GENERAL
NOTES
Employees costs
In respect of certain Services, there are instances of budget
transfers between Wages and Salaries lines, merely reflecting a
change in the nature of individuals' method of pay.
Following the latest actuarial valuation of the pension fund,
the employers superannuation contribution rate applicable from 1
April 2005 is 23%.
Financial Reporting Standard (FRS) 17 requires the elements of
employers pension contributions to be split and shown as
follows:
Ø "Current service cost"
included within service budgets - the assumed rate here
for 2006/07 is 15% of pensionable pay (14% in the original 2005/06
budget, 15% in the revised figures)
Ø The balance of employers
contributions are shown "below the Cost of Services line", in
the overall Summary on page 1, in an "appropriations section"
- as indicated from the above, for 2006/07 this means 8% of
pensionable pay (9% in the original 2005/06 budget, 8% in the
revised figures)
For ease of administration, the Wages lines are inclusive of
oncosts (principally employers national insurance and
superannuation contributions); this means that the contributions
lines on the face of the Service budgets relate to salaried
employees.
Building repairs & maintenance
Budgets for the repair and maintenance of buildings can
consist of both a central budget (managed corporately by Facilities
Management) and a local budget managed by the particular site
manager.
In respect of the central element, priorities can change and
whilst budgets may have increased or decreased on individual
premises, the total central budget remains controlled within
inflation.
Energy and water costs
The budgets reflect latest known or estimated utilities
prices, as well as demand for gas, electricity and water
services.
Capital charges
These are notional charges for the assets used in providing
services, comprising of an interest element and a depreciation
element. However, the total of all capital charges is
reversed out in the General Revenue Account Summary and the level
of Council Tax is unaffected.
The interest rate used to determine the interest part of the
capital charge (by being applied to asset values) is set by the
Chartered Institute of Public Finance and Accountancy (CIPFA). It
remains at 3.5% in 2006/07 for assets carried at current value, but
for assets carried at historical cost, the rate has decreased from
4.95% in 2005/06 to 4.4% for 2006/07.
Principally as a consequence of a revaluation of assets and
the related assessment of their remaining useful lives, the total
for capital charges has increased by some £840k, year-on-year. This
has meant that capital charges for certain properties (e.g. Crewe
and Nantwich Pools, Municipal Buildings, Delamere House) have
changed more significantly than for others.
The future of Capital charges and
depreciation
A change in accounting practice is currently under
consideration, nationally, which could result in the removal of the
interest element of the capital charges (i.e. some £913k in
2006/07). If effected, this change may be applicable to 2006/07
outturn accounts; consequently, it may be reflected firstly in our
2006/07 Revised Budget figures, in a year's time. As indicated
above though, there would be no direct effect on the "bottom
line".
Additionally, as trailed in the Revenue Strategy for some
years, the Government continue to give consideration to the
introduction of real depreciation in local authority accounts. In
effect, this would mean removing the reversal (credit) entry and
consequently would have a direct effect on the "bottom line". As
yet, there is no information on when and how this change may be
effected.
Service management and support service
recharges
Service management and support service costs included within
Directorate, Office and Depot budgets (shown in the Resources
Portfolio) are recharged to service accounts. The bases of
apportionment are subject to at least annual review to reflect
change and some variances from the 2005/06 original estimates will
inevitably occur.