Sheffield City Council Usable Reserves 2008/09 to 2011/12
General Fund Balance
The General Fund is the statutory fund into which all the receipts of a Council are required to be paid and out of which all liabilities of the Council are to be met, except to the extent that statutory rules might provide otherwise. These rules can also specify the financial year in which liabilities and payments should impact on the General Fund Balance, which is not necessarily in accordance with proper accounting practice. The General Fund Balance therefore summarises the resources that the Council is statutorily empowered to spend on its services or on capital investment (or the deficit of resources that the Council is required to recover) at the end of the financial year. The balance is not available to be applied to fund HRA services.
The Major Sporting Facilities (MSF) and PFI reserves exist because of the need to smooth the significant payments made on the MSF and PFI schemes over the 20 year plus terms of the underlying agreements. In both cases the costs being incurred at the moment are lower than the resources available, creating a temporary surplus. However, over time this position changes and future payments become higher than our resources. The reserves will then be needed to support their primary purpose (around 2014 to 2015).
The Invest to Save reserve (I2S) allows for investment in key projects to deliver savings that support the budget.
Earmarked General Fund Reserves
Specific reserves are available to fund capital or revenue expenditure following approval by Cabinet. Expenditure is charged to the revenue or capital account when it is incurred and is financed by an appropriation from the reserve through the Movement in Reserves Statement. The service area reserve includes amounts which are earmarked for particular services.
Where a revenue grant or contribution (or part thereof) has been recognised as income in the Comprehensive Income and Expenditure Statement, but the expenditure to be financed from that grant or contribution has not been incurred at the Balance Sheet date, the grant or contribution has been transferred to the Revenue Grants and Contributions reserve to support future spend.
Other earmarked reserves are set aside to meet not only known or predicted liabilities, such as equal pay liabilities, but ones that are not certain enough to create an exact provision in the accounts. The liabilities are, however, likely enough to say that the earmarked reserves are not normally available to fund the budget or other measures.
The Schools’ Earmarked Reserveconsists of money, that has been allocated under Local Management of Schools legislation, and which remains unspent at the year end.
The Local Authority Business Growth Initiative reserve is earmarked for spend on economic development activity in the city.
Housing Revenue Account
The Housing Revenue Account Balance reflects the statutory obligation to maintain a revenue account for local authority council housing provision in accordance with Part VI of the Local Government and Housing Act 1989. It contains the balance of income and expenditure as defined by the 1989 Act that is available to fund future expenditure in connection with the Council’s landlord function or (where in deficit) that is required to be recovered from tenants in future years.
Capital Receipts Reserve
The Capital Receipts Reserve holds the proceeds from the disposal of land or other assets, which are restricted by statute from being used other than to fund new capital expenditure or to be set aside to finance historical capital expenditure. The balance on the reserve shows the resources that have yet to be applied for these purposes at the year end.
Major Repairs Reserve
The Council is required to maintain the Major Repairs Reserve, which controls the application of the Major Repairs Allowance (MRA). The MRA is restricted to being applied to new capital investment in HRA assets or the financing of historical capital expenditure by the HRA. The balance shows the MRA that has yet to be applied at the year end.
Capital Grants Unapplied Reserve
The Capital Grants Unapplied Reserve holds the grants and contributions received towards capital projects for which the Council has met the conditions that would otherwise require repayment of the monies but which have yet to be applied to meet expenditure. The balance is restricted by grant terms as to the capital expenditure against which it can be applied and / or the financial year in which this can take place.