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 :-

2001/022000/01

£000s £000s

Highways, Roads and Transport Services

Greater Manchester Passenger Transport Authority8,9158,721

Environmental Services

Greater Manchester Waste Disposal Authority6,2015,778

In addition the following are included within the heading Precepts and Levies within operating expenditure :-

2001/02 2000/01

£000s £000s

Environment Agency - Flood Defence (Land Drainage)774747

Association of Greater Manchester Authorities (AGMA)3232

Secretariat

AGMA – North West Regional Chamber3935

6.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.

1

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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.

1

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8.Asset Management Revenue Account

This account comprises the following:-

£000s £000s

Income:

Capital Charges- General Fund/DSOs(32,032)

- Housing Revenue Account(26,864)

------(58,896)

Capital grants released from the government

grants deferred account(1,689)

------

(60,585)

Expenditure:

External Interest Payable

- General Fund/DLO/DSOs13,645

- Housing Revenue Account21,379

------

35,024

Depreciation33,820 ------68,844

------

Balance to the consolidated revenue account 8,259

=====

9.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 £000s

Minimum Revenue Provision11,978

Less: Commutation (2,931)

------9,047 Less: Depreciation (33,820)

------

(24,773)

=====

10.Trading Undertakings

(i) Direct Service Organisations (DSOs)

Details of the trading performance in respect of DSOs are shown on page 69.

(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
£000s / 2000/01
£000s
Expenditure
Income / 473
(293) / 1,109
(780)
Deficit / 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.

2001/02 / 2000/01
Chargeable / Non Chargeable / Total Building Control / Chargeable / Non Chargeable / Total
Building
Control
£000 / £000 / £000 / £000 / £000 / £000
Expenditure
Employees / 219 / 228 / 447 / 251 / 217 / 468
Premises / - / 1 / 1 / 1 / - / 1
Transport / 12 / 12 / 24 / 13 / 14 / 27
Supplies& Services / 76 / 3 / 79 / 78 / 16 / 94
Central& Support Servs / 114 / 119 / 233 / 103 / 108 / 211
Total / 421 / 363 / 784 / 446 / 355 / 801
Income
Building Regs Charges / (483) / - / (483) / (472) / - / (472)
Misc. Income / - / (46) / (46) / - / (36) / (36)
Total Income
/ (483) / (46) / (529) / (472) / (36) / (508)
(Surplus)/ Deficit for the year / (62) / 317 / 255 / (26) / 319 / 293

11.Publicity

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.

2001/02
£000s / 2000/01
£000s
Recruitment advertising
Other advertising
Promotions

Other publicity

/ 737
(54)
599
228 / 520
85
643
1
Total / 1,510 / 1,249

12. 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 :-

  1. reflect at fair value the assets and liabilities relating to retirement benefit obligations and funding
  2. 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 2,089

2003/20041,416

2004/2005 to 2010/20111,232total 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).

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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 / Left During Year / Total / Left During Year
£40,000 - £49,999
£50,000 - £59,999
£60,000 - £69,999
£70,000 - £79,999
£80,000 - £89,999
£90,000 - £99,999 / 51
10
7
-
-
1 / 2
-
1
-
-
- / 30
7
6
-
1
- / 5
1
-
1
-
-

Total

/ 69 / 3 / 44 / 7

17.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.

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 / 2002
£000s / 2002
£000s
533,218
198,488
587
52,512
820
60,892 / fixed assets
Operational Assets
Council dwellings
Other land and buildings
Vehicles, plant and equipment

Infrastructure assets

Community assets
Non Operational Assets
Non-operational land and property / (1) / 546,992
191,920
389
56,303
799
41,719
846,517 / 838,122
2,205 / Deferred Charges
Stock Discount / (2) / 2,088
2,205 / 2,088
10,959 / long term investments / (4) / 10,959
1,306
3,386
1,454
146 / long term debtors
Mortgages
Ex-Manchester Airport
Car Loans
Other / (5) / 553
9,426
1,307
375
6,292 / 11,661
865,973 / total long term assets / 862,830
1,193
62,838
25,188
5,812 / current assets
Stocks, WIP and stores
Debtors (net of bad debts provision) and prepayments
Short term investments
Cash / (6)
(7)
(4) / 1,276
63,229
36,526
8,127
95,031 / 109,158
961,004 / total assets / 971,988
2001
£000s / As at 31st March / Notes / 2002
£000s / 2002
£000s
(47,128)
(52,957)
(9,804) / current liabilities
Borrowing - amounts falling due within one year
Creditors
Cash overdrawn / (8) / (2,127)
(63,208)
(7,663)
(109,889) / (72,998)
851,115 / total assets less current liabilities / 898,990
(400,582)
(14,781)
(4,488)
(920)
(44)
(10,361) / 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) / (478,115)
419,939 / total assets less liabilities / 420,875
271,903
106,449
22,696
13
5,290
(550)
2,095
1,879
7,870
2,294 / reserves and balances
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
419,939 / total equity / 420,875

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
£000s / Other Land & Buildings
£000s / Vehicles, Plant & Equipment
£000s / Infrastructure
£000s / Community Assets
£000s / Non-operational
Land and property
£000s / Total
£000s
GROSS BOOK VALUE AS AT 31ST MARCH 2001 / 533,218 / 207,915 / 1,831 / 108,247 / 839 / 60,935 / 912,985
Capital expenditure during year / 18,593 / 11,099 / 9 / 15,403 / 744 / 6,418 / 52,266
Reclassification of Assets / 0 / (2,966) / 0 / 0 / (23) / 2,989 / 0
Disposals / (10,856) / (3,515) / (16) / 0 / 0 / (20,140) / (34,527)
Revaluations during year / 6,037 / (6,828) / 0 / (20) / (721) / (8,373) / (9,905)
gross book value as at 31st march 2002 / 546,992 / 205,705 / 1,824 / 123,630 / 839 / 41,829 / 920,819
Depreciation at 31st March 2001 / 0 / (9,427) / (1,244) / (55,735) / (19) / (43) / (66,468)
Depreciation for year / (16,786) / (5,126) / (195) / (11,592) / (21) / (99) / (33,819)
Depreciation on revalued/assets sold / 16,786 / 768 / 4 / 0 / 0 / 32 / 17,590
net book value as at 31st march 2002 / 546,992 / 191,920 / 389 / 56,303 / 799 / 41,719 / 838,122

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 / 2000/01
£000s / 2001/02
£000s / 2000/01
£000s

Fixed assets

Deferred charges
Long Term Debtors / 51,849
15,323
219 / 45,144
18,084
- / Loans
Capital Receipts
Capital Grants
MRA
Revenue
Other
Unfunded / 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 / 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 & LeisureCommunity and Social Services

16 Libraries11Children’s Homes

3Art Galleries & Museums5Day Nurseries & Family

Centres

3 Leisure Centres with Pools7Elderly Persons’ Homes

5Leisure Centres without Pools4Adult Training Centres

3 Pools4Handicapped Persons’ Homes

4Nursery Schools8Day Centres

84Primary Schools9Community Centres

14Secondary Schools

5Special SchoolsTrading Services

11Youth Centres2Halls

21Caretakers' Houses2Markets

Environmental ServicesOther Buildings

4Cemeteries27Civic Offices

2Crematoria3Depots

7Other Buildings

Planning

149Industrial UnitsVehicles

64Refuse/Street Cleansing vehicles

Council Dwellings3Mobile Libraries

16,094Houses1Limousines

1,384Bungalows209Vans

3,859Flats - High-rise78Trucks

8,064 - Low-rise50Mini Buses and Coaches

34Other

*Majority of vehicles are leased

InfrastructureLand

83kmPrincipal Roads 1,543Hectares

62kmOther Classified Roads

580kmUnclassified 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

/ Other Land &
Buildings / Non-operational
Assets / Total
£000 / £000 / £000 / £000
Valued at Current Value in :
- Current year / 546,992 / 12,725 / 7,934 / 567,651
- 2000/01 / 18,337 / 4,603 / 22,940
- 1999/00 / 174,643 / 29,292 / 203,935
546,992 / 205,705 / 41,829 / 794,526

2.Deferred Charges

Movements in deferred charges during the year were as follows:-

Balance
1/4/01
£000s / Expenditure
2001/02
£000s / Written
Down
£000s / Balance
31/3/02
£000s
Church Aided Schools
Assistance to Industry
Private Sector Housing
Lowry Centre ERDF Grant
Single Status
Stock Discount
Software Development
VER Scheme / -
-
-
-
-
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

31st March 2002
£000s / 31st March 2001
£000s
General Fund
Housing Revenue Account
Collection Fund / 32,829
389,142
(1,096) / 51,889
345,904
(550)
420,875 / 397,243

4.Investments

Long term investments consist of:-

31st March 2002
£000s / 31st March 2001
£000s
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 / 31st March 2001
£000s
Mortgagors
Manchester Airport plc
Car Loans
Other / 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 / 31st March 2001
£000s
Stocks and stores
Provisions
Work in progress / 1,015
226
116 / 1,148
130
-
1,357 / 1,278
Less: Provision for future losses / (81) / (85)
1,276 / 1,193

7.Debtors and Prepayments

An analysis of debtors and prepayments is shown below:-