NOTES TO THE CONSOLIDATED REVENUE ACCOUNT
1.
General
The Consolidated Revenue Account brings together the income and expenditure relating
to all the City Council’s functions in one consolidated statement.
The statement reflects the revised standard service analysis included in the Best Value
Accounting Code of Practice 2002.
2.
Unapportionable Overheads
This includes the following items :Cost of added years pension in respect of voluntary early retirements/redundancies.
Cost of unused capacity on Information Technology Systems.
In addition to the above in 2001/2002 the above service includes £2.0m in respect of
voluntary early retirement/redundancy lump sum payments. Please refer to note 2 of the
Consolidated Balance Sheet.
3.
Central Services to the Public
This service includes the following items :Council Tax and Non Domestic Rates collection costs.
Council Tax benefit payments and administration.
Registration of Electors, Births, Deaths and Marriages.
Land Charges.
General Grants, Bequests and Donations.
4.
Probation Service
From 1st April 2001 the Probation Service is funded centrally by the National Probation
Service. Up to that date the City Council paid a levy to the Greater Manchester Probation
Committee which was partly reimbursed by a grant from the Home Office. In 2001/02 the
Consolidated Revenue Account includes residual costs related to the function.
5.
Levies by Other Bodies and Other Miscellaneous Services
The net cost of services includes the following amounts which are charged by precept or
levy for services not directly provided by the City Council :2001/02
2000/01
£000s
£000s
Highways, Roads and Transport Services
Greater Manchester Passenger Transport Authority
8,915
8,721
Environmental Services
Greater Manchester Waste Disposal Authority
6,201
5,778
23
notescon
In addition the following are included within the heading Precepts and Levies within
operating expenditure :-
Environment Agency - Flood Defence (Land Drainage)
Association of Greater Manchester Authorities (AGMA)
Secretariat
AGMA – North West Regional Chamber
6.
2001/02
£000s
2000/01
£000s
774
32
747
32
39
35
Rescheduling of Debt
The appropriate net discount/premium arising from the rescheduling exercises carried out
since 1992/93 has been transferred to revenue in 2001/2002. A proportion of this amount
has been transferred to the HRA via the statutory charge.
24
notescon
7.
Agency Services
The City Council carries out repairs to sewers and maintenance of water pumping
stations under an agency agreement with United Utilities plc. United Utilities plc
reimburses the City Council for this work, including a contribution towards
administrative costs. The total expenditure in 2001/02 was £819,000
(£1,228,000 in 2000/01). This sum is not included in the Consolidated Revenue
Account. The agency agreement between the City Council and United Utilities plc
finished at the end of 2001/02.
25
notescon
8.
Asset Management Revenue Account
This account comprises the following:Income:
Capital Charges
- General Fund/DSOs
- Housing Revenue Account
£000s
£000s
(32,032)
(26,864)
--------
(58,896)
Capital grants released from the government
grants deferred account
(1,689)
-------(60,585)
Expenditure:
External Interest Payable
- General Fund/DLO/DSOs
- Housing Revenue Account
13,645
21,379
-------35,024
33,820
--------
Depreciation
Balance to the consolidated revenue account
9.
68,844
-------8,259
=====
Provision for Repayment of External Loans
The City Council is required to set aside a minimum revenue provision (MRP) for the
redemption of external debt. In 2001/02 the City Council's MRP liability is shown under this
heading net of (i) the depreciation charged to the asset management revenue account and (ii)
the reduction in accordance with the Local Authorities (Capital Finance) (Amendment)
Regulations 1993 to mitigate the net loss to the City Council arising from the commutation of
certain specific grants in October 1992. The details are shown below:£000s
Minimum Revenue Provision
Less: Commutation
11,978
(2,931)
--------
Less: Depreciation
10.
£000s
9,047
(33,820)
-------(24,773)
=====
Trading Undertakings
(i)
Direct Service Organisations (DSOs)
Details of the trading performance in respect of DSOs are shown on page 69.
26
notescon
(ii)
Markets
The City Council now only operates trading undertakings at 2 markets, located at Eccles and
Swinton, the results of which were as follows:2001/02
2000/01
£000s
£000s
Expenditure
Income
Deficit
473
(293)
1,109
(780)
180
329
Salford market was sold in April 2001, Pendlebury market was demolished in February 2001
whilst trading has ceased at Walkden market.
(iii) Building Control
The Building (Local Authority Charges) regulations 1998 require the disclosure of information
regarding the setting of charges for the administration of the Building Control function.
However, certain activities performed by the Building Control section cannot be charged for,
such as providing general advice and liaising with other statutory authorities. The statement
overleaf shows the total cost of operating the Building Control function divided between
chargeable and non-chargeable activities.
Expenditure
Employees
Premises
Transport
Supplies&
Services
Central&
Support Servs
Total
Income
Building
Regs Charges
Misc. Income
Total Income
(Surplus)/
Deficit
for
the year
11.
Chargeable
Non
Chargeable
£000
£000
2000/01
Total
Building
Control
£000
447
1
24
79
251
1
13
78
217
14
16
468
1
27
94
119
233
103
108
211
421
363
784
446
355
801
(483)
-
(483)
(472)
-
(472)
(483)
(62)
(46)
(46)
317
(46)
(529)
255
(472)
(26)
(36)
(36)
319
(36)
(508)
293
Chargeable
Non
Chargeable
£000
£000
2001/02
Total
Building
Control
£000
219
12
76
228
1
12
3
114
Publicity
27
notescon
Section 5 of the Local Government Act 1986, requires expenditure on publicity to be disclosed.
Detailed below is the City Council's expenditure incurred in 2001/02 together with the
comparative figures for 2000/01.
Recruitment advertising
Other advertising
Promotions
Other publicity
Total
12.
2001/02
£000s
2000/01
£000s
737
(54)
599
228
520
85
643
1
1,510
1,249
Pension Costs
Teachers
For teachers, the City Council paid an employer's contribution of £4.0m based on 7.4% of
employees' superannuable pay in 2001/02 (£3.6m in 2000/01) into the teachers' superannuation
scheme administered by the Teachers’ Pensions Agency. The City Council is responsible for all
pension payments to teachers relating to added years together with the appropriate increases.
The cost of added years in 2001/02 amounted to £2.1m (3.9% of pensionable employees’
superannuable pay).
Other Employees
The City Council paid £8.1m in 2001/02 (£6.7m in 2000/01) in respect of employees other than
teachers into the Greater Manchester Pension Fund, being the employer’s contribution of 8.8%
of pensionable employees’ superannuable pay.
In addition, the City Council is responsible for all pension payments relating to added years it
has awarded (under its early retirement scheme) together with the related increases. The costs
of added years in 2001/02 amounted to £1.9m, equivalent to 2.1% of pensionable employees'
pay.
The capitalised cost of discretionary pension payments agreed by the City Council in 2001/02
amounts to £0.6m. The capitalised cost of discretionary increases in pension payments made in
previous years for which payments are still being made amount to £32.8m.
In arriving at the employer’s contribution rate the Fund’s actuary makes statistical assumptions
regarding the incidence of benefits payable and financial assumptions to determine the amount
and value of benefits payable.
The latest actuarial valuation carried out as at the 31st March 2001 determined that the
contribution rate for the City Council will increase annually from 8.8% in 2001/02, to 9.0%,
9.5% and 10.0% over the next three years to 31st March 2005.
FRS 17 ‘Retirement Benefits’ issued by the Accounting Standards Board requires financial
statements to :i. reflect at fair value the assets and liabilities relating to retirement benefit obligations and
funding
28
notescon
ii. recognise the cost of providing retirement benefits in the accounting period(s) in which the
benefits are earned by members of the scheme and the related finance costs and changes in
asset and liability values in the accounting periods in which they arise.
The implementation of FRS 17 is being introduced in stages with a full disclosure note being
required for 2001/02. The appropriate details are given in Note 22 to the Consolidated Balance
Sheet.
13.
Leases
The City Council holds various assets under operating leases. The value of assets covered by
new leases taken out during the year was as follows:2001/02
£000s
2000/01
£000s
1,908
2,584
The leasing rentals paid during the year were as follows:2001/02
£000s
2000/01
£000s
2,492
2,400
As at 31st March 2002 the City Council has a commitment to meet the following leasing
charges:£000s
2002/2003
2003/2004
2004/2005 to 2010/2011
2,089
1,416
1,232
total estimated rentals outstanding
The cost of the assets and the liability for future rental payments are not recorded in the balance
sheet.
14.
Local Authority (Goods and Services) Act 1970
Local authorities are empowered by this Act to provide goods and services to other public
bodies. During 2001/02 payroll services were provided to Eccles 6th Form College and
Salfordian to a value of £4,000 (£2,900 in 2000/01).
29
notescon
15.
Members' Allowances
The Council has 60 elected members to whom £0.570m was paid in allowances in the year.
16.
Employees Remuneration
The number of employees whose remuneration, excluding pension contributions, was £40,000 or
more in 2001/02 was:
Remuneration Band
2001/02
2000/01
<---------------Number of Employees--------------->
Total
£40,000 - £49,999
£50,000 - £59,999
£60,000 - £69,999
£70,000 - £79,999
£80,000 - £89,999
£90,000 - £99,999
Total
17.
Left
During
Year
Total
Left
During
Year
51
10
7
1
2
1
-
30
7
6
1
-
5
1
1
-
69
3
44
7
Transactions with Related Parties
Details of the City Council's transactions with other local authorities, precepting or levying
bodies, subsidiary and associated companies and employee pension funds are shown in the
relevant sections of the statement. There were no relevant transactions with members of the City
Council or City Council employees.
18.
Lowry Centre Development Company Limited
The City Council has agreed to pay invoices on behalf of the Lowry Centre Development
Company Limited and in return it will be fully reimbursed for the payments made together with
appropriate interest. This agreement commenced on the 1st November 1996. No payments were
made during the year and the Lowry Centre Development Company Limited owed the City
Council £9.05m under the arrangement at the 31st March 2002. This balance was cleared April
2002 by a payment from the Lowry Centre Development Company Limited, a contribution from
a developer and part of the Lowry provision.
19.
19.
Council Tax Benefit Subsidy
In 1999/00 the government introduced a scheme to limit the subsidy it paid to billing authorities
in respect of council tax benefit. Any billing or precepting authority which increases its council
tax by more than a guideline figure set by the government is required to make a contribution to
the consequent increase in council tax benefit costs.
56
cashflow
For 2001/02 the guideline was set at a 4.5% increase in council tax, or such larger figure as
would result from the City Council increasing its budget by the actual increase in its Standard
Spending Assessment. The City Council’s council tax requirement was £2.1m in excess of that
permitted under the rules of the scheme and as a result was obliged to make a contribution of
£0.363m.
The scheme has been discontinued from April 2002.
2001
£000s
As at
31st
March
Notes
60,892
Operational Assets
Council dwellings
Other land and buildings
Vehicles, plant and equipment
Infrastructure assets
Community assets
546,992
191,920
389
56,303
799
Non Operational Assets
Non-operational land and
property
41,719
846,517
2,205
2002
£000s
(1)
FIXED ASSETS
533,218
198,488
587
52,512
820
2002
£000s
838,122
(2)
Deferred Charges
Stock Discount
2,088
57
cashflow
2001
£000s
2,205
10,959
1,306
3,386
1,454
146
As at 31st March
Notes
LONG TERM INVESTMENTS
(4)
LONG TERM DEBTORS
(5)
Mortgages
Ex-Manchester Airport
Car Loans
Other
2002
£000s
2,088
10,959
553
9,426
1,307
375
6,292
865,973
2002
£000s
11,661
862,830
TOTAL LONG TERM ASSETS
CURRENT ASSETS
1,193
62,838
25,188
5,812
Stocks, WIP and stores
Debtors (net of bad debts
provision) and prepayments
Short term investments
Cash
95,031
961,004
(6)
(7)
1,276
63,229
(4)
36,526
8,127
109,158
971,988
TOTAL ASSETS
58
cashflow
2001
£000s
As at 31st March
Notes
2002
£000s
2002
£000s
CURRENT LIABILITIES
(47,128)
(52,957)
(9,804)
Borrowing - amounts falling due
within one year
Creditors
Cash overdrawn
(2,127)
(8)
(63,208)
(7,663)
(109,889)
851,115
(400,582)
(14,781)
(4,488)
(920)
(44)
(10,361)
(72,998)
898,990
TOTAL ASSETS LESS CURRENT
LIABILITIES
Long term borrowing
Deferred liabilities
Deferred credits
Lowry provision
Debt Rescheduling
Insurance Fund
(9)
(10)
(11)
(13)
(14)
(15)
(448,974)
(14,457)
(2,940)
(946)
(88)
(10,710)
(431,176)
419,939
(478,115)
420,875
TOTAL ASSETS LESS LIABILITIES
RESERVES AND BALANCES
271,903
106,449
22,696
13
5,290
(550)
2,095
1,879
7,870
2,294
419,939
Fixed Asset Restatement Reserve
Capital Financing Reserve
Government grants deferred
Usable Capital Receipts Reserve
Housing Revenue Account
Collection Fund Deficit
HRA Repairs Account Reserve
LMS Schools
Other Reserves
General Fund Reserve
(16)
(16)
(12)
(16)
(16)
(16)
(16)
(16)
(16)
(16)
245,061
121,890
29,772
17
9,584
(1,096)
1,055
2,698
7,199
4,695
420,875
TOTAL EQUITY
A. WESTWOOD, C.P.F.A.
Director of Corporate Services1
30th August 2002
1.
Fixed Assets
Movements in the value of fixed assets during the year were as follows:Council
Dwellings
Other Land &
Buildings
Vehicles, Plant
& Equipment
Infrastructure
£000s
£000s
£000s
£000s
59
cashflow
C
GROSS BOOK VALUE AS AT 31ST MARCH
2001
533,218
207,915
1,831
108,247
18,593
11,099
9
15,403
0
(2,966)
0
0
(10,856)
(3,515)
(16)
0
6,037
(6,828)
0
(20)
546,992
205,705
1,824
123,630
0
(9,427)
(1,244)
(55,735)
(16,786)
(5,126)
(195)
(11,592)
Depreciation on revalued/assets sold
16,786
768
4
0
NET BOOK VALUE AS AT 31ST MARCH
2002
546,992
191,920
389
56,303
Capital expenditure during year
Reclassification of Assets
Disposals
Revaluations during year
GROSS BOOK VALUE AS AT 31ST MARCH
2002
Depreciation at 31st March 2001
Depreciation for year
Notes:
The fixed assets were valued on the 1st April 1999.
Infrastructure assets are valued at historical cost net of depreciation.
Community assets were given a nominal value of £1 each as at 1st April 1994 and subsequently only
adjusted to reflect disposals and acquisitions which are valued at cost. Other associated works on
environmental improvements etc are not considered to materially affect the asset value.
All other assets are valued at the lower of net current replacement cost and net realisable value.
A detailed valuation of the City Council’s housing stock has been undertaken as a result of the
introduction of resource accounting for the Housing Revenue Account. The basis of the valuation is
existing use value for social housing which reflects a value for a property if it were to be sold with
sitting tenants, enjoying rents at less than open market value and rights including the option of ‘right
to buy’.
The net book value of non operational assets includes £3.0m in respect of work in progress on assets at
31.3.2002.
Valuer - R. Wynne (Development Services) A.R.I.C.S.
Financing of Capital Expenditure
Cash payments on capital projects during the year were financed as follows:2001/02
£000s
Fixed assets
Deferred charges
Long Term Debtors
2000/01
£000s
2001/02
£000s
51,849
15,323
219
45,144
18,084
-
67,391
63,228
Loans
Capital Receipts
Capital Grants
MRA
Revenue
Other
Unfunded
2000/01
£000s
16,535
14,378
13,051
16,786
3,983
1,079
1,579
25,627
13,181
15,065
2,061
260
7,034
67,391
63,228
The above figures exclude accrued expenditure amounting to £ 0.88m (£0.5m in 2000/01) and accrued capital
receipts of £0.017m.
Deferred charges relate only to the expenditure which is subject to capital controls.
Statement of Major Physical Assets
The City Council held the following major fixed assets as at 31st March 2002:Of the16 libraries two are housed in Social Services Community Centres, one in a school and one in a
neighbourhood office.
60
cashflow
Buildings
Education & Leisure
16Libraries
3
3
5
3
4
84
14
5
11
21
Environmental Services
4
2
Community and Social Services
11 Children’s Homes
Art Galleries & Museums
Centres
Leisure Centres with Pools
Leisure Centres without Pools
Pools
4
Nursery Schools
Primary Schools
Secondary Schools
Special Schools
Trading Services
Youth Centres
Caretakers' Houses
7
4
Handicap
8
D
9
C
2
2
H
M
Other Buildings
Cemeteries
Crematoria
7
27
3
C
D
5
Other Buildings
Planning
149
Council Dwellings
16,094
1,384 Bungalows
3,859 Flats - High-rise
8,064
- Low-rise
*
Majority of vehicles are leased
Infrastructure
83km
Principal Roads
62km
580km
Industrial Units
Vehicles
64
Refuse/Street Cleansing vehicles
3 Mobile Libraries
Houses
1
209 Vans
78 Trucks
50 Mini Buses and Coaches
34
Other
Limousin
Land
1,543 Hectares
Other Classified Roads
Unclassified Roads
Commitments under Capital Contracts
The City Council has to plan its capital expenditure in advance of work proceeding. At the 31st March 2002 the City
Council had approved a Capital Programme for 2002/2003 amounting to £63.3m which will result in commitments
being carried forward into future years. A total amount of £47.7m was contractually committed at the 31st March
2002 and the significant contracts under these capital schemes were as follows:£m
Private sector renovation grants
Broughton partnership
Seedley and Langworthy – SRB 5
Public Sector (SRB 2 & 3 / HIP)
Inner Relief Road
Eccles Town Centre
Trafford Road
The Albion school
Schools amalgamation
New Deals for schools
Libraries peoples network
Staff redundancy costs
I T development and consultancy costs and settlement of mainframe
agreement
2.0
1.0
3.3
10.7
9.5
1.0
0.7
7.3
0.4
2.8
0.5
0.6
1.7
Deferred Purchase Scheme
The City Council entered a £3m Deferred Purchase agreement in December 1989 for the funding of the construction
of Phase III of the Civic Centre. The balance outstanding of £1.8m was renegotiated in December 1999 for a period
of four years and the second repayment of £0.45m under the terms of the new agreement was made in April 2001.
The value of the asset is included within fixed assets and the balance outstanding under the agreement is included in
loans outstanding.
61
cashflow
Rolling Programme for the Revaluation of Fixed Assets
The following statement shows the progress of the City Council’s rolling programme for the revaluation of fixed
assets. The basis of the valuation is shown in the statement of accounting policies. Infrastructure, Community and
Vehicles, Plant and Equipment assets are effectively valued at historical cost net of depreciation and they are
therefore excluded from the programme of revaluations and from the table shown below :-
Council
Dwellings
£000
Valued at Current Value in :
- Current year
- 2000/01
- 1999/00
546,992
546,992
2.
Other Land &
Buildings
£000
Non-operational
Total
Assets
£000
£000
12,725
18,337
174,643
205,705
7,934
4,603
29,292
41,829
567,651
22,940
203,935
794,526
Deferred Charges
Movements in deferred charges during the year were as follows:Balance
1/4/01
£000s
Church Aided Schools
Assistance to Industry
Private Sector Housing
Lowry Centre ERDF Grant
Single Status
Stock Discount
Software Development
VER Scheme
Expenditure
2001/02
£000s
Written
Down
£000s
Balance
31/3/02
£000s
2,205
-
355
721
10,620
111
57
1,410
2,049
(355)
(721)
(10,620)
(111)
(57)
(117)
(1,410)
(2,049)
2,088
-
2,205
15,323
(15,440)
2,088
(i)
Expenditure incurred during the year has been charged to the service revenue accounts and any grant
received towards this expenditure has been credited to the corresponding service revenue account.
(ii)
The discount allowed on stock market bonds issued in 1993/94 and 1994/95 is being written off over the
life of the bonds.
3. Analysis of Net Assets Employed
General Fund
Housing Revenue Account
Collection Fund
62
31st March
2002
£000s
32,829
389,142
(1,096)
31st March
2001
£000s
51,889
345,904
(550)
420,875
397,243
cashflow
4.
Investments
Long term investments consist of:31st March
2002
£000s
Manchester Airport plc
Ringway Developments plc
SUBEL Ltd.
Chapel Wharf Ltd
Modesole Ltd.
Other
31st March
2001
£000s
10,214
393
335
15
1
1
10,214
393
335
15
1
1
10,959
10,959
Further details concerning these investments are included in note 19, related businesses and companies.
The investments are shown in the balance sheet at their original cost.
Short term investments:The City Council also invests balances which are temporarily surplus to requirements for short periods at market
rates of interest.
5.
Long Term Debtors
31st March
2002
£000s
Mortgagors
Manchester Airport plc
Car Loans
Other
31st March
2001
£000s
553
9,426
1,307
375
1,306
3,386
1,454
146
11,661
6,292
The City Council along with the other nine authorities in Greater Manchester is responsible for loan advances made
to Manchester Airport plc to assist in the financing of Terminal 2. The annual servicing costs of the loans are
reimbursed by the Airport. The proportion of the loan advances applicable to the City Council is shown in the table
above.
The increase in the figures for Manchester Airport plc is a result of rescheduling some of the debt. There has been an
equivalent reduction in short term debtors.
63
cashflow
6.
Stocks and Work in Progress
An analysis of stocks and work in progress is shown below:31st March
2002
£000s
Stocks and stores
Provisions
Work in progress
Less: Provision for future losses
7.
31st March
2001
£000s
1,015
226
116
1,148
130
-
1,357
1,278
(81)
(85)
1,276
1,193
Debtors and Prepayments
An analysis of debtors and prepayments is shown below:31st March
2002
£000s
Customs and Excise
Government departments
Capital
Other local authorities
Local Taxpayers and NDR
Housing rents (net of prepayments)
Sundry debtors
Housing Benefits (overpayments)
Other
Ex-Manchester Airport principal repayments
Mortgagors
Accrued interest on investments
31st March
2001
£000s
2,202
4,168
34
2,381
25,089
5,504
6,358
6,800
19,321
161
408
2,532
3,367
17
1,915
28,378
4,047
8,279
5,960
17,861
6,191
156
262
72,426
(20,705)
78,965
(23,191)
Total Debtors
51,721
55,774
Prepayments
11,508
7,064
63,229
62,838
Less:
Provision for bad debts
64
cashflow
8.
Creditors
The figures shown for creditors include general creditors and provisions and an analysis of each of these is given
below:-
Government departments
Inland Revenue
Other local authorities
Local Taxpayers and NDR
Housing rents
Sundry creditors
Capital accruals
Residents' savings
Other
Small Reserves and Fund Balances
Provisions
Provision for Future Costs
Modesole Loan Guarantee
Repayment of Grant
Amalgamated Schools
31st March
2002
£000s
31st March
2001
£000s
13,400
3,026
931
1,972
90
33,293
877
350
7,678
158
9,052
3,527
989
1,876
52
29,352
458
362
5,817
162
61,775
51,647
635
15
538
245
459
155
459
237
63,208
52,957
Related Party Transactions
The figures for sundry creditors includes the following amount:

Greater Manchester Pension Fund £35,000
Provision for Future Costs - This provision was originally set up to help to meet the costs of the harmonisation of
pay and conditions for employees. Harmonisation has now been completed and the provision has been retained to
help meet the cost of pending pay reviews for Housing Officers (Management).
Modesole Loan Guarantee - in January 1983 the Greater Manchester Passenger Transport Executive made a loan to
Modesole Ltd., as part of the original funding for the G.Mex development. The former Greater Manchester County
Council had guaranteed the amount of the loan and this guarantee was transferred to the ten district councils in
Greater Manchester following the dissolution of the County Council. The provision was set up by annual
contribution to help to meet the City Council’s possible costs in case the guarantee had to be met. The full amount of
the loan was repaid in 2001/02 in accordance with the terms of the guarantee and the balance remaining on the
provision has been repaid to General Fund in 2002/03.
Repayment of Grant - an amount has been earmarked for the possible repayment of grants and subsidy received.
Amalgamated Schools – the provision has been set up to meet any costs arising from the
review of primary school places.
9.
Long Term Borrowing
An analysis of long term loans is shown below:-
Total Outstanding at
Source of Loan
Range of Interest Rates
Payable
%
65
31st March 2002
£000s
31st March 2001
£000s
cashflow
Public Works Loan Board
Money Market
Stock
L.C.C.
PWLB – Airport
Deferred Purchase
4.88 to 11.00
2.75 to 12.00
7.0 to 8.25
6.95
2.75 to 11.50
7.49
206,493
50,809
180,000
684
10,538
450
196,439
12,000
180,000
753
10,490
900
448,974
400,582
These loans are repayable over the following periods:2001/02
£000s
Maturing in 1-2 years
Maturing in 2-5 years
Maturing in 5-10 years
Maturing in 10-15 years
Maturing in more than 15 years
10.
2000/01
£000s
834
3,901
45,396
98,670
300,173
1,808
1,969
37,089
103,187
256,529
448,974
400,582
Deferred Liabilities
The City Council assumed responsibility for its share of the debt outstanding in respect of the former Greater
Manchester County Council when that body was wound up on the 31st March 1986.
11.
Deferred Credits
This item comprises mainly deferred capital receipts and the deferred discounts from the rescheduling of debt.
Deferred capital receipts are amounts derived from sales of fixed assets which will be received in instalments over
agreed periods of time. They arise principally from mortgages on sales of council houses.
Deferred rescheduling discounts represent the discounts received from a number of debt rescheduling exercises
carried out from 1992/93 onwards. The appropriate amount of discounts will be credited to the revenue account
annually over the period of the replacement loan or three years, whichever is the longer.
31st March
2002
£000s
Deferred capital receipts
 Loans
 Council house sales
Private Street Works
Deferred Rescheduling Discounts
Other
12.
31st March
2001
£000s
48
672
7
1,878
335
71
1,405
8
3,004
-
2,940
4,488
Government Grants Deferred Account
Capital grants received and accrued are credited initially to the government grants deferred account. Grants received
in respect of deferred charge expenditure are transferred to the revenue account to offset the relevant expenditure.
Grants received in respect of non depreciating assets are transferred to the Capital Financing Reserve. The
remaining grants received are released to the asset management revenue account to match the depreciation charged
on the asset to which the grant relates.
£000s
66
cashflow
Balance brought forward
Received and accrued in year from government departments
Less:
•
•
•
Grants on non depreciating assets
Grants relating to deferred charges
Release to match depreciation charged
Balance carried forward
13.
22,696
15,929
(1,517)
(5,647)
(1,689)
29,772
Lowry Provision
The provision has been set up to help to meet the agreed contributions under the terms of the agreement with The
Lowry.
14.
Debt Rescheduling
During 1999/2000 £0.7m of annuity loans in respect of Manchester Airport were rescheduled to loans maturing over
various periods to 2024 and a provision has been established to meet the principal sums as they fall due.
15.
Insurance Fund
The fund meets liability claims which are settled for amounts of less than £100,000, with external insurers continuing
to cover claims for amounts in excess of £100,000.
Under the terms of the fire insurance policy the City Council is required to meet the cost of claims up to £10,000 for
dwellings and up to £100,000 for schools and this cover is also provided by the insurance fund.
16.
Reserves and Balances
Usable Capital Receipts Reserve
Details of this account are provided in note i) to the Statement of Total Movements in Reserves on page 52.
Fixed Asset Restatement Reserve
Details of this account are provided in notes ii) and iii) to the Statement of Total Movements in Reserves on page 52.
Capital Financing Reserve
Details of this account are provided in note iv) to the Statement of Total Movements in Reserves on pages 52 and 53.
Provision for credit liabilities
Under the terms of the Local Government and Housing Act 1989 the City Council is required to set aside the
following amounts for debt redemption
- a minimum revenue provision based on the credit ceiling
- prescribed proportions of capital receipts
- the value of any ERDF grant received for accounting periods prior to 1 st April 2000
The following account shows how the City Council has complied with the requirement:Memorandum Account
£000s
Balance brought forward
Amount set aside for MRP
Reserved capital receipts
Set aside credit cover for Minerva house lease
ERDF grants received
Amounts applied to repay loans
67
12,909
9,050
2,300
1,792
49
26,100
(9,099)
cashflow
Balance carried forward
17,001
The MRP and ERDF grants received have been used to repay debt.
All the above entries are held within the capital financing reserve.
Earmarked Reserves and Balances
Full details of these accounts are provided in note v) to the Statement of Total Movements in Reserves on pages 53
and 54.
17.
Contingent Assets and Liabilities
G.Mex Centre
At 31st March 1986, there were a number of outstanding issues concerning possible liabilities in connection with the
G.Mex Centre, the extent of which still remains uncertain. The City Council, along with the other local authorities in
Greater Manchester, may be required to honour any outstanding liabilities in the future. No provision against this
possibility has been made in the balance sheet.
Municipal Mutual Insurance
On the 30th September 1992, the City Council's insurer, MMI Limited, announced that it had ceased taking new
business or issuing renewals and had placed a moratorium on claims payments. On the 6th October 1992, MMI
resumed the full payment of claims. No new business was accepted, however, nor existing policies renewed.
As a result of the above, a special meeting of Finance Committee was held on the 29th January 1993 and the City
Council's insurance business was transferred to a number of new insurers.
MMI’s auditor’s Pricewaterhouse Coopers envisage that there would be a solvent run off and therefore no clawback
claims will be made against the City Council.
As at 31st March 2002 the estimated value of unpaid claims made by third parties was £190,527 and £37,500
remained unpaid in respect of claims made by employees. The extent to which any claims will not be settled in full
cannot be assessed at the present time and no provision, therefore, has been made for these potential liabilities in the
balance sheet.
Manchester Airport plc
Manchester Airport plc has agreed to reimburse the City Council in respect of debt charges on the loans referred to
in note 5. No provision has been made in the balance sheet to cover any potential losses on this agreement which
will operate until all the loans have matured in 2027.
Chapel Wharf Ltd.
The City Council has agreed to indemnify Chapel Wharf Ltd., to a maximum amount of £345,000 plus inflation, in
the event of the Office of the Deputy Prime Minister (ODPM) exercising a right of pre-emption in respect of land
sold by the ODPM to Chapel Wharf Ltd.
Salford University Business Enterprises Ltd.
The directors have decided to realise the company's assets and to distribute the proceeds to the shareholders. At this
stage it is expected there will be no overall deficit after discharging the company's liabilities and therefore, no
provision has been made for any shortfall in the balance sheet.
Lowry Centre
Under an agreement dated 19th March 1997 the City Council has agreed with the Arts Council and the Lowry Centre
Trust (the Trust) that it will pay to the Trust each year an amount representing the planned deficit for the year in the
Trust's revenue accounts in respect of the operation of the Lowry Centre provided that the deficit has actually been
incurred. In addition the agreement includes a commitment that the City Council will guarantee to underwrite the
68
cashflow
Trust with a minimum sum of £350,000 per annum in return for outreach services which the trust will provide to
schools and residents.
The agreement came into operation on the 1st April 2000 and the amount of the fixed annual contribution will be
reviewed every five years beginning from the starting date but the annual contribution will not be reduced below
£350,000.
The terms of the agreement are irrevocable except with the consent of the Arts Council.
The amount of the contribution was £0.677m for each of the two years 2000/01 and 2001/02. To secure additional
external funding amounting to £16.250m it has been agreed that an extra £0.250m will be paid to the Trust for each
of the five years commencing in 2002/03. This variation raises the annual contribution rate to £0.927m. The original
basic contribution of £0.677m each year will remain subject to review in 2005/06 taking into account the Trust’s
annual business plan.
18.
Trust Funds
The City Council administers funds on behalf of 13 various trusts with a total fund value of £0.95m. All trust funds
are excluded from the City Council's accounts.
19.
Related Businesses and Companies
The City Council has an involvement with a number of private companies whose assets and liabilities are not
included in these accounts.
Relevant details of the companies are summarised below. No trading took place during the year, nor is there any
indebtedness between the City Council and any of the companies, except where stated.
Manchester Airport plc
The principal activity of the company is the operation and development of an international airport.
The City Council holds 10,214,000 £1 ordinary shares, equivalent to 5% of share capital.
At the year ended 31 March 2002, the company had net assets of £640m (31.3.01 £636m).
In 2001-02 loss before tax was £3.8m and loss after tax was £12.0m (in 2000/01 £24.9m profit before tax, £16.9m
profit after tax).
A dividend of £0.362m was received in the year (£0.038m in 2000/01).
Ringway Developments Ltd.
The principal activity of the company is to provide and implement opportunities to support the growth of Manchester
Airport.
The City Council holds 393,108 £1 “A” ordinary shares, equivalent to 4.6% of the share capital.
At the year ended 31 March 2001, the company had net assets of £18.2m (31.3.00 £17.0m). In 2000/01 the profit
before and after tax was £1.2m (£0.1m in 1999/00).
The company was sold in April 2002 and the City Council’s share of the net sale proceeds amounted to £0.54m.
Salford University Business Enterprises Ltd.
The principal activity of the company is investing in and managing businesses and property.
The City Council owns 23,500 £1 ordinary shares and 311,500 £1 non-voting preference shares, equivalent to 37%
of ordinary share capital.
At the year ended 31 July 2001, the company had net liabilities of £26,069 (31.7.00 £61,671). In 2000/01 the profit
before and after tax was £35,602 (2000/01 profit before tax was £8,956 and after tax £27,154).
The directors have decided to realise the company’s assets and to distribute the proceeds to shareholders. It is
anticipated that the realisation of assets will be sufficient to discharge the company’s liabilities.
Chapel Wharf Ltd.
69
cashflow
The principal activity of the company is investing and participating in the development of the area known as Chapel
Wharf.
The City Council owns 14,746 £1 ordinary shares, equivalent to 15% of share capital.
At the year ended 31 March 2002, the company had net assets of £5.4m (31.3.01 £6.0m). In 2001/02 the loss before
tax was £76,461 and after tax was £86,461 (2000/01 loss before tax was £38,155 and after tax £35,185).
During the year the City Council made two loans to the company amounting to £219,000 at interest rates of 2.5%
above bank base rate. The loans are due to be repaid during 2002/03.
Others
Modesole Ltd. - Shareholding 941 £1 shares, equivalent to 9.4% of issued share capital.
Salford Hundred Venture Ltd. - Shareholding 2 £1 shares, equivalent to 22% of issued share capital.
Companies limited by guarantee with the City Council's liability limited to £10 in each case:Salford Information Technology Centre Ltd.
The Salford/Trafford Groundwork Trust Ltd.
The Salford Phoenix Initiative Ltd.
Salford Foundation Ltd. (liability limited to £1)
Requests for further details on any of the above companies should be made to the Accountancy Section, Corporate
Services Directorate, Civic Centre, Chorley Road, Swinton M27 5AW (telephone 0161 793 3245).
20.
Reserves held by Schools
Under the terms of the Education Act 1996, local authorities are required to delegate management responsibilities to
the governing bodies of schools. All primary, secondary and special schools are formula funded and are included in
the scheme of full delegation. Nursery schools are excluded from the scheme.
In accordance with the City Council's approved scheme for delegating budgets to schools, the amount of any budget
not spent in the year is available for future use by the schools. The balances are not available to the City Council for
general use.
The balances held at 31st March are:-
Schools managed locally
- underspendings carried forward
- overspendings carried forward
Net underspendings carried forward
2002
£000s
2001
£000s
3,875
(1,177)
3,262
(1,383)
2,698
1,879
21.Economic and Monetary Union (EMU)
On the 1st January 1999 eleven countries of the European Union formed an Economic and Monetary Union (EMU)
and introduced a single currency - the euro. The Government decided not to join the single currency on the 1st
January 1999 but it is making the necessary preparations so that it has the option of joining during the current
parliament.
In the longer term the introduction of the euro could have an impact on the City Council in respect of matters such as
the provision of economic development advice to businesses and in the procurement of goods and services. There
has been no direct impact on the City Council to date. (There were no committed costs as at 31st March 2002).
22. Disclosure of net pensions asset / liability - FRS17 – transitional disclosure
70
cashflow
The implementation of FRS 17 ‘Retirement Benefits’ is being phased in over a three year period. For 2001/02 the
requirement is to provide balance sheet disclosure information in respect of the net asset or liability for retirement
benefits. This note therefore provides memorandum information to the balance sheet only. It only applies to the
Local Government Pension Scheme for officers and other non-teaching staff. The teachers pension scheme
administered by the Teachers Pensions Agency on behalf of the Department for Education and Skills, is a national
unfunded scheme which does not allow the identification of individual local education authority liabilities. The
teachers’ scheme is therefore treated as a defined contribution scheme accounted for by charging the contributions to
the revenue account as they become payable. No further recognition of future obligations is required in the
Statement of Accounts.
As part of the terms and conditions of employment for its employees, the City Council offers retirement benefits.
Although these will not actually be payable until employees retire, the City Council has a commitment to make the
payments that need to be disclosed at the time that the employees earn their future entitlement.
The City Council participates in the Local Government Pension Scheme for civilian employees, administered by
Tameside MBC as the Greater Manchester Pension Fund. This is a funded scheme, meaning that both employers and
employees pay contributions into the fund, calculated at a level which is estimated to balance the pensions liabilities
with investment assets.
In 2001/02, pension costs have been charged to the consolidated revenue account on the basis of contributions
payable for the year to the pension fund and pensions payable in the year for which the City Council is responsible.
The most recent actuarial valuation of the fund was the 31st March 2001, with the next formal valuation scheduled
for 31st March 2004. The actuarial value as at the 31st March 2001 has been rolled forward to the 31 st March 2002 by
the fund’s actuary using the following :



the membership data submitted for the formal valuation as at the 31 st March 2001
pension fund accounts, estimated by Tameside MBC where necessary, for 2001/02 to estimate contribution
income
other relevant information provided by Tameside MBC in 2001/02, estimated where necessary
the projected unit method of valuation.
The liabilities have been assessed by Hymans Robertson, actuaries to the pension fund. The main assumptions used
in the calculations are:
Assumptions as
at 31st March 2002
% per annum
Rate of inflation
2.8
Rate of increase in salaries
4.3
Rate of increase in pensions
Rate of discounting scheme liabilities
2.8
6.4
Assets in the Greater Manchester Pension Fund are valued at fair value, principally market value for investments and
consist of equities, bonds, properties and cash. The table below sets out the proportion of assets held and the
expected rate return per annum:
Assets(Whole Fund)
Fund value as
at 31st March
2002
Asset
Proportion
Equities
Bonds
Property
Cash
£m
3,794
1,555
500
495
%
60
24
8
8
Total
6,344
100
Long term return
per annum
Expected return per
annum
%
7.5
5.5
6.0
4.0
£m
284
86
30
20
420
71
cashflow
As at the 31st March 2002, the City Council had the following overall assets and liabilities for pensions that have not
been included in the balance sheet.
Estimated employers assets
Present value of scheme liabilities
Net Pension Asset
31st March 2002
£m
456
424
32
23. Post Balance Sheet Events
Ringway Developments Limited
On the 11th April 2002 the City Council sold its shareholding in Ringway Developments Limited, shown in the
balance sheet as a long term investment (note 4). The proceeds will be treated as a capital receipt and part of the
consideration was received on the 11th April 2002 with the balance due on the 31st March 2003.
Lowry Centre Development Company Limited
As referred to in note 18 to the Consolidated Revenue Account (page 29) the debt owed to
the City Council of £9.05m was cleared in April 2002.
72
cashflow
STATEMENT OF TOTAL MOVEMENTS IN RESERVES
2001/02
£000s
Surplus / (deficit) for the year:
- General Fund
- Housing Revenue Account
add back Movements on specific revenue
reserves
2000/01
£000s
2,401
(1,762)
4,294
2,179
(1,438)
1,133
______
______
Total increase / (decrease) in revenue
resources
5,257
Increase / (decrease) in usable capital
receipts
Increase / (decrease) in unapplied capital
grants and contributions
1,550
4
(20)
-
______
_______
Total increase / (decrease) in realised
capital resources (note 1)
Gains/(losses) on revaluation of fixed assets
Impairment losses on fixed assets owing to
general changes in prices
4
(20)
7,404
-
_______
_______
Total increase / (decrease) in unrealised
value of fixed assets (note 2)
Value of assets sold, disposed of or
decommissioned (note 3)
7,404
(34,246)
(15,178)
Capital receipts set aside
25,503
Revenue resources set aside
(10,062)
Movements on Government Grants Deferred 7,076
_______
Total increase/ (decrease) in amounts
set aside to finance capital investment
(note 4)
Total recognised gains and losses
(43,797)
15,472
(14,980)
6,244
______
22,517
6,736
_______________________
936
(50,709)
_______________________
NOTES TO THE STATEMENT OF TOTAL MOVEMENTS IN RESERVES
Usable capital
receipts
£000s
_______________
1. Movements in realised capital resources
Amounts receivable in 2001/02
23,207
Amounts applied in 2001/02
23,203
73
cashflow
_______________
Total increase / (decrease) in
realised capital resources in 2001/02
Balance brought forward at 1st April 2001
Balance carried forward at 31st March 2002
4
13
________________
17
________________
Fixed asset
restatement
reserve
£000s
________________
2. Movements in unrealised value of
fixed assets
Gains/(losses) on revaluation of fixed assets in 2001/02
Impairment losses on fixed assets due to general
changes in prices in 2001/02
7,404
________________
Total increase / (decrease) in unrealised
capital resources in 2001/02
7,404
3. Value of assets sold, disposed of
or decommissioned
Amounts written off fixed asset balances for
disposals in 2001/02
(34,246)
_________________
Total movement on reserve in 2001/02
(26,842)
Balance brought forward at 1st April 2001
271,903
________________
245,061
________________
Balance carried forward at 31 March 2002
______________________________
4. Movements in amounts set aside to finance capital investment
Capital receipts set aside in 2001/02:
-
reserved receipts
usable capital receipts
Total capital receipts set aside in 2001/02
Revenue resources set aside in 2001/02:
- capital expenditure financed from revenue
- reconciling amount for provisions for
loan repayment
4,092
21,411
______________________________
25,503
-
20,769
(30,831)
______________________________
Total revenue resources set aside in 2001/02
(10,062)
Grants received in the year
Grant applied to capital investment in 2001/02
74
15,929
(7,164)
cashflow
Amounts credited to the asset management revenue
account in 2001/02
(1,689)
______________________________
______________________________
Total increase / (decrease) in amounts set
aside to finance capital investment
Total movement on reserve in 2001/02
15,441
7,076
Balance brought forward at 1st April 2001
106,449
22,696
______________________________
Balance carried forward at 31st March 2002
121,890
29,772
______________________________
Note i)
Usable Capital Receipts Reserve
These are the unused proportion of capital receipts, i.e. usable receipts which have not yet been used to finance
capital expenditure.
General
Fund
£000s
Receipts in hand 1.4.01
Receipts in year
Less:
Amounts Set Aside
Receipts applied in year
Receipts in hand 31.3.02
HRA
Total
£000s
£000s
9
4
13
22,419
3,088
25,507
22,428
3,092
25,520
(22,419)
(2,300)
(784)
(2,300)
(23,203)
9
8
17
The receipts in hand brought forward have been amended to show the amount of HRA receipts previously shown in
General Fund.
Note ii & iii)
Fixed Asset Restatement Reserve
The account reflects in the main the surpluses or deficits arising from the periodic revaluations of fixed assets. The
net book value of assets disposed of is charged to the reserve.
Details of the reserve are as follows:General
Fund
£000s
75
HRA
Total
£000s
£000s
cashflow
Balance brought forward
Gain / (Loss) on revaluation of assets
Disposal of fixed assets
Note iv)
49,209
(15,302)
(23,390)
222,694
22,706
(10,856)
271,903
7,404
(34,246)
10,517
234,544
245,061
Capital Financing Reserve
The account represents principally the amounts required to be set aside from revenue resources and capital receipts
for the repayment of debt. In addition it includes amounts which have been used from revenue, capital grants and
capital receipts to finance the capital programme. The account, the balance of which is not available to support any
of the City Council's expenditure, is detailed overleaf.
General
Fund
£000s
(9,376)
HRA
Total
£000s
115,825
£000s
106,449
1,792
2,300
4,092
20,627
1,221
(30,219)
784
19,548
5,450
21,411
20,769
(24,769)
291
-
291
Grants released to match depreciation
1,690
-
1,690
Government grants on non depreciating assets
1,517
-
1,517
(9,676)
-
(9,676)
72
-
72
-
44
44
(22,061)
143,951
121,890
Transfers
in/(out) year
£000s
Balance brought forward
Amounts set aside - Capital Receipts
Amounts used to finance capital expenditure
Capital Receipts
Revenue
Provision for debt repayment
Additional debt repayment
Writedown of deferred charges
ERDF Grants
Other
Note v)
Earmarked Reserves and Balances
Balance
1/4/01
Receipts
in year
Payments in
year
£000s
£000s
£000s
76
Balance
31/3/02
£000s
cashflow
Manchester Airport Reserve
HRA Surplus Account
DSO Appropriation Account
LMS Schools & Colleges
Collection Fund
Invest to Save Fund
Barton Moss Trading
Major Repairs Reserve
HRA Repair Account Reserve
Risk Management Fund
General Contingency
Capital Reserve
General Fund Reserve A/c
5,702
5,290
474
1,879
(550)
299
337
2,095
58
500
500
2,294
536
819
550
8
315
16,786
100
-
18,878
19,114
(100)
(16,786)
(104)
(16,990)
4,294
(836)
(1,096)
(652)
(1,040)
562
(500)
2,401
5,702
9,584
174
2,698
(1,096)
207
1,055
54
1,062
4,695
3,133
24,135
The Manchester Airport Reserve was established in 1986/87 as a result of the dissolution of Greater Manchester
County Council and the distribution of its interest in Manchester Airport among the 10 Councils in Greater
Manchester. The proceeds have been reinvested in shares in Manchester Airport plc.
The HRA Surplus Account was established in 1989/90 to provide a working balance for the Housing Revenue
Account.
The DSO Appropriation Account was established in 1981/82 to receive and distribute profits and to cover any losses
made by the City Council's direct service organisations. Certain costs have been earmarked in the account leaving an
effective available balance of £76,000.
LMS Schools – the amount of any budget not spent in the year is available for future use by
the schools. The balances are not available to the City Council for general use.
The Collection Fund shows the transactions of the City Council, as the billing authority, in relation to non-domestic
rates, the council tax and residual community charges and it illustrates the way in which these have been distributed
to the preceptors and the General Fund.
The Invest to Save Fund was set up in 1997/98 to finance projects, primarily aimed at delivering longer term savings,
some of which could be recycled back into the fund to maintain an adequate level for investment in subsequent years.
Certain costs have been earmarked in the account leaving an effective available balance of £107,000.
The Barton Moss Reserve which was set up in 1996/97 to meet any deficits arising on the trading account and to
support specific items of expenditure was transferred to the General Fund Reserve during the year.
The Major Repairs Reserve was established during the year under the Accounts and Audit Regulations 1996. The
reserve can only be used for capital expenditure on HRA assets. Expenditure is charged directly to the reserve and
not the HRA.
The HRA Repair Account Reserve has been set up in the Housing Revenue Account to meet the repair, maintenance
and improvement programme expenditure.
The Risk Management Fund was set up in 1998/99 to meet the costs of identifying risks and carrying out measures to
reduce or eliminate risks to assets, employees and third parties. Certain costs have been earmarked in the account
leaving an effective available balance of £55,000.
The General Contingency Reserve has been established to cover unforeseen future
expenditure.
The Capital Reserve was used during the year to meet capital expenditure incurred.
The General Fund Reserve receives surpluses from and meets deficits on the General Fund Revenue Account.
Underspendings in expenditure in 2001/02, amounting in total to £0.6m have been earmarked against the reserve.
77
cashflow
THE CASH FLOW STATEMENT
FOR THE YEAR ENDED 31ST MARCH 2002
2000/01
2001/02
£000s
185,512
154,217
24,641
61,354
5,869
£000s
Revenue Activities
Cash Outflows
Cash paid to and on behalf of employees
Other operating cash payments
Housing Benefit paid out
National non-domestic rate payments to national pool
Precepts paid from Collection Fund
182,447
173,013
25,000
57,060
6,038
431,593
(31,312)
(47,400)
(62,888)
(55,081)
(111,657)
(85,096)
(27,418)
(41,799)
(14,132)
£000s
443,558
Cash Inflows
Rents (after rebates)
Council Tax Income
National non-domestic rate receipts from national pool
Non-domestic rate receipts
Revenue Support Grant
DWP Grants for rebates
Other Government grants
Cash received for goods and services
Other operating cash receipts
(29,193)
(50,405)
(61,111)
(64,317)
(117,610)
(79,838)
(55,036)
(44,646)
(15,675)
(476,783)
(517,831)
(45,190)
(74,273)
34,589
(1,996)
(38)
Returns on Investments and Servicing of Finance
Cash Outflows
Interest paid
Cash Inflows
Interest received
Dividend income
35,822
(1,107)
(362)
32,555
(12,635)
45,144
18,084
34,353
Net cash flow from revenue activities
(39,920)
Capital Activities
Cash Outflows
Purchase of fixed assets
Other capital cash payments
51,955
15,436
63,228
(15,226)
(19,002)
(226)
67,391
Cash Inflows
Sale of fixed assets
Capital grants received
Other capital cash receipts
(24,734)
(14,707)
(756)
(34,454)
16,139
(40,197)
Net cash (inflow) / outflow before financing
(12,726)
Management of Liquid Resources
3,861
Net reduction in short term deposits
11,337
78
cashflow
2000/01
2001/02
£000s
£000s
£000s
Financing
47,231
Cash Outflows
Repayments of amounts borrowed
47,136
(16,770)
Cash Inflows
New long term loans
(50,203)
(46,058)
New short term loans
-
(15,597)
4,403
(3,067)
Net (increase) / reduction in cash
(4,456)
79
cashflow
NOTES TO THE CASH FLOW STATEMENT
1.
General
This consolidated statement summarises the inflows and outflows of cash arising from transactions with third parties
for revenue and capital purposes.
2.
Revenue Activities
The net cash flow can be reconciled to the Consolidated Revenue Account as follows:2001/02
£000
Deficit/(Surplus) per Consolidated Revenue Account
2000/01
£000
(2,401)
£000
1,762
Non-cash transactions
-
(9,047)
(20,769)
(3,906)
5,578
minimum revenue provision
financing of capital expenditure (inc.MRA)
contribution to reserves
other non-cash movements
(8,824)
(2,061)
(4,693)
(3,882)
(28,144)
Items on an accruals basis
- increase/(reduction) in stock
- increase in revenue debtors
- (increase) in revenue creditors
83
374
(9,832)
Net cash flow from revenue activities
80
(19,460)
84
11,447
(6,468)
(9,375)
5,063
(39,920)
(12,635)
cashflow
The amount recorded for the financing of capital expenditure includes £2.8m in respect of the
Housing Revenue Account.
3.
Analysis of Net Debt
Long Term Debt
Deferred Liabilities
Short Term Debt
Short Term Investments
Cash Overdrawn
4.
As at
31.03.01
Receipts
Payments
£000
£000
£000
Reclassification of
Debt
£000
As at
31.03.02
£000
(400,582)
(14,781)
(47,128)
25,188
(437,303)
(3,992)
(50,200)
(3)
(1,121,000)
(1,171,203)
-
1
47,135
1,132,338
1,179,474
4,456
1,808
326
(2,134)
-
(448,974)
(14,457)
(2,127)
36,526
(429,032)
464
(441,295)
(1,171,203)
1,183,930
-
(428,568)
Reconciliation of Net Debt
2001/02
2000/01
£000
£000
Net Debt:As at 1st April
As at 31st March
Represented by:(Reduction)/increase in cash
Net (increase)/reduction in borrowing
Increase/(reduction) in investments
5.
(425,156)
(441,295)
12,727
(16,139)
4,456
(3,067)
11,338
(4,403)
(15,597)
3,861
(12,727)
(16,139)
Other Government Grants are analysed below:-
Education
Social Services
Neighbourhood Renewal Fund
Probation
Asylum Seekers
Mandatory Student Awards
Housing Revenue Account Subsidy (net of rebates element)
Benefits Administration Subsidy
Single Regeneration Budget
European Community Grants
Countryside Commission
New Deals for Communities
Crime Reduction Grant
Other
6.
(441,295)
(428,568)
2001/02
2000/01
£000
£000
19,122
5,804
2,550
2,029
921
17,031
993
3,687
668
227
538
1,042
424
14,875
3,728
2,075
1,525
1,485
1,424
948
425
324
186
151
62
210
55,036
27,418
Other operating receipts include agency receipts, services to other authorities, other grants and contributions.
81
cashflow
2001
£000s
As at 31st March
Notes
60,892
Operational Assets
Council dwellings
Other land and buildings
Vehicles, plant and equipment
Infrastructure assets
Community assets
546,992
191,920
389
56,303
799
Non Operational Assets
Non-operational land and
property
41,719
846,517
2,205
2,205
10,959
1,306
3,386
1,454
146
838,122
(2)
Deferred Charges
Stock Discount
2,088
LONG TERM INVESTMENTS
(4)
LONG TERM DEBTORS
(5)
Mortgages
Ex-Manchester Airport
Car Loans
Other
2,088
10,959
553
9,426
1,307
375
6,292
865,973
2002
£000s
(1)
FIXED ASSETS
533,218
198,488
587
52,512
820
2002
£000s
11,661
862,830
TOTAL LONG TERM ASSETS
CURRENT ASSETS
1,193
62,838
25,188
5,812
Stocks, WIP and stores
Debtors (net of bad debts
provision) and prepayments
Short term investments
Cash
95,031
961,004
(6)
(7)
1,276
63,229
(4)
36,526
8,127
109,158
971,988
TOTAL ASSETS
56
cashflow
2001
£000s
As at 31st March
Notes
2002
£000s
2002
£000s
CURRENT LIABILITIES
(47,128)
(52,957)
(9,804)
Borrowing - amounts falling due
within one year
Creditors
Cash overdrawn
(2,127)
(8)
(63,208)
(7,663)
(109,889)
851,115
(400,582)
(14,781)
(4,488)
(920)
(44)
(10,361)
(72,998)
898,990
TOTAL ASSETS LESS CURRENT
LIABILITIES
Long term borrowing
Deferred liabilities
Deferred credits
Lowry provision
Debt Rescheduling
Insurance Fund
(9)
(10)
(11)
(13)
(14)
(15)
(448,974)
(14,457)
(2,940)
(946)
(88)
(10,710)
(431,176)
419,939
(478,115)
420,875
TOTAL ASSETS LESS LIABILITIES
RESERVES AND BALANCES
271,903
106,449
22,696
13
5,290
(550)
2,095
1,879
7,870
2,294
419,939
Fixed Asset Restatement Reserve
Capital Financing Reserve
Government grants deferred
Usable Capital Receipts Reserve
Housing Revenue Account
Collection Fund Deficit
HRA Repairs Account Reserve
LMS Schools
Other Reserves
General Fund Reserve
(16)
(16)
(12)
(16)
(16)
(16)
(16)
(16)
(16)
(16)
245,061
121,890
29,772
17
9,584
(1,096)
1,055
2,698
7,199
4,695
420,875
TOTAL EQUITY
A. WESTWOOD, C.P.F.A.
Director of Corporate Services1
30th August 2002
1.
Fixed Assets
Movements in the value of fixed assets during the year were as follows:Council
Dwellings
Other Land &
Buildings
Vehicles, Plant
& Equipment
Infrastructure
£000s
£000s
£000s
£000s
57
cashflow
C
GROSS BOOK VALUE AS AT 31ST MARCH
2001
533,218
207,915
1,831
108,247
18,593
11,099
9
15,403
0
(2,966)
0
0
(10,856)
(3,515)
(16)
0
6,037
(6,828)
0
(20)
546,992
205,705
1,824
123,630
0
(9,427)
(1,244)
(55,735)
(16,786)
(5,126)
(195)
(11,592)
Depreciation on revalued/assets sold
16,786
768
4
0
NET BOOK VALUE AS AT 31ST MARCH
2002
546,992
191,920
389
56,303
Capital expenditure during year
Reclassification of Assets
Disposals
Revaluations during year
GROSS BOOK VALUE AS AT 31ST MARCH
2002
Depreciation at 31st March 2001
Depreciation for year
Notes:
The fixed assets were valued on the 1st April 1999.
Infrastructure assets are valued at historical cost net of depreciation.
Community assets were given a nominal value of £1 each as at 1st April 1994 and subsequently only
adjusted to reflect disposals and acquisitions which are valued at cost. Other associated works on
environmental improvements etc are not considered to materially affect the asset value.
All other assets are valued at the lower of net current replacement cost and net realisable value.
A detailed valuation of the City Council’s housing stock has been undertaken as a result of the
introduction of resource accounting for the Housing Revenue Account. The basis of the valuation is
existing use value for social housing which reflects a value for a property if it were to be sold with
sitting tenants, enjoying rents at less than open market value and rights including the option of ‘right
to buy’.
The net book value of non operational assets includes £3.0m in respect of work in progress on assets at
31.3.2002.
Valuer - R. Wynne (Development Services) A.R.I.C.S.
Financing of Capital Expenditure
Cash payments on capital projects during the year were financed as follows:2001/02
£000s
Fixed assets
Deferred charges
Long Term Debtors
2000/01
£000s
2001/02
£000s
51,849
15,323
219
45,144
18,084
-
67,391
63,228
Loans
Capital Receipts
Capital Grants
MRA
Revenue
Other
Unfunded
2000/01
£000s
16,535
14,378
13,051
16,786
3,983
1,079
1,579
25,627
13,181
15,065
2,061
260
7,034
67,391
63,228
The above figures exclude accrued expenditure amounting to £ 0.88m (£0.5m in 2000/01) and accrued capital
receipts of £0.017m.
Deferred charges relate only to the expenditure which is subject to capital controls.
Statement of Major Physical Assets
The City Council held the following major fixed assets as at 31st March 2002:Of the16 libraries two are housed in Social Services Community Centres, one in a school and one in a
neighbourhood office.
58
cashflow
Buildings
Education & Leisure
16Libraries
3
3
5
3
4
84
14
5
11
21
Environmental Services
4
2
Community and Social Services
11 Children’s Homes
Art Galleries & Museums
Centres
Leisure Centres with Pools
Leisure Centres without Pools
Pools
4
Nursery Schools
Primary Schools
Secondary Schools
Special Schools
Trading Services
Youth Centres
Caretakers' Houses
7
4
Handicap
8
D
9
C
2
2
H
M
Other Buildings
Cemeteries
Crematoria
7
27
3
C
D
5
Other Buildings
Planning
149
Council Dwellings
16,094
1,384 Bungalows
3,859 Flats - High-rise
8,064
- Low-rise
*
Majority of vehicles are leased
Infrastructure
83km
Principal Roads
62km
580km
Industrial Units
Vehicles
64
Refuse/Street Cleansing vehicles
3 Mobile Libraries
Houses
1
209 Vans
78 Trucks
50 Mini Buses and Coaches
34
Other
Limousin
Land
1,543 Hectares
Other Classified Roads
Unclassified Roads
Commitments under Capital Contracts
The City Council has to plan its capital expenditure in advance of work proceeding. At the 31st March 2002 the City
Council had approved a Capital Programme for 2002/2003 amounting to £63.3m which will result in commitments
being carried forward into future years. A total amount of £47.7m was contractually committed at the 31st March
2002 and the significant contracts under these capital schemes were as follows:£m
Private sector renovation grants
Broughton partnership
Seedley and Langworthy – SRB 5
Public Sector (SRB 2 & 3 / HIP)
Inner Relief Road
Eccles Town Centre
Trafford Road
The Albion school
Schools amalgamation
New Deals for schools
Libraries peoples network
Staff redundancy costs
I T development and consultancy costs and settlement of mainframe
agreement
2.0
1.0
3.3
10.7
9.5
1.0
0.7
7.3
0.4
2.8
0.5
0.6
1.7
Deferred Purchase Scheme
The City Council entered a £3m Deferred Purchase agreement in December 1989 for the funding of the construction
of Phase III of the Civic Centre. The balance outstanding of £1.8m was renegotiated in December 1999 for a period
of four years and the second repayment of £0.45m under the terms of the new agreement was made in April 2001.
The value of the asset is included within fixed assets and the balance outstanding under the agreement is included in
loans outstanding.
59
cashflow
Rolling Programme for the Revaluation of Fixed Assets
The following statement shows the progress of the City Council’s rolling programme for the revaluation of fixed
assets. The basis of the valuation is shown in the statement of accounting policies. Infrastructure, Community and
Vehicles, Plant and Equipment assets are effectively valued at historical cost net of depreciation and they are
therefore excluded from the programme of revaluations and from the table shown below :-
Council
Dwellings
£000
Valued at Current Value in :
- Current year
- 2000/01
- 1999/00
546,992
546,992
2.
Other Land &
Buildings
£000
Non-operational
Total
Assets
£000
£000
12,725
18,337
174,643
205,705
7,934
4,603
29,292
41,829
567,651
22,940
203,935
794,526
Deferred Charges
Movements in deferred charges during the year were as follows:Balance
1/4/01
£000s
Church Aided Schools
Assistance to Industry
Private Sector Housing
Lowry Centre ERDF Grant
Single Status
Stock Discount
Software Development
VER Scheme
Expenditure
2001/02
£000s
Written
Down
£000s
Balance
31/3/02
£000s
2,205
-
355
721
10,620
111
57
1,410
2,049
(355)
(721)
(10,620)
(111)
(57)
(117)
(1,410)
(2,049)
2,088
-
2,205
15,323
(15,440)
2,088
(i)
Expenditure incurred during the year has been charged to the service revenue accounts and any grant
received towards this expenditure has been credited to the corresponding service revenue account.
(ii)
The discount allowed on stock market bonds issued in 1993/94 and 1994/95 is being written off over the
life of the bonds.
3. Analysis of Net Assets Employed
General Fund
Housing Revenue Account
Collection Fund
60
31st March
2002
£000s
32,829
389,142
(1,096)
31st March
2001
£000s
51,889
345,904
(550)
420,875
397,243
cashflow
4.
Investments
Long term investments consist of:31st March
2002
£000s
Manchester Airport plc
Ringway Developments plc
SUBEL Ltd.
Chapel Wharf Ltd
Modesole Ltd.
Other
31st March
2001
£000s
10,214
393
335
15
1
1
10,214
393
335
15
1
1
10,959
10,959
Further details concerning these investments are included in note 19, related businesses and companies.
The investments are shown in the balance sheet at their original cost.
Short term investments:The City Council also invests balances which are temporarily surplus to requirements for short periods at market
rates of interest.
5.
Long Term Debtors
31st March
2002
£000s
Mortgagors
Manchester Airport plc
Car Loans
Other
31st March
2001
£000s
553
9,426
1,307
375
1,306
3,386
1,454
146
11,661
6,292
The City Council along with the other nine authorities in Greater Manchester is responsible for loan advances made
to Manchester Airport plc to assist in the financing of Terminal 2. The annual servicing costs of the loans are
reimbursed by the Airport. The proportion of the loan advances applicable to the City Council is shown in the table
above.
The increase in the figures for Manchester Airport plc is a result of rescheduling some of the debt. There has been an
equivalent reduction in short term debtors.
61
cashflow
6.
Stocks and Work in Progress
An analysis of stocks and work in progress is shown below:31st March
2002
£000s
Stocks and stores
Provisions
Work in progress
Less: Provision for future losses
7.
31st March
2001
£000s
1,015
226
116
1,148
130
-
1,357
1,278
(81)
(85)
1,276
1,193
Debtors and Prepayments
An analysis of debtors and prepayments is shown below:31st March
2002
£000s
Customs and Excise
Government departments
Capital
Other local authorities
Local Taxpayers and NDR
Housing rents (net of prepayments)
Sundry debtors
Housing Benefits (overpayments)
Other
Ex-Manchester Airport principal repayments
Mortgagors
Accrued interest on investments
31st March
2001
£000s
2,202
4,168
34
2,381
25,089
5,504
6,358
6,800
19,321
161
408
2,532
3,367
17
1,915
28,378
4,047
8,279
5,960
17,861
6,191
156
262
72,426
(20,705)
78,965
(23,191)
Total Debtors
51,721
55,774
Prepayments
11,508
7,064
63,229
62,838
Less:
Provision for bad debts
62
cashflow
8.
Creditors
The figures shown for creditors include general creditors and provisions and an analysis of each of these is given
below:-
Government departments
Inland Revenue
Other local authorities
Local Taxpayers and NDR
Housing rents
Sundry creditors
Capital accruals
Residents' savings
Other
Small Reserves and Fund Balances
Provisions
Provision for Future Costs
Modesole Loan Guarantee
Repayment of Grant
Amalgamated Schools
31st March
2002
£000s
31st March
2001
£000s
13,400
3,026
931
1,972
90
33,293
877
350
7,678
158
9,052
3,527
989
1,876
52
29,352
458
362
5,817
162
61,775
51,647
635
15
538
245
459
155
459
237
63,208
52,957
Related Party Transactions
The figures for sundry creditors includes the following amount:

Greater Manchester Pension Fund £35,000
Provision for Future Costs - This provision was originally set up to help to meet the costs of the harmonisation of
pay and conditions for employees. Harmonisation has now been completed and the provision has been retained to
help meet the cost of pending pay reviews for Housing Officers (Management).
Modesole Loan Guarantee - in January 1983 the Greater Manchester Passenger Transport Executive made a loan to
Modesole Ltd., as part of the original funding for the G.Mex development. The former Greater Manchester County
Council had guaranteed the amount of the loan and this guarantee was transferred to the ten district councils in
Greater Manchester following the dissolution of the County Council. The provision was set up by annual
contribution to help to meet the City Council’s possible costs in case the guarantee had to be met. The full amount of
the loan was repaid in 2001/02 in accordance with the terms of the guarantee and the balance remaining on the
provision has been repaid to General Fund in 2002/03.
Repayment of Grant - an amount has been earmarked for the possible repayment of grants and subsidy received.
Amalgamated Schools – the provision has been set up to meet any costs arising from the
review of primary school places.
9.
Long Term Borrowing
An analysis of long term loans is shown below:-
Total Outstanding at
Source of Loan
Range of Interest Rates
Payable
%
63
31st March 2002
£000s
31st March 2001
£000s
cashflow
Public Works Loan Board
Money Market
Stock
L.C.C.
PWLB – Airport
Deferred Purchase
4.88 to 11.00
2.75 to 12.00
7.0 to 8.25
6.95
2.75 to 11.50
7.49
206,493
50,809
180,000
684
10,538
450
196,439
12,000
180,000
753
10,490
900
448,974
400,582
These loans are repayable over the following periods:2001/02
£000s
Maturing in 1-2 years
Maturing in 2-5 years
Maturing in 5-10 years
Maturing in 10-15 years
Maturing in more than 15 years
10.
2000/01
£000s
834
3,901
45,396
98,670
300,173
1,808
1,969
37,089
103,187
256,529
448,974
400,582
Deferred Liabilities
The City Council assumed responsibility for its share of the debt outstanding in respect of the former Greater
Manchester County Council when that body was wound up on the 31st March 1986.
11.
Deferred Credits
This item comprises mainly deferred capital receipts and the deferred discounts from the rescheduling of debt.
Deferred capital receipts are amounts derived from sales of fixed assets which will be received in instalments over
agreed periods of time. They arise principally from mortgages on sales of council houses.
Deferred rescheduling discounts represent the discounts received from a number of debt rescheduling exercises
carried out from 1992/93 onwards. The appropriate amount of discounts will be credited to the revenue account
annually over the period of the replacement loan or three years, whichever is the longer.
31st March
2002
£000s
Deferred capital receipts
 Loans
 Council house sales
Private Street Works
Deferred Rescheduling Discounts
Other
12.
31st March
2001
£000s
48
672
7
1,878
335
71
1,405
8
3,004
-
2,940
4,488
Government Grants Deferred Account
Capital grants received and accrued are credited initially to the government grants deferred account. Grants received
in respect of deferred charge expenditure are transferred to the revenue account to offset the relevant expenditure.
Grants received in respect of non depreciating assets are transferred to the Capital Financing Reserve. The
remaining grants received are released to the asset management revenue account to match the depreciation charged
on the asset to which the grant relates.
£000s
64
cashflow
Balance brought forward
Received and accrued in year from government departments
Less:
•
•
•
Grants on non depreciating assets
Grants relating to deferred charges
Release to match depreciation charged
Balance carried forward
13.
22,696
15,929
(1,517)
(5,647)
(1,689)
29,772
Lowry Provision
The provision has been set up to help to meet the agreed contributions under the terms of the agreement with The
Lowry.
15.
Debt Rescheduling
During 1999/2000 £0.7m of annuity loans in respect of Manchester Airport were rescheduled to loans maturing over
various periods to 2024 and a provision has been established to meet the principal sums as they fall due.
15.
Insurance Fund
The fund meets liability claims which are settled for amounts of less than £100,000, with external insurers continuing
to cover claims for amounts in excess of £100,000.
Under the terms of the fire insurance policy the City Council is required to meet the cost of claims up to £10,000 for
dwellings and up to £100,000 for schools and this cover is also provided by the insurance fund.
16.
Reserves and Balances
Usable Capital Receipts Reserve
Details of this account are provided in note i) to the Statement of Total Movements in Reserves on page 52.
Fixed Asset Restatement Reserve
Details of this account are provided in notes ii) and iii) to the Statement of Total Movements in Reserves on page 52.
Capital Financing Reserve
Details of this account are provided in note iv) to the Statement of Total Movements in Reserves on pages 52 and 53.
Provision for credit liabilities
Under the terms of the Local Government and Housing Act 1989 the City Council is required to set aside the
following amounts for debt redemption
- a minimum revenue provision based on the credit ceiling
- prescribed proportions of capital receipts
- the value of any ERDF grant received for accounting periods prior to 1 st April 2000
The following account shows how the City Council has complied with the requirement:Memorandum Account
£000s
Balance brought forward
Amount set aside for MRP
Reserved capital receipts
Set aside credit cover for Minerva house lease
ERDF grants received
Amounts applied to repay loans
65
12,909
9,050
2,300
1,792
49
26,100
(9,099)
cashflow
Balance carried forward
17,001
The MRP and ERDF grants received have been used to repay debt.
All the above entries are held within the capital financing reserve.
Earmarked Reserves and Balances
Full details of these accounts are provided in note v) to the Statement of Total Movements in Reserves on pages 53
and 54.
17.
Contingent Assets and Liabilities
G.Mex Centre
At 31st March 1986, there were a number of outstanding issues concerning possible liabilities in connection with the
G.Mex Centre, the extent of which still remains uncertain. The City Council, along with the other local authorities in
Greater Manchester, may be required to honour any outstanding liabilities in the future. No provision against this
possibility has been made in the balance sheet.
Municipal Mutual Insurance
On the 30th September 1992, the City Council's insurer, MMI Limited, announced that it had ceased taking new
business or issuing renewals and had placed a moratorium on claims payments. On the 6th October 1992, MMI
resumed the full payment of claims. No new business was accepted, however, nor existing policies renewed.
As a result of the above, a special meeting of Finance Committee was held on the 29th January 1993 and the City
Council's insurance business was transferred to a number of new insurers.
MMI’s auditor’s Pricewaterhouse Coopers envisage that there would be a solvent run off and therefore no clawback
claims will be made against the City Council.
As at 31st March 2002 the estimated value of unpaid claims made by third parties was £190,527 and £37,500
remained unpaid in respect of claims made by employees. The extent to which any claims will not be settled in full
cannot be assessed at the present time and no provision, therefore, has been made for these potential liabilities in the
balance sheet.
Manchester Airport plc
Manchester Airport plc has agreed to reimburse the City Council in respect of debt charges on the loans referred to
in note 5. No provision has been made in the balance sheet to cover any potential losses on this agreement which
will operate until all the loans have matured in 2027.
Chapel Wharf Ltd.
The City Council has agreed to indemnify Chapel Wharf Ltd., to a maximum amount of £345,000 plus inflation, in
the event of the Office of the Deputy Prime Minister (ODPM) exercising a right of pre-emption in respect of land
sold by the ODPM to Chapel Wharf Ltd.
Salford University Business Enterprises Ltd.
The directors have decided to realise the company's assets and to distribute the proceeds to the shareholders. At this
stage it is expected there will be no overall deficit after discharging the company's liabilities and therefore, no
provision has been made for any shortfall in the balance sheet.
Lowry Centre
Under an agreement dated 19th March 1997 the City Council has agreed with the Arts Council and the Lowry Centre
Trust (the Trust) that it will pay to the Trust each year an amount representing the planned deficit for the year in the
Trust's revenue accounts in respect of the operation of the Lowry Centre provided that the deficit has actually been
incurred. In addition the agreement includes a commitment that the City Council will guarantee to underwrite the
66
cashflow
Trust with a minimum sum of £350,000 per annum in return for outreach services which the trust will provide to
schools and residents.
The agreement came into operation on the 1st April 2000 and the amount of the fixed annual contribution will be
reviewed every five years beginning from the starting date but the annual contribution will not be reduced below
£350,000.
The terms of the agreement are irrevocable except with the consent of the Arts Council.
The amount of the contribution was £0.677m for each of the two years 2000/01 and 2001/02. To secure additional
external funding amounting to £16.250m it has been agreed that an extra £0.250m will be paid to the Trust for each
of the five years commencing in 2002/03. This variation raises the annual contribution rate to £0.927m. The original
basic contribution of £0.677m each year will remain subject to review in 2005/06 taking into account the Trust’s
annual business plan.
18.
Trust Funds
The City Council administers funds on behalf of 13 various trusts with a total fund value of £0.95m. All trust funds
are excluded from the City Council's accounts.
19.
Related Businesses and Companies
The City Council has an involvement with a number of private companies whose assets and liabilities are not
included in these accounts.
Relevant details of the companies are summarised below. No trading took place during the year, nor is there any
indebtedness between the City Council and any of the companies, except where stated.
Manchester Airport plc
The principal activity of the company is the operation and development of an international airport.
The City Council holds 10,214,000 £1 ordinary shares, equivalent to 5% of share capital.
At the year ended 31 March 2002, the company had net assets of £640m (31.3.01 £636m).
In 2001-02 loss before tax was £3.8m and loss after tax was £12.0m (in 2000/01 £24.9m profit before tax, £16.9m
profit after tax).
A dividend of £0.362m was received in the year (£0.038m in 2000/01).
Ringway Developments Ltd.
The principal activity of the company is to provide and implement opportunities to support the growth of Manchester
Airport.
The City Council holds 393,108 £1 “A” ordinary shares, equivalent to 4.6% of the share capital.
At the year ended 31 March 2001, the company had net assets of £18.2m (31.3.00 £17.0m). In 2000/01 the profit
before and after tax was £1.2m (£0.1m in 1999/00).
The company was sold in April 2002 and the City Council’s share of the net sale proceeds amounted to £0.54m.
Salford University Business Enterprises Ltd.
The principal activity of the company is investing in and managing businesses and property.
The City Council owns 23,500 £1 ordinary shares and 311,500 £1 non-voting preference shares, equivalent to 37%
of ordinary share capital.
At the year ended 31 July 2001, the company had net liabilities of £26,069 (31.7.00 £61,671). In 2000/01 the profit
before and after tax was £35,602 (2000/01 profit before tax was £8,956 and after tax £27,154).
The directors have decided to realise the company’s assets and to distribute the proceeds to shareholders. It is
anticipated that the realisation of assets will be sufficient to discharge the company’s liabilities.
Chapel Wharf Ltd.
67
cashflow
The principal activity of the company is investing and participating in the development of the area known as Chapel
Wharf.
The City Council owns 14,746 £1 ordinary shares, equivalent to 15% of share capital.
At the year ended 31 March 2002, the company had net assets of £5.4m (31.3.01 £6.0m). In 2001/02 the loss before
tax was £76,461 and after tax was £86,461 (2000/01 loss before tax was £38,155 and after tax £35,185).
During the year the City Council made two loans to the company amounting to £219,000 at interest rates of 2.5%
above bank base rate. The loans are due to be repaid during 2002/03.
Others
Modesole Ltd. - Shareholding 941 £1 shares, equivalent to 9.4% of issued share capital.
Salford Hundred Venture Ltd. - Shareholding 2 £1 shares, equivalent to 22% of issued share capital.
Companies limited by guarantee with the City Council's liability limited to £10 in each case:Salford Information Technology Centre Ltd.
The Salford/Trafford Groundwork Trust Ltd.
The Salford Phoenix Initiative Ltd.
Salford Foundation Ltd. (liability limited to £1)
Requests for further details on any of the above companies should be made to the Accountancy Section, Corporate
Services Directorate, Civic Centre, Chorley Road, Swinton M27 5AW (telephone 0161 793 3245).
20.
Reserves held by Schools
Under the terms of the Education Act 1996, local authorities are required to delegate management responsibilities to
the governing bodies of schools. All primary, secondary and special schools are formula funded and are included in
the scheme of full delegation. Nursery schools are excluded from the scheme.
In accordance with the City Council's approved scheme for delegating budgets to schools, the amount of any budget
not spent in the year is available for future use by the schools. The balances are not available to the City Council for
general use.
The balances held at 31st March are:-
Schools managed locally
- underspendings carried forward
- overspendings carried forward
Net underspendings carried forward
2002
£000s
2001
£000s
3,875
(1,177)
3,262
(1,383)
2,698
1,879
21.Economic and Monetary Union (EMU)
On the 1st January 1999 eleven countries of the European Union formed an Economic and Monetary Union (EMU)
and introduced a single currency - the euro. The Government decided not to join the single currency on the 1st
January 1999 but it is making the necessary preparations so that it has the option of joining during the current
parliament.
In the longer term the introduction of the euro could have an impact on the City Council in respect of matters such as
the provision of economic development advice to businesses and in the procurement of goods and services. There
has been no direct impact on the City Council to date. (There were no committed costs as at 31st March 2002).
24. Disclosure of net pensions asset / liability - FRS17 – transitional disclosure
68
cashflow
The implementation of FRS 17 ‘Retirement Benefits’ is being phased in over a three year period. For 2001/02 the
requirement is to provide balance sheet disclosure information in respect of the net asset or liability for retirement
benefits. This note therefore provides memorandum information to the balance sheet only. It only applies to the
Local Government Pension Scheme for officers and other non-teaching staff. The teachers pension scheme
administered by the Teachers Pensions Agency on behalf of the Department for Education and Skills, is a national
unfunded scheme which does not allow the identification of individual local education authority liabilities. The
teachers’ scheme is therefore treated as a defined contribution scheme accounted for by charging the contributions to
the revenue account as they become payable. No further recognition of future obligations is required in the
Statement of Accounts.
As part of the terms and conditions of employment for its employees, the City Council offers retirement benefits.
Although these will not actually be payable until employees retire, the City Council has a commitment to make the
payments that need to be disclosed at the time that the employees earn their future entitlement.
The City Council participates in the Local Government Pension Scheme for civilian employees, administered by
Tameside MBC as the Greater Manchester Pension Fund. This is a funded scheme, meaning that both employers and
employees pay contributions into the fund, calculated at a level which is estimated to balance the pensions liabilities
with investment assets.
In 2001/02, pension costs have been charged to the consolidated revenue account on the basis of contributions
payable for the year to the pension fund and pensions payable in the year for which the City Council is responsible.
The most recent actuarial valuation of the fund was the 31st March 2001, with the next formal valuation scheduled
for 31st March 2004. The actuarial value as at the 31st March 2001 has been rolled forward to the 31 st March 2002 by
the fund’s actuary using the following :



the membership data submitted for the formal valuation as at the 31 st March 2001
pension fund accounts, estimated by Tameside MBC where necessary, for 2001/02 to estimate contribution
income
other relevant information provided by Tameside MBC in 2001/02, estimated where necessary
the projected unit method of valuation.
The liabilities have been assessed by Hymans Robertson, actuaries to the pension fund. The main assumptions used
in the calculations are:
Assumptions as
at 31st March 2002
% per annum
Rate of inflation
2.8
Rate of increase in salaries
4.3
Rate of increase in pensions
Rate of discounting scheme liabilities
2.8
6.4
Assets in the Greater Manchester Pension Fund are valued at fair value, principally market value for investments and
consist of equities, bonds, properties and cash. The table below sets out the proportion of assets held and the
expected rate return per annum:
Assets(Whole Fund)
Fund value as
at 31st March
2002
Asset
Proportion
Equities
Bonds
Property
Cash
£m
3,794
1,555
500
495
%
60
24
8
8
Total
6,344
100
Long term return
per annum
Expected return per
annum
%
7.5
5.5
6.0
4.0
£m
284
86
30
20
420
69
cashflow
As at the 31st March 2002, the City Council had the following overall assets and liabilities for pensions that have not
been included in the balance sheet.
Estimated employers assets
Present value of scheme liabilities
Net Pension Asset
31st March 2002
£m
456
424
32
25. Post Balance Sheet Events
Ringway Developments Limited
On the 11th April 2002 the City Council sold its shareholding in Ringway Developments Limited, shown in the
balance sheet as a long term investment (note 4). The proceeds will be treated as a capital receipt and part of the
consideration was received on the 11th April 2002 with the balance due on the 31st March 2003.
Lowry Centre Development Company Limited
As referred to in note 18 to the Consolidated Revenue Account (page 29) the debt owed to
the City Council of £9.05m was cleared in April 2002.
70
cashflow
STATEMENT OF TOTAL MOVEMENTS IN RESERVES
2001/02
£000s
Surplus / (deficit) for the year:
- General Fund
- Housing Revenue Account
add back Movements on specific revenue
reserves
2000/01
£000s
2,401
(1,762)
4,294
2,179
(1,438)
1,133
______
______
Total increase / (decrease) in revenue
resources
5,257
Increase / (decrease) in usable capital
receipts
Increase / (decrease) in unapplied capital
grants and contributions
1,550
4
(20)
-
______
_______
Total increase / (decrease) in realised
capital resources (note 1)
Gains/(losses) on revaluation of fixed assets
Impairment losses on fixed assets owing to
general changes in prices
4
(20)
7,404
-
_______
_______
Total increase / (decrease) in unrealised
value of fixed assets (note 2)
Value of assets sold, disposed of or
decommissioned (note 3)
7,404
(34,246)
(15,178)
Capital receipts set aside
25,503
Revenue resources set aside
(10,062)
Movements on Government Grants Deferred 7,076
_______
Total increase/ (decrease) in amounts
set aside to finance capital investment
(note 4)
Total recognised gains and losses
(43,797)
15,472
(14,980)
6,244
______
22,517
6,736
_______________________
936
(50,709)
_______________________
NOTES TO THE STATEMENT OF TOTAL MOVEMENTS IN RESERVES
Usable capital
receipts
£000s
_______________
1. Movements in realised capital resources
Amounts receivable in 2001/02
23,207
Amounts applied in 2001/02
23,203
71
cashflow
_______________
Total increase / (decrease) in
realised capital resources in 2001/02
Balance brought forward at 1st April 2001
Balance carried forward at 31st March 2002
4
13
________________
17
________________
Fixed asset
restatement
reserve
£000s
________________
2. Movements in unrealised value of
fixed assets
Gains/(losses) on revaluation of fixed assets in 2001/02
Impairment losses on fixed assets due to general
changes in prices in 2001/02
7,404
________________
Total increase / (decrease) in unrealised
capital resources in 2001/02
7,404
3. Value of assets sold, disposed of
or decommissioned
Amounts written off fixed asset balances for
disposals in 2001/02
(34,246)
_________________
Total movement on reserve in 2001/02
(26,842)
Balance brought forward at 1st April 2001
271,903
________________
245,061
________________
Balance carried forward at 31 March 2002
Capital financing
Government
grants deferred
reserv
£000s
£000s
______________________________
4. Movements in amounts set aside to finance capital investment
Capital receipts set aside in 2001/02:
-
reserved receipts
usable capital receipts
Total capital receipts set aside in 2001/02
Revenue resources set aside in 2001/02:
- capital expenditure financed from revenue
- reconciling amount for provisions for
loan repayment
Total revenue resources set aside in 2001/02
4,092
21,411
______________________________
25,503
-
20,769
(30,831)
______________________________
(10,062)
72
cashflow
Grants received in the year
Grant applied to capital investment in 2001/02
Amounts credited to the asset management revenue
account in 2001/02
15,929
(7,164)
-
(1,689)
______________________________
______________________________
Total increase / (decrease) in amounts set
aside to finance capital investment
Total movement on reserve in 2001/02
15,441
7,076
Balance brought forward at 1st April 2001
106,449
22,696
______________________________
Balance carried forward at 31st March 2002
121,890
29,772
______________________________
Note i)
Usable Capital Receipts Reserve
These are the unused proportion of capital receipts, i.e. usable receipts which have not yet been used to finance
capital expenditure.
General
Fund
£000s
Receipts in hand 1.4.01
Receipts in year
Less:
Amounts Set Aside
Receipts applied in year
Receipts in hand 31.3.02
HRA
Total
£000s
£000s
9
4
13
22,419
3,088
25,507
22,428
3,092
25,520
(22,419)
(2,300)
(784)
(2,300)
(23,203)
9
8
17
The receipts in hand brought forward have been amended to show the amount of HRA receipts previously shown in
General Fund.
Note ii & iii)
Fixed Asset Restatement Reserve
The account reflects in the main the surpluses or deficits arising from the periodic revaluations of fixed assets. The
net book value of assets disposed of is charged to the reserve.
Details of the reserve are as follows:-
73
cashflow
Balance brought forward
Gain / (Loss) on revaluation of assets
Disposal of fixed assets
Note iv)
General
Fund
£000s
49,209
(15,302)
(23,390)
HRA
Total
£000s
222,694
22,706
(10,856)
£000s
271,903
7,404
(34,246)
10,517
234,544
245,061
Capital Financing Reserve
The account represents principally the amounts required to be set aside from revenue resources and capital receipts
for the repayment of debt. In addition it includes amounts which have been used from revenue, capital grants and
capital receipts to finance the capital programme. The account, the balance of which is not available to support any
of the City Council's expenditure, is detailed overleaf.
General
Fund
£000s
(9,376)
HRA
Total
£000s
115,825
£000s
106,449
1,792
2,300
4,092
20,627
1,221
(30,219)
784
19,548
5,450
21,411
20,769
(24,769)
291
-
291
Grants released to match depreciation
1,690
-
1,690
Government grants on non depreciating assets
1,517
-
1,517
(9,676)
-
(9,676)
72
-
72
-
44
44
(22,061)
143,951
121,890
Transfers
in/(out) year
£000s
Balance brought forward
Amounts set aside - Capital Receipts
Amounts used to finance capital expenditure
Capital Receipts
Revenue
Provision for debt repayment
Additional debt repayment
Writedown of deferred charges
ERDF Grants
Other
Note v)
Earmarked Reserves and Balances
Balance
1/4/01
Receipts
in year
Payments in
year
£000s
£000s
£000s
74
Balance
31/3/02
£000s
cashflow
Manchester Airport Reserve
HRA Surplus Account
DSO Appropriation Account
LMS Schools & Colleges
Collection Fund
Invest to Save Fund
Barton Moss Trading
Major Repairs Reserve
HRA Repair Account Reserve
Risk Management Fund
General Contingency
Capital Reserve
General Fund Reserve A/c
5,702
5,290
474
1,879
(550)
299
337
2,095
58
500
500
2,294
536
819
550
8
315
16,786
100
-
18,878
19,114
(100)
(16,786)
(104)
(16,990)
4,294
(836)
(1,096)
(652)
(1,040)
562
(500)
2,401
5,702
9,584
174
2,698
(1,096)
207
1,055
54
1,062
4,695
3,133
24,135
The Manchester Airport Reserve was established in 1986/87 as a result of the dissolution of Greater Manchester
County Council and the distribution of its interest in Manchester Airport among the 10 Councils in Greater
Manchester. The proceeds have been reinvested in shares in Manchester Airport plc.
The HRA Surplus Account was established in 1989/90 to provide a working balance for the Housing Revenue
Account.
The DSO Appropriation Account was established in 1981/82 to receive and distribute profits and to cover any losses
made by the City Council's direct service organisations. Certain costs have been earmarked in the account leaving an
effective available balance of £76,000.
LMS Schools – the amount of any budget not spent in the year is available for future use by
the schools. The balances are not available to the City Council for general use.
The Collection Fund shows the transactions of the City Council, as the billing authority, in relation to non-domestic
rates, the council tax and residual community charges and it illustrates the way in which these have been distributed
to the preceptors and the General Fund.
The Invest to Save Fund was set up in 1997/98 to finance projects, primarily aimed at delivering longer term savings,
some of which could be recycled back into the fund to maintain an adequate level for investment in subsequent years.
Certain costs have been earmarked in the account leaving an effective available balance of £107,000.
The Barton Moss Reserve which was set up in 1996/97 to meet any deficits arising on the trading account and to
support specific items of expenditure was transferred to the General Fund Reserve during the year.
The Major Repairs Reserve was established during the year under the Accounts and Audit Regulations 1996. The
reserve can only be used for capital expenditure on HRA assets. Expenditure is charged directly to the reserve and
not the HRA.
The HRA Repair Account Reserve has been set up in the Housing Revenue Account to meet the repair, maintenance
and improvement programme expenditure.
The Risk Management Fund was set up in 1998/99 to meet the costs of identifying risks and carrying out measures to
reduce or eliminate risks to assets, employees and third parties. Certain costs have been earmarked in the account
leaving an effective available balance of £55,000.
The General Contingency Reserve has been established to cover unforeseen future
expenditure.
The Capital Reserve was used during the year to meet capital expenditure incurred.
The General Fund Reserve receives surpluses from and meets deficits on the General Fund Revenue Account.
Underspendings in expenditure in 2001/02, amounting in total to £0.6m have been earmarked against the reserve.
75
cashflow
THE CASH FLOW STATEMENT
FOR THE YEAR ENDED 31ST MARCH 2002
2000/01
2001/02
£000s
185,512
154,217
24,641
61,354
5,869
£000s
Revenue Activities
Cash Outflows
Cash paid to and on behalf of employees
Other operating cash payments
Housing Benefit paid out
National non-domestic rate payments to national pool
Precepts paid from Collection Fund
182,447
173,013
25,000
57,060
6,038
431,593
(31,312)
(47,400)
(62,888)
(55,081)
(111,657)
(85,096)
(27,418)
(41,799)
(14,132)
£000s
443,558
Cash Inflows
Rents (after rebates)
Council Tax Income
National non-domestic rate receipts from national pool
Non-domestic rate receipts
Revenue Support Grant
DWP Grants for rebates
Other Government grants
Cash received for goods and services
Other operating cash receipts
(29,193)
(50,405)
(61,111)
(64,317)
(117,610)
(79,838)
(55,036)
(44,646)
(15,675)
(476,783)
(517,831)
(45,190)
(74,273)
34,589
(1,996)
(38)
Returns on Investments and Servicing of Finance
Cash Outflows
Interest paid
Cash Inflows
Interest received
Dividend income
35,822
(1,107)
(362)
32,555
(12,635)
45,144
18,084
34,353
Net cash flow from revenue activities
(39,920)
Capital Activities
Cash Outflows
Purchase of fixed assets
Other capital cash payments
51,955
15,436
63,228
(15,226)
(19,002)
(226)
67,391
Cash Inflows
Sale of fixed assets
Capital grants received
Other capital cash receipts
(24,734)
(14,707)
(756)
(34,454)
16,139
(40,197)
Net cash (inflow) / outflow before financing
(12,726)
Management of Liquid Resources
3,861
Net reduction in short term deposits
11,337
76
cashflow
2000/01
2001/02
£000s
£000s
£000s
Financing
47,231
Cash Outflows
Repayments of amounts borrowed
47,136
(16,770)
Cash Inflows
New long term loans
(50,203)
(46,058)
New short term loans
-
(15,597)
4,403
(3,067)
Net (increase) / reduction in cash
(4,456)
77
cashflow
NOTES TO THE CASH FLOW STATEMENT
1.
General
This consolidated statement summarises the inflows and outflows of cash arising from
transactions with third parties for revenue and capital purposes.
2.
Revenue Activities
The net cash flow can be reconciled to the Consolidated Revenue Account as follows:2001/02
£000
Deficit/(Surplus) per Consolidated Revenue Account
2000/01
£000
(2,401)
£000
1,762
Non-cash transactions
-
(9,047)
(20,769)
(3,906)
5,578
minimum revenue provision
financing of capital expenditure (inc.MRA)
contribution to reserves
other non-cash movements
(8,824)
(2,061)
(4,693)
(3,882)
(28,144)
Items on an accruals basis
- increase/(reduction) in stock
- increase in revenue debtors
- (increase) in revenue creditors
83
374
(9,832)
Net cash flow from revenue activities
78
(19,460)
84
11,447
(6,468)
(9,375)
5,063
(39,920)
(12,635)
cashflow
The amount recorded for the financing of capital expenditure includes £2.8m in respect of the
Housing Revenue Account.
4.
Analysis of Net Debt
Long Term Debt
Deferred Liabilities
Short Term Debt
Short Term Investments
Cash Overdrawn
4.
As at
31.03.01
Receipts
Payments
£000
£000
£000
Reclassification of
Debt
£000
As at
31.03.02
£000
(400,582)
(14,781)
(47,128)
25,188
(437,303)
(3,992)
(50,200)
(3)
(1,121,000)
(1,171,203)
-
1
47,135
1,132,338
1,179,474
4,456
1,808
326
(2,134)
-
(448,974)
(14,457)
(2,127)
36,526
(429,032)
464
(441,295)
(1,171,203)
1,183,930
-
(428,568)
Reconciliation of Net Debt
2001/02
2000/01
£000
£000
Net Debt:As at 1st April
As at 31st March
Represented by:(Reduction)/increase in cash
Net (increase)/reduction in borrowing
Increase/(reduction) in investments
5.
(425,156)
(441,295)
12,727
(16,139)
4,456
(3,067)
11,338
(4,403)
(15,597)
3,861
(12,727)
(16,139)
Other Government Grants are analysed below:-
Education
Social Services
Neighbourhood Renewal Fund
Probation
Asylum Seekers
Mandatory Student Awards
Housing Revenue Account Subsidy (net of rebates element)
Benefits Administration Subsidy
Single Regeneration Budget
European Community Grants
Countryside Commission
New Deals for Communities
Crime Reduction Grant
Other
6.
(441,295)
(428,568)
2001/02
2000/01
£000
£000
19,122
5,804
2,550
2,029
921
17,031
993
3,687
668
227
538
1,042
424
14,875
3,728
2,075
1,525
1,485
1,424
948
425
324
186
151
62
210
55,036
27,418
Other operating receipts include agency receipts, services to other authorities, other grants and contributions.
79
cashflow
1.
Fixed Assets
Movements in the value of fixed assets during the year were as follows:-
GROSS BOOK VALUE AS AT 31ST MARCH
2001
Capital expenditure during year
Council
Dwellings
Other Land &
Buildings
Vehicles, Plant
& Equipment
Infrastructure
£000s
£000s
£000s
£000s
533,218
207,915
1,831
108,247
18,593
11,099
9
15,403
56
cashflow
C
Reclassification of Assets
0
(2,966)
0
0
(10,856)
(3,515)
(16)
0
6,037
(6,828)
0
(20)
546,992
205,705
1,824
123,630
0
(9,427)
(1,244)
(55,735)
(16,786)
(5,126)
(195)
(11,592)
Depreciation on revalued/assets sold
16,786
768
4
0
NET BOOK VALUE AS AT 31ST MARCH
2002
546,992
191,920
389
56,303
Disposals
Revaluations during year
GROSS BOOK VALUE AS AT 31ST MARCH
2002
Depreciation at 31st March 2001
Depreciation for year
Notes:
The fixed assets were valued on the 1st April 1999.
Infrastructure assets are valued at historical cost net of depreciation.
Community assets were given a nominal value of £1 each as at 1st April 1994 and subsequently only
adjusted to reflect disposals and acquisitions which are valued at cost. Other associated works on
environmental improvements etc are not considered to materially affect the asset value.
All other assets are valued at the lower of net current replacement cost and net realisable value.
A detailed valuation of the City Council’s housing stock has been undertaken as a result of the
introduction of resource accounting for the Housing Revenue Account. The basis of the valuation is
existing use value for social housing which reflects a value for a property if it were to be sold with
sitting tenants, enjoying rents at less than open market value and rights including the option of ‘right
to buy’.
The net book value of non operational assets includes £3.0m in respect of work in progress on assets at
31.3.2002.
Valuer - R. Wynne (Development Services) A.R.I.C.S.
Financing of Capital Expenditure
Cash payments on capital projects during the year were financed as follows:2001/02
£000s
Fixed assets
Deferred charges
Long Term Debtors
2000/01
£000s
2001/02
£000s
51,849
15,323
219
45,144
18,084
-
67,391
63,228
Loans
Capital Receipts
Capital Grants
MRA
Revenue
Other
Unfunded
2000/01
£000s
16,535
14,378
13,051
16,786
3,983
1,079
1,579
25,627
13,181
15,065
2,061
260
7,034
67,391
63,228
The above figures exclude accrued expenditure amounting to £ 0.88m (£0.5m in 2000/01) and accrued capital
receipts of £0.017m.
Deferred charges relate only to the expenditure which is subject to capital controls.
Statement of Major Physical Assets
The City Council held the following major fixed assets as at 31st March 2002:Of the16 libraries two are housed in Social Services Community Centres, one in a school and one in a
neighbourhood office.
Buildings
Education & Leisure
16Libraries
3
Community and Social Services
11 Children’s Homes
Art Galleries & Museums
Centres
57
5
cashflow
3
5
3
4
84
14
5
11
21
Environmental Services
4
2
Leisure Centres with Pools
Leisure Centres without Pools
Pools
4
Nursery Schools
Primary Schools
Secondary Schools
Special Schools
Trading Services
Youth Centres
Caretakers' Houses
Other Buildings
Cemeteries
Crematoria
7
7
4
Handicap
8
D
9
C
2
2
H
M
27
3
C
D
Other Buildings
Planning
149
Council Dwellings
16,094
1,384 Bungalows
3,859 Flats - High-rise
8,064
- Low-rise
*
Majority of vehicles are leased
Infrastructure
83km
Principal Roads
62km
580km
Industrial Units
Vehicles
64
Refuse/Street Cleansing vehicles
3 Mobile Libraries
Houses
1
209 Vans
78 Trucks
50 Mini Buses and Coaches
34
Other
Limousin
Land
1,543 Hectares
Other Classified Roads
Unclassified Roads
Commitments under Capital Contracts
The City Council has to plan its capital expenditure in advance of work proceeding. At the 31st March 2002 the City
Council had approved a Capital Programme for 2002/2003 amounting to £63.3m which will result in commitments
being carried forward into future years. A total amount of £47.7m was contractually committed at the 31st March
2002 and the significant contracts under these capital schemes were as follows:£m
Private sector renovation grants
Broughton partnership
Seedley and Langworthy – SRB 5
Public Sector (SRB 2 & 3 / HIP)
Inner Relief Road
Eccles Town Centre
Trafford Road
The Albion school
Schools amalgamation
New Deals for schools
Libraries peoples network
Staff redundancy costs
I T development and consultancy costs and settlement of mainframe
agreement
2.0
1.0
3.3
10.7
9.5
1.0
0.7
7.3
0.4
2.8
0.5
0.6
1.7
Deferred Purchase Scheme
The City Council entered a £3m Deferred Purchase agreement in December 1989 for the funding of the construction
of Phase III of the Civic Centre. The balance outstanding of £1.8m was renegotiated in December 1999 for a period
of four years and the second repayment of £0.45m under the terms of the new agreement was made in April 2001.
The value of the asset is included within fixed assets and the balance outstanding under the agreement is included in
loans outstanding.
Rolling Programme for the Revaluation of Fixed Assets
The following statement shows the progress of the City Council’s rolling programme for the revaluation of fixed
assets. The basis of the valuation is shown in the statement of accounting policies. Infrastructure, Community and
58
cashflow
Vehicles, Plant and Equipment assets are effectively valued at historical cost net of depreciation and they are
therefore excluded from the programme of revaluations and from the table shown below :-
Council
Dwellings
£000
Valued at Current Value in :
- Current year
- 2000/01
- 1999/00
546,992
546,992
2.
Other Land &
Buildings
£000
Non-operational
Total
Assets
£000
£000
12,725
18,337
174,643
205,705
7,934
4,603
29,292
41,829
567,651
22,940
203,935
794,526
Deferred Charges
Movements in deferred charges during the year were as follows:Balance
1/4/01
£000s
Church Aided Schools
Assistance to Industry
Private Sector Housing
Lowry Centre ERDF Grant
Single Status
Stock Discount
Software Development
VER Scheme
Expenditure
2001/02
£000s
Written
Down
£000s
Balance
31/3/02
£000s
2,205
-
355
721
10,620
111
57
1,410
2,049
(355)
(721)
(10,620)
(111)
(57)
(117)
(1,410)
(2,049)
2,088
-
2,205
15,323
(15,440)
2,088
(i)
Expenditure incurred during the year has been charged to the service revenue accounts and any grant
received towards this expenditure has been credited to the corresponding service revenue account.
(ii)
The discount allowed on stock market bonds issued in 1993/94 and 1994/95 is being written off over the
life of the bonds.
3. Analysis of Net Assets Employed
General Fund
Housing Revenue Account
Collection Fund
59
31st March
2002
£000s
32,829
389,142
(1,096)
31st March
2001
£000s
51,889
345,904
(550)
420,875
397,243
cashflow
4.
Investments
Long term investments consist of:31st March
2002
£000s
Manchester Airport plc
Ringway Developments plc
SUBEL Ltd.
Chapel Wharf Ltd
Modesole Ltd.
Other
31st March
2001
£000s
10,214
393
335
15
1
1
10,214
393
335
15
1
1
10,959
10,959
Further details concerning these investments are included in note 19, related businesses and companies.
The investments are shown in the balance sheet at their original cost.
Short term investments:The City Council also invests balances which are temporarily surplus to requirements for short periods at market
rates of interest.
5.
Long Term Debtors
31st March
2002
£000s
Mortgagors
Manchester Airport plc
Car Loans
Other
31st March
2001
£000s
553
9,426
1,307
375
1,306
3,386
1,454
146
11,661
6,292
The City Council along with the other nine authorities in Greater Manchester is responsible for loan advances made
to Manchester Airport plc to assist in the financing of Terminal 2. The annual servicing costs of the loans are
reimbursed by the Airport. The proportion of the loan advances applicable to the City Council is shown in the table
above.
The increase in the figures for Manchester Airport plc is a result of rescheduling some of the debt. There has been an
equivalent reduction in short term debtors.
6.
Stocks and Work in Progress
An analysis of stocks and work in progress is shown below:60
cashflow
31st March
2002
£000s
Stocks and stores
Provisions
Work in progress
Less: Provision for future losses
7.
31st March
2001
£000s
1,015
226
116
1,148
130
-
1,357
1,278
(81)
(85)
1,276
1,193
Debtors and Prepayments
An analysis of debtors and prepayments is shown below:31st March
2002
£000s
Customs and Excise
Government departments
Capital
Other local authorities
Local Taxpayers and NDR
Housing rents (net of prepayments)
Sundry debtors
Housing Benefits (overpayments)
Other
Ex-Manchester Airport principal repayments
Mortgagors
Accrued interest on investments
31st March
2001
£000s
2,202
4,168
34
2,381
25,089
5,504
6,358
6,800
19,321
161
408
2,532
3,367
17
1,915
28,378
4,047
8,279
5,960
17,861
6,191
156
262
72,426
(20,705)
78,965
(23,191)
Total Debtors
51,721
55,774
Prepayments
11,508
7,064
63,229
62,838
Less:
Provision for bad debts
61
cashflow
8.
Creditors
The figures shown for creditors include general creditors and provisions and an analysis of each of these is given
below:-
Government departments
Inland Revenue
Other local authorities
Local Taxpayers and NDR
Housing rents
Sundry creditors
Capital accruals
Residents' savings
Other
Small Reserves and Fund Balances
Provisions
Provision for Future Costs
Modesole Loan Guarantee
Repayment of Grant
Amalgamated Schools
31st March
2002
£000s
31st March
2001
£000s
13,400
3,026
931
1,972
90
33,293
877
350
7,678
158
9,052
3,527
989
1,876
52
29,352
458
362
5,817
162
61,775
51,647
635
15
538
245
459
155
459
237
63,208
52,957
Related Party Transactions
The figures for sundry creditors includes the following amount:

Greater Manchester Pension Fund £35,000
Provision for Future Costs - This provision was originally set up to help to meet the costs of the harmonisation of
pay and conditions for employees. Harmonisation has now been completed and the provision has been retained to
help meet the cost of pending pay reviews for Housing Officers (Management).
Modesole Loan Guarantee - in January 1983 the Greater Manchester Passenger Transport Executive made a loan to
Modesole Ltd., as part of the original funding for the G.Mex development. The former Greater Manchester County
Council had guaranteed the amount of the loan and this guarantee was transferred to the ten district councils in
Greater Manchester following the dissolution of the County Council. The provision was set up by annual
contribution to help to meet the City Council’s possible costs in case the guarantee had to be met. The full amount of
the loan was repaid in 2001/02 in accordance with the terms of the guarantee and the balance remaining on the
provision has been repaid to General Fund in 2002/03.
Repayment of Grant - an amount has been earmarked for the possible repayment of grants and subsidy received.
Amalgamated Schools – the provision has been set up to meet any costs arising from the
review of primary school places.
9.
Long Term Borrowing
An analysis of long term loans is shown below:-
Total Outstanding at
Source of Loan
Range of Interest Rates
Payable
%
62
31st March 2002
£000s
31st March 2001
£000s
cashflow
Public Works Loan Board
Money Market
Stock
L.C.C.
PWLB – Airport
Deferred Purchase
4.88 to 11.00
2.75 to 12.00
7.0 to 8.25
6.95
2.75 to 11.50
7.49
206,493
50,809
180,000
684
10,538
450
196,439
12,000
180,000
753
10,490
900
448,974
400,582
These loans are repayable over the following periods:2001/02
£000s
Maturing in 1-2 years
Maturing in 2-5 years
Maturing in 5-10 years
Maturing in 10-15 years
Maturing in more than 15 years
10.
2000/01
£000s
834
3,901
45,396
98,670
300,173
1,808
1,969
37,089
103,187
256,529
448,974
400,582
Deferred Liabilities
The City Council assumed responsibility for its share of the debt outstanding in respect of the former Greater
Manchester County Council when that body was wound up on the 31st March 1986.
11.
Deferred Credits
This item comprises mainly deferred capital receipts and the deferred discounts from the rescheduling of debt.
Deferred capital receipts are amounts derived from sales of fixed assets which will be received in instalments over
agreed periods of time. They arise principally from mortgages on sales of council houses.
Deferred rescheduling discounts represent the discounts received from a number of debt rescheduling exercises
carried out from 1992/93 onwards. The appropriate amount of discounts will be credited to the revenue account
annually over the period of the replacement loan or three years, whichever is the longer.
31st March
2002
£000s
Deferred capital receipts
 Loans
 Council house sales
Private Street Works
Deferred Rescheduling Discounts
Other
12.
31st March
2001
£000s
48
672
7
1,878
335
71
1,405
8
3,004
-
2,940
4,488
Government Grants Deferred Account
Capital grants received and accrued are credited initially to the government grants deferred account. Grants received
in respect of deferred charge expenditure are transferred to the revenue account to offset the relevant expenditure.
Grants received in respect of non depreciating assets are transferred to the Capital Financing Reserve. The
remaining grants received are released to the asset management revenue account to match the depreciation charged
on the asset to which the grant relates.
£000s
63
cashflow
Balance brought forward
Received and accrued in year from government departments
Less:
•
•
•
Grants on non depreciating assets
Grants relating to deferred charges
Release to match depreciation charged
Balance carried forward
13.
22,696
15,929
(1,517)
(5,647)
(1,689)
29,772
Lowry Provision
The provision has been set up to help to meet the agreed contributions under the terms of the agreement with The
Lowry.
16.
Debt Rescheduling
During 1999/2000 £0.7m of annuity loans in respect of Manchester Airport were rescheduled to loans maturing over
various periods to 2024 and a provision has been established to meet the principal sums as they fall due.
15.
Insurance Fund
The fund meets liability claims which are settled for amounts of less than £100,000, with external insurers continuing
to cover claims for amounts in excess of £100,000.
Under the terms of the fire insurance policy the City Council is required to meet the cost of claims up to £10,000 for
dwellings and up to £100,000 for schools and this cover is also provided by the insurance fund.
16.
Reserves and Balances
Usable Capital Receipts Reserve
Details of this account are provided in note i) to the Statement of Total Movements in Reserves on page 52.
Fixed Asset Restatement Reserve
Details of this account are provided in notes ii) and iii) to the Statement of Total Movements in Reserves on page 52.
Capital Financing Reserve
Details of this account are provided in note iv) to the Statement of Total Movements in Reserves on pages 52 and 53.
Provision for credit liabilities
Under the terms of the Local Government and Housing Act 1989 the City Council is required to set aside the
following amounts for debt redemption
- a minimum revenue provision based on the credit ceiling
- prescribed proportions of capital receipts
- the value of any ERDF grant received for accounting periods prior to 1 st April 2000
The following account shows how the City Council has complied with the requirement:Memorandum Account
£000s
Balance brought forward
Amount set aside for MRP
Reserved capital receipts
Set aside credit cover for Minerva house lease
ERDF grants received
Amounts applied to repay loans
64
12,909
9,050
2,300
1,792
49
26,100
(9,099)
cashflow
Balance carried forward
17,001
The MRP and ERDF grants received have been used to repay debt.
All the above entries are held within the capital financing reserve.
Earmarked Reserves and Balances
Full details of these accounts are provided in note v) to the Statement of Total Movements in Reserves on pages 53
and 54.
17.
Contingent Assets and Liabilities
G.Mex Centre
At 31st March 1986, there were a number of outstanding issues concerning possible liabilities in connection with the
G.Mex Centre, the extent of which still remains uncertain. The City Council, along with the other local authorities in
Greater Manchester, may be required to honour any outstanding liabilities in the future. No provision against this
possibility has been made in the balance sheet.
Municipal Mutual Insurance
On the 30th September 1992, the City Council's insurer, MMI Limited, announced that it had ceased taking new
business or issuing renewals and had placed a moratorium on claims payments. On the 6th October 1992, MMI
resumed the full payment of claims. No new business was accepted, however, nor existing policies renewed.
As a result of the above, a special meeting of Finance Committee was held on the 29th January 1993 and the City
Council's insurance business was transferred to a number of new insurers.
MMI’s auditor’s Pricewaterhouse Coopers envisage that there would be a solvent run off and therefore no clawback
claims will be made against the City Council.
As at 31st March 2002 the estimated value of unpaid claims made by third parties was £190,527 and £37,500
remained unpaid in respect of claims made by employees. The extent to which any claims will not be settled in full
cannot be assessed at the present time and no provision, therefore, has been made for these potential liabilities in the
balance sheet.
Manchester Airport plc
Manchester Airport plc has agreed to reimburse the City Council in respect of debt charges on the loans referred to
in note 5. No provision has been made in the balance sheet to cover any potential losses on this agreement which
will operate until all the loans have matured in 2027.
Chapel Wharf Ltd.
The City Council has agreed to indemnify Chapel Wharf Ltd., to a maximum amount of £345,000 plus inflation, in
the event of the Office of the Deputy Prime Minister (ODPM) exercising a right of pre-emption in respect of land
sold by the ODPM to Chapel Wharf Ltd.
Salford University Business Enterprises Ltd.
The directors have decided to realise the company's assets and to distribute the proceeds to the shareholders. At this
stage it is expected there will be no overall deficit after discharging the company's liabilities and therefore, no
provision has been made for any shortfall in the balance sheet.
Lowry Centre
Under an agreement dated 19th March 1997 the City Council has agreed with the Arts Council and the Lowry Centre
Trust (the Trust) that it will pay to the Trust each year an amount representing the planned deficit for the year in the
Trust's revenue accounts in respect of the operation of the Lowry Centre provided that the deficit has actually been
incurred. In addition the agreement includes a commitment that the City Council will guarantee to underwrite the
65
cashflow
Trust with a minimum sum of £350,000 per annum in return for outreach services which the trust will provide to
schools and residents.
The agreement came into operation on the 1st April 2000 and the amount of the fixed annual contribution will be
reviewed every five years beginning from the starting date but the annual contribution will not be reduced below
£350,000.
The terms of the agreement are irrevocable except with the consent of the Arts Council.
The amount of the contribution was £0.677m for each of the two years 2000/01 and 2001/02. To secure additional
external funding amounting to £16.250m it has been agreed that an extra £0.250m will be paid to the Trust for each
of the five years commencing in 2002/03. This variation raises the annual contribution rate to £0.927m. The original
basic contribution of £0.677m each year will remain subject to review in 2005/06 taking into account the Trust’s
annual business plan.
18.
Trust Funds
The City Council administers funds on behalf of 13 various trusts with a total fund value of £0.95m. All trust funds
are excluded from the City Council's accounts.
19.
Related Businesses and Companies
The City Council has an involvement with a number of private companies whose assets and liabilities are not
included in these accounts.
Relevant details of the companies are summarised below. No trading took place during the year, nor is there any
indebtedness between the City Council and any of the companies, except where stated.
Manchester Airport plc
The principal activity of the company is the operation and development of an international airport.
The City Council holds 10,214,000 £1 ordinary shares, equivalent to 5% of share capital.
At the year ended 31 March 2002, the company had net assets of £640m (31.3.01 £636m).
In 2001-02 loss before tax was £3.8m and loss after tax was £12.0m (in 2000/01 £24.9m profit before tax, £16.9m
profit after tax).
A dividend of £0.362m was received in the year (£0.038m in 2000/01).
Ringway Developments Ltd.
The principal activity of the company is to provide and implement opportunities to support the growth of Manchester
Airport.
The City Council holds 393,108 £1 “A” ordinary shares, equivalent to 4.6% of the share capital.
At the year ended 31 March 2001, the company had net assets of £18.2m (31.3.00 £17.0m). In 2000/01 the profit
before and after tax was £1.2m (£0.1m in 1999/00).
The company was sold in April 2002 and the City Council’s share of the net sale proceeds amounted to £0.54m.
Salford University Business Enterprises Ltd.
The principal activity of the company is investing in and managing businesses and property.
The City Council owns 23,500 £1 ordinary shares and 311,500 £1 non-voting preference shares, equivalent to 37%
of ordinary share capital.
At the year ended 31 July 2001, the company had net liabilities of £26,069 (31.7.00 £61,671). In 2000/01 the profit
before and after tax was £35,602 (2000/01 profit before tax was £8,956 and after tax £27,154).
The directors have decided to realise the company’s assets and to distribute the proceeds to shareholders. It is
anticipated that the realisation of assets will be sufficient to discharge the company’s liabilities.
Chapel Wharf Ltd.
66
cashflow
The principal activity of the company is investing and participating in the development of the area known as Chapel
Wharf.
The City Council owns 14,746 £1 ordinary shares, equivalent to 15% of share capital.
At the year ended 31 March 2002, the company had net assets of £5.4m (31.3.01 £6.0m). In 2001/02 the loss before
tax was £76,461 and after tax was £86,461 (2000/01 loss before tax was £38,155 and after tax £35,185).
During the year the City Council made two loans to the company amounting to £219,000 at interest rates of 2.5%
above bank base rate. The loans are due to be repaid during 2002/03.
Others
Modesole Ltd. - Shareholding 941 £1 shares, equivalent to 9.4% of issued share capital.
Salford Hundred Venture Ltd. - Shareholding 2 £1 shares, equivalent to 22% of issued share capital.
Companies limited by guarantee with the City Council's liability limited to £10 in each case:Salford Information Technology Centre Ltd.
The Salford/Trafford Groundwork Trust Ltd.
The Salford Phoenix Initiative Ltd.
Salford Foundation Ltd. (liability limited to £1)
Requests for further details on any of the above companies should be made to the Accountancy Section, Corporate
Services Directorate, Civic Centre, Chorley Road, Swinton M27 5AW (telephone 0161 793 3245).
20.
Reserves held by Schools
Under the terms of the Education Act 1996, local authorities are required to delegate management responsibilities to
the governing bodies of schools. All primary, secondary and special schools are formula funded and are included in
the scheme of full delegation. Nursery schools are excluded from the scheme.
In accordance with the City Council's approved scheme for delegating budgets to schools, the amount of any budget
not spent in the year is available for future use by the schools. The balances are not available to the City Council for
general use.
The balances held at 31st March are:-
Schools managed locally
- underspendings carried forward
- overspendings carried forward
Net underspendings carried forward
2002
£000s
2001
£000s
3,875
(1,177)
3,262
(1,383)
2,698
1,879
21.Economic and Monetary Union (EMU)
On the 1st January 1999 eleven countries of the European Union formed an Economic and Monetary Union (EMU)
and introduced a single currency - the euro. The Government decided not to join the single currency on the 1st
January 1999 but it is making the necessary preparations so that it has the option of joining during the current
parliament.
In the longer term the introduction of the euro could have an impact on the City Council in respect of matters such as
the provision of economic development advice to businesses and in the procurement of goods and services. There
has been no direct impact on the City Council to date. (There were no committed costs as at 31st March 2002).
26. Disclosure of net pensions asset / liability - FRS17 – transitional disclosure
67
cashflow
The implementation of FRS 17 ‘Retirement Benefits’ is being phased in over a three year period. For 2001/02 the
requirement is to provide balance sheet disclosure information in respect of the net asset or liability for retirement
benefits. This note therefore provides memorandum information to the balance sheet only. It only applies to the
Local Government Pension Scheme for officers and other non-teaching staff. The teachers pension scheme
administered by the Teachers Pensions Agency on behalf of the Department for Education and Skills, is a national
unfunded scheme which does not allow the identification of individual local education authority liabilities. The
teachers’ scheme is therefore treated as a defined contribution scheme accounted for by charging the contributions to
the revenue account as they become payable. No further recognition of future obligations is required in the
Statement of Accounts.
As part of the terms and conditions of employment for its employees, the City Council offers retirement benefits.
Although these will not actually be payable until employees retire, the City Council has a commitment to make the
payments that need to be disclosed at the time that the employees earn their future entitlement.
The City Council participates in the Local Government Pension Scheme for civilian employees, administered by
Tameside MBC as the Greater Manchester Pension Fund. This is a funded scheme, meaning that both employers and
employees pay contributions into the fund, calculated at a level which is estimated to balance the pensions liabilities
with investment assets.
In 2001/02, pension costs have been charged to the consolidated revenue account on the basis of contributions
payable for the year to the pension fund and pensions payable in the year for which the City Council is responsible.
The most recent actuarial valuation of the fund was the 31st March 2001, with the next formal valuation scheduled
for 31st March 2004. The actuarial value as at the 31st March 2001 has been rolled forward to the 31 st March 2002 by
the fund’s actuary using the following :



the membership data submitted for the formal valuation as at the 31 st March 2001
pension fund accounts, estimated by Tameside MBC where necessary, for 2001/02 to estimate contribution
income
other relevant information provided by Tameside MBC in 2001/02, estimated where necessary
the projected unit method of valuation.
The liabilities have been assessed by Hymans Robertson, actuaries to the pension fund. The main assumptions used
in the calculations are:
Assumptions as
at 31st March 2002
% per annum
Rate of inflation
2.8
Rate of increase in salaries
4.3
Rate of increase in pensions
Rate of discounting scheme liabilities
2.8
6.4
Assets in the Greater Manchester Pension Fund are valued at fair value, principally market value for investments and
consist of equities, bonds, properties and cash. The table below sets out the proportion of assets held and the
expected rate return per annum:
Assets(Whole Fund)
Fund value as
at 31st March
2002
Asset
Proportion
Equities
Bonds
Property
Cash
£m
3,794
1,555
500
495
%
60
24
8
8
Total
6,344
100
Long term return
per annum
Expected return per
annum
%
7.5
5.5
6.0
4.0
£m
284
86
30
20
420
68
cashflow
As at the 31st March 2002, the City Council had the following overall assets and liabilities for pensions that have not
been included in the balance sheet.
Estimated employers assets
Present value of scheme liabilities
Net Pension Asset
31st March 2002
£m
456
424
32
27. Post Balance Sheet Events
Ringway Developments Limited
On the 11th April 2002 the City Council sold its shareholding in Ringway Developments Limited, shown in the
balance sheet as a long term investment (note 4). The proceeds will be treated as a capital receipt and part of the
consideration was received on the 11th April 2002 with the balance due on the 31st March 2003.
Lowry Centre Development Company Limited
As referred to in note 18 to the Consolidated Revenue Account (page 29) the debt owed to
the City Council of £9.05m was cleared in April 2002.
69
cashflow
STATEMENT OF TOTAL MOVEMENTS IN RESERVES
2001/02
£000s
Surplus / (deficit) for the year:
- General Fund
- Housing Revenue Account
add back Movements on specific revenue
reserves
2000/01
£000s
2,401
(1,762)
4,294
2,179
(1,438)
1,133
______
______
Total increase / (decrease) in revenue
resources
5,257
Increase / (decrease) in usable capital
receipts
Increase / (decrease) in unapplied capital
grants and contributions
1,550
4
(20)
-
______
_______
Total increase / (decrease) in realised
capital resources (note 1)
Gains/(losses) on revaluation of fixed assets
Impairment losses on fixed assets owing to
general changes in prices
4
(20)
7,404
-
_______
_______
Total increase / (decrease) in unrealised
value of fixed assets (note 2)
Value of assets sold, disposed of or
decommissioned (note 3)
7,404
(34,246)
(15,178)
Capital receipts set aside
25,503
Revenue resources set aside
(10,062)
Movements on Government Grants Deferred 7,076
_______
Total increase/ (decrease) in amounts
set aside to finance capital investment
(note 4)
Total recognised gains and losses
(43,797)
15,472
(14,980)
6,244
______
22,517
6,736
_______________________
936
(50,709)
_______________________
NOTES TO THE STATEMENT OF TOTAL MOVEMENTS IN RESERVES
Usable capital
receipts
£000s
_______________
1. Movements in realised capital resources
Amounts receivable in 2001/02
23,207
Amounts applied in 2001/02
23,203
70
cashflow
_______________
Total increase / (decrease) in
realised capital resources in 2001/02
Balance brought forward at 1st April 2001
Balance carried forward at 31st March 2002
4
13
________________
17
________________
Fixed asset
restatement
reserve
£000s
________________
2. Movements in unrealised value of
fixed assets
Gains/(losses) on revaluation of fixed assets in 2001/02
Impairment losses on fixed assets due to general
changes in prices in 2001/02
7,404
________________
Total increase / (decrease) in unrealised
capital resources in 2001/02
7,404
3. Value of assets sold, disposed of
or decommissioned
Amounts written off fixed asset balances for
disposals in 2001/02
(34,246)
_________________
Total movement on reserve in 2001/02
(26,842)
Balance brought forward at 1st April 2001
271,903
________________
245,061
________________
Balance carried forward at 31 March 2002
Capital financing
Government
grants deferred
reserv
£000s
£000s
______________________________
4. Movements in amounts set aside to finance capital investment
Capital receipts set aside in 2001/02:
-
reserved receipts
usable capital receipts
Total capital receipts set aside in 2001/02
Revenue resources set aside in 2001/02:
- capital expenditure financed from revenue
- reconciling amount for provisions for
loan repayment
Total revenue resources set aside in 2001/02
4,092
21,411
______________________________
25,503
-
20,769
(30,831)
______________________________
(10,062)
71
cashflow
Grants received in the year
Grant applied to capital investment in 2001/02
Amounts credited to the asset management revenue
account in 2001/02
15,929
(7,164)
-
(1,689)
______________________________
______________________________
Total increase / (decrease) in amounts set
aside to finance capital investment
Total movement on reserve in 2001/02
15,441
7,076
Balance brought forward at 1st April 2001
106,449
22,696
______________________________
Balance carried forward at 31st March 2002
121,890
29,772
______________________________
Note i)
Usable Capital Receipts Reserve
These are the unused proportion of capital receipts, i.e. usable receipts which have not yet been used to finance
capital expenditure.
General
Fund
£000s
Receipts in hand 1.4.01
Receipts in year
Less:
Amounts Set Aside
Receipts applied in year
Receipts in hand 31.3.02
HRA
Total
£000s
£000s
9
4
13
22,419
3,088
25,507
22,428
3,092
25,520
(22,419)
(2,300)
(784)
(2,300)
(23,203)
9
8
17
The receipts in hand brought forward have been amended to show the amount of HRA receipts previously shown in
General Fund.
Note ii & iii)
Fixed Asset Restatement Reserve
The account reflects in the main the surpluses or deficits arising from the periodic revaluations of fixed assets. The
net book value of assets disposed of is charged to the reserve.
Details of the reserve are as follows:-
72
cashflow
Balance brought forward
Gain / (Loss) on revaluation of assets
Disposal of fixed assets
Note iv)
General
Fund
£000s
49,209
(15,302)
(23,390)
HRA
Total
£000s
222,694
22,706
(10,856)
£000s
271,903
7,404
(34,246)
10,517
234,544
245,061
Capital Financing Reserve
The account represents principally the amounts required to be set aside from revenue resources and capital receipts
for the repayment of debt. In addition it includes amounts which have been used from revenue, capital grants and
capital receipts to finance the capital programme. The account, the balance of which is not available to support any
of the City Council's expenditure, is detailed overleaf.
General
Fund
£000s
(9,376)
HRA
Total
£000s
115,825
£000s
106,449
1,792
2,300
4,092
20,627
1,221
(30,219)
784
19,548
5,450
21,411
20,769
(24,769)
291
-
291
Grants released to match depreciation
1,690
-
1,690
Government grants on non depreciating assets
1,517
-
1,517
(9,676)
-
(9,676)
72
-
72
-
44
44
(22,061)
143,951
121,890
Transfers
in/(out) year
£000s
Balance brought forward
Amounts set aside - Capital Receipts
Amounts used to finance capital expenditure
Capital Receipts
Revenue
Provision for debt repayment
Additional debt repayment
Writedown of deferred charges
ERDF Grants
Other
Note v)
Earmarked Reserves and Balances
Balance
1/4/01
Receipts
in year
Payments in
year
£000s
£000s
£000s
73
Balance
31/3/02
£000s
cashflow
Manchester Airport Reserve
HRA Surplus Account
DSO Appropriation Account
LMS Schools & Colleges
Collection Fund
Invest to Save Fund
Barton Moss Trading
Major Repairs Reserve
HRA Repair Account Reserve
Risk Management Fund
General Contingency
Capital Reserve
General Fund Reserve A/c
5,702
5,290
474
1,879
(550)
299
337
2,095
58
500
500
2,294
536
819
550
8
315
16,786
100
-
18,878
19,114
(100)
(16,786)
(104)
(16,990)
4,294
(836)
(1,096)
(652)
(1,040)
562
(500)
2,401
5,702
9,584
174
2,698
(1,096)
207
1,055
54
1,062
4,695
3,133
24,135
The Manchester Airport Reserve was established in 1986/87 as a result of the dissolution of Greater Manchester
County Council and the distribution of its interest in Manchester Airport among the 10 Councils in Greater
Manchester. The proceeds have been reinvested in shares in Manchester Airport plc.
The HRA Surplus Account was established in 1989/90 to provide a working balance for the Housing Revenue
Account.
The DSO Appropriation Account was established in 1981/82 to receive and distribute profits and to cover any losses
made by the City Council's direct service organisations. Certain costs have been earmarked in the account leaving an
effective available balance of £76,000.
LMS Schools – the amount of any budget not spent in the year is available for future use by
the schools. The balances are not available to the City Council for general use.
The Collection Fund shows the transactions of the City Council, as the billing authority, in relation to non-domestic
rates, the council tax and residual community charges and it illustrates the way in which these have been distributed
to the preceptors and the General Fund.
The Invest to Save Fund was set up in 1997/98 to finance projects, primarily aimed at delivering longer term savings,
some of which could be recycled back into the fund to maintain an adequate level for investment in subsequent years.
Certain costs have been earmarked in the account leaving an effective available balance of £107,000.
The Barton Moss Reserve which was set up in 1996/97 to meet any deficits arising on the trading account and to
support specific items of expenditure was transferred to the General Fund Reserve during the year.
The Major Repairs Reserve was established during the year under the Accounts and Audit Regulations 1996. The
reserve can only be used for capital expenditure on HRA assets. Expenditure is charged directly to the reserve and
not the HRA.
The HRA Repair Account Reserve has been set up in the Housing Revenue Account to meet the repair, maintenance
and improvement programme expenditure.
The Risk Management Fund was set up in 1998/99 to meet the costs of identifying risks and carrying out measures to
reduce or eliminate risks to assets, employees and third parties. Certain costs have been earmarked in the account
leaving an effective available balance of £55,000.
The General Contingency Reserve has been established to cover unforeseen future
expenditure.
The Capital Reserve was used during the year to meet capital expenditure incurred.
The General Fund Reserve receives surpluses from and meets deficits on the General Fund Revenue Account.
Underspendings in expenditure in 2001/02, amounting in total to £0.6m have been earmarked against the reserve.
74
cashflow
THE CASH FLOW STATEMENT
FOR THE YEAR ENDED 31ST MARCH 2002
2000/01
2001/02
£000s
185,512
154,217
24,641
61,354
5,869
£000s
Revenue Activities
Cash Outflows
Cash paid to and on behalf of employees
Other operating cash payments
Housing Benefit paid out
National non-domestic rate payments to national pool
Precepts paid from Collection Fund
182,447
173,013
25,000
57,060
6,038
431,593
(31,312)
(47,400)
(62,888)
(55,081)
(111,657)
(85,096)
(27,418)
(41,799)
(14,132)
£000s
443,558
Cash Inflows
Rents (after rebates)
Council Tax Income
National non-domestic rate receipts from national pool
Non-domestic rate receipts
Revenue Support Grant
DWP Grants for rebates
Other Government grants
Cash received for goods and services
Other operating cash receipts
(29,193)
(50,405)
(61,111)
(64,317)
(117,610)
(79,838)
(55,036)
(44,646)
(15,675)
(476,783)
(517,831)
(45,190)
(74,273)
34,589
(1,996)
(38)
Returns on Investments and Servicing of Finance
Cash Outflows
Interest paid
Cash Inflows
Interest received
Dividend income
35,822
(1,107)
(362)
32,555
(12,635)
45,144
18,084
34,353
Net cash flow from revenue activities
(39,920)
Capital Activities
Cash Outflows
Purchase of fixed assets
Other capital cash payments
51,955
15,436
63,228
(15,226)
(19,002)
(226)
67,391
Cash Inflows
Sale of fixed assets
Capital grants received
Other capital cash receipts
(24,734)
(14,707)
(756)
(34,454)
16,139
(40,197)
Net cash (inflow) / outflow before financing
(12,726)
Management of Liquid Resources
3,861
Net reduction in short term deposits
11,337
75
cashflow
2000/01
2001/02
£000s
£000s
£000s
Financing
47,231
Cash Outflows
Repayments of amounts borrowed
47,136
(16,770)
Cash Inflows
New long term loans
(50,203)
(46,058)
New short term loans
-
(15,597)
4,403
(3,067)
Net (increase) / reduction in cash
(4,456)
76
cashflow
NOTES TO THE CASH FLOW STATEMENT
1.
General
This consolidated statement summarises the inflows and outflows of cash arising from transactions with third parties
for revenue and capital purposes.
2.
Revenue Activities
The net cash flow can be reconciled to the Consolidated Revenue Account as follows:2001/02
£000
Deficit/(Surplus) per Consolidated Revenue Account
2000/01
£000
(2,401)
£000
1,762
Non-cash transactions
-
(9,047)
(20,769)
(3,906)
5,578
minimum revenue provision
financing of capital expenditure (inc.MRA)
contribution to reserves
other non-cash movements
(8,824)
(2,061)
(4,693)
(3,882)
(28,144)
Items on an accruals basis
- increase/(reduction) in stock
- increase in revenue debtors
- (increase) in revenue creditors
83
374
(9,832)
Net cash flow from revenue activities
77
(19,460)
84
11,447
(6,468)
(9,375)
5,063
(39,920)
(12,635)
cashflow
The amount recorded for the financing of capital expenditure includes £2.8m in respect of the
Housing Revenue Account.
5.
Analysis of Net Debt
Long Term Debt
Deferred Liabilities
Short Term Debt
Short Term Investments
Cash Overdrawn
4.
As at
31.03.01
Receipts
Payments
£000
£000
£000
Reclassification of
Debt
£000
As at
31.03.02
£000
(400,582)
(14,781)
(47,128)
25,188
(437,303)
(3,992)
(50,200)
(3)
(1,121,000)
(1,171,203)
-
1
47,135
1,132,338
1,179,474
4,456
1,808
326
(2,134)
-
(448,974)
(14,457)
(2,127)
36,526
(429,032)
464
(441,295)
(1,171,203)
1,183,930
-
(428,568)
Reconciliation of Net Debt
2001/02
2000/01
£000
£000
Net Debt:As at 1st April
As at 31st March
Represented by:(Reduction)/increase in cash
Net (increase)/reduction in borrowing
Increase/(reduction) in investments
5.
(425,156)
(441,295)
12,727
(16,139)
4,456
(3,067)
11,338
(4,403)
(15,597)
3,861
(12,727)
(16,139)
Other Government Grants are analysed below:-
Education
Social Services
Neighbourhood Renewal Fund
Probation
Asylum Seekers
Mandatory Student Awards
Housing Revenue Account Subsidy (net of rebates element)
Benefits Administration Subsidy
Single Regeneration Budget
European Community Grants
Countryside Commission
New Deals for Communities
Crime Reduction Grant
Other
6.
(441,295)
(428,568)
2001/02
2000/01
£000
£000
19,122
5,804
2,550
2,029
921
17,031
993
3,687
668
227
538
1,042
424
14,875
3,728
2,075
1,525
1,485
1,424
948
425
324
186
151
62
210
55,036
27,418
Other operating receipts include agency receipts, services to other authorities, other grants and contributions.
78
cashflow
Financing of Capital Expenditure
Cash payments on capital projects during the year were financed as follows:2001/02
£000s
Fixed assets
Deferred charges
Long Term Debtors
2000/01
£000s
2001/02
£000s
51,849
15,323
219
45,144
18,084
-
67,391
63,228
Loans
Capital Receipts
Capital Grants
MRA
Revenue
Other
Unfunded
2000/01
£000s
16,535
14,378
13,051
16,786
3,983
1,079
1,579
25,627
13,181
15,065
2,061
260
7,034
67,391
63,228
The above figures exclude accrued expenditure amounting to £ 0.88m (£0.5m in 2000/01) and accrued capital
receipts of £0.017m.
Deferred charges relate only to the expenditure which is subject to capital controls.
Statement of Major Physical Assets
The City Council held the following major fixed assets as at 31st March 2002:Of the16 libraries two are housed in Social Services Community Centres, one in a school and one in a
neighbourhood office.
Buildings
Education & Leisure
16Libraries
3
3
5
3
4
84
14
5
11
21
Environmental Services
4
2
Community and Social Services
11 Children’s Homes
Art Galleries & Museums
Centres
Leisure Centres with Pools
Leisure Centres without Pools
Pools
4
Nursery Schools
Primary Schools
Secondary Schools
Special Schools
Trading Services
Youth Centres
Caretakers' Houses
7
4
Handicap
8
D
9
C
2
2
H
M
Other Buildings
Cemeteries
Crematoria
7
27
3
C
D
56
5
Other Buildings
cashflow
Planning
149
Industrial Units
Vehicles
64
Refuse/Street Cleansing vehicles
3 Mobile Libraries
Houses
1
209 Vans
78 Trucks
50 Mini Buses and Coaches
34
Other
Council Dwellings
16,094
1,384 Bungalows
3,859 Flats - High-rise
8,064
- Low-rise
*
Majority of vehicles are leased
Infrastructure
83km
Principal Roads
62km
580km
Limousin
Land
1,543 Hectares
Other Classified Roads
Unclassified Roads
Commitments under Capital Contracts
The City Council has to plan its capital expenditure in advance of work proceeding. At the 31st March 2002 the City
Council had approved a Capital Programme for 2002/2003 amounting to £63.3m which will result in commitments
being carried forward into future years. A total amount of £47.7m was contractually committed at the 31st March
2002 and the significant contracts under these capital schemes were as follows:£m
Private sector renovation grants
Broughton partnership
Seedley and Langworthy – SRB 5
Public Sector (SRB 2 & 3 / HIP)
Inner Relief Road
Eccles Town Centre
Trafford Road
The Albion school
Schools amalgamation
New Deals for schools
Libraries peoples network
Staff redundancy costs
I T development and consultancy costs and settlement of mainframe
agreement
2.0
1.0
3.3
10.7
9.5
1.0
0.7
7.3
0.4
2.8
0.5
0.6
1.7
Deferred Purchase Scheme
The City Council entered a £3m Deferred Purchase agreement in December 1989 for the funding of the construction
of Phase III of the Civic Centre. The balance outstanding of £1.8m was renegotiated in December 1999 for a period
of four years and the second repayment of £0.45m under the terms of the new agreement was made in April 2001.
The value of the asset is included within fixed assets and the balance outstanding under the agreement is included in
loans outstanding.
Rolling Programme for the Revaluation of Fixed Assets
The following statement shows the progress of the City Council’s rolling programme for the revaluation of fixed
assets. The basis of the valuation is shown in the statement of accounting policies. Infrastructure, Community and
Vehicles, Plant and Equipment assets are effectively valued at historical cost net of depreciation and they are
therefore excluded from the programme of revaluations and from the table shown below :-
Council
Dwellings
£000
Valued at Current Value in :
- Current year
- 2000/01
- 1999/00
546,992
546,992
Other Land &
Buildings
£000
12,725
18,337
174,643
205,705
57
Non-operational
Total
Assets
£000
£000
7,934
4,603
29,292
41,829
567,651
22,940
203,935
794,526
cashflow
2.
Deferred Charges
Movements in deferred charges during the year were as follows:Balance
1/4/01
£000s
Church Aided Schools
Assistance to Industry
Private Sector Housing
Lowry Centre ERDF Grant
Single Status
Stock Discount
Software Development
VER Scheme
Expenditure
2001/02
£000s
Written
Down
£000s
Balance
31/3/02
£000s
2,205
-
355
721
10,620
111
57
1,410
2,049
(355)
(721)
(10,620)
(111)
(57)
(117)
(1,410)
(2,049)
2,088
-
2,205
15,323
(15,440)
2,088
(i)
Expenditure incurred during the year has been charged to the service revenue accounts and any grant
received towards this expenditure has been credited to the corresponding service revenue account.
(ii)
The discount allowed on stock market bonds issued in 1993/94 and 1994/95 is being written off over the
life of the bonds.
3. Analysis of Net Assets Employed
General Fund
Housing Revenue Account
Collection Fund
4.
31st March
2002
£000s
32,829
389,142
(1,096)
31st March
2001
£000s
51,889
345,904
(550)
420,875
397,243
Investments
Long term investments consist of:31st March
2002
£000s
58
31st March
2001
£000s
cashflow
Manchester Airport plc
Ringway Developments plc
SUBEL Ltd.
Chapel Wharf Ltd
Modesole Ltd.
Other
10,214
393
335
15
1
1
10,214
393
335
15
1
1
10,959
10,959
Further details concerning these investments are included in note 19, related businesses and companies.
The investments are shown in the balance sheet at their original cost.
Short term investments:The City Council also invests balances which are temporarily surplus to requirements for short periods at market
rates of interest.
5.
Long Term Debtors
31st March
2002
£000s
Mortgagors
Manchester Airport plc
Car Loans
Other
31st March
2001
£000s
553
9,426
1,307
375
1,306
3,386
1,454
146
11,661
6,292
The City Council along with the other nine authorities in Greater Manchester is responsible for loan advances made
to Manchester Airport plc to assist in the financing of Terminal 2. The annual servicing costs of the loans are
reimbursed by the Airport. The proportion of the loan advances applicable to the City Council is shown in the table
above.
The increase in the figures for Manchester Airport plc is a result of rescheduling some of the debt. There has been an
equivalent reduction in short term debtors.
6.
Stocks and Work in Progress
An analysis of stocks and work in progress is shown below:31st March
2002
£000s
Stocks and stores
Provisions
Work in progress
Less: Provision for future losses
59
31st March
2001
£000s
1,015
226
116
1,148
130
-
1,357
1,278
(81)
(85)
cashflow
1,276
7.
1,193
Debtors and Prepayments
An analysis of debtors and prepayments is shown below:31st March
2002
£000s
Customs and Excise
Government departments
Capital
Other local authorities
Local Taxpayers and NDR
Housing rents (net of prepayments)
Sundry debtors
Housing Benefits (overpayments)
Other
Ex-Manchester Airport principal repayments
Mortgagors
Accrued interest on investments
31st March
2001
£000s
2,202
4,168
34
2,381
25,089
5,504
6,358
6,800
19,321
161
408
2,532
3,367
17
1,915
28,378
4,047
8,279
5,960
17,861
6,191
156
262
72,426
(20,705)
78,965
(23,191)
Total Debtors
51,721
55,774
Prepayments
11,508
7,064
63,229
62,838
Less:
Provision for bad debts
60
cashflow
8.
Creditors
The figures shown for creditors include general creditors and provisions and an analysis of each of these is given
below:-
Government departments
Inland Revenue
Other local authorities
Local Taxpayers and NDR
Housing rents
Sundry creditors
Capital accruals
Residents' savings
Other
Small Reserves and Fund Balances
Provisions
Provision for Future Costs
Modesole Loan Guarantee
Repayment of Grant
Amalgamated Schools
31st March
2002
£000s
31st March
2001
£000s
13,400
3,026
931
1,972
90
33,293
877
350
7,678
158
9,052
3,527
989
1,876
52
29,352
458
362
5,817
162
61,775
51,647
635
15
538
245
459
155
459
237
63,208
52,957
Related Party Transactions
The figures for sundry creditors includes the following amount:

Greater Manchester Pension Fund £35,000
Provision for Future Costs - This provision was originally set up to help to meet the costs of the harmonisation of
pay and conditions for employees. Harmonisation has now been completed and the provision has been retained to
help meet the cost of pending pay reviews for Housing Officers (Management).
Modesole Loan Guarantee - in January 1983 the Greater Manchester Passenger Transport Executive made a loan to
Modesole Ltd., as part of the original funding for the G.Mex development. The former Greater Manchester County
Council had guaranteed the amount of the loan and this guarantee was transferred to the ten district councils in
Greater Manchester following the dissolution of the County Council. The provision was set up by annual
contribution to help to meet the City Council’s possible costs in case the guarantee had to be met. The full amount of
the loan was repaid in 2001/02 in accordance with the terms of the guarantee and the balance remaining on the
provision has been repaid to General Fund in 2002/03.
Repayment of Grant - an amount has been earmarked for the possible repayment of grants and subsidy received.
Amalgamated Schools – the provision has been set up to meet any costs arising from the
review of primary school places.
9.
Long Term Borrowing
An analysis of long term loans is shown below:-
Total Outstanding at
Source of Loan
Range of Interest Rates
Payable
%
61
31st March 2002
£000s
31st March 2001
£000s
cashflow
Public Works Loan Board
Money Market
Stock
L.C.C.
PWLB – Airport
Deferred Purchase
4.88 to 11.00
2.75 to 12.00
7.0 to 8.25
6.95
2.75 to 11.50
7.49
206,493
50,809
180,000
684
10,538
450
196,439
12,000
180,000
753
10,490
900
448,974
400,582
These loans are repayable over the following periods:2001/02
£000s
Maturing in 1-2 years
Maturing in 2-5 years
Maturing in 5-10 years
Maturing in 10-15 years
Maturing in more than 15 years
10.
2000/01
£000s
834
3,901
45,396
98,670
300,173
1,808
1,969
37,089
103,187
256,529
448,974
400,582
Deferred Liabilities
The City Council assumed responsibility for its share of the debt outstanding in respect of the former Greater
Manchester County Council when that body was wound up on the 31st March 1986.
11.
Deferred Credits
This item comprises mainly deferred capital receipts and the deferred discounts from the rescheduling of debt.
Deferred capital receipts are amounts derived from sales of fixed assets which will be received in instalments over
agreed periods of time. They arise principally from mortgages on sales of council houses.
Deferred rescheduling discounts represent the discounts received from a number of debt rescheduling exercises
carried out from 1992/93 onwards. The appropriate amount of discounts will be credited to the revenue account
annually over the period of the replacement loan or three years, whichever is the longer.
31st March
2002
£000s
Deferred capital receipts
 Loans
 Council house sales
Private Street Works
Deferred Rescheduling Discounts
Other
12.
31st March
2001
£000s
48
672
7
1,878
335
71
1,405
8
3,004
-
2,940
4,488
Government Grants Deferred Account
Capital grants received and accrued are credited initially to the government grants deferred account. Grants received
in respect of deferred charge expenditure are transferred to the revenue account to offset the relevant expenditure.
Grants received in respect of non depreciating assets are transferred to the Capital Financing Reserve. The
remaining grants received are released to the asset management revenue account to match the depreciation charged
on the asset to which the grant relates.
£000s
62
cashflow
Balance brought forward
Received and accrued in year from government departments
Less:
•
•
•
Grants on non depreciating assets
Grants relating to deferred charges
Release to match depreciation charged
Balance carried forward
13.
22,696
15,929
(1,517)
(5,647)
(1,689)
29,772
Lowry Provision
The provision has been set up to help to meet the agreed contributions under the terms of the agreement with The
Lowry.
17.
Debt Rescheduling
During 1999/2000 £0.7m of annuity loans in respect of Manchester Airport were rescheduled to loans maturing over
various periods to 2024 and a provision has been established to meet the principal sums as they fall due.
15.
Insurance Fund
The fund meets liability claims which are settled for amounts of less than £100,000, with external insurers continuing
to cover claims for amounts in excess of £100,000.
Under the terms of the fire insurance policy the City Council is required to meet the cost of claims up to £10,000 for
dwellings and up to £100,000 for schools and this cover is also provided by the insurance fund.
16.
Reserves and Balances
Usable Capital Receipts Reserve
Details of this account are provided in note i) to the Statement of Total Movements in Reserves on page 52.
Fixed Asset Restatement Reserve
Details of this account are provided in notes ii) and iii) to the Statement of Total Movements in Reserves on page 52.
Capital Financing Reserve
Details of this account are provided in note iv) to the Statement of Total Movements in Reserves on pages 52 and 53.
Provision for credit liabilities
Under the terms of the Local Government and Housing Act 1989 the City Council is required to set aside the
following amounts for debt redemption
- a minimum revenue provision based on the credit ceiling
- prescribed proportions of capital receipts
- the value of any ERDF grant received for accounting periods prior to 1 st April 2000
The following account shows how the City Council has complied with the requirement:Memorandum Account
£000s
Balance brought forward
Amount set aside for MRP
Reserved capital receipts
Set aside credit cover for Minerva house lease
ERDF grants received
Amounts applied to repay loans
63
12,909
9,050
2,300
1,792
49
26,100
(9,099)
cashflow
Balance carried forward
17,001
The MRP and ERDF grants received have been used to repay debt.
All the above entries are held within the capital financing reserve.
Earmarked Reserves and Balances
Full details of these accounts are provided in note v) to the Statement of Total Movements in Reserves on pages 53
and 54.
17.
Contingent Assets and Liabilities
G.Mex Centre
At 31st March 1986, there were a number of outstanding issues concerning possible liabilities in connection with the
G.Mex Centre, the extent of which still remains uncertain. The City Council, along with the other local authorities in
Greater Manchester, may be required to honour any outstanding liabilities in the future. No provision against this
possibility has been made in the balance sheet.
Municipal Mutual Insurance
On the 30th September 1992, the City Council's insurer, MMI Limited, announced that it had ceased taking new
business or issuing renewals and had placed a moratorium on claims payments. On the 6th October 1992, MMI
resumed the full payment of claims. No new business was accepted, however, nor existing policies renewed.
As a result of the above, a special meeting of Finance Committee was held on the 29th January 1993 and the City
Council's insurance business was transferred to a number of new insurers.
MMI’s auditor’s Pricewaterhouse Coopers envisage that there would be a solvent run off and therefore no clawback
claims will be made against the City Council.
As at 31st March 2002 the estimated value of unpaid claims made by third parties was £190,527 and £37,500
remained unpaid in respect of claims made by employees. The extent to which any claims will not be settled in full
cannot be assessed at the present time and no provision, therefore, has been made for these potential liabilities in the
balance sheet.
Manchester Airport plc
Manchester Airport plc has agreed to reimburse the City Council in respect of debt charges on the loans referred to
in note 5. No provision has been made in the balance sheet to cover any potential losses on this agreement which
will operate until all the loans have matured in 2027.
Chapel Wharf Ltd.
The City Council has agreed to indemnify Chapel Wharf Ltd., to a maximum amount of £345,000 plus inflation, in
the event of the Office of the Deputy Prime Minister (ODPM) exercising a right of pre-emption in respect of land
sold by the ODPM to Chapel Wharf Ltd.
Salford University Business Enterprises Ltd.
The directors have decided to realise the company's assets and to distribute the proceeds to the shareholders. At this
stage it is expected there will be no overall deficit after discharging the company's liabilities and therefore, no
provision has been made for any shortfall in the balance sheet.
Lowry Centre
Under an agreement dated 19th March 1997 the City Council has agreed with the Arts Council and the Lowry Centre
Trust (the Trust) that it will pay to the Trust each year an amount representing the planned deficit for the year in the
Trust's revenue accounts in respect of the operation of the Lowry Centre provided that the deficit has actually been
incurred. In addition the agreement includes a commitment that the City Council will guarantee to underwrite the
64
cashflow
Trust with a minimum sum of £350,000 per annum in return for outreach services which the trust will provide to
schools and residents.
The agreement came into operation on the 1st April 2000 and the amount of the fixed annual contribution will be
reviewed every five years beginning from the starting date but the annual contribution will not be reduced below
£350,000.
The terms of the agreement are irrevocable except with the consent of the Arts Council.
The amount of the contribution was £0.677m for each of the two years 2000/01 and 2001/02. To secure additional
external funding amounting to £16.250m it has been agreed that an extra £0.250m will be paid to the Trust for each
of the five years commencing in 2002/03. This variation raises the annual contribution rate to £0.927m. The original
basic contribution of £0.677m each year will remain subject to review in 2005/06 taking into account the Trust’s
annual business plan.
18.
Trust Funds
The City Council administers funds on behalf of 13 various trusts with a total fund value of £0.95m. All trust funds
are excluded from the City Council's accounts.
19.
Related Businesses and Companies
The City Council has an involvement with a number of private companies whose assets and liabilities are not
included in these accounts.
Relevant details of the companies are summarised below. No trading took place during the year, nor is there any
indebtedness between the City Council and any of the companies, except where stated.
Manchester Airport plc
The principal activity of the company is the operation and development of an international airport.
The City Council holds 10,214,000 £1 ordinary shares, equivalent to 5% of share capital.
At the year ended 31 March 2002, the company had net assets of £640m (31.3.01 £636m).
In 2001-02 loss before tax was £3.8m and loss after tax was £12.0m (in 2000/01 £24.9m profit before tax, £16.9m
profit after tax).
A dividend of £0.362m was received in the year (£0.038m in 2000/01).
Ringway Developments Ltd.
The principal activity of the company is to provide and implement opportunities to support the growth of Manchester
Airport.
The City Council holds 393,108 £1 “A” ordinary shares, equivalent to 4.6% of the share capital.
At the year ended 31 March 2001, the company had net assets of £18.2m (31.3.00 £17.0m). In 2000/01 the profit
before and after tax was £1.2m (£0.1m in 1999/00).
The company was sold in April 2002 and the City Council’s share of the net sale proceeds amounted to £0.54m.
Salford University Business Enterprises Ltd.
The principal activity of the company is investing in and managing businesses and property.
The City Council owns 23,500 £1 ordinary shares and 311,500 £1 non-voting preference shares, equivalent to 37%
of ordinary share capital.
At the year ended 31 July 2001, the company had net liabilities of £26,069 (31.7.00 £61,671). In 2000/01 the profit
before and after tax was £35,602 (2000/01 profit before tax was £8,956 and after tax £27,154).
The directors have decided to realise the company’s assets and to distribute the proceeds to shareholders. It is
anticipated that the realisation of assets will be sufficient to discharge the company’s liabilities.
Chapel Wharf Ltd.
65
cashflow
The principal activity of the company is investing and participating in the development of the area known as Chapel
Wharf.
The City Council owns 14,746 £1 ordinary shares, equivalent to 15% of share capital.
At the year ended 31 March 2002, the company had net assets of £5.4m (31.3.01 £6.0m). In 2001/02 the loss before
tax was £76,461 and after tax was £86,461 (2000/01 loss before tax was £38,155 and after tax £35,185).
During the year the City Council made two loans to the company amounting to £219,000 at interest rates of 2.5%
above bank base rate. The loans are due to be repaid during 2002/03.
Others
Modesole Ltd. - Shareholding 941 £1 shares, equivalent to 9.4% of issued share capital.
Salford Hundred Venture Ltd. - Shareholding 2 £1 shares, equivalent to 22% of issued share capital.
Companies limited by guarantee with the City Council's liability limited to £10 in each case:Salford Information Technology Centre Ltd.
The Salford/Trafford Groundwork Trust Ltd.
The Salford Phoenix Initiative Ltd.
Salford Foundation Ltd. (liability limited to £1)
Requests for further details on any of the above companies should be made to the Accountancy Section, Corporate
Services Directorate, Civic Centre, Chorley Road, Swinton M27 5AW (telephone 0161 793 3245).
20.
Reserves held by Schools
Under the terms of the Education Act 1996, local authorities are required to delegate management responsibilities to
the governing bodies of schools. All primary, secondary and special schools are formula funded and are included in
the scheme of full delegation. Nursery schools are excluded from the scheme.
In accordance with the City Council's approved scheme for delegating budgets to schools, the amount of any budget
not spent in the year is available for future use by the schools. The balances are not available to the City Council for
general use.
The balances held at 31st March are:-
Schools managed locally
- underspendings carried forward
- overspendings carried forward
Net underspendings carried forward
2002
£000s
2001
£000s
3,875
(1,177)
3,262
(1,383)
2,698
1,879
21.Economic and Monetary Union (EMU)
On the 1st January 1999 eleven countries of the European Union formed an Economic and Monetary Union (EMU)
and introduced a single currency - the euro. The Government decided not to join the single currency on the 1st
January 1999 but it is making the necessary preparations so that it has the option of joining during the current
parliament.
In the longer term the introduction of the euro could have an impact on the City Council in respect of matters such as
the provision of economic development advice to businesses and in the procurement of goods and services. There
has been no direct impact on the City Council to date. (There were no committed costs as at 31st March 2002).
28. Disclosure of net pensions asset / liability - FRS17 – transitional disclosure
66
cashflow
The implementation of FRS 17 ‘Retirement Benefits’ is being phased in over a three year period. For 2001/02 the
requirement is to provide balance sheet disclosure information in respect of the net asset or liability for retirement
benefits. This note therefore provides memorandum information to the balance sheet only. It only applies to the
Local Government Pension Scheme for officers and other non-teaching staff. The teachers pension scheme
administered by the Teachers Pensions Agency on behalf of the Department for Education and Skills, is a national
unfunded scheme which does not allow the identification of individual local education authority liabilities. The
teachers’ scheme is therefore treated as a defined contribution scheme accounted for by charging the contributions to
the revenue account as they become payable. No further recognition of future obligations is required in the
Statement of Accounts.
As part of the terms and conditions of employment for its employees, the City Council offers retirement benefits.
Although these will not actually be payable until employees retire, the City Council has a commitment to make the
payments that need to be disclosed at the time that the employees earn their future entitlement.
The City Council participates in the Local Government Pension Scheme for civilian employees, administered by
Tameside MBC as the Greater Manchester Pension Fund. This is a funded scheme, meaning that both employers and
employees pay contributions into the fund, calculated at a level which is estimated to balance the pensions liabilities
with investment assets.
In 2001/02, pension costs have been charged to the consolidated revenue account on the basis of contributions
payable for the year to the pension fund and pensions payable in the year for which the City Council is responsible.
The most recent actuarial valuation of the fund was the 31st March 2001, with the next formal valuation scheduled
for 31st March 2004. The actuarial value as at the 31st March 2001 has been rolled forward to the 31 st March 2002 by
the fund’s actuary using the following :



the membership data submitted for the formal valuation as at the 31 st March 2001
pension fund accounts, estimated by Tameside MBC where necessary, for 2001/02 to estimate contribution
income
other relevant information provided by Tameside MBC in 2001/02, estimated where necessary
the projected unit method of valuation.
The liabilities have been assessed by Hymans Robertson, actuaries to the pension fund. The main assumptions used
in the calculations are:
Assumptions as
at 31st March 2002
% per annum
Rate of inflation
2.8
Rate of increase in salaries
4.3
Rate of increase in pensions
Rate of discounting scheme liabilities
2.8
6.4
Assets in the Greater Manchester Pension Fund are valued at fair value, principally market value for investments and
consist of equities, bonds, properties and cash. The table below sets out the proportion of assets held and the
expected rate return per annum:
Assets(Whole Fund)
Fund value as
at 31st March
2002
Asset
Proportion
Equities
Bonds
Property
Cash
£m
3,794
1,555
500
495
%
60
24
8
8
Total
6,344
100
Long term return
per annum
Expected return per
annum
%
7.5
5.5
6.0
4.0
£m
284
86
30
20
420
67
cashflow
As at the 31st March 2002, the City Council had the following overall assets and liabilities for pensions that have not
been included in the balance sheet.
Estimated employers assets
Present value of scheme liabilities
Net Pension Asset
31st March 2002
£m
456
424
32
29. Post Balance Sheet Events
Ringway Developments Limited
On the 11th April 2002 the City Council sold its shareholding in Ringway Developments Limited, shown in the
balance sheet as a long term investment (note 4). The proceeds will be treated as a capital receipt and part of the
consideration was received on the 11th April 2002 with the balance due on the 31st March 2003.
Lowry Centre Development Company Limited
As referred to in note 18 to the Consolidated Revenue Account (page 29) the debt owed to
the City Council of £9.05m was cleared in April 2002.
68
cashflow
STATEMENT OF TOTAL MOVEMENTS IN RESERVES
2001/02
£000s
Surplus / (deficit) for the year:
- General Fund
- Housing Revenue Account
add back Movements on specific revenue
reserves
2000/01
£000s
2,401
(1,762)
4,294
2,179
(1,438)
1,133
______
______
Total increase / (decrease) in revenue
resources
5,257
Increase / (decrease) in usable capital
receipts
Increase / (decrease) in unapplied capital
grants and contributions
1,550
4
(20)
-
______
_______
Total increase / (decrease) in realised
capital resources (note 1)
Gains/(losses) on revaluation of fixed assets
Impairment losses on fixed assets owing to
general changes in prices
4
(20)
7,404
-
_______
_______
Total increase / (decrease) in unrealised
value of fixed assets (note 2)
Value of assets sold, disposed of or
decommissioned (note 3)
7,404
(34,246)
(15,178)
Capital receipts set aside
25,503
Revenue resources set aside
(10,062)
Movements on Government Grants Deferred 7,076
_______
Total increase/ (decrease) in amounts
set aside to finance capital investment
(note 4)
Total recognised gains and losses
(43,797)
15,472
(14,980)
6,244
______
22,517
6,736
_______________________
936
(50,709)
_______________________
NOTES TO THE STATEMENT OF TOTAL MOVEMENTS IN RESERVES
Usable capital
receipts
£000s
_______________
1. Movements in realised capital resources
Amounts receivable in 2001/02
23,207
Amounts applied in 2001/02
23,203
69
cashflow
_______________
Total increase / (decrease) in
realised capital resources in 2001/02
Balance brought forward at 1st April 2001
Balance carried forward at 31st March 2002
4
13
________________
17
________________
Fixed asset
restatement
reserve
£000s
________________
2. Movements in unrealised value of
fixed assets
Gains/(losses) on revaluation of fixed assets in 2001/02
Impairment losses on fixed assets due to general
changes in prices in 2001/02
7,404
________________
Total increase / (decrease) in unrealised
capital resources in 2001/02
7,404
3. Value of assets sold, disposed of
or decommissioned
Amounts written off fixed asset balances for
disposals in 2001/02
(34,246)
_________________
Total movement on reserve in 2001/02
(26,842)
Balance brought forward at 1st April 2001
271,903
________________
245,061
________________
Balance carried forward at 31 March 2002
Capital financing
Government
grants deferred
reserv
£000s
£000s
______________________________
4. Movements in amounts set aside to finance capital investment
Capital receipts set aside in 2001/02:
-
reserved receipts
usable capital receipts
Total capital receipts set aside in 2001/02
Revenue resources set aside in 2001/02:
- capital expenditure financed from revenue
- reconciling amount for provisions for
loan repayment
Total revenue resources set aside in 2001/02
4,092
21,411
______________________________
25,503
-
20,769
(30,831)
______________________________
(10,062)
70
cashflow
Grants received in the year
Grant applied to capital investment in 2001/02
Amounts credited to the asset management revenue
account in 2001/02
15,929
(7,164)
-
(1,689)
______________________________
______________________________
Total increase / (decrease) in amounts set
aside to finance capital investment
Total movement on reserve in 2001/02
15,441
7,076
Balance brought forward at 1st April 2001
106,449
22,696
______________________________
Balance carried forward at 31st March 2002
121,890
29,772
______________________________
Note i)
Usable Capital Receipts Reserve
These are the unused proportion of capital receipts, i.e. usable receipts which have not yet been used to finance
capital expenditure.
General
Fund
£000s
Receipts in hand 1.4.01
Receipts in year
Less:
Amounts Set Aside
Receipts applied in year
Receipts in hand 31.3.02
HRA
Total
£000s
£000s
9
4
13
22,419
3,088
25,507
22,428
3,092
25,520
(22,419)
(2,300)
(784)
(2,300)
(23,203)
9
8
17
The receipts in hand brought forward have been amended to show the amount of HRA receipts previously shown in
General Fund.
Note ii & iii)
Fixed Asset Restatement Reserve
The account reflects in the main the surpluses or deficits arising from the periodic revaluations of fixed assets. The
net book value of assets disposed of is charged to the reserve.
Details of the reserve are as follows:-
71
cashflow
Balance brought forward
Gain / (Loss) on revaluation of assets
Disposal of fixed assets
Note iv)
General
Fund
£000s
49,209
(15,302)
(23,390)
HRA
Total
£000s
222,694
22,706
(10,856)
£000s
271,903
7,404
(34,246)
10,517
234,544
245,061
Capital Financing Reserve
The account represents principally the amounts required to be set aside from revenue resources and capital receipts
for the repayment of debt. In addition it includes amounts which have been used from revenue, capital grants and
capital receipts to finance the capital programme. The account, the balance of which is not available to support any
of the City Council's expenditure, is detailed overleaf.
General
Fund
£000s
(9,376)
HRA
Total
£000s
115,825
£000s
106,449
1,792
2,300
4,092
20,627
1,221
(30,219)
784
19,548
5,450
21,411
20,769
(24,769)
291
-
291
Grants released to match depreciation
1,690
-
1,690
Government grants on non depreciating assets
1,517
-
1,517
(9,676)
-
(9,676)
72
-
72
-
44
44
(22,061)
143,951
121,890
Transfers
in/(out) year
£000s
Balance brought forward
Amounts set aside - Capital Receipts
Amounts used to finance capital expenditure
Capital Receipts
Revenue
Provision for debt repayment
Additional debt repayment
Writedown of deferred charges
ERDF Grants
Other
Note v)
Earmarked Reserves and Balances
Balance
1/4/01
Receipts
in year
Payments in
year
£000s
£000s
£000s
72
Balance
31/3/02
£000s
cashflow
Manchester Airport Reserve
HRA Surplus Account
DSO Appropriation Account
LMS Schools & Colleges
Collection Fund
Invest to Save Fund
Barton Moss Trading
Major Repairs Reserve
HRA Repair Account Reserve
Risk Management Fund
General Contingency
Capital Reserve
General Fund Reserve A/c
5,702
5,290
474
1,879
(550)
299
337
2,095
58
500
500
2,294
536
819
550
8
315
16,786
100
-
18,878
19,114
(100)
(16,786)
(104)
(16,990)
4,294
(836)
(1,096)
(652)
(1,040)
562
(500)
2,401
5,702
9,584
174
2,698
(1,096)
207
1,055
54
1,062
4,695
3,133
24,135
The Manchester Airport Reserve was established in 1986/87 as a result of the dissolution of Greater Manchester
County Council and the distribution of its interest in Manchester Airport among the 10 Councils in Greater
Manchester. The proceeds have been reinvested in shares in Manchester Airport plc.
The HRA Surplus Account was established in 1989/90 to provide a working balance for the Housing Revenue
Account.
The DSO Appropriation Account was established in 1981/82 to receive and distribute profits and to cover any losses
made by the City Council's direct service organisations. Certain costs have been earmarked in the account leaving an
effective available balance of £76,000.
LMS Schools – the amount of any budget not spent in the year is available for future use by
the schools. The balances are not available to the City Council for general use.
The Collection Fund shows the transactions of the City Council, as the billing authority, in relation to non-domestic
rates, the council tax and residual community charges and it illustrates the way in which these have been distributed
to the preceptors and the General Fund.
The Invest to Save Fund was set up in 1997/98 to finance projects, primarily aimed at delivering longer term savings,
some of which could be recycled back into the fund to maintain an adequate level for investment in subsequent years.
Certain costs have been earmarked in the account leaving an effective available balance of £107,000.
The Barton Moss Reserve which was set up in 1996/97 to meet any deficits arising on the trading account and to
support specific items of expenditure was transferred to the General Fund Reserve during the year.
The Major Repairs Reserve was established during the year under the Accounts and Audit Regulations 1996. The
reserve can only be used for capital expenditure on HRA assets. Expenditure is charged directly to the reserve and
not the HRA.
The HRA Repair Account Reserve has been set up in the Housing Revenue Account to meet the repair, maintenance
and improvement programme expenditure.
The Risk Management Fund was set up in 1998/99 to meet the costs of identifying risks and carrying out measures to
reduce or eliminate risks to assets, employees and third parties. Certain costs have been earmarked in the account
leaving an effective available balance of £55,000.
The General Contingency Reserve has been established to cover unforeseen future
expenditure.
The Capital Reserve was used during the year to meet capital expenditure incurred.
The General Fund Reserve receives surpluses from and meets deficits on the General Fund Revenue Account.
Underspendings in expenditure in 2001/02, amounting in total to £0.6m have been earmarked against the reserve.
73
cashflow
THE CASH FLOW STATEMENT
FOR THE YEAR ENDED 31ST MARCH 2002
2000/01
2001/02
£000s
185,512
154,217
24,641
61,354
5,869
£000s
Revenue Activities
Cash Outflows
Cash paid to and on behalf of employees
Other operating cash payments
Housing Benefit paid out
National non-domestic rate payments to national pool
Precepts paid from Collection Fund
182,447
173,013
25,000
57,060
6,038
431,593
(31,312)
(47,400)
(62,888)
(55,081)
(111,657)
(85,096)
(27,418)
(41,799)
(14,132)
£000s
443,558
Cash Inflows
Rents (after rebates)
Council Tax Income
National non-domestic rate receipts from national pool
Non-domestic rate receipts
Revenue Support Grant
DWP Grants for rebates
Other Government grants
Cash received for goods and services
Other operating cash receipts
(29,193)
(50,405)
(61,111)
(64,317)
(117,610)
(79,838)
(55,036)
(44,646)
(15,675)
(476,783)
(517,831)
(45,190)
(74,273)
34,589
(1,996)
(38)
Returns on Investments and Servicing of Finance
Cash Outflows
Interest paid
Cash Inflows
Interest received
Dividend income
35,822
(1,107)
(362)
32,555
(12,635)
45,144
18,084
34,353
Net cash flow from revenue activities
(39,920)
Capital Activities
Cash Outflows
Purchase of fixed assets
Other capital cash payments
51,955
15,436
63,228
(15,226)
(19,002)
(226)
67,391
Cash Inflows
Sale of fixed assets
Capital grants received
Other capital cash receipts
(24,734)
(14,707)
(756)
(34,454)
16,139
(40,197)
Net cash (inflow) / outflow before financing
(12,726)
Management of Liquid Resources
3,861
Net reduction in short term deposits
11,337
74
cashflow
2000/01
2001/02
£000s
£000s
£000s
Financing
47,231
Cash Outflows
Repayments of amounts borrowed
47,136
(16,770)
Cash Inflows
New long term loans
(50,203)
(46,058)
New short term loans
-
(15,597)
4,403
(3,067)
Net (increase) / reduction in cash
(4,456)
75
cashflow
NOTES TO THE CASH FLOW STATEMENT
1.
General
This consolidated statement summarises the inflows and outflows of cash arising from
transactions with third parties for revenue and capital purposes.
2.
Revenue Activities
The net cash flow can be reconciled to the Consolidated Revenue Account as follows:2001/02
£000
Deficit/(Surplus) per Consolidated Revenue Account
2000/01
£000
(2,401)
£000
1,762
Non-cash transactions
-
(9,047)
(20,769)
(3,906)
5,578
minimum revenue provision
financing of capital expenditure (inc.MRA)
contribution to reserves
other non-cash movements
(8,824)
(2,061)
(4,693)
(3,882)
(28,144)
Items on an accruals basis
- increase/(reduction) in stock
- increase in revenue debtors
- (increase) in revenue creditors
83
374
(9,832)
Net cash flow from revenue activities
76
(19,460)
84
11,447
(6,468)
(9,375)
5,063
(39,920)
(12,635)
cashflow
The amount recorded for the financing of capital expenditure includes £2.8m in respect of the
Housing Revenue Account.
6.
Analysis of Net Debt
Long Term Debt
Deferred Liabilities
Short Term Debt
Short Term Investments
Cash Overdrawn
4.
As at
31.03.01
Receipts
Payments
£000
£000
£000
Reclassification of
Debt
£000
As at
31.03.02
£000
(400,582)
(14,781)
(47,128)
25,188
(437,303)
(3,992)
(50,200)
(3)
(1,121,000)
(1,171,203)
-
1
47,135
1,132,338
1,179,474
4,456
1,808
326
(2,134)
-
(448,974)
(14,457)
(2,127)
36,526
(429,032)
464
(441,295)
(1,171,203)
1,183,930
-
(428,568)
Reconciliation of Net Debt
2001/02
2000/01
£000
£000
Net Debt:As at 1st April
As at 31st March
Represented by:(Reduction)/increase in cash
Net (increase)/reduction in borrowing
Increase/(reduction) in investments
5.
(425,156)
(441,295)
12,727
(16,139)
4,456
(3,067)
11,338
(4,403)
(15,597)
3,861
(12,727)
(16,139)
Other Government Grants are analysed below:-
Education
Social Services
Neighbourhood Renewal Fund
Probation
Asylum Seekers
Mandatory Student Awards
Housing Revenue Account Subsidy (net of rebates element)
Benefits Administration Subsidy
Single Regeneration Budget
European Community Grants
Countryside Commission
New Deals for Communities
Crime Reduction Grant
Other
6.
(441,295)
(428,568)
2001/02
2000/01
£000
£000
19,122
5,804
2,550
2,029
921
17,031
993
3,687
668
227
538
1,042
424
14,875
3,728
2,075
1,525
1,485
1,424
948
425
324
186
151
62
210
55,036
27,418
Other operating receipts include agency receipts, services to other authorities, other grants and contributions.
77
cashflow
THE CASH FLOW STATEMENT
FOR THE YEAR ENDED 31ST MARCH 2002
2000/01
2001/02
£000s
185,512
154,217
24,641
61,354
5,869
£000s
Revenue Activities
Cash Outflows
Cash paid to and on behalf of employees
Other operating cash payments
Housing Benefit paid out
National non-domestic rate payments to national pool
Precepts paid from Collection Fund
56
£000s
182,447
173,013
25,000
57,060
6,038
cashflow
2000/01
2001/02
£000s
£000s
£000s
431,593
(31,312)
(47,400)
(62,888)
(55,081)
(111,657)
(85,096)
(27,418)
(41,799)
(14,132)
443,558
Cash Inflows
Rents (after rebates)
Council Tax Income
National non-domestic rate receipts from national pool
Non-domestic rate receipts
Revenue Support Grant
DWP Grants for rebates
Other Government grants
Cash received for goods and services
Other operating cash receipts
(29,193)
(50,405)
(61,111)
(64,317)
(117,610)
(79,838)
(55,036)
(44,646)
(15,675)
(476,783)
(517,831)
(45,190)
(74,273)
34,589
(1,996)
(38)
Returns on Investments and Servicing of Finance
Cash Outflows
Interest paid
Cash Inflows
Interest received
Dividend income
35,822
(1,107)
(362)
32,555
(12,635)
45,144
18,084
34,353
Net cash flow from revenue activities
(39,920)
Capital Activities
Cash Outflows
Purchase of fixed assets
Other capital cash payments
51,955
15,436
63,228
(15,226)
(19,002)
(226)
67,391
Cash Inflows
Sale of fixed assets
Capital grants received
Other capital cash receipts
(24,734)
(14,707)
(756)
(34,454)
16,139
(40,197)
Net cash (inflow) / outflow before financing
(12,726)
Management of Liquid Resources
3,861
Net reduction in short term deposits
11,337
Financing
47,231
Cash Outflows
Repayments of amounts borrowed
47,136
(16,770)
Cash Inflows
New long term loans
(50,203)
(46,058)
New short term loans
-
(15,597)
4,403
(3,067)
Net (increase) / reduction in cash
(4,456)
57
cashflow
58
cashflow
NOTES TO THE CASH FLOW STATEMENT
1.
General
This consolidated statement summarises the inflows and outflows of cash arising from
transactions with third parties for revenue and capital purposes.
2.
Revenue Activities
The net cash flow can be reconciled to the Consolidated Revenue Account as follows:2001/02
£000
Deficit/(Surplus) per Consolidated Revenue Account
2000/01
£000
(2,401)
£000
1,762
Non-cash transactions
-
(9,047)
(20,769)
(3,906)
5,578
minimum revenue provision
financing of capital expenditure (inc.MRA)
contribution to reserves
other non-cash movements
(8,824)
(2,061)
(4,693)
(3,882)
(28,144)
Items on an accruals basis
- increase/(reduction) in stock
- increase in revenue debtors
- (increase) in revenue creditors
83
374
(9,832)
Net cash flow from revenue activities
59
(19,460)
84
11,447
(6,468)
(9,375)
5,063
(39,920)
(12,635)
cashflow
The amount recorded for the financing of capital expenditure includes £2.8m in respect of the
Housing Revenue Account.
60
cashflow
7.
Analysis of Net Debt
Long Term Debt
Deferred Liabilities
Short Term Debt
Short Term Investments
Cash Overdrawn
4.
As at
31.03.01
Receipts
Payments
£000
£000
£000
Reclassification of
Debt
£000
As at
31.03.02
£000
(400,582)
(14,781)
(47,128)
25,188
(437,303)
(3,992)
(50,200)
(3)
(1,121,000)
(1,171,203)
-
1
47,135
1,132,338
1,179,474
4,456
1,808
326
(2,134)
-
(448,974)
(14,457)
(2,127)
36,526
(429,032)
464
(441,295)
(1,171,203)
1,183,930
-
(428,568)
Reconciliation of Net Debt
2001/02
2000/01
£000
£000
Net Debt:As at 1st April
As at 31st March
Represented by:(Reduction)/increase in cash
Net (increase)/reduction in borrowing
Increase/(reduction) in investments
5.
(441,295)
(428,568)
(425,156)
(441,295)
12,727
(16,139)
4,456
(3,067)
11,338
(4,403)
(15,597)
3,861
(12,727)
(16,139)
Other Government Grants are analysed below:-
Education
Social Services
Neighbourhood Renewal Fund
Probation
Asylum Seekers
Mandatory Student Awards
Housing Revenue Account Subsidy (net of rebates element)
Benefits Administration Subsidy
Single Regeneration Budget
European Community Grants
Countryside Commission
New Deals for Communities
Crime Reduction Grant
Other
61
2001/02
2000/01
£000
£000
19,122
5,804
2,550
2,029
921
17,031
993
3,687
668
227
538
1,042
424
14,875
3,728
2,075
1,525
1,485
1,424
948
425
324
186
151
62
210
55,036
27,418
cashflow
6.
Other operating receipts include agency receipts, services to other authorities, other grants and
contributions.
COLLECTION FUND
INCOME AND EXPENDITURE ACCOUNT
FOR THE YEAR ENDED 31ST MARCH 2002
2000/01
2001/02
Notes
£000s
£000s
£000s
Income
(49,867)
(16,413)
(8)
(215)
(2)
Council Tax Payers
Transfers from General Fund
Council Tax Benefit
(52,827)
(16,458)
Compensation for Council Tax Benefit Subsidy
Limitation
GM Police
GM Fire and Civil Defence
City of Salford
(3)
(363)
(363)
(34)
(16)
(500)
Contribution towards previous years
Collection Fund Deficit
GM Police
GM Fire and Civil Defence
City of Salford
(5)
(34)
(16)
(500)
(550)
(55,073)
Non-Domestic Rate Payers
(4)
(64,530)
(122,126)
4,018
1,908
60,269
(134,728)
Expenditure
Precepts and Demands
GM Police
GM Fire and Civil Defence
City of Salford
(2)
4,083
1,955
62,473
66,195
54,607
466
68,511
Non-Domestic Rates
Payment to National Pool
Costs of Collection
(4)
64,077
453
62
cashflow
55,073
858
64,530
Adjustment to the Provision for Uncollectable
Amounts
Council Tax
(2)
2,233
Deficit / (Surplus) for the Year
(5)
546
858
0
550
Deficit as at 1st April
550
Deficit as at 31st March
550
(5)
1,096
COLLECTION FUND
INCOME AND EXPENDITURE ACCOUNT
FOR THE YEAR ENDED 31ST MARCH 2002
2000/01
2001/02
Notes
£000s
£000s
£000s
Income
(49,867)
(16,413)
(8)
(215)
(2)
Council Tax Payers
Transfers from General Fund
Council Tax Benefit
(52,827)
(16,458)
Compensation for Council Tax Benefit Subsidy
Limitation
GM Police
GM Fire and Civil Defence
City of Salford
(3)
(363)
(363)
(34)
(16)
(500)
Contribution towards previous years
Collection Fund Deficit
GM Police
GM Fire and Civil Defence
City of Salford
(5)
(34)
(16)
(500)
(550)
(55,073)
Non-Domestic Rate Payers
(4)
(64,530)
(122,126)
4,018
1,908
60,269
(134,728)
Expenditure
Precepts and Demands
GM Police
GM Fire and Civil Defence
City of Salford
(2)
4,083
1,955
62,473
66,195
54,607
466
68,511
Non-Domestic Rates
Payment to National Pool
Costs of Collection
(4)
64,077
453
63
cashflow
55,073
858
64,530
Adjustment to the Provision for Uncollectable
Amounts
Council Tax
(2)
2,233
Deficit / (Surplus) for the Year
(5)
546
858
0
550
Deficit as at 1st April
550
Deficit as at 31st March
550
(5)
64
1,096
cashflow
65
cashflow