%                   6.50%
            Other                                       4.00%                   3.75%



                                                        35
Broxtowe Borough Council                                                        Annual Statement of Accounts

No specific investigations have been carried out into whether the average age of membership of the pension
scheme has increased but the actuary has not been given any reason to believe that there have been
substantial changes since the 2001 actuarial valuation.


13. Government Grants Deferred
Government Grants Deferred are amounts received towards the financing of capital expenditure. Amounts held
at the balance sheet date represent grants for which a related fixed asset exists on the balance sheet.
Amounts are released from this account on an annual basis, to offset depreciation charges for the related
assets.

As at 31 March:

                                                                       2004              2003
                                                                            £’000             £’000
                     Balance as at 1 April                                (3,952)           (4,395)
                     New grants received                                  (1,505)           (1,164)
                     Released to offset depreciation                          408               190
                     Amounts where no related asset exists                      0             1,417
                     Balance as at 31 March                               (5,049)           (3,952)


14. Deferred Capital Receipts
Deferred Capital Receipts are amounts derived from mortgage advances which will be received in instalments
over agreed periods of time.

                              Balance at          Principal           New            Balance at
                                  1.4.03       Repayments         Advances              31.3.04
                                    £'000              £'000           £'000              £'000
   Housing Advances                    61               (22)                -                39
   Council Houses                     288               (84)                -              204
                                      349              (106)                -              243



15. Deferred Credit
This balance represents the housing revenue account (HRA) proportion of discounts received for the early
repayment of debt. These discounts are credited to the HRA over a 10 year period.


16. Unapplied Capital Contribution
This balance represents amounts received from developers in lieu of providing affordable housing on new
housing sites. The amount will be used by the Council in future years as a contribution to affordable housing
projects.


17. Contingent Liabilities
On 17 June 2001, the Independent Insurance Company Limited presented a petition to the High Court for the
winding-up of the company. Provisional liquidators were subsequently appointed. The Council had
approximately £268,000 of outstanding liability claims relating to cover provided by the Independent of which
£220,000 had been settled out of the Council’s insurance fund as at 31 March 2004. The Council has lodged
an appropriate claim with the provisional liquidators for the full value of amounts paid. The insurance provision
in note 11 on page 34 excludes outstanding claims to the value of £159,300, which based on the
circumstances of the claims and past experiences of similar claims, the Council does not expect the claims to
be successful.


18. The Euro
The Council has not yet evaluated the implications or identified the potential costs of introducing the Euro. The
Council is in the process of replacing its main financial systems. All new systems will be Euro compliant.

                                                        36
                                                STATEMENT OF TOTAL MOVEMENTS IN RESERVES

                                                       CAPITAL RESERVES                                                 REVENUE RESERVES

                                             Fixed Asset      Capital     Usable
                                                                                                Major                Housing   Collection   Pensions     Specific
                                             Restatement    Financing     Capital   Capital               General
                                                                                               Repairs               Revenue     Fund       Reserve     Revenue      Total
                                               Reserve      Reserve      Receipts   Reserve                Fund
                                                                                               Reserve               Account    (Note 5)    (Note 6)    Reserves
                                               (Note 2)      (note 3)    (Note 4)

                                                   £’000        £’000       £’000     £’000      £’000      £’000      £’000        £’000      £’000        £’000      £’000
                                                                                                                                                                                 Broxtowe Borough Council




     Balance as at 1 April 2003                  (85,232)     (29,587)    (1,345)    (1,376)      (492)    (1,335)     (830)        (373)     17,384      (1,539)   (104,725)




     Net (surplus)/deficit for year                     0       1,776           0       533        371          0       (19)           38     (2,841)          19       (123)


     Unrealised (gains)/losses from               (3,007)           0           0                                                                                     (3,007)
                                                                                          0          0          0          0            0          0            0
     revaluation of fixed assets




37
     Effects of disposals of fixed assets:


     Cost or value of assets disposed of           3,145            0           0         0          0          0          0            0          0            0      3,145


     Proceeds of disposals                              0      (3,713)    (2,040)         0          0          0          0            0          0            0     (5,753)


     Net (surplus)/deficit on disposals            3,145       (3,713)    (2,040)         0          0          0          0            0          0            0     (2,608)


     Financing of fixed assets                          0      (1,042)      1,042         0          0          0          0            0          0            0            0


     Balances as at 31 March 2004                (85,094)     (32,566)    (2,343)     (843)       (121)    (1,335)     (849)        (335)     14,543      (1,520)   (110,463)
                                                                                                                                                                                 Annual Statement of Accounts
Broxtowe Borough Council                                                        Annual Statement of Accounts


   NOTES TO THE STATEMENT OF TOTAL MOVEMENTS IN RESERVES

1. Total Equity
Total equity on page 29 includes an unapplied capital contribution of £101,000 increasing the above total to
£110,506,000 as recorded in the Consolidated Balance Sheet.

2. Fixed Asset Restatement Reserve

                                                                    Housing
                                             General Fund           Revenue               Total
                                                                     Account
                                                      £'000            £'000             £'000
Balance as at 1 April 2003                          (12,604)        (72,628)           (85,232)
(Gain) / Loss on revaluation of Fixed
                                                     (3,007)              0             (3,007)
Assets
Disposal of Fixed Assets                                 12           3,133              3,145
Balance as at 31 March 2004                         (15,599)        (69,495)           (85,094)


This reserve was established when the capital accounting system changed as from 1 April 1994. The balance
represents the difference between the valuation of assets under the previous system of accounting and the
revised basis of valuation. The reserve will be written down by the net book value of assets as they are
disposed of and debited or credited with any deficits or surpluses arising on future revaluations.


3. Capital Financing Reserve

                                                                               £'000         £'000
Balance as at 1 April 2003                                                                (29,587)
- Reserved Capital Receipts                                                (3,800)
- Financing of Fixed Assets             - Major Repairs Allowance          (2,979)
                                        - Capital Receipts                 (1,042)
                                        - Revenue                              (469)
- Release of Government Grants                                                 (408)       (8,698)

Write down of Deferred Charges                                                  459
Use of capital receipts in respect of transferred debt                           87
Excess of depreciation over M.R.P                                              4,334
Premiums charged to Provision for Credit Liabilities                            839          5,719
Balance as at 31 March 2004                                                               (32,566)



The capital financing reserve contains the amounts, which are required by statute to be set aside from capital
receipts for the repayment of external loans, and the amount of capital expenditure financed from revenue and
capital receipts. It also contains the difference between amounts provided for depreciation and that required to
be charged to revenue to repay the principal element of external loans.




                                                             38
Broxtowe Borough Council                                                        Annual Statement of Accounts

Provision for Credit Liabilities

                                                             2003/04            2002/03
                                                               £'000              £'000
       Balance Brought Forward as at 1 April                       NIL                   NIL
       Minimum Revenue Provision                                      -                    -
       Reserved Capital Receipts                                  3,800              4,055
                                                                  3,800              4,055
       Applied to loan premiums                                   (839)                   0
       Applied to external debt repayment                     (2,961)            (4,055)
       Balance Carried Forward as at 31 March                      NIL                   NIL


4. Usable Capital Receipts
This reserve represents the proportion of capital receipts arising from the disposal of assets which is available
to finance other capital expenditure after setting aside the statutory amounts for the repayment of external
loans.

                                                                          Housing
                                                      General
                                                                          Revenue              Total
                                                        Fund
                                                                          Account
                                                         £'000               £'000             £'000
     Balance as at 1 April 2003                          (478)               (867)         (1,345)
     Capital Receipts 2003/04                            (876)             (4,964)         (5,840)
                                                       (1,354)             (5,831)         (7,185)

     Less: Capital receipts set aside 2003/04                87              3,713             3,800
           Capital receipts used for financing             132                910              1,042
     Balance as at 31 March 2004                       (1,135)             (1,208)         (2,343)


5. Collection Fund
The Collection Fund is a statutory fund in which the Council records transactions for council tax, business rates
and residual community charges. The balance on the fund is available for reducing the council tax
requirements of this Council, Nottinghamshire County Council and the Nottinghamshire Police Authority. It will
be paid out in future years in proportion to the value of the respective precepts and demands made by the
various bodies on the Collection Fund.


6. Pensions Reserve

                                                                               £'000              £'000    %
   Balance as at 1 April 2003                                                                    17,384     -
     Appropriation to Consolidated Revenue Account (Note
                                                                                599                         -
     7, page 20)
     Asset Gain                                                              (3,440)                      9.8
     Liability Gain                                                                  0                      -
     Changes in the demographic and financial
                                                                                     0                      -
     assumptions used to estimate liabilities
                                                                                                (2,841)

   Balance as at 31 March 2004                                                                   14,543


                                                        39
Broxtowe Borough Council                                            Annual Statement of Accounts

                                CASH FLOW STATEMENT

                                               2003/04                 2002/03          Notes
                                             £'000     £'000        £'000      £'000
  REVENUE ACTIVITIES
  Cash Outflows:
  Cash paid to and on behalf of
                                            14,226                 13,160
  employees
  Other operating cash payments             10,214                 10,108
  Precepts to other authorities             38,656                 34,691
  Housing benefit paid out                   4,829                  4,910
  Non-domestic rate payments to national
                                            15,909                 18,372
  pool
                                                        83,834                81,241
  Cash Inflows:
  Rents (after rebates)                     (5,308)                (5,638)
  Council tax income                       (38,460)               (35,415)
  Non-domestic rate income                 (17,395)               (17,054)
  Non-domestic rate receipts from
                                            (3,864)                (4,725)
  national pool
  Revenue support grant                     (2,954)                (1,496)
  Grants for rebates                        (8,893)                (9,088)
  Other government grants                   (3,762)                (3,666)                4
  Cash received for goods & services        (7,469)                (8,128)
  Other revenue cash payments/income          (160)                    381
                                                       (88,265)              (84,829)
  Revenue Activities Net Cash Flow                      (4,431)               (3,588)     1

  RETURNS ON INVESTMENTS AND
  SERVICING OF FINANCE
  Cash Outflows:
  Interest paid                              1,258                  1,457
  Interest element of finance lease
                                                 0                      0
  payments
                                             1,258                  1,457
  Cash Inflows:
  Interest received                          (472)                  (549)
                                                           786                   908


  CAPITAL ACTIVITIES
  Cash Outflows:
  Purchase of fixed assets                   7,378                  5,880
  Other capital cash payments                    0                      0
                                             7,378                  5,880
  Cash Inflows:
  Sales of fixed assets                     (5,753)                (4,137)
  Capital grants received                   (1,491)                (1,398)
                                            (7,244)                (5,535)
                                                           134                   345
  Net Cash (Inflow)/Outflow Before
                                                        (3,511)               (2,335)
  Financing




                                                  40
Broxtowe Borough Council                                      Annual Statement of Accounts

                         CASH FLOW STATEMENT (Continued)

                                            2003/04              2002/03         Notes
                                          £’000     £’000     £’000      £’000
  Net Cash (Inflow)/Outflow Before
                                                   (3,511)             (2,335)
  Financing (B/F)

  MANAGEMENT OF LIQUID                                                               2
  RESOURCES
  Net Increase/(Decrease) in Short Term
                                                   (2,320)              1,660
  Deposits

  FINANCING                                                                          2
  Cash Outflows:

  Repayments of amounts borrowed          5,575               5,332

  Capital element of finance lease
                                             0                    0
  payments
                                          5,575               5,332
  Cash Inflows:
  New loans raised                            0              (3,500)
  New short term loans                     (27)                 (73)
  Loans repaid by other authorities        (87)                (998)
                                          (114)              (4,571)
                                                    5,461                 761
  Net (Increase)/Decrease in Cash                   (370)                  86




                                              41
Broxtowe Borough Council                                                          Annual Statement of Accounts

                       NOTES TO THE CASH FLOW STATEMENT

1. Reconciliation of Revenue Cash Flow

                                                          2003/04                     2002/03
                                                       £'000     £'000              £'000    £'000
General Fund (Surplus) / Deficit                                      0                          0
Housing Revenue Account (Surplus) / Deficit                        (18)                      (118)
Depreciation                                         (4,334)                      (4,157)
Additional charge in respect of Minimum
                                                     4,334                        4,157
Revenue Provision
Major Repairs Allowance                              (2,979)                      (2,191)
Direct Revenue Financing                               (469)                        (507)
Premium/Discounts for Loan Rescheduling                (228)                         (68)
Contribution from / (to) Reserves and Balances           961      (2,715)           (222)   (2,988)
                                                                  (2,733)                   (3,106)
(Increase) / Decrease in Provisions                         31                     (178)
(Increase) / Decrease in Revenue Creditors               (727)                      965
Increase / (Decrease) in Revenue Debtors                 (207)                     (341)
Increase / (Decrease) in Stocks and Work in
                                                           (9)      (912)            (20)      426
Progress
                                                                  (3,645)                   (2,680)
Interest Paid                                        (1,258)                      (1,457)
Interest Received                                     472           (786)            549      (908)
Revenue Activities Net Cash Flow                                  (4,431)                   (3,588)



2. Analysis of Net Debt (including analysis of changes in Financing and Liquid Resources)


                                   As at 31.03.04              As at 31.03.03          Movement
                                   £'000      £'000            £'000     £'000             £'000
Cash (In-Hand) / Overdrawn                       (6)                       364             (370)
CHANGES IN FINANCING
AND LIQUID RESOURCES:
Investments                      (6,030)                       (8,350)                       2,320
Long Term Borrowing:
 PWLB                              9,662                       13,914                       (4,252)
 Money Market                      6,000                        6,000                             0
Temporary Borrowing:
 Bramcote Crematorium               307                           280                           27
Debt Serviced for Other
                                 (1,035)                       (1,122)                          87
Authorities
                                                 8,904                   10,722
Total Net Debt                                   8,898                   11,086             (2,188)


The above movements differ from those shown in the Financing section of the Cash Flow Statement because
repayments of amounts borrowed in the Cash Flow Statement includes £1,323,000 for premiums resulting
from the early repayment of loans.




                                                          42
Broxtowe Borough Council                                                        Annual Statement of Accounts

3. Reconciliation of Net Cash Flow Movement to Movement in Net Debt

                                                   2003/04                         2002/03
                                                £'000      £'000                £'000      £'000
Net Debt at 1 April                                     (11,086)                        (13,092)
Increase/(Decrease) in Cash in the period                    370                             (86)

Cash Outflow/(Inflow) from change in Short
                                               (2,320)                          1,660
Term Investments
Cash (Inflow) from new Long Term Borrowing          0                       (3,500)
Cash Outflow from repayment of Long Term
                                                4,252                           5,003
Loans
Cash Outflow/(Inflow) from change in
                                                  (27)                           (73)
Temporary Borrowing
Cash (Inflow) from loans repaid by Other
                                                  (87)                          (998)
Authorities
                                                               1,818                       2,092
Change in Net Debt resulting from Cash Flows                   2,188                       2,006
Other Non Cash Movements                                           0                           0
Change in Net Debt                                             2,188                       2,006
Net Debt at 31 March                                          (8,898)                   (11,086)




4. Analysis of Government Grants

                                                 2003/04           2002/03
                                                   £’000             £’000

   Housing Revenue Account Subsidy                  3,201               3,513

   Planning Delivery Grant                               75                0

   Communities Against Drugs                              0               82
   Safer Communities Initiative                          40               38
   Waste Minimisation                                    47               11
   Homelessness Strategy                               16                  22
   Supporting People                                  383                   0
                                                    3,762               3,666




                                                   43
Broxtowe Borough Council                                                     Annual Statement of Accounts


           AUDITORS’ REPORT TO BROXTOWE BOROUGH COUNCIL
We have audited the statement of accounts on pages 17 to 43 which has been prepared in accordance with
the accounting policies applicable to local authorities as set out on pages 13 to 16.

This report is made solely to Broxtowe Borough Council in accordance with Part II of the Audit Commission Act
1998 and for no other purpose, 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 2, the Director of Finance 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 Council.

We review whether the statement on the system of internal control on pages 3 to 7, 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 not 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 authority’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 explanatory foreword published with the statement of accounts on pages 8 to 12 and consider the
implications for our report if we become aware of any apparent misstatements or material inconsistencies with
the statement of accounts.

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 auditing 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 Council in the preparation of the statement of accounts and of whether the accounting policies are
appropriate to the council’s circumstances, consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all the information and explanations which we considered
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 evaluated the overall adequacy of the presentation of the information in the statement of
accounts.

OPINION
In our opinion the statement of accounts presents fairly the financial position of Broxtowe Borough Council as
at 31 March 2004 and its income and expenditure for the year then ended.

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



SIGNATURE:                                       DATE:

NAME OF ORGANISATION: PRICEWATERHOUSECOOPERS LLP
                                                        44

				
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