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Back to part one of the statement of accounts - Police and Crime Commissioner for Hertfordshire - 2020-2021

Consolidated statement of accounts 2020/21

The Police and Crime Commissioner for Hertfordshire group

Note 9 - PCC expenditure and funding analysis

Note 9 - PCC expenditure and funding analysis

2019/20

 

2020/21

Net Expenditure in the CIES*

 

£’000

Adjustments between the Accounting and Funding basis

£’000

Net Expenditure Chargeable to the General Fund

 

£’000

 

Net Expenditure in the CIES*

 

£’000

Adjustments between the Accounting and Funding basis

£’000

Net Expenditure Chargeable to the General Fund

 

£’000

5,723

-5,723

0

Local Policing

4,213

-4,213

0

1,560

-1,560

0

Protective Services

1,089

-1,089

0

1,303

-1,303

0

Operational Support

1,332

-1,332

0

2,131

-2,131

0

Organisational Support

1,153

-1,153

0

1,843

-350

1,493

Office of the PCC

1,860

-217

1,643

800

220

1,020

PCC Commissioning

986

193

1,179

-

-

0

Past Service Pension Cost

-

-

0

13,360

-10,847

2,513

Cost of Services

10,633

-7,811

2,822

-1,886

2,650

764

Other Operating Expenditure

-4,639

206

-4,433

11,474

-8,197

3,276

(Surplus) or Deficit on

the Provision of Services

5,994

-7,605

-1,611

 

 

-24,790

Opening General Fund

 

 

-21,514

 

 

3,276

Less Surplus / Plus Deficit on the General Fund for the Year

 

 

-1,611

 

 

-21,514

Closing General Fund

 

 

-23,125

* Comprehensive income and expenditure statement

PCC Note to the expenditure and funding analysis - adjustment between accounting and funding basis

PCC Note to the expenditure and funding analysis - adjustment between accounting and funding basis

2019/20

 

2020/21

Adjustment for Capital Purposes

£’000

Net Change for The Pensions Adjustments

£’000

Other Differences

 

£’000

Total Adjustments

 

£’000

 

Adjustment for Capital Purposes

£’000

Net Change for The Pensions Adjustments

£’000

Other Differences

 

£’000

Total Adjustments

 

£’000

-5,723

-

-

-5,723

Local Policing

-4,213

-

-

-4,213

-1,560

-

-

-1,560

Protective Services

-1,089

-

-

-1,089

-1,303

-

-

-1,303

Operational Support

-1,332

-

-

-1,332

-2,131

-

-

-2,131

Organisational Support

-1,153

-

-

-1,153

-

-

-

0

Corporate Budgets

-

-

-

0

-

-307

-43

-350

Office of the PCC

-

-188

-29

-217

-

-

220

220

PCC Commissioning

-

-

193

193

-

-

-

0

Past Service Pension Cost

-

-

-

0

-10,717

-307

177

-10,847

Cost of Services

-7,787

-188

164

-7,811

148

-27

2,529

2,650

Other Operating Expenditure

-6,007

-35

6,248

206

-10,569

-334

2,706

-8,197

(Surplus) or Deficit on

the Provision of Services

-13,794

-223

6,412

-7,605

Note 10 - Adjustments between accounting basis and funding basis under regulations

This note details the adjustments that are made to the total comprehensive income and expenditure recognised by the PCC in the year in accordance with proper accounting practice to the resources that are specified by statutory provisions as being available to the PCC to meet future capital and revenue expenditure.

Adjustments between accounting basis and funding basis under regulations

2019/20

Police Fund Balance

 

£’000

Capital Receipts Reserve

£’000

Capital Grants Unapplied

£’000

Movement in Unusable Reserves

£’000

Adjustments primarily involving the Capital Adjustment Account:

Charges for depreciation and impairment of non-current assets not charged to the Revaluation Reserve

9,545

-

-

-9,545

Amortisation of intangible assets

1,173

-

-

-1,173

Amounts of non-current assets written off on disposal or sale as part of the gain / loss on disposal to the Comprehensive Income and Expenditure Statement

2,723

-

-

-2,723

Statutory provision for the repayment of debt – Minimum Revenue Provision

-904

-

-

904

Capital expenditure charged against the Police Fund

-134

-

-

134

Adjustments primarily involving the Capital Grants Unapplied Account:

Capital grants and contributions unapplied credited to the Comprehensive Income and Expenditure Statement

-1,833

-

1,833

-

Application of grants to capital financing transferred to the Capital Adjustment Account

-

-

-1,833

1,833

Adjustments primarily involving the Capital Receipts Reserve:

Transfer of cash sale proceeds credited as part of the gain / loss on disposal to the Comprehensive Income and Expenditure Statement

Costs of disposal of non-current assets funded from capital receipts

-7,200

7,200

 

-

Use of the Capital Receipts Reserve to finance new capital expenditure

 

-

-4,964

 

4,964

Adjustments between accounting basis and funding basis under regulations

2019/20 Continued

Police Fund Balance

£’000

Capital Receipts Reserve

£’000

Capital Grants Unapplied

£’000

Movement in Unusable Reserves

£’000

Adjustment primarily involving the Deferred Capital Receipts Reserve:

Transfer of deferred capital receipt proceeds credited as part of the gain / loss on disposal to the Comprehensive Income and Expenditure Statement

4,493

-

-

-4,493

Adjustments primarily involving the Collection Fund Adjustment Account:

Amount by which council tax income credited to the Comprehensive Income and Expenditure Statement is different from council tax income calculated for the year in accordance with statutory requirements

1

-

-

-1

Adjustments primarily involving the Pensions Reserve:

Reversal of items relating to retirement benefits debited or credited to the Comprehensive Income and Expenditure Statement (see note 38)

547

-

-

-547

Employer's pensions contributions and direct payments to pensioners payable in the year (see note 38)

-212

-

-

212

Total PCC Adjustment

8,199

2,236

0

-10,435

Adjustments primarily involving the Pensions Reserve (CC):

Reversal of items relating to retirement benefits debited or credited to the Comprehensive Income and Expenditure Statement (see note 38)

110,301

-

-

-110,301

Employer's pensions contributions and direct payments to pensioners payable in the year (see note 38)

-49,173

-

-

49,173

Adjustment primarily involving the Accumulated Absences Account:

Amount by which officer remuneration charged to the Comprehensive Income and Expenditure Statement on an accruals basis is different from remuneration chargeable in the year in accordance with statutory requirements

-33

-

-

33

Total Group Adjustments

69,294

2,236

0

-71,530

Adjustments between accounting basis and funding basis under regulations

2020/21

Police Fund Balance

 

£’000

Capital Receipts Reserve

£’000

Capital Grants Unapplied

£’000

Movement in Unusable Reserves

£’000

Adjustments primarily involving the Capital Adjustment Account:

Charges for depreciation and impairment of non-current assets not charged to the Revaluation Reserve

6,676

-

-

-6,676

Amortisation of intangible assets

1,110

-

-

-1,110

Amounts of non-current assets written off on disposal or sale as part of the gain / loss on disposal to the Comprehensive Income and Expenditure Statement

7,404

-

-

-7,404

Statutory provision for the repayment of debt – Minimum Revenue Provision

-931

-

-

931

Capital expenditure charged against the Police Fund

-267

-

-

267

Adjustments primarily involving the Capital Grants Unapplied Account:

Capital grants and contributions unapplied credited to the Comprehensive Income and Expenditure Statement

-199

-

199

-

Application of grants to capital financing transferred to the Capital Adjustment Account

-

-

-199

199

Adjustments primarily involving the Capital Receipts Reserve:

Transfer of cash sale proceeds credited as part of the gain / loss on disposal to the Comprehensive Income and Expenditure Statement

Costs of disposal of non-current assets funded from capital receipts

-7,454

7,454

-

-

Use of the Capital Receipts Reserve to finance new capital expenditure

 

-

-4,521

-

4,521

Adjustment primarily involving the Deferred Capital Receipts Reserve:

Transfer of deferred capital receipt proceeds credited as part of the gain / loss on disposal to the Comprehensive Income and Expenditure Statement

-8

-

-

8

Adjustments between accounting basis and funding basis under regulations

2020/21 Continued

Police Fund Balance

 

£’000

Capital Receipts Reserve

£’000

Capital Grants Unapplied

£’000

Movement in Unusable Reserves

£’000

Adjustments primarily involving the Collection Fund Adjustment Account:

Amount by which council tax income credited to the Comprehensive Income and Expenditure Statement is different from council tax income calculated for the year in accordance with statutory requirements

1,050

-

-

-1,050

Adjustments primarily involving the Pensions Reserve:

Reversal of items relating to retirement benefits debited or credited to the Comprehensive Income and Expenditure Statement (see note 38)

465

-

-

-465

Employer's pensions contributions and direct payments to pensioners payable in the year (see note 38)

-242

-

-

242

Total PCC Adjustment

7,604

2,933

0

-10,537

Adjustments primarily involving the Pensions Reserve (CC):

Reversal of items relating to retirement benefits debited or credited to the Comprehensive Income and Expenditure Statement (see note 38)

112,852

-

-

-112,852

Employer's pensions contributions and direct payments to pensioners payable in the year (see note 38)

-49,999

-

-

49,999

Adjustment primarily involving the Accumulated Absences Account:

Amount by which officer remuneration charged to the Comprehensive Income and Expenditure Statement on an accruals basis is different from remuneration chargeable in the year in accordance with statutory requirements

2,387

-

-

-2,387

Total Group Adjustments

72,844

2,933

0

-75,777

Note 11 - Transfers to/from earmarked reserves

The PCC holds all of the Group’s reserves.  This note sets out the amounts set aside from the Police Fund in earmarked reserves to provide financing for future expenditure plans and the amounts posted back from earmarked reserves to meet Police Fund expenditure in 2020/21.

Transfers to/from earmarked reserves

 

Balance

1 April 2019

2019/20

Transfers

Balance

31 March 2020

2020/21

Transfers

Balance

31 March 2021

 

Out

In

 

Out

In

 

 

£’000

£’000

£’000

£’000

£’000

£’000

£’000

Base Budget Support Reserve

10,945

-3,214

2,744

10,477

-

719

11,196

Change Management Reserve

3,213

-3,213

-

-

-

-

-

Operational Capability Reserve

400

-400

-

-

-

-

-

Road Safety Fund

1,860

-235

593

2,218

-369

333

2,182

Insurance Fund

100

-100

-

-

-

-

-

Property Act Fund

110

-147

37

-

-

-

-

Chief Constable’s Forfeiture Fund

118

-166

48

-

-

-

-

Reactive Maintenance Property Fund

428

-428

-

-

-

-

-

Consortium Reserves

85

-85

-

-

-

-

-

Unconditional Funding Reserve

216

-

165

381

-186

31

226

Police and Crime Commissioner

595

-331

-

264

-264

-

-

Local Partnership Reserve

164

-164

-

-

-

-

-

PCC Efficiency and Innovation Fund

256

-256

-

-

-

-

-

Headquarter Redevelopment

-

-

500

500

-500

-

-

Sexual Assault Referral

-

-

674

674

-

-

674

Covid Related Funding

-

-

-

-

-

1,132

1,132

Total Specific Reserves Group

18,490

-8,739

4,761

14,514

-1,319

2,215

15,410

Police Fund

6,300

-

700

7,000

-

715

7,715

Total Specific and General Reserves Group

24,790

-8,739

5,461

21,514

-1,319

2,930

23,125

Accounting policy

The PCC sets aside specific amounts as reserves for future policy purposes or to cover contingencies.  Reserves are created by ring-fencing amounts out of the Police Fund Balance in the Movement in Reserves Statement.  When expenditure to be financed from a reserve is incurred, it is charged to the service in that year to score against the Surplus or Deficit on the Provision of Services in the Comprehensive Income and Expenditure Statement.  The reserve is then appropriated back into the Police Fund Balance in the Movement in Reserves Statement so that there is no net charge against council tax for the expenditure. 

Certain reserves are kept to manage the accounting processes for non-current assets, financial instruments, retirement and employee benefits and do not represent usable resources for the PCC - these reserves are explained in the relevant policies. 

Following a review of reserves carried out by the PCC, the reserves above have been rationalised into 5 separate reserves alongside the General Revenue Reserve. The purpose of each reserve carried forward is laid out below; 

Base budget support reserve

The use of reserves to support the base budget is an important part of the Medium-Term Financial Plan.  In particular reserves provide the PCC with the flexibility to manage the bridging of the budget gap alongside the generation of savings, thereby offsetting the impact of higher standstill costs and significant reductions in grant funding.

Road safety fund

This fund holds the balance of income generated in excess of the running costs of the Camera Tickets and Collisions and reflects the ring-fencing of this income for re-investment in Road Safety related activity. In 2020/21, expenditure of £0.036m was funded from this Road Safety Fund. 

Unconditional funding reserve

This fund was created as a result of the introduction of International Financial Reporting Standards (IFRS). The standards require the recognition of unconditional grant income within the PCC’s Comprehensive Income and Expenditure Statement in the year of receipt. The reserve represents the level of unconditional grant received but not spent at year end and is ring fenced.

Sexual Assault Referral Centre (SARC)

This balance represents funding set aside by the PCC for the construction of a new SARC. 

COVID related fund

Following the outbreak of the Covid-19 pandemic in 2020, Central Government provided a number of grants and funding to support Police Forces as a result of increased demand on the force’s services and to reimburse lost income. The last tranche of 2020/21 funding was received in late March with the understanding that Police Forces could carry the balance into 2021/22 for use in the new Financial Year. 

All other reserves laid out above were reduced to nil during 2019/20 and 2020/21, and will not be required going forward. 

Note 12 - Other operating expenditure

Other operating expenditure

 

2019/20

£’000

2020/21

£’000

Gains / Loss on Disposal of Non-Current Assets

15

-57

Police Pensions Top-Up Grant

-15,972

-13,573

Total Group

-15,957

-13,630

Note 13 - Financing and investment income and expenditure

Financing and investment income and expenditure

 

 

 

2019/20

£’000

2020/21

£’000

Interest payable and similar charges

780

796

Interest receivable and similar income

-248

-118

Net interest on the net defined liability (PCC)

27

35

Total PCC

559

713

Net interest on the net defined liability (CC)

46,055

44,638

Total Group

46,614

45,351

Note 14 - Taxation and non-specific grant income

Taxation and non-specific grant income

 

2019/20

£’000

2020/21

£’000

Home Office Settlement Grant

-120,741

-128,860

Council Tax Income

-84,689

-90,853

Capital grants applied

-1,833

-199

Council Tax – Movement on Collection Fund Adjustment Account

1

1,049

Total Group

-207,262

-218,863

Note 15 - PCC funding for financial resources consumed 

The Comprehensive Income and Expenditure Statement summarises the resources that have been generated and consumed in providing policing and crime reduction services during the year.  It includes all day to day expenses and related income on an accruals basis, as well as transactions measuring the value of fixed assets actually consumed and the real projected value of retirement benefits earned by employees in the year. 

The PCC provided funding to the Chief Constable for financial resources consumed.  The funding provided covers the day to expenses on an accruals basis as well as charges for operational assets consumed in the year.  These transactions are reflected in the intra-group accounts of both entities.

The funding does not cover pension (IAS 19) charges and charges for compensated absences as these charges to the Comprehensive Income and Expenditure Statement are reversed in the Movement in Reserves Statement (MIRS) and charged to the Pensions Reserve and Accumulated Absences Account resulting.

PCC funding for financial resources consumed

 

2019/20

£’000

2020/21

£’000

Chief Constable’s Cost of Service

235,815

247,743

Pensions interest cost

46,055

44,638

Re-measurement of the net defined benefit liability

-220,300

179,522

CI&E Statement (Surplus) Deficit Pre-PCC Funding

61,570

471,903

 

 

 

Items Removed through MIRS

 

 

Pensions

 

 

            Opening Balance

2,133,167

1,973,996

            Less Closing Balance

-1,973,996

-2,216,370

 

159,171

-242,375

Accumulated Absences

 

 

            Opening Balance

2,424

2,391

            Less Closing Balance

-2,391

-4,778

 

33

-2,387

PCC Funding for Resources Consumed

220,774

227,141

Note 16 - Property, plant and equipment 

Accounting policy 

Assets that have physical substance and are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes and that are expected to be used during more than one financial year are classified as Property, Plant and Equipment.

a) Recognition 

All expenditure above £5,000 on the acquisition, creation or enhancement of Property, Plant and Equipment is capitalised on an accruals basis, provided that it is probable that the future economic benefits or service potential associated with the item will flow to the PCC and the cost of the item can be measured reliably. Expenditure below £5,000 on the acquisition of individual assets is treated as being de minimis and is charged directly against the relevant service account in revenue. Expenditure that maintains but does not add to an asset's potential to deliver future economic benefits or service potential (i.e. repairs and maintenance) is charged as an expense when it is incurred. 

b) Measurement 

Assets are initially measured at cost, comprising: 

  • the purchase price,
  • any costs attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management,
  • where appropriate, the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located.

The PCC does not capitalise borrowing costs incurred whilst assets are under construction. 

Assets are then carried in the Balance Sheet using the fair value measurement bases, determined as the amount that would be paid for the asset in its existing use (Existing Use Value - EUV). 

Where there is no market-based evidence of fair value because of the specialist nature of an asset, depreciated replacement cost (DRC) is used as an estimate of fair value. 

Where non-property assets that have short useful lives or low values (or both), depreciated historical cost basis is used as a proxy for fair value.

Assets included in the Balance Sheet at fair value are reviewed annually to ensure that their carrying amount is not materially different from their fair value at the year-end. Increases in valuations are matched by credits to the Revaluation Reserve to recognise unrealised gains.  The Group values its non-current assets carried at fair value on a five-year full valuation cycle, with intervening valuations undertaken when necessary to comply with the requirements of the Code. 

Where decreases in value are identified, they are accounted for as follows: 

  • where there is a balance of revaluation gains for the asset in the Revaluation Reserve, the carrying amount of the asset is written down against that balance (up to the amount of the accumulated gains)
  • where there is no balance in the Revaluation Reserve or an insufficient balance, the carrying amount of the asset is written down against the relevant service line(s) in the Comprehensive Income and Expenditure Statement.

The Revaluation Reserve contains revaluation gains recognised since 1 April 2007 only, the date of its formal implementation. Gains arising before that date have been consolidated into the Capital Adjustment Account. 

c) Impairment 

Assets are assessed at each year-end as to whether there is any indication that an asset may be impaired.  Where indications of impairment exist and any possible differences are estimated to be material, the recoverable amount of the asset is estimated and, where this is less than the carrying amount of the asset, an impairment loss is recognised for the shortfall. 

Where impairment losses are identified, they are accounted for as follows:

  • where there is a balance of revaluation gains for the asset in the Revaluation Reserve, the carrying amount of the asset is written down against that balance (up to the amount of the accumulated gains)
  • where there is no balance in the Revaluation Reserve or an insufficient balance, the carrying amount of the asset is written down against the Comprehensive Income and Expenditure Statement. 

Where an impairment loss is reversed subsequently, the reversal is credited to the Comprehensive Income and Expenditure Statement, up to the amount of the original loss, adjusted for depreciation that would have been charged if the loss had not been recognised. 

d) Component accounting 

Component parts of the PCC’s property assets are separately identified and accounted for in the capital accounts and the PCC’s asset register in accordance with the Code of Practice.  Recognition of components takes place at the time of the initial capital expenditure on the asset and thereafter at the times of the revaluations of the assets concerned.  This includes retrospective adjustments where necessary, however retrospective adjustments can only relate to the period from 1 April 2010.  No individual asset has more than three components these being Structure, Fit Out and Plant & Machinery. 

e) Charges to Revenue for Non-Current Assets 

The PCC’s Comprehensive Income and Expenditure Statement is debited with the following charges to record the cost of holding non-current assets during the year:

  • depreciation attributable to the assets used in providing a police service
  • revaluation and impairment losses on assets where there are no accumulated gains in the Revaluation Reserve against which the losses can be written off
  • amortisation of intangible fixed assets attributable to the service. 

The PCC is not required to raise council tax to fund depreciation, revaluation and impairment losses or amortisations.  However, the PCC is required to make an annual contribution known as the Minimum Revenue Provision (MRP), from revenue towards the reduction in its overall borrowing requirement equal to an amount calculated on a prudent basis determined by the PCC in accordance with statutory guidance.  Depreciation, revaluation and impairment losses and amortisations are therefore replaced by the MRP contribution in the Police Fund Balance, by way of an adjusting transaction with the Capital Adjustment Account in the Movement in Reserves Statement for the difference between the two. 

Property, plant and equipment

2019/20

Operational

Non-Operational

Total

Land and Buildings

£’000

Furniture & Equipment

£’000

Vehicles

 

£’000

Assets Under Construction

£’000

Surplus Assets

£’000

Property, Plant and Equipment

£’000

Cost or Valuation

 

 

 

 

 

 

At 1 April 2019

111,051

29,953

10,825

0

13,179

165,008

Additions

4,903

3,607

1,629

-

-

10,139

Revaluation increases/ (decreases) recognised in the Revaluation Reserve

6,519

-

-

-

-274

6,245

Revaluations recognised in the Surplus/Deficit on Provision of Services

-2,593

-

-

-

-954

-3,547

De-recognition

-

-5,638

-1,977

-

-2,500

-10,115

Re-classified

-6,111

-

-

-

6,111

0

Other movements in cost or valuation

-2,840

-

-

-

-

-2,840

At 31 March 2020

110,929

27,922

10,477

0

15,562

164,890

 

Depreciation and Impairments

 

 

 

 

 

 

As at 1 April 2019

0

24,730

7,079

0

0

31,809

Depreciation written out to the Surplus/Deficit on the Provision of Services

2,840

1,797

1,362

-

-

5,999

Other movements in depreciation and impairment

-2,840

-

-

-

-

-2,840

De-recognition

-

-5,638

-1,754

-

-

-7,392

At 31 March 2020

0

20,889

6,687

0

0

27,576

 

 

 

 

 

 

 

Net book value

 

 

 

 

 

 

At 1 April 2019

111,051

5,223

3,746

0

13,179

133,199

At 31 March 2020

110,929

7,033

3,790

0

15,562

137,314

Property, plant and equipment

2020/21

Operational

Non-Operational

Total

Land and Buildings

£’000

Furniture & Equipment

£’000

Vehicles

 

£’000

Assets Under Construction

£’000

Surplus Assets

£’000

Property, Plant and Equipment

£’000

Cost or Valuation

 

 

 

 

 

 

At 1 April 2020

110,929

27,922

10,477

0

15,562

164,890

Additions

1,694

2,777

1,682

-

-

6,153

Revaluation increases/(decreases) recognised in the Revaluation Reserve

-1,488

-

-

-

350

-1,138

Revaluations recognised in the Surplus/Deficit on Provision of Services

-352

-

-

-

-

-352

De-recognition

-818

-8,403

-1,191

-

-6,372

-16,784

Reclassified

340

-

-

-

-340

0

Other movements in cost or valuation

-2,901

-

-

-

-

-2,901

At 31 March 2021

107,404

22,296

10,968

0

9,200

149,868

Depreciation and Impairments

 

 

 

 

 

 

As at 1 April 2020

0

20,889

6,687

0

0

27,576

In Year Depreciation Charge

2,901

2,025

1,398

-

-

6,324

Depreciation written out to the Surplus/Deficit on the Provision of Services

-2,901

-

-

-

-

-2,901

De-recognition

-

-8,403

-976

-

-

-9,379

At 31 March 2021

0

14,511

7,109

0

0

21,620

 

 

 

 

 

 

 

Net book value

 

 

 

 

 

 

At 1 April 2020

110,929

7,033

3,790

0

15,562

137,314

At 31 March 2021

107,404

7,785

3,859

0

9,200

128,248

The additions shown in the above tables comprise of all capital expenditure on property plant and equipment in the financial year on an accruals basis.  Capital expenditure that is considered to not add to the value of fixed assets is written off to the Comprehensive Income and Expenditure Statement as an impairment or revaluation loss in the same year in which the expenditure was incurred and is reversed out to the Balance Sheet in the Movement in Reserves Statement.  Individual assets are also assessed in the year for any impairments or revaluation losses in line with the Code of Practice.

The Commissioner’s approach to the use or disposal of surplus assets is set out in the Estates Strategy 2017-2022.  This includes a commitment to explore options to generate long term income from estates assets which can be used to fund policing. The primary way this can be achieved is through a retained interest in the redevelopment of surplus sites, however, opportunities to lease operational space to our public sector partners will also be explored where there is an operational rationale and identifiable service benefits to the public. The options for each site will be evaluated on a case by case basis.

Fair value hierarchy 

Details of the PCC’s surplus assets and information about the fair value hierarchy as at 31 March 2020 and 2021 are as follows:

Fair value hierarchy

 

(Level 1)

Quoted prices in active markets for identical assets

£000s

(Level 2)

Other significant observable inputs

£000s

(Level 3)

Significant unobservable inputs

£000s

Total

Fair value as

at 31 March

 

£000s

31 March 2020

 

 

 

 

-  Borehamwood ex Police Station

-

-

5,750

5,750

-  Watford ex Court Site

-

-

3,100

3,100

-  Police Houses (12 sites)

-

6,712

-

6,712

 

0

6,712

8,850

15,562

31 March 2021

 

 

 

 

-  Borehamwood ex Police Station

-

-

5,995

5,995

-  Watford ex Court Site

-

-

3,205

3,205

 

0

0

9,200

9,200

Other significant observable inputs – Level 2

The fair value for surplus police houses has been based on the market approach using current market conditions and recent sales prices and other relevant information for similar assets in the area. Market conditions are such that similar properties are actively purchased and sold and the level of observable inputs are significant, leading to the properties being categorised at Level 2 in the fair value hierarchy. 

Significant unobservable inputs – Level 3

The ex-police stations and ex-court sites were held as Surplus Assets at the reporting dates. As such, they have been valued using the residual method, which reflects an apportionment of the value of the whole site subject to an assumed redevelopment scheme which has been discounted to reflect lack of planning. As this valuation method uses significant unobservable inputs, these properties have been categorised at Level 3.

Note 17 - Depreciation 

Depreciation is provided for on all operational fixed assets other than land.  Depreciation is calculated using the straight-line method over the following periods:

Depreciation

Asset Class

Estimated Life

(Years)

Vehicles

2 - 10

Furniture & Equipment

1 - 10

Buildings

5 – 72

A full year’s depreciation is charged to the Income and Expenditure Account in the year of acquisition or entry into service for all classes of asset used in the provision of services. 

Where an item of Property, Plant and Equipment asset has major components whose cost is significant in relation to the total cost of the item, the components are separately depreciated. 

Revaluation gains are also depreciated, with an amount equal to the difference between current value depreciation charged on assets and the depreciation that would have been chargeable based on their historical cost being transferred each year from the Revaluation Reserve to the Capital Adjustment Account.

Note 18 - Revaluations 

The freehold and leasehold properties that comprise the PCC’s non-residential estate were valued through an interim valuation as at 31 March 2020 by Gerald Eve LLP. The valuation was previously last undertaken in full as at 31 March 2020 and was applied in the accounts from 31 March 2020. The valuation was carried out in accordance with the methodologies and bases of value set out in the professional standards of the Royal Institution of Chartered Surveyors and the CIPFA Code, specifically with specialised properties valued by means of the Depreciated Replacement Cost (DRC) method, other operational properties valued to Existing Use Value and non-operational properties valued on a Market Value basis.

Gerald Eve set-out in their valuation report that in arriving at the replacement build cost rates used in their DRC valuations (specialist properties), they have taken build costs data from the BCIS in their 27 March 2020 update which was published after the COVID-19 pandemic was declared and represents the most up-to-date position on build costs on the valuation date. The majority of Land and Buildings £100.026m (86%) are carried at DRC.

Market activity is being impacted in many sectors. As at the valuation date, Gerald Eve consider that they can attach less weight to previous market evidence for comparison purposes, to inform opinions of value. Indeed, the current response to COVID-19 means that they are faced with an unprecedented set of circumstances on which to base a judgement. Their valuation is therefore reported as being subject to ‘material valuation uncertainty’ as set out in VPS 3 and VPGA 10 of the RICS Valuation – Global Standards. Consequently, less certainty – and a higher degree of caution – should be attached to the valuation than would normally be the case. Given the unknown future impact that COVID-19 might have on the real estate market, Gerald Eve recommend the valuation is kept under frequent review.

For non-specialised properties, in order to derive Current Value (equated to either Existing Use Value or Market Value), Gerald Eve have had regard to the available evidence derived from of transactions of comparable properties in their respective locations or other valuation approaches. The carrying value of non-specialist properties as at 31 March 2021 is £16.273m (14%) of which £9.200m are carried at market value. 

Note 19 - Intangible assets 

Expenditure on non-monetary assets that do not have physical substance but are controlled by the PCC as a result of past events (e.g. software licences) is capitalised when it is expected that future economic benefits or service potential will flow from the intangible asset to the PCC. 

Intangible assets are measured initially at cost. Amounts are only re-valued where the fair value of the assets held by the PCC can be determined by reference to an active market.  In practice, no intangible asset held by the PCC meets this criterion, and they are therefore carried at amortised cost. The depreciable amount of an intangible asset is amortised over its useful life in the Comprehensive Income and Expenditure Statement. 

In order to be classed an intangible asset, the item must be identifiable, lacking in physical substance, controlled by the PCC as a result of past events and future benefits or service potential will flow to the PCC.  All intangible assets held on the PCC’s balance sheet have been purchased from external suppliers. There are no internally generated intangible assets. 

The PCC accounts for its software as intangible assets, to the extent that the software is not an integral part of a particular IT system and accounted for as part of the hardware item of Property, Plant and Equipment.  All software classed as an intangible asset is given a finite useful life of 5 years based on an assessment of the average period that the software is expected to be of use to the PCC. 

The amortisation of £1.110m charged to revenue in 2020/21 (2019/20 £1.173m) was charged to the Cost of Services in the Comprehensive Income and Expenditure Statement.  It is not possible to quantify exactly how much of the amortisation is attributable to each service heading, therefore has been charged proportionately to each service heading based expenditure incurred. 

The movement on Intangible Assets balances during the year is as follows:

Intangible assets

 

2019/20

£’000

2020/21

£’000

Opening balances:

 

 

  Gross carrying amounts

10,961

11,969

  Accumulated amortisation

-7,555

-8,728

Net opening carrying value

3,406

3,241

 

 

 

Purchases

1,008

529

Disposals (Cost)

-

-1,887

Disposals (Accumulated Amortisation)

-

1,887

Amortisation for the period charged to the Cost of Services in the Comprehensive Income and Expenditure Statement

-1,173

-1,110

Net closing carrying value

3,241

2,660

 

 

 

Comprising of:

 

 

Gross carrying amounts

11,969

10,611

Accumulated amortisation

-8,728

-7,951

Net closing carrying value

3,241

2,660

Intangible Assets are identified in the following table:

Intangible assets

Asset description

Carrying Value

2019/20

£’000

Carrying Value

2020/21

£’000

Remaining Amortisation period

Athena

401

356

1 to 5 years

Desktop software

674

411

1 to 3 years

Support Services software

1,655

1,208

1 to 5 years

Tuserv

233

253

1 to 5 years

All other software

278

432

1 to 5 years

Total

3,241

2,660

 

Note 20 - Capital commitments 

At 31 March 2021, the PCC has entered into a number of contracts related to capital expenditure on Property, Plant and Equipment assets in 2020/21 and future years budgeted to cost £0.362m.  Similar commitments at 31st March 2020 were £0.300m.  The commitments at 31 March 2021 relate to HQ redevelopment and ICT.

Note 21 – Financial instruments

Categories of financial instruments 

The borrowings and investments disclosed in the balance sheet are made up of the following categories of financial instruments.

Categories of financial instruments

Group

Non-Current

Current

31 March 2020

£’000

31 March 2021

£’000

31 March 2020

£’000

31 March 2021

£’000

Financial Assets

 

 

 

 

Fair value through profit and loss

2,500

2,500

-

-

Amortised cost other

138

89

20,221

23,964

Total Financial Assets (group)

2,638

2,589

20,221

23,964

 

 

 

 

 

Financial Liabilities:

 

 

 

 

Amortised cost

-17,998

-17,998

-17,955

-13,831

Total Financial Liabilities (group)

-17,998

-17,998

-17,955

-13,831

Income and expense from financial instruments

Income and expense from financial instruments

Group

Financial Liabilities

Financial

Assets

 

At amortised cost

 

£’000

Fair value through profit and loss

£’000

At amortised cost

 

£’000

Total

 

 

£’000

2019/20

 

 

 

 

Interest Payable and similar charges

780

-

-

780

Interest and investment income

-

-107

-141

-248

Net (income)/expense for the year

780

-107

-141

532

 

 

 

 

 

2020/21

 

 

 

 

Interest Payable and similar charges

796

-

-

796

Interest and investment income

-

-16

-102

-118

Net (income)/expense for the year

796

-16

-102

678

Fair values of assets and liabilities 

Some of the PCC’s financial assets are measured at fair value on a recurring basis and are described in the following table, including the valuation techniques used to measure them.

Fair values of assets and liabilities

 

Input level in Fair Value Hierarchy

Valuation Technique used to measure fair value

31 March 2020

£’000

31 March 2021

£’000

Financial Assets

Fair value through profit and loss

 

 

 

 

-   Local Authorities Property Fund

Level 1 - derived from quoted prices in active markets

Bid Value

2,375

2,358

Fair values of assets and liabilities that are not carried at fair value but for which fair value disclosures are required

Except for the financial assets carried at fair value, all other financial liabilities and financial assets held by the authority are carried in the balance sheet at amortised cost. The fair values calculated are as follows;

Fair values of assets and liabilities that are not carried at fair value but for which fair value disclosures are required

Financial Liabilities

2019/20

2020/21

Carrying Amount

£’000

Fair Value

 

£’000

Carrying Amount

£’000

Fair Value

 

£’000

PWLB debt

-8,141

-18,196

-8,141

-15,610

Non-PWLB debt

-16,066

-22,998

-10,066

-17,347

Total debt (group)

-24,207

-41,194

-18,207

-32,957

 

 

 

 

 

Trade creditors & bank overdraft

 

 

 

 

-                 PCC

-1,463

-1,463

-1,563

-1,563

-           Chief Constable

-10,282

-10,282

-12,058

-12,057

Total Financial Liabilities (group)

-35,952

-52,939

-31,828

-46,577

The fair value is greater than the carrying amount because the PCC’s portfolio of loans includes a number of fixed rate loans where the interest rate payable is higher than the rates available for similar loans in the market at the balance sheet date.  This increases the fair value of financial liabilities.

The fair values for Financial Assets have been determined by reference to the Public Works Loans Board (PWLB) redemption rules which provide a good approximation for the fair value of a financial instrument and includes accrued interest.  The comparator market rates prevailing have been taken from indicative investment rates at each balance sheet date.  In practice rates will be determined by the size of the transaction and the counterparty, but it is impractical to use these figures, and the difference is likely to be immaterial. 

Short term debtors and creditors are carried at cost as this is a fair approximation of their value.

Fair values of assets and liabilities that are not carried at fair value but for which fair value disclosures are required

Financial Assets

2019/20

2020/21

Carrying Amount

£’000

Fair Value

 

£’000

Carrying Amount

£’000

Fair Value

 

£’000

 

 

 

 

 

Call Accounts < 1 Year

2,915

2,915

2,308

2,308

Money market loans < 1 Year

2,000

2,000

6,948

6,948

Fixed Loans < 1 Year

-

-

-

-

Long Term Debtors

140

140

89

89

Trade Debtors

602

602

990

990

Other Receivables & Advances

14,701

14,701

13,718

13,718

Total Financial Assets (group)

20,358

20,358

24,053

24,053

Fair value hierarchy for financial assets and financial liabilities that are not measured at fair value 

Carrying values are shown in the table below, split by their level in the fair value hierarchy;

  • Level 1 - derived only from quoted prices in active markets for identical assets or liabilities, e.g. bond prices
  • Level 2 - calculated from inputs other than quoted prices that are observable for the asset or liability, e.g. interest rates or yields for similar instruments
  • Level 3 - determined using unobservable inputs, e.g. non-market data such as cash flow forecasts or estimated creditworthiness
Fair value hierarchy for financial assets and financial liabilities that are not measured at fair value

2019/20 (GROUP)

Level 1

£’000

Level 2

£’000

Level 3

£’000

Total

£’000

Financial Liabilities carried at amortised cost

 

 

 

 

Loans & Borrowings

 

 

 

 

 - PWLB loans

-

-18,196

-

-18,196

 - Non-PWLB loans

-

-22,998

-

-22,998

Financial Liabilities 31 March 2020

0

-41,194

0

-41,194

 

 

 

 

 

2020/21 (GROUP)

Level 1

£’000

Level 2

£’000

Level 3

£’000

Total

£’000

Financial Liabilities carried at amortised cost

 

 

 

 

Loans & Borrowings

 

 

 

 

 - PWLB loans

-

-15,610

-

-15,610

 - Non-PWLB loans

-

-17,347

-

-17,347

Financial Liabilities 31 March 2021

0

-32,957

0

-32,957

The fair value for financial liabilities and financial assets that are not measured at fair value included in Level 2 in the table above have been arrived at using a discounted cash flow analysis, with the most significant inputs being the discount rate. 

The fair value for financial liabilities and financial assets that are not measured at fair value can be assessed by calculating the present value of the cash flows that will take place over the remaining term of the instruments, using the following assumptions: 

  • The fair values for financial liabilities have been determined by reference to the Public Works Loans Board (PWLB) redemption rules and prevailing PWLB redemption rates as at the balance sheet date and include accrued interest.  The fair values for non-PWLB debt have also been calculated using the same procedures and interest rates and this provides a sound approximation of fair value for these instruments.
  • No early repayment or impairment is recognised;
  • Where an instrument has a maturity of less than 12 months or is a trade or other receivable the fair value is taken to be the principal outstanding or the billed amount;

Note 22 - Short-term debtors 

The following table provides an analysis of money owed by debtors:

Short-term debtors

 

31 March 2020

£’000

31 March 2021

£’000

Net Trade Debtors

542

927

Year End Accruals

14,424

13,766

Grant & Partner Contributions Due

127

-

VAT Refund

1,540

802

Payments in Advance

5,174

1,685

Payroll Debtor

2

1

Total (Chief Constable)

21,809

17,181

 

 

 

Year End Accruals

137

160

Police Pension Fund Debtor

3,336

5,072

Grant & Partner Contributions Due

-

-

Net Council Tax Debtors

3,579

4,405

Total (PCC)

7,052

9,637

 

 

 

Total (Group)

28,861

26,818

All outstanding debts are reviewed throughout the year and a bad debt provision made in respect of those debts for which payment is considered doubtful.  At 31 March 2021 the bad debt provision was £0.063m (31 March 2020 was £0.060m).

Note 23 - Short-term creditors

The following table provides an analysis of money owed to creditors:

Short-term creditors

 

31 March 2020

£’000

31 March 2021

£’000

Net Trade Creditors

-836

-63

Conditional Grant

-179

-371

Year End Accruals and Grant Held at Year End

-9,717

-12,523

Payroll Deductions

-5,525

-5,898

Total (Chief Constable)

-16,256

-18,855

 

 

 

Year End Accruals and Grant Held at Year End

-1,463

-1,563

Net Council Tax

-2,616

-4,490

Total (PCC)

-4,079

-6,053

 

 

 

Total (Group)

-20,335

-24,908

Note 24 - Intra-entity creditor/debtor

Intra-entity creditor/debtor

  Chief Constable’s Balance Sheet

31 March 2020

£’000

31 March 2021

£’000

- Short Term Debtors

21,807

17,180

- Short Term Creditors

-16,256

-18,855

- Provisions

-442

-1,030

Intra-Entity (Debtor)/Creditor

5,109

-2,705

Note 25 - Short-term and long-term investments

The PCC invests its surplus cash balances in banks and similar financial institutions in order to generate income by earning interest.  Short term investments are those where the investment period was greater than three months but less than one year. Long term investments are where the investment term exceeds one year.  The Annual Treasury Management Strategy approved by the PCC lists the classes of approved organisations and the maximum proportion of monies available for investment that can be invested short-term or long term with any one party.  The interest earned on the investments has been credited to the Comprehensive Income and Expenditure Statement. 

The analysis of investments is shown in the following table:

Short-term and long-term investments

  Investments

31 March 2020

£’000

31 March 2021

£’000

Long Term

 

 

Local Authority Property Fund

2,500

2,500

Total (Group)

2,500

2,500

Note 26 - Usable reserves 

Capital receipts from the disposal of property, plant and equipment assets are accounted for on an accrual basis.  The receipts arising from the disposal of Police assets are 100% usable by the PCC.  Costs associated with the disposal of property, plant and equipment assets are charged against the appropriate capital receipts from the disposals.

Capital receipts below £10,000 are treated as de-minimus and are taken directly to the Comprehensive Income and Expenditure Statement.  Capital receipts of £10,000 and above are considered to be material and can only be used to finance new capital investment and such receipts are appropriated to the Usable Capital Receipts Reserve on the balance sheet via the Movement in Reserves Statement. 

All of the Usable Reserves are revenue reserves.  The Police Fund is a statutory usable reserve.  All other earmarked reserves are discretionary and have been set up voluntarily to earmark resources to finance future spending plans.  Movements in the PCC's usable reserves are detailed in the Movement in Reserves Statement and note 11.

Usable reserves

 

31 March 2020

£’000

31 March 2021

£’000

Earmarked Reserves

14,514

15,410

Police Fund

7,000

7,715

Unapplied Capital Receipts

4,519

7,452

Total (Group)

26,033

30,577

Note 27 - Unusable reserves

Unusable reserves

 

31 March 2020

£’000

31 March 2021

£’000

Revaluation Reserve

57,101

50,107

Capital Adjustment Account

47,779

44,363

Collection Fund Adjustment Account

965

-85

Deferred Capital Receipts Reserve

248

256

Pensions Reserve (PCC)

-1,414

-2,828

Total Unusable Reserves (PCC)

104,679

91,813

Pensions Reserve (Chief Constable)

-1,973,995

-2,216,370

Accumulated Absences Account

-2,391

-4,778

Total Group Unusable Reserves (Group)

-1,871,707

-2,129,335

a) Revaluation reserve 

The Revaluation Reserve contains the gains made by the PCC arising from increases in the value of its Property, Plant and Equipment and Intangible Assets. The balance is reduced when assets with accumulated gains are: 

  • re-valued downwards or impaired and the gains are lost
  • used in the provision of services and the gains are consumed through depreciation, or
  • disposed of and the gains are realised. 

The Reserve contains only revaluation gains accumulated since 1 April 2007, the date that the Reserve was created. Accumulated gains arising before that date are consolidated into the balance on the Capital Adjustment Account.

Revaluation reserve

 

2019/20

£’000

2020/21

£’000

Balance at 1 April

52,086

57,101

Upward revaluation of assets

14,237

1,302

Downward revaluation of assets and impairment losses not posted to the Surplus or Deficit on the Provision of Services.

-7,994

-2,440

(Surplus) or deficit on revaluation of non-current assets not posted to the Surplus or Deficit on the Provision of Services

6,243

-1,138

Difference between fair value depreciation and historical cost depreciation

-1,228

-1,909

Accumulated gains on assets sold or scrapped

-

-3,947

Amount written off to the Capital Adjustment Account

-1,228

-5,856

Balance at 31 March

57,101

50,107

b) Capital adjustment account 

The Capital Adjustment Account absorbs the timing differences arising from the different arrangements for accounting for the consumption of non-current assets and for financing the acquisition, construction or enhancement of those assets under statutory provisions. The Account is debited with the cost of acquisition, construction or enhancement as depreciation, impairment losses and amortisations are charged to the Comprehensive Income and Expenditure Statement (with reconciling postings from the Revaluation Reserve to convert fair value figures to a historical cost basis). The Account is credited with the amounts set aside by the PCC as finance for the costs of acquisition, construction and enhancement. 

The Account contains revaluation gains accumulated on Property, Plant and Equipment before 1 April 2007, the date that the Revaluation Reserve was created to hold such gains. 

Note 10 gives details of the source of all the transactions posted to the Account, apart from those involving the Revaluation Reserve.

Capital adjustment account

 

2019/20

£’000

2020/21

£’000

Balance at 1 April

52,157

47,779

Reversal of items relating to capital expenditure debited or credited to the Comprehensive Income and Expenditure Statement:

 

 

Charges for depreciation and impairment of non-current assets

-9,545

-6,676

Amortisation of intangible assets

-1,173

-1,110

Current Value versus Historic Cost Depreciation Adjustment

1,228

1,909

Revaluation Gains outstanding on disposal

-

3,947

Amounts of non-current assets written off on disposal or sale as part of the Gain / loss on disposal to the Comprehensive Income and Expenditure Statement

-2,723

-7,404

 

 

 

Net written out amount of the cost of non-current assets consumed in the year:

 

 

Use of the Capital Receipts Reserve to finance new capital expenditure

4,964

4,521

Capital grants and contributions credited to the Comprehensive Income and Expenditure Statement that have been applied to capital financing

1,833

199

Statutory provision for the financing of capital investment charged against the Police Fund and HRA balances

904

931

Capital expenditure charged against the Police Fund

134

267

Balance at 31 March

47,779

44,363

c) Pensions reserve 

The Pensions Reserve absorbs the timing differences arising from the different arrangements for accounting for post-employment benefits and for funding benefits in accordance with statutory provisions. The PCC accounts for post-employment benefits in the Comprehensive Income and Expenditure Statement as the benefits are earned by employees accruing years of service, updating the liabilities recognised to reflect inflation, changing assumptions and investment returns on any resources set aside to meet the costs. However, statutory arrangements require benefits earned to be financed as the PCC makes employer's contributions to pension funds or eventually pays any pensions for which it is directly responsible. The debit balance on the Pensions Reserve therefore shows a substantial shortfall in the benefits earned by past and current employees and the resources the PCC has set aside to meet them.  The statutory arrangements will ensure that funding will have been set aside by the time the benefits come to be paid.

Pensions reserve

 

2019/20

£’000

2020/21

£’000

Balance at 1 April (PCC)

-991

-1,414

Actuarial gains or losses on pensions assets and liabilities

-88

-1,191

Reversal of items relating to retirement benefits debited or credited to the (Surplus) or Deficit on the Provision of Services in the Comprehensive Income and Expenditure Statement

-547

-465

Employer's pensions contributions and direct payments to pensioners payable in the year

212

242

Balance at 31 March (PCC)

-1,414

-2,828

 

 

 

Balance at 1 April (Chief Constable)

-2,133,167

-1,973,995

Actuarial gains or losses on pensions assets and liabilities

220,300

-179,522

Reversal of items relating to retirement benefits debited or credited to the Surplus or Deficit on the Provision of Services in the Comprehensive Income and Expenditure Statement

-110,301

-112,852

Employer's pensions contributions and direct payments to pensioners payable in the year

49,173

49,999

Balance at 31 March (Chief Constable)

-1,973,995

-2,216,370

 

 

 

Balance at 1 April (Group)

-2,134,158

-1,975,409

Balance at 31 March (Group)

-1,975,409

-2,219,198

d) Collection fund adjustment account 

The Collection Fund Adjustment Account manages the differences arising from the recognition of council tax income in the Comprehensive Income and Expenditure Statement as it falls due from council tax payers compared with the statutory arrangements for paying across amounts to the Police Fund from the Collection Fund.

Collection fund adjustment account

 

2019/20

£’000

2020/21

£’000

Balance at 1 April

966

965

Amount by which council tax income credited to the Comprehensive Income and Expenditure Statement is different from council tax income calculated for the year in accordance with statutory requirements

-1

-1,050

Balance at 31 March

965

-85

e) Accumulated absences account

Accounting policy

Benefits payable during employment 

Short-term employee benefits are those due to be settled within 12 months of the year-end. They include such benefits as wages and salaries, paid annual leave and paid sick leave, bonuses and non-monetary benefits for current employees and are recognised as an expense for services in the year in which employees render service to the Group / PCC.  An accrual is made for the cost of holiday entitlements (or any form of leave, e.g. time off in lieu) earned by employees but not taken before the year-end which employees can carry forward into the next financial year.  The accrual ischarged to Surplus or Deficit on the Provision of Services, but then reversed out through the Movement in Reserves Statement to the Accumulated Absences Account which absorbs the differences that would otherwise arise on the Police Fund Balance, so that holiday benefits are charged to revenue in the financial year in which the holiday absence occurs.  All transactions and balances relating to the above are disclosed within the accounts of the Chief Constable and the Group on the basis of materiality.

Benefits payable during employment

 

2019/20

£’000

2020/21

£’000

Balance at 1 April

-2,424

-2,391

Settlement or cancellation of accrual made at the end of the preceding year

2,424

2,391

Amounts accrued at the end of the current year

-2,391

-4,778

Amount by which officer remuneration charged to the Comprehensive Income and Expenditure Statement on an accruals basis is different from remuneration chargeable in the year in accordance with statutory requirements

33

-2,387

Balance at 31 March

-2,391

-4,778

f) Deferred capital receipts reserve

The Deferred Capital Receipts Reserve holds the gains recognised on the disposal of non-current assets but for which cash settlement has yet to take place. Under statutory arrangements, the PCC does not treat these gains as usable for financing new capital expenditure until they are backed by cash receipts. When the deferred cash settlement is made, paid amounts are transferred to the Capital Receipts Reserve.

 

2019/20

£’000

2020/21

£’000

Balance at 1 April

4,741

248

Transfer of deferred sale proceeds credited as part of the gain / loss on disposal to the Comprehensive Income and Expenditure Statement

-4,493

8

Balance at 31 March

248

256

Note 28 - Cash flow statement notes

Adjustment to net surplus or feficit on the provision of services for non-cash movements

The following adjustments were made to remove non-cash items from the surplus or deficit on the provision of services:

Adjustment to net surplus or feficit on the provision of services for non-cash movements

   

2019/20

£’000

2020/21

£’000

Adjustment for non-cash movements (PCC):

 

 

Depreciation of Non-Current Assets

5,999

6,324

Impairment and downward valuation of Non-Current Assets

3,546

352

Amortisation of Intangible Assets

1,173

1,110

Carrying Amount of Sold Non-Current Assets

2,723

7,404

Deferred Capital Receipts

-4,448

50

Amount by which pension costs calculated in accordance with the Code are different from the contributions due under the pension scheme regulations

546

465

Employer’s contribution payable to the Pension Fund and retirement benefits payable directly to pensioners (including additional contributions payable to balance a deficit on the Police Pension Fund Account)

-212

-242

Notional Interest

-

-

Transfer To/From the Collection Fund Adjustment Account

1

1,050

Adjust for accruals (PCC):

 

 

Increase (-)/Decrease in Revenue Debtors

7,595

-1,751

Increase/Decrease (-) in Revenue Creditors

1,221

92

Increase/Decrease (-) in Intra-Entity Creditor/Debtor

-8,244

7,814

Total Non-Cash Movements (PCC)

9,900

22,668

 

 

 

Adjustment for non-cash movements (Chief Constable):

 

 

Transfer To/From the Accumulated Absences Account

-33

2,387

Chief Constable’s Provision

-202

588

Amount by which pension costs calculated in accordance with the Code are different from the contributions due under the pension scheme regulations

110,302

112,852

Employer’s contribution payable to the Pension Fund and retirement benefits payable directly to pensioners (including additional contributions payable to balance a deficit on the Police Pension Fund Account)

-49,173

-49,999

Adjust for accruals (Chief Constable):

 

 

Increase (-)/Decrease in Revenue Debtors

-7,049

4,627

Increase/Decrease (-) in Revenue Creditors

-993

2,599

Increase (-)/Decrease in Intra-Entity Debtor/Creditor

8,244

-7,814

Total Non-Cash Movements (Group)

70,996

87,908

Adjustment for items included in the net surplus or deficit on the provision of services that are investing and Financing activities

Adjustment for items included in the net surplus or deficit on the provision of services that are investing and Financing activities

Group 

2019/20

£’000

2020/21

£’000

Sale Proceeds from disposal of non-current assets

-2,700

-7,455

Capital Grants

1,833

199

Total

-867

-7,256

Investing activities 

Investing activities

Group 

2019/20

£’000

2020/21

£’000

Purchase of property, plant and equipment, and intangible assets

-12,153

-6,682

Sale / (Purchase) of investments

7,500

-

Disposal Proceeds Applied to Fund Capital

4,964

4,521

Disposal Proceeds Held to Fund Capital

2,236

2,933

Capital Grants

-1,833

-199

Net cash flows from investing activities

714

573

Financing activities 

Financing activities

Group 

2019/20

£’000

2020/21

£’000

Cash receipts of short and long-term borrowing

6,000

-

Repayments of short and long-term borrowing

-3,000

-6,000

Net cash flows from financing activities

3,000

-6,000

Note 29 - Joint arrangements 

Accounting policy

A joint arrangement is an arrangement of which two or more parties have joint control where the parties are bound by a contractual arrangement and the contractual arrangement gives two or more of those parties joint control of the arrangement.  A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement. To be a joint operation, the arrangement must meet the definition of joint control where decisions about the relevant activities of the arrangement require the unanimous consent of all the parties sharing control.

The Group in conjunction with other parties participates in a number of joint operations that involve the use of the assets and resources of the parties rather than the establishment of a separate entity.  The Group recognises on its Balance Sheet the assets that it controls and the liabilities that it incurs.  Jointly controlled assets are items of property, plant or equipment that are jointly controlled by the Group and other parties, with the assets being used to obtain benefits for all the parties. The joint operations do not involve the establishment of a separate entity.  The Group accounts for only its share of the liabilities and expenses that it incurs on its own behalf or jointly with others in respect of its interest in the joint venture and income that it earns from the venture. 

(i) Bedfordshire, Cambridgeshire and Hertfordshire collaborative units 

Bedfordshire Police, Cambridgeshire Constabulary and the Chief Constable operate a number of collaborative units. The units are jointly funded by the Forces in accordance with agreements approved by the Policing Bodies under Section 22 of the Police reform and Social Responsibility Act 2001.  The collaborated units are jointly staffed and funded by the two or three forces as appropriate.  The material benefits from working together include improved efficiency, effectiveness and resilience for each of the forces.  The table below sets out the aggregate income and expenditure on all collaborative units.  Each force’s contribution reflects its share of the units and its contribution towards support and accommodation costs.

Bedfordshire, Cambridgeshire and Hertfordshire collaborative units

Beds

2019/20

£’000

Cambs

2019/20

£’000

Herts

2019/20

£’000

Total

2019/20

£’000

 

Beds

2020/21

£’000

Cambs

2020/21

£’000

Herts

2020/21

£’000

Total

2020/21

£’000

 

 

 

 

Joint Protective Services

 

 

 

 

2,809

2,471

2,816

8,096

Armed Policing Unit

3,467

3,110

3,686

10,263

731

913

1,221

2,865

Dogs

812

998

1,353

3,163

2,492

3,022

3,691

9,205

Major Crime Unit

2,495

2,980

3,690

9,165

 280

362

506

1,148

Operational Planning & Public Order

313

396

565

1,274

 245

318

444

1,007

Protective Services Command Team

258

327

466

1,051

95

123

171

389

Resilience

94

119

169

382

2,471

3,591

4,769

10,831

Roads Policing Unit

2,553

3,651

4,912

11,116

2,433

2,986

4,019

9,438

Scientific Services Unit

2,457

2,968

4,049

9,474

 11,556

13,786

17,637

42,979

Total Joint Protective Services

12,449

14,549

18,890

45,888

 

 

 

 

 

 

 

 

 

 

 

 

 

Operational Support

 

 

 

 

-356

-454

-593

-1,403

Camera, Tickets, Collisions

-201

-251

-333

-785

277

359

502

1,138

Criminal Justice & Custody Management Team

285

180

514

979

655

850

1,187

2,692

Criminal Justice

586

742

1,057

2,385

108

210

171

489

Firearms & Explosives Licensing

114

221

180

515

3,603

4,671

6,527

14,801

ICT

3,711

4,696

6,695

15,102

303

393

549

1,245

Public Contact Senior Leader Team

288

364

519

1,171

 4,590

6,029

8,343

18,962

Total Operational Support Expenditure

4,783

5,952

8,632

19,367

 

 

 

 

 

 

 

 

 

 

 

 

 

Organisational Support

 

 

 

 

455

590

825

1,870

Collaboration Team

415

525

748

1,688

4,056

5,257

7,345

16,658

HR / L&D

3,963

5,015

7,148

16,126

668

866

   1,210

2,744

Information Management Department

796

1007

1,435

3,238

1,104

1,149

1,659

3,912

Professional Standards Unit

1,249

1,279

1,873

4,401

279

362

506

1,147

Procurement*

-

-

-

-

 6,562

8,224

11,545

26,331

Total Organisational Support Expenditure

6,423

7,826

11,204

25,453

 

 

 

 

 

 

 

 

 

22,708

28,039

37,525

88,272

Total BCH Net Operating Costs

23,655

28,327

38,726

90,708

 

 

 

 

 

 

 

 

 

-

-

-

-

Regional Procurement*

270

342

487

1,099

 

 

 

 

 

 

 

 

 

22,708

28,039

37,525

88,272

Total Net Operating Costs

23,925

28,669

39,213

91,807

* Procurement service provided by the 7 Force Procurement Department from 2020/21

(i) Eastern Region Special Operations Unit (ERSOU) 

The Eastern Region Special Operations Unit (ERSOU) was established in 2010/11 and is a joint unit consisting of the six eastern region police forces: Bedfordshire, Cambridgeshire, Essex, Hertfordshire, Norfolk and Suffolk.  The unit provides a single serious and organised crime unit as well as Counter Terrorism capability across the region. 

Bedfordshire Police have lead force responsibility for ERSOU.  Police Officers from each member force are seconded to the unit broadly in line with funding shares.  Legal title to all vehicles, equipment and premises owned and used by the unit transferred sit with Bedfordshire and the assets are recorded in its capital accounts and asset register. 

All revenue costs and capital expenditure are shared between the six forces in accordance with the percentages defined in the Section 22 agreement.  All capital expenditure is fully funded in the year of expenditure and there is therefore no capital financing charge to the six participating forces.

ERSOU is a joint operation with no separate entity and is therefore not able to hold reserves in respect of any cumulative surplus or deficit at year end.  Each participating Local Policing Body shows its share of the carried forward surplus in its accounts.  The ERSOU operating account is shown in the following table.  The expenditure figures do not include depreciation charges. 

The Home Office grants were paid to Bedfordshire as agent for the participating forces. 

ERSOU income and expenditure statement 2020/21

ERSOU income and expenditure statement 2020/21

 

2019/20

£’000

2020/21

£’000

 

 

 

Operating costs

21,834

20,231

Specific HO grant

-4,336

-4,796

Net expenditure

17,498

15,435

 

 

 

Contributions

 

 

Bedfordshire

-1,997

-1,746

Cambridgeshire

-2,567

-2,224

Essex

-1,953

-1,735

Hertfordshire

-3,607

-3,159

Kent

-2,249

-2,095

Norfolk

-2,918

-2,542

Suffolk

-2,207

-1,934

Total Contributions

-17,498

-15,435

 

 

 

(Surplus) / Deficit for year

645

-263

(Surplus) / Deficit b/f

-645

-

(Surplus) / Deficit c/f

0

-263

The capital assets for ERSOU at 31 March 2021 are analysed as follows:

ERSOU capital assets

 

2019/20

£’000

2020/21

£’000

Net book value brought forward 1 April

1,282

1,645

Opening Balance Adjustment

-

-  

Revised Net book value

1,282

1,645

 

 

 

Expenditure for the year:

 

 

-    Vehicles

608

193

-    Land and Buildings

-

-

-    Equipment

-

182

Depreciation for the year

-245

-345

Net book value carried forward 31 March

1,645

1,675

Hertfordshire’s share of the total Net Book Value of ERSOU assets as at 31 March 2021 was £0.445m (£0.368m as at 31 March 2020). Two additional properties are jointly owned by the 7 forces, and are held on individual forces’ balance sheets. Hertfordshire share of these properties as at 31 March 2021 was £1.731m. 

The capital expenditure for 2020/21 was funded in accordance with the formulae agreed by the forces.  Details are shown in the following table:

ERSOU capital expenditure

 

2019/20

£’000

2020/21

£’000

Bedfordshire

-67

-49

Cambridgeshire

-86

-62

Essex

-94

-24

Hertfordshire

-121

-88

Kent

-68

-26

Norfolk

-98

-71

Suffolk

-74

-54

Total

-608

-374

Note 30 - Cash and cash equivalents

Accounting policy 

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours.  Cash equivalents are highly liquid investments that mature in periods of three months or less from the date of acquisition that are readily convertible to known amounts of cash with insignificant risk of change in value. 

In the Cash Flow Statement, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the PCC's cash management.

PCC and PCC Group

PCC & Group

31 March 2020

£’000

31 March 2021

£’000

Total cash and cash equivalents

5,056

9,048

Note 31 - Senior officers’ remuneration 

The remuneration paid to the PCC’s senior police officers and employees is as follows:

Senior officers’ remuneration

2019/20

Post Holder Information (Job Title) For individuals changing roles, role titles used are those as at 31 March 2020. Final role title is used for individuals no longer employed. (1)

Salary (inc. Fees, Allowances and Salary Sacrifice)

£

Bonuses

 

 

£

Expense Allowances

 

£

Benefits in Kind

 

£

Total Remuneration exc. pension contr.

£

Pension Contributions (2)

£

Total Remuneration inc. pension contr.

£

Police and Crime Commissioner

76,500

-

-

-

76,500

13,617

90,117

Deputy Police and Crime Commissioner

55,000

-

-

-

55,000

9,790

64,790

Chief Executive

98,392

-

-

-

98,392

16,947

115,339

Chief Finance Officer

91,286

-

-

-

91,286

15,743

107,029

Deputy Chief Executive for Governance (3)

73,300

-

-

-

73,300

12,643

85,943

Director of Strategy (3)

79,076

-

-

-

79,076

13,570

92,646

Total (PCC)

473,554

0

0

0

473,554

82,310

555,864

Chief Constable - Mr C Hall

170,535

-

-

7,807

178,342

51,600

229,942

Deputy Chief Constable

127,310

-

-

6,628

133,938

38,697

172,635

Assistant Chief Constable (Op Support)

111,082

-

-

7,336

118,418

33,220

151,638

Assistant Chief Constable (Op Support) (4)

2,593

-

-

-

2,593

736

3,329

Assistant Chief Constable (Local Policing)

128,823

-

-

-

128,823

35,690

164,513

Director of Resources (5)

132,321

-

13,042

-

145,363

24,612

169,975

Director of Resources (6)

2,782

-

-

-

2,782

518

3,300

Total (Chief Constable)

675,446

0

13,042

21,771

710,259

185,073

895,332

 

 

 

 

 

 

 

 

Total (Group)

1,149,000

0

13,042

21,771

1,183,813

267,383

1,451,196



(1) The BCH role of Assistant Chief Constable (Joint Protective Services) is currently held by an officer within Cambridgeshire Constabulary and their remuneration is included as part of the Cambridgeshire Senior Officer Remuneration statement.

(2) The employer pension contribution rate for police officers increased to 31% from 1 April 2019. The Pension contribution rate for Constabulary and PCC Senior Staff is 18.6% and 17.8% respectively.

(3) In line with the CIPFA Statutory Guidance Notes, the posts of Deputy Chief Executive for Governance and Director of Strategy within the Office of the Police and Crime Commissioner, have been included as members of the Executive team. The post of Deputy Chief Executive for Governance is not a full-time post. The annualised salary on a full-time basis (including fees, allowances and employers pension contribution) equates to £106,860.

(4) G Telfer temporarily covered the role of Assistant Chief Constable (Op Support) from the 23 to 31 March 2020. The annualised salary (including fees, allowances, and employers pension contribution) equates to £125,500

(5) Mr J Hurley continued to carry out the role of Director of Resources until the 30 April 2020.

(6) Mr J Cook joined the Constabulary as Director of Resources effective 23 March 2020 on a permanent basis. The annualised salary (including fees, allowances and employers pension contribution) equates to £136,390.

Senior officers’ remuneration

2020/21

Post Holder Information (Job Title) For individuals changing roles, role titles used are those as at 31 March 2020. Final role title is used for individuals no longer employed. (1)

Salary (inc. Fees, Allowances & Salary Sacrifice)

£

Bonuses

 

 

£

Expense Allowances

 

£

Benefits in Kind

 

£

Total Remuneration exc. pension contr.

£

Pension Contributions (2)

£

Total Remuneration inc. pension contr.

£

Police and Crime Commissioner

76,500

-

-

-

76,500

13,617

90,117

Deputy Police and Crime Commissioner

55,000

-

-

-

55,000

9,790

64,790

Chief Executive

99,370

-

-

-

99,370

17,121

116,491

Chief Finance Officer

96,935

-

-

-

96,935

16,575

113,510

Deputy Chief Executive for Governance (3)

59,055

-

-

-

59,055

9,983

69,038

Director of Strategy

87,819

-

-

-

87,819

14,441

102,260

Total (PCC)

474,679

0

0

0

474,679

81,527

556,206

Chief Constable - Mr C Hall

174,696

-

-

5,855

180,551

52,890

233,441

Deputy Chief Constable

130,430

-

-

3,827

134,257

39,665

173,922

Assistant Chief Constable (Op Support) (4)

39,838

-

-

1,758

41,596

11,948

53,544

Assistant Chief Constable (Change Portfolio Office)

79,676

-

-

3,517

83,193

23,896

107,089

Assistant Chief Constable (Op Support) (5)

111,253

-

-

-

111,253

31,143

142,396

Assistant Chief Constable (Local Policing)

131,629

-

-

-

131,629

36,583

168,212

Director of Resources (6)

19,489

-

1,087

-

20,576

2,072

22,648

Director of Resources (7)

116,678

-

-

165

116,843

21,702

138,545

Total (Chief Constable)

803,689

0

1,087

15,122

819,898

219,899

1,039,797

 

 

 

 

 

 

 

 

Total (Group)

1,278,368

0

1,087

15,122

1,294,577

301,426

1,596,003

In addition to the requirements of the Accounts and Audit Regulations 2015, the PCC has voluntarily disclosed details for all members of the Executive team.

(1) The BCH role of Assistant Chief Constable (Joint Protective Services) is currently held by an officer within Cambridgeshire Constabulary and their remuneration is included as part of the Cambridgeshire Senior Officer Remuneration statement.

(2) The employer pension contribution rate for police officers increased to 31% from 1st April 2019. The Pension contribution rate for Constabulary and PCC Senior Staff is 18.6% and 17.8% respectively.

(3) The post of Deputy Chief Executive for Governance is not a full-time post. The annualised salary on a full-time basis (including fees, allowances and employers pension contribution) equates to £114,000.

(4) N Doust-Briant occupied the ACC (Op Support) role but worked on Operation Bullrush from 1st April to 31st July 2020. From the 1st August 2020 through to retirement on the 28th March 2021, he took over the ACC (Change Portfolio Office) role. This is a BCH role where costs are shared between Herts, Beds & Cambs Constabularies. The table costs show the full remuneration prior to any BCH allocation.

(5) G Telfer temporarily covered the role of ACC (Op support) through 2020/21 & was appointed permanently effective 8th March 2021.

(6) J Hurley continued to carry out the role of Director of Resources until the 30th April 2020. The salary includes an annual leave payment owing.

(7) The benefit in kind value reflects the use of a fully electric car to the 25th March 2021 which has a zero value in respect of the P11d calculation.

Note 32 - Officers’ emoluments 

The Accounts and Audit Regulations 2015, as amended by regulations, require the Group to disclose the numbers of senior police officers and police staff whose remuneration, excluding pension contributions was £50,000 or more in the relevant financial year.  The Group has extended this disclosure to include all police officers whose remuneration was greater than £50,000. Individuals whose remuneration is disclosed separately in note 31 above are not included within the table.

Officers’ emoluments

Remuneration Band

2019/20

2020/21

CC

PCC

CC

PCC

£130,000 - £134,999

 

 

1 **

 

£115,000 - £119,999

1 **

 

 

 

£105,000 - £109,999

 

 

 

 

£100,000 - £104,999

 

 

1

 

£95,000 - £99,999

1

 

3

 

£90,000 - £94,999

4

 

4

 

£85,000 - £89,999

6

 

4

 

£80,000 - £84,999

3

 

5

 

£75,000 - £79,999

3

 

5

 

£70,000 - £74,999

7

 

11

 

£65,000 - £69,999

9

 

15

 

£60,000 - £64,999

46

1

70

2

£55,000 - £59,999

121*

1

125

 

£50,000 - £54,999

162

 

235

2

 

363

2

479

4

*Includes a redundancy payment, **ACC seconded to National Body

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