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					                     Appendix 1




  STATEMENT OF
ACCOUNTS 2002/2003
     SOUTHEND-ON-SEA BOROUGH COUNCIL
          STATEMENT OF ACCOUNTS
                 2002/2003



                            Mayor

                     Councillor A. Crystall




                    Leader of the Council

        Councillor C.D. Latham (to 20th February 2003)
        Councillor H.P. Briggs (from 20th February 2003)



               Chief Executive and Town Clerk

                J.K.M. Krawiec LL.B., Solicitor




                      Borough Treasurer

                        David Andrews




               Southend-on-Sea Borough Council
Chief Executive & Town Clerk‟s Department - Borough Treasurer‟s
                          PO Box 2
                         Civic Centre
                       Victoria Avenue
                       Southend-on-Sea
                            Essex
                          SS2 6EP
                             Contents
                                                              Page
Explanatory Foreword                                                 1

Statement of Responsibilities for the Statement of Accounts          7

Auditors’ Certificate and Opinion                                    8

Statement of Accounting Policies                                     9

Statement of Internal Control                                    13

The Accounting Statements (and associated notes):

Consolidated Revenue Account                                     15

Notes to the Consolidated Revenue Account                        16

Housing Revenue Account                                          23

Notes to the Housing Revenue Account                             24

Collection Fund                                                  27

Notes to the Collection Fund Accounts                            28

Consolidated Balance Sheet                                       30

Notes to the Consolidated Balance Sheet                          31

Statement of Total Movement in Reserves                          45

Consolidated Cash Flow Statement                                 48

Notes to the Consolidated Cash Flow Statement                    49

Terms and Abbreviations                                          52
                           EXPLANATORY FOREWORD

1.       Introduction
This publication presents the financial performance for 2002/2003 of the activities undertaken by Southend-on-Sea
Borough Council.

2.       Financial Statements
The financial statements cover all the activities of the Council and include: -


i)    Statement of Accounting Policies

This explains the basis on which the accounts have been prepared.


ii)   Consolidated Revenue Account

This shows the revenue income and expenditure of the authority


iii) Housing Revenue Account

This covers the activities of the Council as a landlord of approximately 6,500 dwellings.


iv) Collection Fund

This account reflects the statutory requirement for billing authorities to maintain a separate Collection
Fund, which shows the transactions of the Authority in relation to non-domestic rates, community charge and council
tax and the way money has been distributed between Leigh-on-Sea Town Council, Essex Police Authority and
Southend-on-Sea Borough Council.


v)    Consolidated Balance Sheet

This is the balance sheet of all of the Council's activities including the Collection Fund and Housing Revenue Account.


vi) Statement of Total Movement in Reserves

This statement summarises the movements in the revenue and capital reserves.


vii) Cash Flow Statement

This statement summarises the inflows and outflows of cash arising from transactions with third parties.




                     Southend-on-Sea Borough Council – Statement of Accounts 2002/2003            1
                            EXPLANATORY FOREWORD

3.        Revenue Sources of Funding, Expenditure and Services Provided
Sources of Funding

The Council‟s revenue spending is funded from various sources.

                                                                                     Revenue
                                                                                     Funding        Percentage
                                                                                       £m               %
  S ource of funding:-
  Government Grant                                                                         61.1             16.3
  HRA Rents                                                                                17.1              4.6
  HRA Subsidy                                                                              12.3              3.3
  Sales, Fees and Charges                                                                  36.7              9.8
  Other Income                                                                             82.5             22.1
  Revenue Support Grant                                                                    66.1             17.6
  Non Domestic Rates                                                                       54.4             14.6
  Council Tax                                                                              43.6             11.7
  Total                                                                                  373.8


Revenue Expenditure

                                                                                    Revenue
                                                                                   Expenditure      Percentage
                                                                                       £m               %
  Type of expenditure:-
  Employees                                                                               58.6             15.7
  Capital Charges                                                                         17.4              4.7
  Third Party Payments                                                                   158.9             42.5
  Transfer Payments                                                                       49.8             13.3
  Other Expenses                                                                          89.1             23.8
  Total Revenue Expenditure                                                              373.8

Other Expenses include maintenance of buildings, vehicle costs, purchase of supplies. Capital charges are notional
charges made to services for the capital assets employed in the delivery of services.




                     Southend-on-Sea Borough Council – Statement of Accounts 2002/2003       2
                             EXPLANATORY FOREWORD

Services Provided

The proportion of expenditure by the Council on the various services.

                                                                                            Net
                                                                                        Expenditure       Percentage
                                                                                            £m                %
  S ervice:-
  Central Services to the Public                                                                33.1               8.9
  Cultural, Environmental and Planning                                                          43.9              11.7
  Education                                                                                    139.0              37.2
  Highways, Roads and Transport                                                                 16.4               4.4
  Housing                                                                                       71.0              19.0
  Social Services                                                                               65.5              17.5
  Corporate and Democratic Core                                                                  3.0               0.8
  Unapportionable Central Overheads                                                              1.9               0.5
  Total                                                                                        373.8

Central Services to the Public – this includes council tax benefit and administration, all central support services,
registration of births, deaths and marriages, elections and emergency planning.

Corporate and Democratic Core – this includes mayoral costs, members‟ allowances as well as all the cost of members‟
activities in the capacity of democratic representation and core costs for the provision of the management infrastructure
to support the delivery of services.

Unapportionable Central Overheads – this is our contribution, as determined by the actuarial valuation as at 31 st March
2001, of the estimated deficiency on our share of the Pension Fund assets compared to the ongoing liabilities of current
and past employees.

Housing Revenue Account

The main categories of expenditure within the Housing Revenue Account.

                                                                                            Net
                                                                                         Expenditure       Percentage
                                                                                             £m                %
  Housing Revenue Expenditure:-
  Repairs and M aintenance                                                                       4.4              11.8
  Supervision and M anagement                                                                    5.5              14.7
  Rent Rebates                                                                                  12.4              33.2
  Debt Charges                                                                                  10.0              26.7
  Other                                                                                          5.1              13.6
  Total                                                                                         37.4




                     Southend-on-Sea Borough Council – Statement of Accounts 2002/2003             3
                               EXPLANATORY FOREWORD

4.           The General Fund 2002/2003 Budget
The Council agreed a budget, including Leigh-on-Sea Town Council precept and after the use of reserves of £164.151m
in 2002/2003 (2001/2002 - £160.321). After government grants, the community charge and council tax surpluses have
been taken into account, a demand on the Collection Fund of £43.196m was made by this Council. This resulted in the
council tax of £733.70 for a Band D property in 2002/2003, (£745.51 for the areas covered by Leigh-on-Sea Town
Council). This excludes the amount relating to the Essex Police Authority (see note 8 Financial Facts for 2002/2003).

The General Fund Summary Revenue Account (excluding the Housing Revenue Account) is shown below:


                                                                       Original         Revised          Actual
                                                                       Estimate        Estimate
                                                                        £000's           £000's          £000's

     Net expenditure:

     Southend-on-Sea Borough Council                                    165,400          167,348          165,747

     Leigh-on-Sea Town Council                                              101              101              101

     Total before reserves                                              165,501          167,449          165,848

     Use of reserves                                                      (1,350)          (2,150)          (1,697)

     Items carried forward from 2001/2002                                        0         (1,148)                0

     Total                                                              164,151          164,151          164,151

     Financed by:-

     Revenue Support Grant                                                66,133          66,133           66,133

     Distributions From NDR Pool                                          54,418          54,418           54,418

     Demand on Collection Fund                                            43,196          43,196           43,196

     Collection Fund Surplus                                                404              404              404

     Total                                                              164,151          164,151          164,151

The reserves of the General Fund on 31st March 2003 were £22.755m (31st March 2002 - £26.836m), including
earmarked reserves of £18.757m (31st March 2002 - £20.455m).

5.           Housing Revenue Account
For 2002/2003 the Housing Revenue account had a surplus of £1.857m. and the cumulative balance carried forward
was £9.710m. The major repairs reserve had a balance at 31 st March 2003 of £4.472m. ( 31st March 2002 -£2.028m ).

Average rents in 2002/2003 were £51.22 per property which included the rent increase at April 2002 of 3.3%. The
Council has started the implementation of rent restructuring from April 2003 and has introduced separate service
charges for relevant tenants in accordance with Government guidelines.




                        Southend-on-Sea Borough Council – Statement of Accounts 2002/2003         4
                          EXPLANATORY FOREWORD

6.       Capital
In 2002/2003 the Council spent £38.022m, £33.217m on General Fund and £4.805m on Housing Services. The areas of
capital expenditure within the £33.217m were:

    Education                             £10.072m
    Local Transport Plan                   £7.848m
    Sea Defences                           £4.968m
    Southend Pier                          £2.697m
    Regeneration Objective 2               £1.907m
    Health and Social Care                 £1.441m
    Schools Devolved Capital               £1.213m
    Other Leisure                          £1.104m
    Other Highways                         £1.085m
    Other Schemes                          £0.882m
     Total                                 £33.217m

Expenditure on the acquisition of tangible assets that improves and not merely maintains the value of existing assets
must be capitalised.

Capital expenditure was financed in the following manner:

    Borrowing                             £16.535m
    Grants                                £11.974m
    General Reserves                        £4.874m
    Major Repairs Reserve (Housing)         £1.638m
    Capital Receipts                       £1.307m
    Third Party Contributions               £0.840m
    Revenue Contributions                   £0.854m
     Total                                 £38.022m


7.       Leigh-on-Sea Town Council
The precept for 2002/2003 was set at £100,737 (2001/2002 - £91,878). This resulted in a Council Tax of £11.81
(2001/2002 - £10.73) for a Band D property in the area of the Town Council.




                   Southend-on-Sea Borough Council – Statement of Accounts 2002/2003           5
                           EXPLANATORY FOREWORD

8.      Financial Facts for 2002/2003
Council Tax for a band D property:

                                                                                                       £
  Southend-on-Sea Borough Council                                                                     733.70
  Leigh-on-Sea Town Council                                                                            11.81
  Essex Police Authority                                                                               77.67
  Total for Leigh-on-S ea Town Council Area                                                           823.18
  Total for all other parts of the Borough                                                            811.37
 Council tax base - £58,736.70

 Council tax base - Leigh-on-Sea Town Council -£8,527.89

 Essex Police Authority precept of £4.562m.

 Southend-on-Sea Borough Council budget requirement was £164.050m.

 Southend-on-Sea Borough Council demand on Collection Fund was £43.196m.

 Standard Spending Assessment of £163.251m.

 Business Rate of 43.7p per £ of Rateable Value.

PricewaterhouseCoopers are the auditors appointed by the Audit Commission.

Any comments or suggestions for improvements in the format of these accounts in future years would be
welcomed submitted to the address at the beginning of this booklet.




                                                                    Councillor H.P. Briggs
                                                                    Leader of the Council
                                                                    Southend-on-Sea Borough Council




                    Southend-on-Sea Borough Council – Statement of Accounts 2002/2003      6
       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 Borough Treasurer;

 To manage its affairs to secure economic, efficient and effective use of resources and safeguard its assets.

 To approve the statement of accounts

The Borough Treasurer’s Responsibilities

The Borough Treasurer is responsible for the preparation of the Authority‟s statement of accounts which, in terms of
the CIPFA Code of Practice on Local Authority Accounting in Great Britain („the Code of Practice‟), is required to
present fairly the financial position of the authority at the accounting date and its income and expenditure for the year
ended 31st March 2003.

In preparing this statement of accounts, the Borough Treasurer 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;

 kept proper accounting records which were up to date;

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




                                  BOROUGH TREASURER‟S CERTIFICATE
                         I certify that the accounts set out on pages 15 to 51 represent
                         the true financial position of the Council at 31st March 2003.




                                           BOROUGH TREASURER




                    Southend-on-Sea Borough Council – Statement of Accounts 2002/2003              7
              AUDITORS‟ CERTIFICATE AND OPINION

AUDITORS’ REPORT TO Southend-on-Sea Borough Council

We have audited the statement of accounts on pages 15 to 51, which have been prepared in accordance with the
accounting policies applicable to local authorities as set out on pages 9 to 12.

Respective Responsibilities to Borough Treasurer and Auditors

As described on page 7 the Borough Treasurer is responsible for the preparation of the statement of accounts. Our
responsibilities as independent 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.

Basis of Opinion

We carried out 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 the relevant audit standards. Our audit included examination,
on a test basis of evidence relevant to the amounts and disclosures in the statement of accounts. It also included an
assessment of the significant estimates and judgements made by the authority in the preparation of the statement of
accounts and of whether the accounting policies are appropriate to the authority‟s circumstances, consistently applied
and adequately disclosed.

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

Opinion

In our opinion the statement of accounts presents fairly the financial position of Southend-on-Sea Borough Council at
31st March 2003 and its income and expenditure for the year then ended.

Certificate

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

Signature




Date



PricewaterhouseCoopers
Southwark Towers
32 London Bridge Street
London SE1 9SY




                    Southend-on-Sea Borough Council – Statement of Accounts 2002/2003              8
            STATEMENT OF ACCOUNTING POLICIES

1. General
The accounts have been prepared in accordance with the Code of Practice for Local Authority Accounting in Great
Britain Statement of Recommended Practice (SORP), issued by the Chartered Institute of Public Finance and
Accountancy (CIPFA).

2. Income and Expenditure
The accounts are prepared on an accruals basis.

Interest payable on external borrowings and interest earned is accrued and accounted for in the accounts of the period to
which it relates on a basis which reflects the overall economic effect of the borrowings and investments.

Accruals are made for all known material revenue debtors and creditors for goods and services supplied both by and to
the Authority during the year.

3. Materials Reserves and Provisions
The reserves of the General Fund include:

a)   The General Fund balance combines all funds held for general purposes and is available to meet future net
     expenditure as required. The General Fund receives all interest on external investments except the element
     relating to the Housing Revenue Account balance. The Housing Revenue Account is ring-fenced and is utilised in
     the provision of housing services.

b)   A repairs and renewals reserve is maintained by the General Fund specifically for the replacement or repair of
     scheduled items.

c)   A capital reserve is maintained for future capital expenditure that will be financed from revenue contributions.

d)   An insurance provision exists to cover reported claims, whilst an insurance reserve is maintained to provide future
     cover for potential liabilities arising from insurance claims.

e)   Other reserves are held to meet unpredictable items of expenditure and have been accumulated by contributions
     from revenue.

f)   Provisions for bad and doubtful debts have been made in:-

    The Collection Fund for Council Tax, Community Charge and Non-Domestic Rates (NDR) in the light of
     anticipated collection levels.

    The Housing Revenue Account for housing rent arrears in accordance with recommended practice.

    The General Fund for residual rates and other miscellaneous income, in accordance with recommended practice.

In all cases the provisions were reassessed for appropriateness.

g)   Specific movements on reserves are disclosed in The Statement of Total Movement in Reserves. Movements in
     provisions are disclosed in notes to the Consolidated Balance Sheet.




                    Southend-on-Sea Borough Council – Statement of Accounts 2002/2003              9
                STATEMENT OF ACCOUNTING POLICIES

    4.    Fixed Assets
    Fixed assets are included in the Balance Sheet at valuation, less depreciation where appropriate. Service revenue
    accounts are charged with capital charges for all fixed assets used in the delivery of the service, comprising a provision
    for depreciation (where appropriate) and a notional interest charge. Capital financing costs are disclosed separately in
    the Consolidated Revenue Account.

    Operational assets have been included in the Balance Sheet at the lower of open market value for existing use or
    depreciated replacement cost. Non-operational assets have been included at open market value. Infrastructure and
    community assets, which by their nature are not capable of being realised, are included at their historical cost.

    The current asset values used in the accounts are based upon a certificate issued by the Department of Technical and
    Environmental Services in accordance with the Statement of Asset Valuation Practice and Guidance Notes of the Royal
    Institute of Chartered Surveyors.

    Large public buildings and schools have been revalued as at 31 st March 2003 thereafter, all assets of the council will be
    revalued on a rolling 5 year programme.

    5.    Depreciation
    Depreciation is a measure of the wearing out, consumption or reduction in the useful economic life of a fixed asset. It
    has been charged on those assets that have a finite useful life, excluding land, and is calculated by taking the valuation
    and apportioning it over the economic life of the asset.

    6.    Charges to Revenue
    General fund services and central support services are charged with a capital charge for all fixed assets used in the
    provision of services. The total charge covers the annual provision for depreciation plus a capital financing charge
    determined by applying a notional rate specified annually by CIPFA to net asset values. For 2002/2003 these rates
    were 6% for assets carried at current value and 6% for assets such as infrastructure and community assets, carried at
    historical cost.

    External interest payable and the provision for depreciation are charged to the Asset Management Revenue Account,
    which is credited with the capital charges made to services. Capital charges therefore have a neutral impact on the
    amounts required to be raised from local taxation.

    Amounts set aside from revenue (by means of a minimum revenue provision) for the repayment of external loans and to
    finance capital expenditure are disclosed separately as appropriations, on the face of the Consolidated Revenue
    Account, below net operating expenditure.

    The Housing Revenue Account is charged with a notional 6% capital charge and a depreciation charge.

    7. Capital Reserves

        The Fixed Asset Restatement Reserve represents the balance of the surpluses and deficits arising from the
         revaluation of fixed assets.

        The Capital Financing Reserve represents amounts set aside from revenue resources or capital receipts to finance
         expenditure on fixed assets. This represents sums for debt redemption from the minimum revenue provision and
         “set-aside” capital receipts.

        The Usable Capital Receipts Reserve represents the proportion of capital receipts available to finance new
         capital investment.




                        Southend-on-Sea Borough Council – Statement of Accounts 2002/2003              10
            STATEMENT OF ACCOUNTING POLICIES

8.   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. Capital grants have been applied to the appropriate capital expenditure during the
year.

9.   Basis of Determining Interest Charges

Interest is paid to the Housing Revenue Account using the average rate of interest earned by the authority from external
investments. Interest on capital is charged by applying the average rate of interest to outstanding borrowings.

10. Treatment of Leases

Finance Leases

Rental payments under finance leases are apportioned between the finance charge and the reduction of the outstanding
obligation, with the finance charge being allocated and charged to revenue over the term of the lease.

Operating Leases

Rentals payable, net of benefits received or receivable (eg cash incentives for a lessee to sign a lease), under operating
leases are charged to revenue on a straight line basis over the term of the lease, even if the payments are not made on
such a basis, unless another systematic and rational basis is more appropriate.

11. Stocks and Works in Progress

All stocks are valued at replacement cost. Works in progress are valued on the basis of the cost of work done.

12. Allocation of Support Services

The Council has adopted the principle of the full allocation of support service costs as recommended by CIPFA.

13. Investments

Investments are in accordance with the Council‟s Treasury Management Policy and are only placed with:-

 Banks (Clearing and Merchant) as authorised by the Banking Act 1987, who are UK incorporated and rated by
  IBCA (A1+ or A1), Moody‟s (P1) or Standard and Poor‟s (A1+ or A1).

 Building Societies - the top 20 as defined by asset size.

 Local Authorities

Investments undertaken by Scottish Widows Investment Partnership Ltd and Morley Fund Management on behalf of
the Council can also be placed in certificates of sterling cash deposits issued by authorised banks under the Banking
Act 1987 and Building Societies all rated A1+, Treasury bills and gilt edged securities and the fund managers own cash
portfolio (subject to agreed limits). Investments are shown in the accounts at market value.




                    Southend-on-Sea Borough Council – Statement of Accounts 2002/2003              11
            STATEMENT OF ACCOUNTING POLICIES

14. Borrowing Limits

Under Section 45 of the Local Government and Housing Act 1989 the council has determined:

 an overall borrowing limit of £100m.

 a short term borrowing limit of £20m.

 the maximum proportion of total interest payable at variable rates of 50%.

During the year, the outstanding balance on a loan from the European Investment Bank of £112,914 was repaid in full
together with a prepayment premium of £16,246.

15. Pension Costs

Local Government Scheme The pension costs that are charged to the Council's accounts in respect of its employees
are equal to the contributions paid to the funded pension scheme for these employees. Further costs arise in respect of
certain pensions paid to retired employees on an unfunded basis. These costs have been determined on the basis of
contribution rates that are set to meet the liabilities of the Pension Fund. S.S.A.P. 24 “Accounting for pension costs”
was never fully incorporated into the SORP, as a result, the Council does not comply with the accounting requirements
of S.S.A.P. 24 and the liabilities included in the balance sheet are understated in respect of pension costs. The amounts
that would have been necessary in order to provide for pension costs in accordance with S.S.A.P. 24 are disclosed by
way of a note to the summary revenue account.

Teachers This is an unfunded scheme administered by the Department for Education and Skills. The pension cost
charged to the accounts is the contribution rate set by DFES on the basis of a notional fund.

FRS 17 Under the transitional arrangements for financial years ending on or after 22nd June 2002 and before 22nd June
2003, implementation of FRS 17 is limited to certain balance sheet disclosures. A memorandum note to the balance
sheet discloses information on the fund‟s assets as well as the movement in the year on the net asset/liability relating to
the defined benefit scheme, analysed across the different gains and losses defined by FRS 17.

16. Deferred Charges

Deferred Charges are charged to revenue on the basis of the benefit obtained by the service from the expenditure in that
period.

17. Euro

During the last financial year the Council has been a member of the CIPFA Euro Forum. This forum provides the
opportunity to discuss with colleagues from other Local Authorities the common issues faced in planning for the
possible introduction of the Euro in the United Kingdom. Membership of the CIPFA Euro Forum will continue in the
next financial year.

There have been no specific funds allocated for Euro preparation. Until the decision is made to adopt the Euro, the
expenditure on Euro activities should be absorbed, together with expenditure incurred on other strategic planning
analyses, within existing budgetary provision.




                    Southend-on-Sea Borough Council – Statement of Accounts 2002/2003               12
               STATEMENT OF INTERNAL CONTROL

Statement of Assurance on the Council’s corporate governance arrangements, risk
management processes and internal controls

1.       Overview
Southend-on-Sea 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, properly accounted for and used economically, efficiently
and effectively. In order to ensure this, members and senior officers are responsible for:

    Putting in place proper arrangements for the governance of the Council‟s affairs and the stewardship of the
     resources at its disposal
    Ensuring that an effective system of risk management and internal controls is maintained

2.       Governance
The Council has approved and adopted a Local Code of corporate governance, which is consistent with the principles
and reflects the requirements of the CIPFA/SOLACE framework “Corporate Governance in Local Government: A
Keystone for Community Governance”. A copy of the code is on our website (www.southend.gov.uk) or can be
obtained from the Strategy & Performance Unit on 01702 215167.

In June 2002, the Council put in place appropriate management and reporting arrangements to enable it to satisfy itself
that its approach to corporate governance is both adequate and effective in practice. The Assistant Chief Executive has
been given responsibility for

    Overseeing the implementation and monitoring the operation of the code
    Reviewing the operation of the code in practice on an annual basis
    Reporting annually to Cabinet on compliance with the code and any changes that may be necessary to maintain it
     and ensure its effectiveness in practice
    Preparing a summary report to be made available in the Best Value Performance Plan

In addition the Chief Internal Auditor, on behalf of the Borough Treasurer, has been given the responsibility to
undertake an independent review and report to Cabinet annually to provide assurance on the adequacy and
effectiveness of the code and extent of compliance with it.

On the basis of the Cabinet reports of both the Assistant Chief Executive and the Chief Internal Auditor arising from
the reviews of the Council‟s corporate governance arrangements for 2002/2003, we are satisfied that except for the
matters listed below, they are adequate and operating effectively. In particular in 2002/2003, significant progress has
been made in developing a Local Strategic Partnership “Southend Together”, adopting and implementing a risk
management strategy and introducing a performance management framework. This has resulted in the launch of a
community plan; formulation of corporate and departmental risk registers through the involvement of Members and
Officers; the adoption of a corporate plan; the finalisation of departmental delivery plans; and the introduction of
regular performance monitoring reports to Cabinet.

There are certain aspects of the code of corporate governance that require further enhancement, in order to ensure that
the Council is fully compliant. The main areas that require further enhancement as identified in the 2002/2003 annual
review are:

    The Council‟s approach to consultation to provide a more co-ordinated and effective approach to consultation.
    The performance management framework in particular the quality and format of performance monitoring
     information presented to senior officers and Members and further development of the links between the Council‟s
     corporate objectives, departmental delivery plans and individual development plans.
    Formalisation of the Council‟s approach to providing and recording Member training.

We propose over the coming year to take steps to address the above 3 matters to further enhance our corporate
governance arrangements. We are satisfied that these steps will address the need for improvements that were identified
and will monitor their implementation and operation as part of our next annual review.




                   Southend-on-Sea Borough Council – Statement of Accounts 2002/2003             13
                STATEMENT OF INTERNAL CONTROL

3.       Risk management processes and Internal controls
The Council has approved and adopted a risk management strategy and “controls assurance” process formalising the
Council‟s responsibility for maintaining a sound system of internal controls (including financial controls) and risk
management processes and for ensuring that these systems are regularly reviewed to ensure effectiveness. The system
of internal controls is based on an ongoing process designed to identify the principal risks that threaten the achievement
of corporate and departmental objectives, to evaluate the nature and extent of those risks and to manage them.

The system of internal control is designed to manage rather than eliminate the risk of failure to achieve the Council‟s
objectives; it can therefore only provide reasonable and not absolute assurance of effectiveness.

The Council‟s review of the effectiveness of the systems of internal controls and risk management processes for
2002/2003 is informed by

a)       Self certification assurance statements (relating to 2002/2003) provided by Directors and Assistant Directors
         based on their review of the

(i)      Adequacy and effectiveness of officer review processes
(ii)     Outcomes from formal risk assessments and departmental risk registers
(iii)    Relevant self-assessments of key service areas within the department
(iv)     Relevant internal audit reports and results of follow ups regarding implementation                             of
         recommendations
(v)      Outcomes from reviews of services by other bodies including, Inspectorates, external auditors etc

b)       The report of the Assistant Chief Executive relating to the effectiveness of the Council‟s risk management and
         corporate governance processes

c)       The work of Internal Audit and the Chief Internal Auditor‟s independent annual opinion to Cabinet relating to
         the adequacy and effectiveness of the Council‟s system of internal controls and risk management processes.

d)       The work of the external auditors and comments in their annual management letter and other reports

This review has identified certain areas where internal controls have needed or still need to be enhanced. These areas
have been detailed in the corporate risk register, departmental risk registers and Directors‟/Assistant Directors‟ controls
assurance statements and actions assigned to enhance controls over the coming year. We are satisfied that these actions
will strengthen controls and will monitor their implementation and operation as part of the Council‟s next annual
review.

We are satisfied that except for these matters a sound system of internal control has been in place throughout the
financial year and is ongoing.

By Order of the Council




…………………………………………                                       ……………………………………….
Councillor H.P. Briggs                                 J.K.M. Krawiec
Leader of the Council                                  Chief Executive and Town Clerk

on behalf of Southend-on-Sea Borough Council




                    Southend-on-Sea Borough Council – Statement of Accounts 2002/2003               14
               CONSOLIDATED REVENUE ACCOUNT

 2001/2002                                                                     2002/2003     2002/2003     2002/2003
    Ne t                                                                         Gross         Gross          Ne t
Expe nditure                                                                  Expe nditure    Income      Expe nditure
   £000's                                                                        £000s         £000s         £000s
               Expe nditure on Se rvice s
      3,662    Central Services to the Public                                      33,143      (29,689)         3,454
     24,226    Cultural, Environmental and Planning                                43,871      (17,656)        26,215
     98,397    Education                                                          139,319      (41,292)        98,027
      6,633    Highways, Roads and T ransport                                      16,367       (9,349)         7,018
     10,092    Housing                                                             71,076      (61,197)         9,879
     36,029    Social Services                                                     65,459      (26,922)        38,537
      2,743    Corporate and Democratic Core                                        2,999             0         2,999
      1,860    Unapportionable Central Overheads                                    1,931             0         1,931
    183,642    NET CO ST O F SERVICES                                             374,165     (186,105)       188,060
      6,186    Levies                                             (Note 1)          6,510                       6,510
         92    Leigh-on-Sea T own Council Precept                                     101                         101
         31    Council T ax subsidy limitation scheme                                   0                           0
         41    (Surpluses)/deficits on trading undertakings       (Note 6)             54                          54
      2,511    Deferred charges                                                     2,748                       2,748
   (29,465)    Asset Management Revenue Account                   (Note 8)                     (28,489)      (28,489)
     (1,208)   Interest and Investment Income                                                   (1,268)        (1,268)
    161,830    NET O PERATING EXPENDITURE                                         383,578     (215,862)       167,716
               APPRO PRIATIO NS
      1,150    T ransfer to HRA balances                                                                        1,857
     (8,021)   Contribution to capital financing reserve          (Note 9)                                     (7,891)
      1,013    Deferred liability                                                                                 973
      2,565    Revenue Contribution to Capital Financing                                                        5,449
      1,084    Contribution to/(from) Specific Revenue Reserves                                                (2,256)
               AMO UNTS TO BE MET FRO M GO VERNMENT
    159,621    GRANTS AND LO CAL TAXATIO N                                                                    165,848
   (69,224)    Revenue Support Grant                                                                         (66,133)
   (49,684)    Distribution from NDR Pool                                                                    (54,418)
   (41,130)    Demand on Collection Fund                                                                     (43,196)
      (283)    Collection Fund Surplus                            (Note 14)                                     (404)
  (160,321)                                                                                                 (164,151)
      (700)    NET GENERAL FUND (SURPLUS)/DEFICIT                                                               1,697

     (5,748)   Balance on Ge ne ral Fund Brought Forward                                                       (6,381)
      (700)    Net General Fund Deficit/(Surplus)                                                               1,697
         67    Contribution to/(from) Specific Revenue Reserves                                                   686
     (6,381)   Balance on Ge ne ral Fund Carrie d Forward                                                      (3,998)




                  Southend-on-Sea Borough Council – Statement of Accounts 2002/2003              15
             NOTES TO THE CONSOLIDATED REVENUE
                          ACCOUNT
Note 1.       Levies

                                                                                            2001/2002       2002/2003
                                                                                              £000's          £000's
  Essex Fire Authority                                                                           4,824          5,106
  Essex Local Flood Defence Committee                                                            1,042          1,055
  Essex M agistrates' Court Committee                                                                185          185
  Coroner's Courts                                                                                   118          147
  Kent and Essex Sea Fisheries Committee                                                              17           17
  Total Levies                                                                                   6,186          6,510

Note 2.       Expenditure on Publicity
Section 5 of the Local Government Act 1986 requires a local authority to keep a separate account of its expenditure on
publicity.


                                                                                             2001/2002      2002/2003
                                                                                               £000's         £000's
  M arketing
     Expenditure                                                                                     254         274
     Income                                                                                          (21)        (15)
     Net Marketing Expenditure                                                                       233         259
  Advertising
     Staff                                                                                           372         422
     General                                                                                         479         581
     Net Advertising Expenditure                                                                     851        1,003
  Total Publicity Expenditure                                                                    1,084          1,262


Note 3.       Contributions to Joint Committees and Joint Bodies

Southend-on-Sea Borough Council has contributed £0.3m towards the cost of Magistrates and Coroner‟s Services.

Southend-on-Sea Borough Council is a constituent member of the combined Fire Authority for Essex and as such is
responsible for meeting its proportion of the cost of the service (£5.1m).




                     Southend-on-Sea Borough Council – Statement of Accounts 2002/2003          16
          NOTES TO THE CONSOLIDATED REVENUE
                       ACCOUNT
Note 4.     Officers‟ Emoluments
The number of employees, including teachers, whose remuneration, excluding pension contributions, was £50,000 or
more.


                                                                                              2001/2002     2002/2003
                                                                                                 No.           No.
                                                                                                S taff        S taff
  Remuneration
     £50,000 to £59,999                                                                                27           20
     £60,000 to £69,999                                                                                9            22
     £70,000 to £79,999                                                                                4            4
     £80,000 to £89,999                                                                                1            5
     £90,000 to £99,999                                                                                1            1
     £100,000 to £109,999                                                                              1            1
     £110,000 to £119,999                                                                              1            0
     £120,000 to £129,999                                                                              1            0
     £130,000 to £139,999                                                                              0            1
  Total                                                                                                45           54
Overall there has been an increase of 9 staff falling into these remuneration bands, mainly due to increased
remuneration through increments and cost of living increases. The 54 staff included 26 at schools and the Adult College
(2001/2002 – 20 at schools and the Adult College).

This table includes any severance payments that have been made in either of the two years.

Note 5.     Pensions
In 2002/2003 the council paid an employers contribution of £5.546m, based on 13.80% (2001/2002 - £4.829m based on
13.06%) of participating employees pensionable pay, into the Essex County Council Pension Fund, which provides
members with defined benefits related to pay and service. The contribution rate is based on triennial actuarial
valuations, the last valuation being as at 31st March 2001 (this rate applies for 3 years from 1 st April 2002). The
increase in contribution for 2002/2003 is due to an increase in the deficiency contribution of £165,000 and an increase
in employers contributions of £552,000 as a result of pay awards, increments and changes in staffing levels, and an
increase in the employers contribution rate.

The Fund‟s Actuary has advised that the pension costs necessary to provide for in the year in accordance with S.S.A.P.
24 “Accounting for Pension Costs” should be 14.22% of pensionable pay (2001/2002 – 13.05%). In 2002/2003 this
amounted to £5.714m (2001/2002 - £4.825m). This amount would have had to have been provided for in the year in
order to meet future pension liabilities on a systematic and rational basis over the period which the Council derives
benefit from its employees‟ services. This information was provided after the end of the financial year, the £5.546m
actually paid was based on an estimated position when the budget was prepared.

In addition, the Council is also responsible for all pension increases and added year‟s payments totalling £0.674m
(2001/2002 - £0.650m), which represents 1.68% of pensionable pay (2001/2002 – 1.76%).

The capital cost of discretionary increases in pension payments and strain on the fund in 2002/2003 totalled £0.035 m.

The cost in relation to earlier years, for which payments are still being made, totalled £6.897m (2000/2001 - £6.715m).

The transitional period disclosures relating to FRS17 are disclosed in note 13 to the Consolidated Balance Sheet.




                   Southend-on-Sea Borough Council – Statement of Accounts 2002/2003              17
          NOTES TO THE CONSOLIDATED REVENUE
                       ACCOUNT
Teachers Pensions

In 2002/2003 the Council paid £3.578m at a contribution rate of 8.35% (2001/2002 - £2.912m at a contribution rate of
7.40%) to the Department for Education and Skills in respect of teachers‟ pension costs. Added years payments
awarded in respect of the teachers‟ pension scheme were £23,210.

Note 6.     Trading Undertakings

                                                                                                2001/2002      2002/2003
                                                                                                  £000's         £000's
  The Building Services Division                                           Turnover                3,386          3,580
  provides a repairs and maintenance service
  to the Authority's housing stock and undertakes a                        Expenditure             3,352          3,532
  small amount of work for other public bodies
                                                                           S urplus                     (34)        (48)
  The Amenity Services Organisation                                        Turnover                1,100          1,285
  provides a grounds maintenance service
  to the Authority and carries out a small                                 Expenditure             1,259          1,427
  amount of work for other public bodies
                                                                           Deficit                      159         142
  The Personnel section provides                                           Turnover                      84          78
  an advisory service to schools
                                                                           Expenditure                   60          90

                                                                           (S urplus)/Deficit           (24)          12
  Building control (see note 15)                                           Turnover                     323         396

                                                                           Expenditure                  263         344

                                                                           S urplus                     (60)        (52)
  Total deficit/(surplus) on trading activities                                                          41           54
Losses incurred on the Amenity Services Organisation contracts should cease in 2003/2004 due to the full year effect of
new contracts started on 1st January 2003.




                    Southend-on-Sea Borough Council – Statement of Accounts 2002/2003              18
          NOTES TO THE CONSOLIDATED REVENUE
                       ACCOUNT
Note 7      Government Grants
Significant Government Grants received towards revenue expenditure during the year were as follows:


                                                                                            2001/2002 2002/2003
                                                                                             £000's     £000's
  Office of Deputy Prime Minister
  Revenue Support Grant                                                                        69,224        66,133
  Distribution from N.D.R. Pool                                                                49,684        54,418
  Housing Subsidy                                                                              12,133        12,326
  N.D.R. Cost of Collection                                                                         261        261
  Department for Work and Pensions
  Housing and Council Tax Benefit                                                              33,902        35,596
  Housing Benefit Administration                                                                    655        728
  Total Government Grants                                                                     165,859       169,462


Note 8.     Asset Management Revenue Account
This account consolidates interest payable on loans and depreciation with the charges made to services for the use of
assets. The balance on this account is transferred to Revenue Account. The impact of the capital charges, which are
calculated on a notional basis, is therefore nil.


                                                                                             2001/2002 2002/2003
                                                                                               £000's    £000's
  Expenditure
     External Interest                                                                              3,910      4,645
     Depreciation                                                                                   7,131      7,378
                                                                                                 11,041      12,023
  Less: Capital charges made to services                                                       (40,506)     (40,512)
  Income to Revenue Account                                                                    (29,465)     (28,489)




                    Southend-on-Sea Borough Council – Statement of Accounts 2002/2003          19
          NOTES TO THE CONSOLIDATED REVENUE
                       ACCOUNT
Note 9.     Contribution to Capital Financing Reserve
The net amount charged to the revenue accounts in compliance with the statutory requirement for the repayment of
external loans is:


                                                                                             2001/2002     2002/2003
                                                                                               £000's        £000's
  General Fund                                                                                   1,037         1,696
  Housing Revenue Account                                                                            584        539
  Minimum Revenue Provision                                                                      1,621         2,235
  Less:
  Deferred charges                                                                              (2,511)      (2,748)
  Amount Charged as Depreciation                                                                (7,131)      (7,378)
  Provision for Repayment of External Loans                                                     (8,021)      (7,891)


The Council is required to set-aside a minimum revenue provision (MRP) for the redemption of external debt. The
method for calculating the provision is defined by statute and for 2002/2003 the amount is £2,235,000, and this amount
has been charged to revenue as a depreciation charge for the fixed assets relating to services.

Note 10. Leased Assets – Rentals
The rentals relating to outstanding leases are:-

                                                                                              Finance      Operating
                                                                                               Leases       Leases
                                                                                               £000's       £000's
  Total Rentals Paid in 2002/2003                                                                     1         564
  Outstanding undischarged Leasing Obligations
  · 2003/2004                                                                                         1         426
  · 2004/2005                                                                                         1         276
  · 2005/2006                                                                                         1         142




                     Southend-on-Sea Borough Council – Statement of Accounts 2002/2003          20
          NOTES TO THE CONSOLIDATED REVENUE
                       ACCOUNT
Note 11. Related Party Transactions
The Council is required to disclose material transactions with related parties. These are bodies or individuals that have
the potential to control or influence the Council or to be controlled or influenced by the Council.

 Central Government

 Details of significant transactions with Government Departments are set out in Note 7 to the consolidated revenue
 account and in note 1 to the cash flow statement.

 Members of the Council

 A Member was the chairman of an organisation which received grant of £23,409 from the Council.
 A Member was related to the secretary of an organisation which received grant of £138,484 from the Council
 A Member was president of a group which received grant of £500 from the Council
 A Member was chairman of a panel which received grant of £526 from the Council
 A Member was a director of an organisation which received £138,484 from the Council

 Other Public Bodies

 The Council paid a precept to the Essex Police Authority of £4,562,000
 Other levies are set out in note 1 to the consolidated revenue account


 Other Organisations

 Grants made to voluntary organisations which fund at least 20% of their expenses are:

 Age Concern received a grant of £23,409
 Southend Pier Museum Trust received a grant of £10,000.
 The Citizens Advice Bureau received a grant of £133,434.
 DIAL received a grant of £10,000.
 The So Speak Group received a grant of £18,984.
 HARP received a grant of £104,321


Note 12. Members Allowances
A full list of members‟ allowances will be published in Civic News.

Note 13. Local Authority (Goods and Services) Act 1970
The Council is empowered by this Act to provide goods and services to other public bodies. The Authority provided
grounds maintenance to Foundation, Independent and Voluntary Aided Schools and the Essex Magistrates Court
Committee, income from these services amounted to £13,272. The Authority also provided building maintenance
service to other public bodies, income from this service totalled £22,324.

Note 14. Collection Fund Surplus

                                                                                            2001/2002       2002/2003
                                                                                              £000's          £000's
  Council Tax                                                                                      256            404
  Community Charge                                                                                     27            0
  Collection Fund S urplus                                                                         283            404




                   Southend-on-Sea Borough Council – Statement of Accounts 2002/2003              21
           NOTES TO THE CONSOLIDATED REVENUE
                        ACCOUNT
Note 15. Building Control Fees
Under regulation 5(6) of the 1998 Charges Regulations the authority is required to ensure that income received from
building control fees fully recovers the costs over a three-year rolling period.

Although there was a deficit in the first year (1999/2000) of £7,000, for the three-year period from 2000/2001 to
2002/2003, income received from building control fees exceeds the costs by £172,000.

This is the fourth year in which the regulations apply.

The surplus generated for 2002/2003 was £52,000 as follows:-


                                                                  Trading             Non-            Total
                                                                  Account           Trading
                                                                 2002/2003         2002/2003        2002/2003
                                                                   £000's            £000's           £000's
  Income
  Building regulations                                                   396                   0              396
  M iscellaneous charges                                                     0                 7                7
  Total turnover                                                         396                   7              403
  Expenditure
  Employees                                                              199               144                343
  Transport                                                                11                  8               19
  Supplies and services                                                    43                  9               52
  Central and support services                                             91               66                157
  Total expenditure                                                      344               227                571
  (S urplus)/deficit for year                                            (52)              220                168



                st
  Balance at 31 March 2002                                                                                 (113)
                           st
  Surplus for year ended 31 M arch 2003                                                                       (52)
                st
  Balance at 31 March 2003                                                                                 (165)




                     Southend-on-Sea Borough Council – Statement of Accounts 2002/2003         22
                   HOUSING REVENUE ACCOUNT

2001/2002                                                                                    2002/2003
  £000’s                                                                                      £000’s
             INCOME
   16,019    Dwelling rents (gross)                                                             16,751
      379    Non dwelling rents (gross)                                                            339
    1,119    Charges for services and facilities                                                 1,253
   12,133    Housing Revenue Account subsidy                                      (Note 3)      12,326
  29,650     TOTAL INCOME                                                                      30,669
             EXPENDITURE
    4,311    Repairs and M aintenance                                                            4,410
    5,232    Supervision and M anagement                                                         5,505
      363    Rents, rates, taxes and other charges                                                 372
   12,029    Rent Rebates                                                                       12,409
        0    Provision for bad or doubtful debts                                  (Note 4)         188
       40    Stock transfer                                                                          0
             Capital charges
   10,281       Cost of capital charges                                           (Note 5)      10,093
    4,394       Depreciation on dwellings                                                        4,318
       53       Depreciation on other assets                                                        54
       40    Debt management expenses                                                               40
  36,743     TOTAL EXPENDITURE                                                                 37,389
    7,093    NET COS T OF S ERVICES                                                              6,720
  (10,281)   Cost of capital charge                                                            (10,093)
    2,084    Loan interest payable                                                               1,755
     (486)   Interest receivable                                                                  (488)
  (1,590)    NET OPERATING EXPENDITURE / (INCOME)                                              (2,106)
             APPROPRIATIONS
      250    Revenue contribution to capital                                                         0
      584    HRA set aside                                                                         539
     (394)   Transfer to / (from) major repairs reserve                                           (290)
  (1,150)    NET S URPLUS                                                                      (1,857)
             HOUS ING REVENUE ACCOUNT BALANCE
  (6,703)    Balance Brought Forward                                                           (7,853)
   (1,150)   Surplus for year                                                                   (1,857)
  (7,853)    WORKING BALANCE                                                                   (9,710)
   (2,028)   MAJOR REPAIRS RES ERVE                                               (Note 6)      (4,472)

   (9,881)   TOTAL AVAILABLE FUNDS                                                             (14,182)




              Southend-on-Sea Borough Council – Statement of Accounts 2002/2003     23
     NOTES TO THE HOUSING REVENUE ACCOUNT

Note 1.       Analysis of Housing Stock

                                                                                         Number of      Number of
                                                                                         Properties     Properties
                                                                                         2001/2002      2002/2003
  Houses (inc. Bungalows)                                                                      2,261         2,204
  Flats                                                                                        4,277         4,261
             st
  S tock at 31 March                                                                           6,538         6,465

Note 2.       Rent Arrears
Cumulative rent arrears in respect of H.R.A. properties at 31 st March 2003 including service charges and water were
£1.395m. (At 31st March 2002 - £1.333m).

Note 3.       Government Subsidy

  Housing S ubsidy Calculation                                                             2001/2002 2002/2003
                                                                                            £000’s     £000’s
  Housing Subsidy                                                                               8,080       8,244
  Major Repairs Allowance                                                                       4,053       4,082
  Government S ubsidy                                                                         12,133       12,326


Note 4.       Provision for Bad and Doubtful Debts
Additional provision for bad debts in 2002/2003 was £187,700. The provision stood at £1.108m at 31 st March 2003
(31st March 2002 - £1.032m). Debts amounting to £113,100 were written off (2001/2002 £172,100).




                    Southend-on-Sea Borough Council – Statement of Accounts 2002/2003         24
       NOTES TO THE HOUSING REVENUE ACCOUNT

Note 5.          Cost of Capital and Capital Asset Charges
Capital charges are included in accordance with the item 8 credit and item 8 debit Government Determination for the
Housing Revenue Account.

Capital charges consist of depreciation and a notional interest charge. The latter reflects the benefit gained from the
capital investment being tied up in a particular asset. Capital charges within the HRA are calculated as follows:

(a)       Cost of Capital – this requires that a charge be made to the HRA for the use of fixed assets. This is
          determined by applying a specified rate of interest (6%) to the net value at which the asset is held in the
          balance sheet at 31st March 2003.

(b)       Depreciation – a charge for depreciation has also been made covering dwellings. The Major Repairs
          Allowance (MRA) is used to represent a reasonable estimate of depreciation. Other buildings and non-
          operational assets are depreciated over 40 years. Land is not depreciated due to having an infinite life.


                                                                         2001/2002                   2002/2003
                                                                    £000’s       £000’s         £000’s       £000’s
  Item 8 Debit
  Cost of Capital                                                                  10,281                      10,093
  Depreciation
      Council Dwellings                                                4,394                      4,318
      Non-Council Dwellings                                              53         4,447               54      4,372
  Debt M anagement                                                                        40                          40
  Capital Accounting Adjustment                                                  (10,281)                     (10,093)
  Loan Interest Payable                                                            2,084                        1,755
  Appropriation from M ajor Repairs Reserve                                         (394)                       (290)
  Item 8 Credit
  Interest Receivable                                                               (486)                       (488)
  Net Effect on HRA                                                                 5,691                       5,389


Note 6           Major Repairs Reserve

                                                                                               2001/2002     2002/2003
                                                                                                £000's        £000's
                 st
  Balance at 1 April 2002                                                                                0       2,028
  Transfers in                                                                                     4,448         4,372
  Used to fund capital (Council dwellings)                                                        (2,026)       (1,638)
  Capital Accounting Adjustment                                                                     (394)         (290)
                      st
  Balance at 31 March 2003                                                                        2,028         4,472




                           Southend-on-Sea Borough Council – Statement of Accounts 2002/2003       25
     NOTES TO THE HOUSING REVENUE ACCOUNT

Note 7          Fixed Assets

The Fixed Assets for the Housing Revenue Account are as follows:
                                                         Council Other Land      Infra-     Non-                 TOTAL
                                                        Dwellings & Buildings S tructure Operational

                                                           £000's        £000's       £000's       £000's        £000's
                                  st
  Gross Book Value as at 31 March 2002                      175,369          2,551        2,026             76    180,022
  Additions                                                   3,678               0            0            0       3,678
  Disposals                                                  (2,628)              0            0            0      (2,628)
  Revaluation                                                (3,678)              0            0          (65)     (3,743)
                                 st                         172,741          2,551        2,026             11    177,329
  Gross book value as at 31 March 2003
  Depreciation b/fwd                                         (4,384)         (333)         (91)            (1)     (4,809)
  Depreciation for current year                              (4,318)          (43)         (11)             0      (4,372)
  Depreciation on assets sold                                       65            0            0            0             65
  Depreciation on revalued assets                                    0            0            0            0              0
  Depreciation c/fwd                                         (8,637)         (376)        (102)            (1)     (9,116)
                            st
  Net Book Value as at 31 March 2003                        164,104          2,175        1,924             10    168,213


The assets are shown at existing use value to reflect the fact that they are used for social housing and are less than
market value.




                    Southend-on-Sea Borough Council – Statement of Accounts 2002/2003                26
                                    COLLECTION FUND

2001/2002                                                                   2002/2003        2002/2003
  £000's                                                                     £000's           £000's
              INCOME
     38,509   Income from Council Tax                            (Note 1)                         41,141
     36,929   Income collectable from Business Ratepayers        (Note 2)                         33,658
              Transfers from General Fund
      6,663   Council Tax Benefits                                                                 6,870
              Contributions
        14    Residual Community Charge                          (Note 3)                                7
     82,115                                                                                       81,676
              EXPENDITURE
              Precepts and Demands
      4,167   Essex Police Authority                                               4,562
     41,130   Southend-on-Sea Borough Council                                     43,196          47,758
              Business Rate
     36,668   Payment to National Pool                                            33,397
       261    Cost of Collection Allowance                                          261           33,658
              Provisions
      (100)   Council Tax Appeals & Non-collection               (Note 4)                          (300)
     82,126                                                                                       81,116
       (11)   S urplus/(Loss) for the year                                                          560
              Appropriation of Reserves
      (256)   Council Tax – Southend-on-Sea Borough Council                        (404)
       (26)   Council Tax – Essex Police Authority                                  (41)
       (27)   Community Charge-Southend-on-Sea Borough Council                           0         (445)
       698    Balance as at 1st April                                                               378
                               st
       378    Balance as at 31 March                             (Note 5)                           493




              Southend-on-Sea Borough Council – Statement of Accounts 2002/2003     27
                   NOTES TO THE COLLECTION FUND

Note 1.        Income from Council Tax
Council Tax derives from charges raised according to the value of residential properties, which have been classified
into 8 valuation bands using estimated 1st April 1991, values for this specific purpose. Individual charges are
calculated by estimating the amount of income required to be taken from the Collection Fund by Essex Police
Authority and Southend-on-Sea Borough Council for the forthcoming year and dividing this by the council tax base.
The basic amount for a Band D property (£823.18 for the Leigh-on-Sea Town Council area and £811.37 for all other
parts of the Borough) is multiplied by the proportion specified for the particular band to give an individual amount due.
The number of chargeable dwellings for council tax in each valuation band (adjusted for dwellings where discounts
apply) for the year was as follows:


                                                                                       Band Number Ratio Equivalent
                                                                                              of         Number of
                                                                                           Dwellings     Dwellings
                                                                                         A*           31      5/9      17
                                                                                         A        12,518      6/9    8,345
                                                                                         B        12,528      7/9    9,744
                                                                                         C        19,484      8/9   17,319
                                                                                         D        10,770      9/9   10,770
                                                                                         E         5,759 11/9        7,039
                                                                                         F         3,213 13/9        4,641
                                                                                         G         1,355 15/9        2,258
                                                                                         H            52 18/9         105
                                                                                                  65,710            60,238
  Less:
  Adjustment for collection of rates and anticipated changes during the year for successful appeals against          1,501
  valuation banding, new properties, demolitions, disabled persons relief and exempt properties.
  * Reductions for band A disabled.
  Council Tax Base                                                                                                  58,737


Note 2.        Non-Domestic Rates
Non Domestic Rates are organised on a national basis. The Government specified an amount 43.7p in 2002/2003
(2001/2002 - 43.0p) and, subject to the effects of transitionary arrangements, local business‟s pay rates that are
calculated by multiplying their rateable value by that amount. The Council is responsible for collecting rates due from
the ratepayers in its area but pays the proceeds into an NDR pool administered by the Government. The Government
redistributes the sums paid into the pool back to local authorities‟ General Funds on the basis of a fixed amount per
head of population.

After relief and provisions, the NDR income collectable was £33,657,670 for 2002/2003 (2001/2002 - £36,929,379).
The year end rateable value for the Council‟s area was £88,335,359 (31st March 2002 - £90,138,774).

Note 3.        Residual Community Charge
This is net income received during the year relating to Community Charge outstanding accounts.




                    Southend-on-Sea Borough Council – Statement of Accounts 2002/2003                   28
                  NOTES TO THE COLLECTION FUND

Note 4.       Council Tax Appeals and Non-Collection
There was a reduction of £300,000 (2001/2002 - £100,000 decrease) in the provision for bad and doubtful debts for
Council Tax.

Note 5.       Collection Fund Balance
Any surplus or deficit on the Collection Fund as a result of community charge accrues to the Council and reduces or
increases the amount of the borough Council Tax in subsequent years. Of the £493,000 surplus on the Collection Fund
at 31st March 2003, £19,000 is attributable to Community Charge collection and will be available in subsequent years
to reduce the borough Council Tax. The balance of £474,000 on the Collection Fund, remaining after adjusting for the
Community Charge surplus will be split between Essex Police Authority and this Council, in proportion to the value of
the respective precept demands made by the two authorities on the Collection Fund and will be reflected in future
year‟s Council Tax.


                                                                                           31st March 31st March
                                                                                              2002       2003
                                                                                             £000’s     £000’s
  Council Tax - Southend-on-Sea Borough Council                                                     333        429
  Council Tax - Essex Police Authority                                                              34          45
  Community Charge - Southend-on-Sea Borough Council                                                11          19
  Total                                                                                             378        493

Note 6.       Uncollectable Debts
Uncollectable debts of £479,600 (2001/2002 - £503,000) for council tax and £294,850 (2001/2002 - £394,400) for non-
domestic rates were written off in 2002/2003.




                   Southend-on-Sea Borough Council – Statement of Accounts 2002/2003           29
                     CONSOLIDATED BALANCE SHEET

31st March 2002                                                                                  31st March 2003
    £000's             FIXED AS S ETS                                                                £000's
                       Operational Assets                                        (Note 1)
        171,602        - Council Dwellings                                                               164,669
        359,709        - Other Land and Buildings                                                        441,270
          1,502        - Vehicles, Plant, Furniture and Equipment                                          1,733
         17,293        - Infrastructure                                                                   21,765
            289        - Community Assets                                                                  4,087
         11,559        - Non-operational Assets                                                           11,610
        561,954        Total Fixed Assets                                                                645,134
              108      Long Term Investments                                     (Note 3)                      108
                       Long Term Debtors
              177      - M ortgages                                                                            143
              146      - Other                                                                                 102
        562,385        Total Long Term Assets                                                            645,487
                       CURRENT AS S ETS
              576      Stocks and Works in Progress                                                            205
         18,765        Debtors (net of bad debt provision)                       (Note 4)                 24,298
          1,759        Prepayments                                                                         1,088
         61,631        Investments (Short Term)                                  (Note 3)                 63,801
          8,249        Cash at bank and in hand                                                            7,695
         90,980        Total Current Assets                                                               97,087
                       CURRENT LIABILITIES
             (164)     Short Term Borrowing                                      (Note 6)                      (14)
       (26,276)        Creditors                                                 (Note 5)               (26,168)
        (2,025)        Cash overdrawn                                                                    (1,528)
         62,515        Total Assets less Current Liabilities                                              69,377
       (62,962)        Long Term Borrowing                                       (Note 6)               (79,774)
       (24,319)        Deferred Liability                                        (Note 7)               (23,346)
             (892)     Provisions                                                (Note 8)                     (920)
        536,727        Total Assets less Liabilities                                                     610,824
                       Reserves
        474,224          Fixed Asset Restatement Reserve                         (Note 9)                533,880
         11,115          Capital Financing Reserve                              (Note 10)                 24,147
          8,277          Useable Capital Receipts Reserve                       (Note 11)                  8,322
          2,028          M ajor Repairs Reserve                                                            4,472
         20,455          Specific Reserves                                      (Note 14)                 18,757
          1,177          Trust Funds                                            (Note 15)                  1,381
                       Balances
          6,381           General Fund                                                                     3,998
          4,623           Schools Balances - Revenue                                                       4,852
              216                              - Capital                                                       812
          7,853           H.R.A.                                                                           9,710
            378          Collection Fund                                                                     493
        536,727        Total Equity                                                                      610,824




                     Southend-on-Sea Borough Council – Statement of Accounts 2002/2003      30
  NOTES TO THE CONSOLIDATED BALANCE SHEET
Expenditure and disposals during the year were as follows:

Note 1          Movement in Fixed Assets

                                       Council Other Land Vehicles, Plant, Infra- Community  Non-     TOTAL
                                      Dwellings & Buildings Furniture & S tructure Assets Operational
                                                             Equipment
                                        £000's    £000's       £000's      £000's   £000's  £000's     £000's
 Gross Book Value as at
 31st March 2002                        176,018    376,838        2,080   19,530      289      11,966     586,721
 Additions                                3,678     15,536        2,350   16,458        0            0     38,022
 Disposals                              (2,628)        (46)                             0         (137)    (2,811)
 Revaluation                            (3,717)     62,011       (1,925) (11,217)    3,798         308     49,258
                                 st
 Gross book value as at 31
                                        173,351    454,339        2,505   24,771     4,087     12,137     671,190
 March 2003
 Depreciation b/fwd                     (4,416)    (17,129)       (578)   (2,237)       0         (407)   (24,767)
 Depreciation for current year          (4,334)     (6,320)       (194)     (770)       0         (132)   (11,750)
 Depreciation on assets sold                66           3            0        0        0           12         81
 Depreciation on revalued
 assets                                       2     10,377            0        1        0            0     10,380
 Depreciation c/fwd                     (8,682)    (13,069)       (772)   (3,006)       0         (527)   (26,056)
                            st
 Net Book Value as at 31
 March 2003                             164,669    441,270        1,733   21,765     4,087     11,610     645,134


The net fixed assets at 31st March analysed by fund is shown below:

                                       Council Other Land Vehicles, Plant, Infra- Community  Non-     TOTAL
                                      Dwellings & Buildings Furniture & S tructure Assets Operational
 Net Fixed Assets by Fund                                    Equipment
                                        £000's    £000's       £000's      £000's   £000's  £000's     £000's
 General Fund                              565     439,095        1,733   19,841     4,087     11,600     476,921
 Housing Revenue Account                164,104      2,175            0    1,924        0           10    168,213
 Total Net Fixed Assets                 164,669    441,270        1,733   21,765     4,087     11,610     645,134




                    Southend-on-Sea Borough Council – Statement of Accounts 2002/2003        31
 NOTES TO THE CONSOLIDATED BALANCE SHEET

Source of Financing

Reconciliation of Capital Expenditure

                                                                     31st March 2002       31st March 2003
                                                                          £000's                £000's
  Capital expenditure capitalised as fixed assets                                 18,121                35,274
  Capital expenditure not giving rise to additions to fixed assets                2,511                 2,748
                                                                                 20,632                38,022
  Capital creditors                                                                 261                     0
  Total Capital Expenditure                                                      20,893                38,022
  Total capital expenditure comprising:-
  Housing Services                                                     4,148                 4,805
  General Fund Services                                              16,745                33,217
  Total Capital Expenditure                                                      20,893                38,022
  Financed by:-
  Usable capital receipts                                                           673                 1,307
  Revenue contributions:-
  • Revenue                                                             292                     854
  • General reserves                                                   2,273                 4,874
  • M ajor repairs reserve                                             2,026                 1,638
  • Third Party                                                          601                   840
  • Capital Grant                                                      4,776      9,968    11,974      20,180
  Loan:
  • Basic Credit Approval                                              3,539                 8,532
  • Supplementary Credit Approval – GF                                 6,713     10,252      8,003     16,535
  Total Capital Expenditure                                                      20,893                38,022




                      Southend-on-Sea Borough Council – Statement of Accounts 2002/2003    32
 NOTES TO THE CONSOLIDATED BALANCE SHEET

a)           Analysis of Fixed Assets:

Southend-on-Sea Borough Council owned the following assets:

                                                                                         st              st
                                                                                       31 March         31 March
                                                                                         2002             2003
                                                                                          No.              No.
     Council Dwellings:
     - Houses                                                                                 2261            2204
     - Flats                                                                                  4112            4096
     - Shared Dwellings                                                                        165            165
     Shops                                                                                         40          40
     Schools (excluding foundation schools)                                                        42          42
     Pupil Referral Unit                                                                           0               1
     Libraries                                                                                     7               7
     Training Centres                                                                              3               3
     Residential Care Homes
     - Learning Disabilities                                                                       3               3
     - Older People                                                                                3               3
     Office - Family Finders                                                                       1               1
     Family Centre                                                                                 1               1
     Civic Centre                                                                                  1               1
     Depots                                                                                        1               1
     Swimming Pool                                                                                 1               1
     Crematorium                                                                                   1               1
     Cemeteries                                                                                    3               3
     M useums and Galleries                                                                        4               4
     Day Centres                                                                                   1               1
     Pier                                                                                          1               1
     Car Parks:
     - Surface                                                                                     27          27
     - M ulti-storey                                                                               3               3
     Parks and Open Spaces                                                                         75          75
     Industrial Estates                                                                            5               5
     Community Centres                                                                             9               9
     Bus Station                                                                                   1               1
     Theatres and Entertainment centres                                                            2               2
     Airport                                                                                       1               1




                          Southend-on-Sea Borough Council – Statement of Accounts 2002/2003   33
 NOTES TO THE CONSOLIDATED BALANCE SHEET

b)           Capital Expenditure

Summary of Capital Expenditure:


     General Fund                                                                               £000
     Education and Lifelong Learning                                                            10,012
     Local Transport Plan                                                                        7,848
     Sea Defences                                                                                4,968
     Southend Pier                                                                               2,697
     Regeneration - Objective 2                                                                  1,907
     Health & Social Care                                                                        1,441
     Schools devolved capital *                                                                  1,213
     Highway Schemes                                                                             1,085
     Cliffs Slippage near Bandstage                                                                347
     Airport *                                                                                     338
     Parks and Gardens                                                                             317
     Peoples Network Programme                                                                     244
     Public Toilet Refurbishments                                                                  236
     Sport and Recreation                                                                          196
     Refurbishment of Registry Office                                                              130
     CCTV                                                                                              75
     Electronic Government                                                                             60
     Royal Village Nursery*                                                                            60
     Other                                                                                             43
     Total                                                                                      33,217


Items marked * denotes expenditure not giving rise to additions to fixed assets.




                       Southend-on-Sea Borough Council – Statement of Accounts 2002/2003   34
 NOTES TO THE CONSOLIDATED BALANCE SHEET

  Housing S ervices                                                                           £000
  Renovation/Disabled Facility Grants*                                                         1,036
  Boiler Replacements                                                                           728
  Electrical Rewiring                                                                           548
  Kitchen Renewals                                                                              419
  Sheltered Bedsit Conversion                                                                   412
  Bathroom Renewals                                                                             227
  Window and Door Replacements                                                                  194
  External Door Replacements                                                                    173
  Bournemouth Park Road                                                                         169
  Warden Call System                                                                            115
  High Rise Flats Repairs                                                                       100
  Door Entry System                                                                              95
  Local Authority Social Housing Grant (to Shaftesbury Housing Association)*                     91
  Fire/Smoke Alarms & Fire Prevention                                                            78
  Structural Survey/Asbestos removal                                                             77
  Roofing and Balconies                                                                          75
  Central Heating                                                                                64
  Estate Improvements                                                                            57
  Lifts                                                                                          50
  Disabled Adaptations                                                                           25
  Town Centre Landscaping                                                                        14
  Other smaller schemes                                                                          14
  M astic Renewal - Panel Joints                                                                 13
  M icro Film Conversions                                                                        12
  Garage Demolition*                                                                             10
  Drainage Blyth Avenue                                                                              9
  Total                                                                                        4,805
Items marked * denotes expenditure not giving rise to fixed assets.




                     Southend-on-Sea Borough Council – Statement of Accounts 2002/2003   35
 NOTES TO THE CONSOLIDATED BALANCE SHEET

Note 2.          Deferred Charges
The Councils policy is to write off all deferred charges to the revenue account in the year expenditure was incurred.


                                                                                           31st March             31st March
                                                                                              2002                   2003
                                                                                             £000's                 £000's
     General Fund
     Airport                                                                                         673                  338
     Royal Village Nursery                                                                                0                 60
     Schools Devolved Capital                                                                        822                 1,213
     Housing S ervices
     Local Authority Social Housing Grant                                                                 0                 91
     Renovation/Disabled Facility Grants                                                            1,006                1,036
     Assisted Purchase Scheme                                                                             9                  0
     Garage Demolition                                                                                    1                 10
     Total Deferred Charges                                                                         2,511                2,748


Note 3.             Investments
a)         Long Term Investments

                                                                                               st                   st
                                                                                            31 March              31 March
                                                                                               2002                  2003
                                                                                              £000's                £000's
     Association of District Councils Property Ltd. Debenture                                          100                 100
     Essex & Herts Provincial Council-Flempton House                                                          8                8
     Total Long Term Investments                                                                       108                 108


b)         Short Term Investments

                                                                                           31st March             31st March
                                                                                              2002                   2003
                                                                                             £000's                 £000's
     Investments in the money markets                                                               13,300               13,000
     Investments managed by Morley Fund Management                                                  24,334               25,610
     Investments managed by Scottish Widows Investment Partnership Ltd                              23,997               25,191
     Total Short Term Investments                                                                   61,631               63,801




                      Southend-on-Sea Borough Council – Statement of Accounts 2002/2003              36
 NOTES TO THE CONSOLIDATED BALANCE SHEET

Note 4.       Debtors

                                                                                     31st March       31st March
                                                                                        2002             2003
                                                                                       £000's           £000's
  Central Government                                                                        2,793            6,694
  Local Authorities                                                                         1,525            1,587
  Housing Rents                                                                             1,333            1,395
  Taxation                                                                                  2,067            2,866
  General                                                                                  11,565           12,844
  Council Taxpayers                                                                         4,349            3,858
  N.D.R. Payers                                                                             1,279            1,218
  Schools                                                                                       512          1,434
  Bad Debt Provision                                                                       (6,658)          (7,598)
  Total Debtors                                                                            18,765           24,298

Note 5.       Creditors

                                                                                      st               st
                                                                                    31 March          31 March
                                                                                       2002              2003
                                                                                      £000's            £000's
 Central Government                                                                         1,244             720
 Local Authorities                                                                          1,367            2,226
 Taxation                                                                                   1,646            1,819
 General                                                                                   12,066           11,717
 General Receipts - In Advance                                                              5,868            4,549
 N.D.R. In Advance                                                                           345             1,012
 Council Tax- Paid in Advance                                                                877              978
 Schools                                                                                    2,863            3,147
 Total Creditors                                                                           26,276           26,168




                      Southend-on-Sea Borough Council – Statement of Accounts 2002/2003    37
 NOTES TO THE CONSOLIDATED BALANCE SHEET

Note 6.       Borrowing
Analysis of borrowing – other than temporary

Short Term Borrowing

                                                                                             31st March 31st March
  Analysis of Loans by Type                                                                     2002       2003
                                                                                               £000's     £000's
  Short Term Debt Maturing Within O ne Year                                                              164             14

Long Term Borrowing

                                                                                              st                 st
                                                                                           31 March            31 March
  Analysis of Loans by Type                                                                   2002                2003
                                                                                             £000's              £000's
  Public Works Loans Board                                                                         62,874             79,774
  European Loans                                                                                         88               0
  Total Long Term Borrowing                                                                        62,962             79,774

                                                                                              st                 st
                                                                                           31 March            31 March
                                                                                              2002                2003
                                                                                             £000's              £000's
  Between 1 and 2 Years                                                                                  54               0
  Between 2 and 5 Years                                                                                  34               0
  Between 5 and 10 Years                                                                            7,150              7,150
  M ore Than 10 Years                                                                              55,724             72,624
  Total Long Term Borrowing                                                                        62,962             79,774


Note 7.       Deferred Liability
This is owed to Essex County Council in respect of assets transferred to this Council in 1998 at Local Government
Reorganisation. As defined by statute this Council is required to pay, each year, to Essex County Council an amount
equal to the interest charges that they have incurred on this debt together with the amount of Minimum Revenue
Provision (MRP) that they have set aside towards repayment of the principle. The balance outstanding at 31st March
2003 was £23.346m (31st March 2002 - £24.319m) The amount of MRP repaid in the year was £0.973m and interest
charges were £1.302m.

Note 8.       Provisions

                                                       31st March       Transfers        Transfers             31st March
                                                          2002             to              from                   2003
                                                         £000's          £000's           £000's                 £000's
  Insurance                                                   850              658             (634)                    874
  Equipment                                                    42               10                 (6)                   46
  Total Provisions                                            892              668             (640)                    920

The insurance provision is to provide for the level of excess on claims, which is met by the Council, and is expected to
be paid in 2003/04.




                     Southend-on-Sea Borough Council – Statement of Accounts 2002/2003             38
 NOTES TO THE CONSOLIDATED BALANCE SHEET

Note 9.          Fixed Asset Restatement Reserve

                                                                                              st               st
                                                                                            31 March 31 March
                                                                                               2002     2003
                                                                                              £000's   £000's
  Surplus on revaluation and restatement of fixed assets                                           477,141          474,224
  Revaluations                                                                                           336         62,385
  Disposal of Fixed Assets                                                                         (3,253)          (2,729)
  Closing Balance                                                                                  474,224          533,880


Note 10              Capital Financing Reserve

                                                                                            31st March 31st March
                                                                                               2002       2003
                                                                                              £000's     £000's
  Opening Balance                                                                                    9,403           11,115
  Deferred Liability                                                                                 1,013             973
  Capital Receipts Set Aside                                                                         2,527            2,835
  M inimum Revenue Provision less Depreciation                                                      (9,958)         (9,515)
  Capital Expenditure Financed by:-
  Capital receipts                                                                                       673          1,307
  Revenue contributions                                                                                  292           854
  General reserves                                                                                   2,273            4,874
  M ajor repairs reserve                                                                             2,026            1,638
                                                                                                     8,249           14,081
  Capital Grant                                                                                      4,776           11,974
  Third Party                                                                                            601           840
  Less:
  Deferred Charges                                                                                  (2,511)         (2,748)
  Closing Balance                                                                                   11,115           24,147


The total capital receipts set aside, at 31st March 2003, to repay debts are £6.012m for General Fund, £31.720m for the
Housing Revenue Account. (At 31st March 2002, £5.921m for General Fund and £28.976m for the Housing Revenue
Account).




                       Southend-on-Sea Borough Council – Statement of Accounts 2002/2003            39
    NOTES TO THE CONSOLIDATED BALANCE SHEET

Note 11.           Capital Receipts Reserve
Useable Capital Receipts of £8.322m represent that proportion of capital receipts which may be used for new capital
expenditure and is not required to be set aside in the provision for credit liabilities for the repayment of debt.


    Useable Capital Receipts                       31st March         Received          Utilised           31st March
                                                      2002                                                    2003
                                                     £000's             £000's           £000's              £000's
    General Fund                                          4,755              436            (816)                4,375
    H.R.A.                                                3,522              916            (491)                3,947
    Total Capital Receipts Reserve                        8,277            1,352           (1,307)               8,322


Of the useable capital receipts held by the General Fund at 31 st March 2003 £2,224,248 is committed to
the London Southend Airport for future development (31st March 2002 - £2,575,661).

.
Note 12.           Provision for Credit Liabilities (Memorandum Account)

                                                                                             31st March 31st March
                                                                                                2002       2003
                                                                                               £000's     £000's
    Opening Balance                                                                                  29,626     33,750
    Amount Set Aside for M inimum Revenue Provision (M RP)                                            1,621      2,235
    Reserved Capital Receipts                                                                         2,527      2,835
                                                                                                     33,774     38,820

    Amount Applied to Repay Loans                                                                       (24)     (113)
    Closing Balance                                                                                  33,750     38,707




                      Southend-on-Sea Borough Council – Statement of Accounts 2002/2003            40
 NOTES TO THE CONSOLIDATED BALANCE SHEET

Note 13.           Retirement Benefits
Employees are admitted to the Essex County Council Pension Fund (the Fund), which is administered by Essex County
Council under the Regulations governing the Local Government Pension Scheme, a defined benefit scheme (non-
teaching employees are omitted).

The figures disclosed below have been derived by approximate methods from the full actuarial valuation of the Fund
carried out by Watson Wyatt as at 31st March 2001
The fair values and expected rate of return of each main class of assets held by the Fund as a whole, as at 1 st April 2002
and 31st March 2003 set out in the following table:

  Assets held by the Fund as a whole                           31st March 2002                   31st March 2003
                                                            Market      Expected rate        Market      Expected rate
                                                            value         of return           value        of return
                                                             £m             % pa               £m            % pa

  Equities (UK)                                                   1,387             7.50          1,080             8.50
  Equities (Overseas)                                                 0             7.50               0            8.50
  Property                                                           87             6.00               86           7.00
  Fixed Interest Gilts                                             215              5.25            204             4.50
  Index Linked Gilts                                                 93             5.25            119             4.50
  Other Bonds                                                         0             6.00               0            5.50
  Cash                                                               59             4.50               36           4.00


  Total                                                           1,841             6.96          1,525             7.46

The main financial assumptions used as at 1st April 2002 and at 31st March 2003 were as follows:

                                                                                      31st March 2002 31st March 2003
                                                                                            % pa            % pa
  Inflation Rate                                                                                2.50                2.50
  Discount Rate (Pre Retirement)                                                                6.10                6.10
  Discount Rate (Post Retirement)                                                               6.10                6.10
  Expected Rate of Salary Increases                                                             4.30                4.30
  Rate of Pension Increases in Payment                                                          2.50                2.50
  Rate of Pension Increases in Deferment                                                        2.50                2.50
The actuarial value of Fund liabilities, the market value of Fund assets and the resulting deficit for the part of the Fund
relating to Southend-on-Sea Borough Council, as at 1st April 2002 and at 31st March 2003 were as follows:


  For the part of the Fund relating to S outhend-on-S ea Borough Council              31st March 2002 31st March 2003
                                                                                           £000's          £000's
  Actuarial Value of Fund Liabilities                                                        170,957            181,906
  Market Value of Fund Assets                                                                138,059            114,839
  Deficit in the Fund                                                                         32,898             67,067




                     Southend-on-Sea Borough Council – Statement of Accounts 2002/2003              41
 NOTES TO THE CONSOLIDATED BALANCE SHEET

An analysis of the movements in the deficit for the part of the Fund relating to Southend-on-Sea Borough Council,
during the financial year is set out in the following table:

                                                                                                         st
                                                                                                        31 March 2003
                                                                                                           £000's
                         st
  Deficit in the Fund at 1 April 2002                                                                                32,898
  Current Service Cost                                                                                                5,561
  Curtailment Cost (Increase in Scheme Benefits above Original Estimate)                                                 6
  Interest on Pension Scheme Liabilities                                                                              9,037
  Actuarial Loss                                                                                                     35,317
  Less:
  Contributions Paid                                                                                                  6,059
  Expected Return on Assets in the Pension Scheme                                                                     9,693
                              st
  Deficit in the Fund at 31 March 2003                                                                               67,067


For the part of the Fund relating to Southend-on-Sea Borough Council, the difference between the expected and actual
return on assets was £35.3m, this was 30.75% of Fund assets at 31 st March 2003. There were no experience gains or
losses arising on the scheme liabilities at 31st March 2003, (this is where events occur which are outside the
assumptions made in the actuarial valuation).

The actuaries will determine the future contribution rate at the next actuarial valuation on 31st March 2004.

Note 14.           Specific Reserves

The specific reserves comprise:-

                                    st                                                                          st
                                   31 March              Transfers                 Transfers                  31 March
                                      2002                  to                       from                        2003
                                     £000's               £000's                    £000's                      £000's
  Repairs and Renewals                   10,917                  512                      (83)                       11,346
  Capital                                 4,728                1,240                   (3,424)                        2,544
  Insurance                               2,532                  659                     (660)                        2,531
  Commuted Sums                            248                    10                      (50)                          208
  Security                                 400                    15                         0                          415
  Leaseholder Repair                      1,093                  151                     (471)                          773
  Other                                    537                   528                     (125)                          940
                                         20,455                3,115                   (4,813)                       18,757




                    Southend-on-Sea Borough Council – Statement of Accounts 2002/2003              42
 NOTES TO THE CONSOLIDATED BALANCE SHEET

Note 15.           Trust Funds

The Trust Funds comprise:

                                                                                                  st              st
                                                                                               31 March 31 March
                                                                                                  2002     2003
                                                                                                 £000's   £000's
  The Shrubbery*                                                                                            146         170
  S. Thorpe Smith Bequest                                                                                   24           25
  Jones M emorial Recreation Ground*                                                                        87           90
  Youth Commemoration Ground*                                                                               908        1,047
  Emily Briggs Bequest                                                                                      12           12
  R.A. Jones in M emoriam                                                                                     0          12
  A.H. & M .E. Thatcher M emorial Fund                                                                        0           8
  E.C.Jones Primary School Fund                                                                               0          15
  E.D.F. Garvie M emorial Fund                                                                                0           2

                                                                                                        1,177          1,381


* The accounts for these trusts are subject to specific audit or examination in accordance with the requirements of the
Charity Commission.

The Shrubbery is an area of Southend held in Trust by the Borough Council for the enjoyment of the public as an open
space under the Open Spaces Act 1906.

The S.Thorpe Smith bequest was a bequest made to the Council for the acquisition of works of art.

The Jones Memorial Recreation Ground Trust was registered in 1973 and has as its object “The provision and
maintenance of a recreation ground for the benefit of children and young persons who have not reached the age of 25
years and are resident in the district of Southend-on-Sea, without distinction of political, religious or other opinions.”

The Youth Commemoration Ground Trust derives from a Deed of Trust dated 1 st March 1954 between Edward Cecil
Jones and the Corporation of the County Borough of Southend-on-Sea. Mr. Jones donated £6,000 to the Corporations
(subsequently the Borough Council) to buy land, which became known as the youth Commemoration Ground. This
ground has now been sold and the money used to replace the Youth Commemoration Ground at a different site and to
part fund the cost of the Southend Leisure and Tennis Centre. A recoupment fund has been established in accordance
with the requirements of the Charity Commission in order to provide funds (including interest) to replace the Trust fund
money used towards the building of the Southend Leisure and Tennis Centre. The freehold of the building, some
adjoining land, including the netball courts, and a subsidiary car park will be held by the Council as Trustee. Leases
exist between Norman Garon Trustees and the Council as Trustee for the car parks and outdoor tennis courts.
The Council owns the freehold of the running track.

The Emily Briggs bequest, received in 1961, was a bequest made to the Council to be used for the purchase of works of
art.

During the year, following the resolution of outstanding issues, four trusts were transferred from Essex County
Council:

The R.A. Jones in Memoriam Fund was registered on 15 th January 1980 with the objects of promoting the education of
children attending primary schools, providing facilities for recreation or other leisure-time occupation, providing
entertainment‟s for furthering education of children.




                    Southend-on-Sea Borough Council – Statement of Accounts 2002/2003                  43
 NOTES TO THE CONSOLIDATED BALANCE SHEET

A.H. and M.E. Thatcher Memorial Fund was set up with a bequest from Mr. A.R. Thatcher for the purposes of
providing an annual memorial scholarship or prize in the names of his parents Mr. A.H. and Mrs. M.E. Thatcher for the
advancement of education.

The E.C. Jones Primary School Fund was set up on the 9 th August 1956 for the promotion and encouragement of
education with income to be applied for the benefit of children attending primary schools within the meaning of the
Education Act 1944 or any statutory amendment thereof.

The E.D.F. Garvie Memorial Fund was set up by Mr D. Garvie, Mr J.H. Garvie and Mr. A.G. Garvie in memory of
their mother Elizabeth Dorothy Findlay Garvie to promote and encourage education in the Special Schools in the
Borough of Southend-on-Sea.

16      Other Trusts
Southend-on-Sea Borough Council is responsible, as trustee under the various schemes of arrangements, for the upkeep
and maintenance of the following:

The Palace Theatre Charity,
Beecroft Art Trust,
Victory Sports Ground,
Priory Park,
Prittlewell Priory Museum.

In addition to the above, the Council is also represented on the Palace Theatre Trust (Southend-on-Sea) Ltd and the
Southend Pier Museum Trust Ltd.

17      Reporting
In accordance with the requirements of The Charities Act 1993, individual trust accounts are prepared annually for the
following trusts, using information from the Council‟s accounts:

Jones Memorial Recreation Ground Trust,
Youth Commemoration Ground Trust,
The Palace Theatre Charity,
The Shrubbery,
Beecroft Art Trust,
Victory Sports Ground,
Priory Park,
Prittlewell Priory Museum.

The accounts of the Youth Commemoration Ground Trust and Priory Park are subject to audit, and the others are
subject to an independent examination. Hudson and Co. Chartered Accountants and Registered Auditors of 365
Rayleigh Road, Eastwood, SS9 5PS carry out this work. Copies of the accounts can be obtained from the Borough
Treasurer.




                   Southend-on-Sea Borough Council – Statement of Accounts 2002/2003            44
STATEMENT OF TOTAL MOVEMENT IN RESERVES

A reserve is created by appropriating “below the line” from the Consolidated Revenue Account after net expenditure
has been calculated. The reserve can by specifically earmarked or kept for general purposes. Unlike a provision no
service expenditure is recognised in the revenue account until the year it is incurred.

   2001/2002                                                                                         2002/2003
     £000                                                                                              £000
               S urplus/(Deficit) for the year
         700 General Fund                                                                               (1,697)
       1,150 Housing Revenue Account                                                                     1,857
        (645) Add back movements on specific revenue reserves                                            1,204
       1,205 Total Increase in Revenue Resources                                                         1,364
         646 Increase in useable capital receipts                                                           45
         646 Total Increase in Realised Capital Resources                                 (Note 1)          45
         336 Gains on revaluation of fixed assets                                                       62,385
         336 Total Increase in Unrealised Value of Fixed Assets                           (Note 2)      62,385
      (3,253) Value of Assets S old, Disposed of or Decommissioned                        (Note 2)      (2,729)
       3,200 Capital receipts set aside                                                                  4,142
      (5,367) Revenue resources set aside                                                               (2,149)
       5,377 M ovement on contributions and Government Grants Deferred                                  12,814
      (1,498) Write-downs in Capital Financing Reserve                                                  (1,775)
       1,712 Total Change in Amounts S et Aside to Finance Capital Investment             (Note 3)      13,032
         646 Total Recognised Gains and Losses                                                          74,097




                   Southend-on-Sea Borough Council – Statement of Accounts 2002/2003        45
 STATEMENT OF TOTAL MOVEMENT IN RESERVES

Note 1.           Movements in Realised Capital Resources
Capital Receipts are categorised between useable or set aside. The level of the useable proportion of an individual
capital receipt depends upon the type of asset sold. The useable part of capital receipts is disclosed separately on the
Consolidated Balance Sheet, whereas the set aside part is included within the Capital Financing Reserve. The details
below show the movement of useable capital receipts for the year.


  2001/2002                                                                                               2002/2003
   Useable                                                                                                 Useable
   Capital                                                                                                 Capital
   Receipts                                                                                                Receipts
    £000                                                                                                    £000
               Movements in Realised Capital Resources
       1,319 Amounts received                                                                                 1,352
        (673) Amounts applied to new capital investment                                                       (1,307)
          646 Total Increase in Realised Capital Resources in Year                                               45
                               st
       7,631 Balance as at 1 April                                                                            8,277
                                    st
       8,277 Balance as at 31 March                                                                           8,322


Note 2.           Movements in Value of Fixed Assets

The Fixed Asset Restatement Reserve is written down by the net book value of assets as they are disposed of. In
addition, any increase or decrease in the valuation of an asset which is currently held is also charged to this account.



   2001/2002                                                                                             2002/2003
     £000                                                                                                  £000
                 Movements in Unrealised Value of Fixed Assets
            336 Gains on revaluation of fixed assets                                                          62,385
            336 Total Increase in Unrealised Capital Resources in Year                                        62,385
                 Value of Assets S old, Disposed of or Decommissioned
        (3,253) Amounts written off fixed asset balances for disposals                                        (2,729)
        (2,917) Total Movement in Year                                                                        59,656
                                     st
       477,141 Balance as at 1 April                                                                        474,224
                                          st
       474,224 Balance as at 31 March                                                                       533,880




                    Southend-on-Sea Borough Council – Statement of Accounts 2002/2003            46
STATEMENT OF TOTAL MOVEMENT IN RESERVES

Note 3             Movements in Amounts Set Aside to Finance Capital Investment

This statement combines the Capital Financing Reserve with the Contributions and Government Grants Deferred
Account.

    Capital Financing Reserve - this reserve contains the amounts which are required by statute to be set aside from
     capital receipts and revenue. It also contains the difference between amounts provided for depreciation and that
     required to be charged to revenue as the Minimum Revenue Provision.

    Contributions and Government Grants Deferred Account – this account receives contributions and government
     grant credits relating to fixed assets. The credits are written off to the Asset Management Revenue Account.

    2001/2002                                                                               2002/2003
      Total                                                                  Capital      Contibutions        Total
                                                                            Financing    and Government
                                                                             Reserve     Grants Deferred
      £000                                                                    £000            £000            £000
                Capital Receipts S et Aside
        2,527 Reserved receipts received                                        2,835                     0     2,835
          673 Usable receipts applied                                           1,307                     0     1,307
        3,200 Total Capital Receipts S et Aside                                 4,142                     0     4,142
                Revenue Resources S et Aside
          292 Capital expenditure financed from revenue                          854                      0      854
        2,026 Capital expenditure financed from major repairs reserve           1,638                     0     1,638
        2,273 Capital expenditure financed from specific reserves               4,874                     0     4,874
                Reconciling amount for provisions for loan repayment
        1,620 Provision for repayment of external loans (M RP)                  2,235                     0     2,235
      (11,578) Depreciation                                                   (11,750)                    0   (11,750)


       (9,958) Total reconciling amount for provisions for loan repayment      (9,515)                    0    (9,515)
       (5,367) Total Revenue Resources S et Aside                              (2,149)                    0    (2,149)
                Movement on Contributions and Government Grants
                Deferred
        4,770 Grants applied to capital investment                                   0               11,533    11,533
             6 Lottery Grant                                                         0                 441       441
          601 Third Party Contributions                                              0                 840       840
              Total Movement on Contributions and Government
        5,377 Grants Deferred                                                        0               12,814    12,814
                Write-downs to the Capital Financing Reserve                                                          0
       (2,511) Deferred Charges                                                (2,748)                    0    (2,748)
        1,013 Deferred Liabilities                                               973                      0      973
       (1,498) Total Write-downs to the Capital Financing Reserve              (1,775)                    0    (1,775)
              Total increase in Amounts S et Aside to Finance
        1,712 Capital Investment                                                 218                 12,814    13,032




                    Southend-on-Sea Borough Council – Statement of Accounts 2002/2003                47
      CONSOLIDATED CASH FLOW STATEMENT

2001/2002                                                                                2002/2003
  £000's     REVENUE ACTIVITIES                                                      £000's     £000's
             Cash O utflows
    88,640   Cash paid to and on behalf of employees                                  95,813
   160,123   Other Operating Costs                                                   181,729
    30,058   Housing Benefits paid out                                                31,543
    38,464   National Non-Domestic Rate Payments to National Pool                     37,265
     4,193   Precepts Paid                                                                6,878
   321,478                                                                                         353,228
             Cash Inflows
   (7,681)   Rents (after rebates)                                                    (7,802)
  (39,850)   Council T ax Income                                                     (42,786)
  (36,759)   Non-domestic Rate Receipts                                              (34,618)
  (49,684)   Receipts from NDR Pool                                                  (54,418)
  (69,224)   Revenue Support Grant                                                   (66,133)
  (34,901)   Department of Work and Pensions Grants                       (Note 1)   (34,406)
  (33,326)   Other Government Grants                                      (Note 1)   (37,874)
  (63,471)   Cash Received For Goods and Services                                    (85,571)
 (334,896)                                                                                        (363,608)
  (13,418)   Revenue Activities Net Cash Flow                             (Note 2)                 (10,380)
             SERVICING O F FINANCE
             Cash O utflows
     3,896   Interest Paid                                                                4,645
             Cash Inflows
     (428)   Interest Received                                                            (704)
     3,468   Servicing of Finance Net Cash Flow                                                      3,941
             CAPITAL ACTIVITIES
             Cash O utflows
    20,891   Purchase of Fixed Assets                                                 38,022
    20,891                                                                            38,022
             Cash Inflows
   (3,897)   Sale of Fixed Assets                                                     (4,218)
   (6,133)   Capital Grants received                                                 (11,974)
     (261)   Other Capital Cash Receipts                                                  (842)
  (10,291)                                                                           (17,034)
    10,600   Capital Activities Net Cash Flow                                                       20,988
      650    NET CASH (INFLO W)/O UTFLO W BEFO RE FINANCING               (Note 3)                  14,549
             MANAGEMENT O F LIQ UID RESO URCES
     8,631   Net increase in short term investments                       (Note 4)        2,170
     8,631   Net Increase in Management of Liquid Resources                                          2,170
             FINANCING
             Cash O utflows
     1,274   Repayment of amounts borrowed                                                 238
             Cash Inflows
  (11,615)   New Short-term Loans                                                    (16,900)
  (10,341)   Financing Net Cash Flow                                                               (16,662)
   (1,060)   (INCREASE)/DECREASE IN CASH AND CASH EQ UIVALENTS            (Note 5)                      57




                Southend-on-Sea Borough Council – Statement of Accounts 2002/2003    48
      NOTES TO THE CONSOLIDATED CASH FLOW
                   STATEMENT
Note 1.           Analysis of Government Grants

                                                                 31st March 2002         31st March 2003
                                                                      £000's                  £000's
 Department of Work and Pensions Grants
 Housing Benefits                                                            28,190                  27,233
 Council Tax Benefits                                                         6,711                    7,173
 Total Department of Work and Pensions Grants                                34,901                  34,406
 Other Government Grants
 Housing Subsidy                                                             11,524                  11,772
 Housing Benefit Administration                                                    581                     682
 N.D.R. Costs of Collection                                                        261                     260
 Three Year Old grant                                                         1,200                    1,493
 Standards Funds                                                              4,038                    4,869
 Recoupment                                                                   1,155                          0
 Schools Standard grant                                                       2,050                    2,126
 Class Size Initiative                                                             476                     579
 Threshold Funding                                                                 972                 1,507
 Learning and Skills Council                                                  1,671                        590
 Other Education grants                                                            67                      585
 M andatory Awards                                                                 312                     259
 Verification Framework                                                            219                     209
 Asylum Seekers                                                               2,788                    1,778
 Promoting Independence Partnership                                           1,206                        618
 M ental Health grant                                                              556                     560
 Children's Services grants                                                   1,098                    1,808
 Building Care Capacity grant                                                      566                 1,190
 Preserved Rights grant                                                              0                 2,913
 Residential Allowance grant                                                         0                     370
 Other Social Services grants                                                      647                     882
 Economic Regeneration grants                                                 1,569                    1,976
 Other                                                                             370                     848
 Total Other Government Grants                                               33,326                  37,874




                    Southend-on-Sea Borough Council – Statement of Accounts 2002/2003    49
      NOTES TO THE CONSOLIDATED CASH FLOW
                   STATEMENT
Note 2.           Reconciliation of Surplus to Net Cash Flow

                                                                                         2001/2002         2002/2003
                                                                                          £000's            £000's
 General Fund Surplus/(Deficit)                                                                     700        (1,697)
 H.R.A. Surplus                                                                                  1,150          1,857
 Collection Fund Surplus/(Deficit)                                                                (11)            560
 Specific Reserves                                                                                  857           535
 Trust Funds                                                                                        169           204
 Add M inimum Revenue Provision                                                                  1,621          2,235
 Add Revenue Contributions to Capital Outlay                                                        292           854
 Add Reserves Contribution to Capital Outlay                                                     2,272          1,240
 Add Provisions in the year                                                                         509           940
 Decrease/(Increase) in Stocks                                                                    (13)               76
 Decrease/(Increase) in Debtors                                                                  2,314         (4,694)
 Increase/(Decrease) in Creditors                                                              (3,729)            917
 Servicing of finance                                                                            3,468          3,941
 HRA depreciation                                                                                4,447          4,370
 Schools Balances                                                                                (628)          (958)
 Net Cash Flow from Revenue Activities                                                          13,418         10,380


Note 3.           Net Debt Reconciled to Balance Sheet

                                                        31st March 2002           31st March 2003           Movement
                                                             £000's                    £000's                £000's
 Cash with Accounting Officers                                      8,249                      7,695             (554)
 Cash Overdrawn                                                  (2,025)                    (1,528)               497
 Long Term Borrowing                                           (62,962)                   (79,774)            (16,812)
 Short Term Borrowing                                               (164)                       (14)              150
 Investments (Short Term)                                        61,631                     63,801              2,170
 Total                                                              4,729                   (9,820)           (14,549)

Note 4.           Liquid Resources

                                                   st                        st
                                                 31 March 2002              31 March 2003                 Movement
                                                    £000's                     £000's                      £000's
 Investments (Short Term)                                  61,631                     63,801                    2,170
 Total Liquid Resources                                    61,631                     63,801                    2,170




                     Southend-on-Sea Borough Council – Statement of Accounts 2002/2003           50
      NOTES TO THE CONSOLIDATED CASH FLOW
                   STATEMENT
Note 5.                 Movement in Cash Reconciled to Net Debt

                                                                                            st
                                                                                        31 March 2003
                                                                                      £000's      £000's
 Decrease in cash in the period                                                                  (57)
 Cash inflow from debt financing                                                          (16,662)

 Cash inflow from increase in liquid resources                                              (300)
 Change in net debt from cashflow                                                         (17,019)
 Increase in liquid resources                                                               2,470
 Increase in net debt                                                                                   (14,548)
              st
 Net debt at 1 April 2002                                                                                 4,729
                   st
 Net debt at 31 March 2003                                                                               (9,819)




                    51Southend-on-Sea Borough Council – Statement of Accounts 2002/2003          51
TERMS AND ABBREVIATIONS USED IN THE STATEMENT
                OF ACCOUNTS

  Capital                        This is expenditure on items whose expected useful life is greater than
                                 one year. A detailed definition is laid down in the Local Government
                                 and Housing Act 1989.
  Capital Receipts               The proceeds from disposals of land, buildings and other capital
                                 assets.
  Collection Fund                A separate fund for the collection and distribution of amounts due in
                                 respect of Council Tax, Community Charge and Non-Domestic Rates
                                 (N.D.R.).
  Consolidated Balance Sheet     This is the combined balance sheet of all the funds of the Council,
                                 General fund, H.R.A., and Collection Fund.
  Council Tax Base               This is the revenue that is raised per £1 of Council Tax.
  Deferred Charges               Capital expenditure which does not result in a fixed asset in the
                                 balance sheet e.g. Renovation Grant, Schools Devolved Capital.
  FRS                            Financial Reporting Standards. e.g. FRS 17 Retirement Benefits
  General Fund                   The main fund of the Council. Day to day spending on services
                                 provided by the Council is met from this fund.
  H.R.A.                         Housing Revenue Account. This is a separate account for the landlord
                                 activities that the Council undertakes in respect of housing.
  MRP.                           Minimum Revenue Provision, this is an amount defined by statute to
                                 be set aside for the repayment of debt.
  N.D.R.                         Non Domestic Rates. The rates paid on business properties, which has
                                 been determined by the Government since 1st April 1990.
  Precept                        A levy made by the Essex Police Authority and this Council on the
                                 Collection Fund.
  Provisions                     These are set up to meet expenditure, which is likely or certain to be
                                 incurred, but the date at which it will be spent is unknown.
  Reserves                       These are sums of money set aside to meet programmed expenditure
                                 e.g. replacements of assets.
  Revenue                        This is expenditure on day to day running costs, and consists mainly
                                 of salaries and wages, capital financing costs and general running
                                 expenses.
  Schools Devolved Capital       This money is passed to schools to spend on capital and does not
                                 result in a fixed asset in the balance sheet.
  S.S.A.                         Standard Spending Assessment. This represents the amount, which
                                 the government considers appropriate for the authority to calculate as
                                 its budget requirement.
  S.S.A.P.                       Statements of Standard Accounting Practice.




             52Southend-on-Sea Borough Council – Statement of Accounts 2002/2003             52

				
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