CLACKMANNANSHIRE COUNCIL
Scrutiny Committee of 21st June, 2007.
Subject: 2006/2007 TRADING OPERATIONS ACTUALS
Prepared by: LIZ SHAW, PRINCIPAL ACCOUNTANT and JEANETTE PEARCY, FINANCE AND SUPPORT MANAGER.
1.0 SUMMARY
1.1. This report covers the performance of the Trading Operations determined by the Council in accordance with the Local Government in Scotland Act 2003 which was approved by the Council in September 2005.
1.2. The figures show the Annual Budget and Actual Spend for the year to the 31st March, 2007.
1.3. The adoption of the accounting standard FRS17, Retirement Benefits in 2003/04 introduced the principle that an organisation should account for retirement benefits when it is committed to give them, even if that might be many years into the future. This is in contrast to the previous practice of accounting based on employers contributions payable and payments to pensioners in the year. Accordingly, the Councils net pension liability is more transparent, although the overall impact on the Council is neutralised to ensure there is no direct impact on the council tax payer. That being said, it is a requirement that Significant Trading Operations demonstrate the full impact of the FRS17 standard.
1.4. Prior to any FRS 17 calculation or SIMCO allocation the trading operations achieved a combined surplus of £463K for the year. The total FRS17 STO charge is calculated at £269K. This therefore results in a net surplus of £194K being reported. £33K of this is set-aside as part of the SIMCO agreement, £33K is attributable to the Housing Revenue Account and the remaining balance of £128K is attributable to the General Fund.
1.5. Both STO’s have also achieved their statutory target of breaking even over the last three years.
1.6. Reasons for any material changes from budget have been given on the appropriate detailed page.
2.0 CONCLUSIONS
2.1. The summary paper shows that at the year end both STO’s achieved a surplus.
2.2. In total, the summary shows a gross surplus on trading activities of £463K with a net surplus of £269K being achieved after the FRS17 charge.
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Head of Finance
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Director of Corporate Development
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