Summary of Accounts 2005-2006

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This is a guide to our accounts for the period 1 April 2005 to 31 March 2006. It shows what we spent and how we paid for it, and is based on the information in the full version of our accounts. The full version is in the format that meets UK accounting standards and has been independently checked by Audit Scotland, the professional auditors for the Scottish Executive.

If you want a copy of the full version of our 2005-2006 accounts, you can download it from the related content area.

1. The financial review by Councillor John Kenny
2. Our Services Accounts 2005-2006
3. Balance Sheet
4. Cash Flow
5. Our housing accounts 2005-2006
6. How has our finance service performed?
7. Council Tax
8. Managing our money
9. Capital Investment

The financial review by Councillor John Kenny

Our accounts show how we manage public funds.

Financial Information

For the period 1 April 2005 to 31 March 2006, we planned to use £1 million from our funds (general reserves), added to our income from Council Tax, rates and grants. This was to pay for the day-to-day costs of our services. By the end of financial year, we have used £1.6 million even though we had to pay a one-off cost of £10.3 million for equal-pay compensation. We were able to keep most of what we spent in line with our budget because we manage the money we borrow effectively and plan savings we can make.

At the end of the year, the money left in our funds (general reserves) was £14.5million, of which £10.7million has been set aside for services such as schools, service reviews and other services in 2006-2007. This leaves £3.8million, which is 1.2% of our running costs for each year (or, about four days spending). We set aside some of our general reserves in case we need to pay for things we have not planned for. This needs to be about 2% of our budget each year, and we plan to build this back up over the next two years.

Our Housing

We own 14,158 houses which we charge rent for. By law, all the money we spend on these houses must come from rent. At the end of the year, we have to transfer any money left over, or any we fall short of, into or out of our 'housing reserves'.

We planned to use £0.6 million from our housing reserves in 2005-2006 to add to the income from rent to pay for our day-to-day costs for housing (operating costs). During the year, our income (not including the £0.6million) was actually higher than our spending by £2.2million, which meant we could transfer this amount to our housing reserves. We were able to have this amount left over because we managed how we borrowed the money effectively. At the end of the year, our housing reserves were £9.8million, of which we set aside £8.4million. This was for some of the costs of transferring our Council houses to a not-for-profit social landlord. This left £1.4million to stop us having to increase our rent as much. We have to increase our rent because the number of homes we rent out to our tenants have fallen.

Capital Investment

Capital investment is money we spend on buying, building and improving our assets such as land, buildings, roads, machinery and vehicles. We manage how we spend our capital investment within a long-term framework that is affordable and efficient. During 2005-2006, we spent £50.1million on our capital investment programme. This was within our approval limit.

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Our services accounts 2005-2006

The accounts below show how much it cost to run our services for the period between April 2005 and March 2006, and where the money came from to pay for these services.

How we spend our budget	£m
Education Services	147.5
Cultural Services	19.3
Environmental Services	16.3
Roads and Transport Services	26.3
Planning and Development Services	4.4
Social Work	69.5
Our contribution to the police and fire boards	26.2
Other public services	17.1
Total amount we spent on our services	326.6
We make adjustments for
Deduct: charges for using our assets	-45.1
Add: repaying our loans and interest on loans	+39.7
Deduct: transfers to reserves and other accounting adjustments	-1.8
This leaves an amount to be met from government grants and local taxes	319.4
The money came from
Scottish Executive support grant	184.4
Business rates	64.1
Council Tax	69.3
Money from general reserves	1.6
Total	319.4
General fund at the end of March 2005	16.1
General fund at the end of March 2006	14.5

We had a total income in 2005-2006 of £319 million. As the diagram on the right shows, most of it (57%) came from the Scottish Executive. About 21% of our income came from the rates we charge for business premises, the levels of which are controlled by the Scottish Executive. Council Tax is also about 21% of our total income and is the only part that we control. We used £1.6 million from our general reserves.


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Balance Sheet

What we own, what we owe and what we are owed (at 31 March 2006)

Balance Sheet	£m
Land, buildings, roads, machinery and vehicles we own	696.4
Stock of materials	1.0
Money we are owed	61.4
Cash we have invested	72.7
Money we owe to the bank	-1.8
Other money we owe	-192.4
	637.3
Financed By
Money we borrow	287.7
Reserves we cannot use (see note 1 below)	296.5
Reserves we can use (see Note 2 below)	53.1
	637.3

Note 1: Reserves we cannot use under UK accounting rules, we must keep several reserve funds. this takes account of our share of pension fund, what we spend on Capital investment and what our assets are worth.

Note 2: Reserves we can use. These are funds we can use to spend on our services. The figure for reserves we can use above is made up of:

• general reserves - £14.5m
• housing reserves - £9.8m
• money selling our assets which we will use for Capital investment in the future - £21.0m
• money for insurance - £2.4m
• money for refurbishing our main offices - £1.7m
• money for computers and related equipment for schools - £1.2m
• money for our share of building the M74 motorway - £2.5m

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Cash flow

Cash flow	£m
Money we owed to the bank on 31 March 2005	4.4
Cash out	+505.6
Cash in	-508.2
Money we owed the bank on 31 March 2006	1.8

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Our housing accounts 2005-2006

Our housing accounts deal mainly with the cost of providing, improving and managing our housing. By law, all the money we spend on these houses must come from rent.

Income	£m
Council house rent	39.8
Other Income	2.7
Total	42.6
Spending
Repairs and maintenance	15.4
Supervision and management	7.5
Debt charges	14.3
Other costs	3.1
Total	40.3
Money left over for the year	2.2
Housing reserves at the end of March 2005	7.6
Housing reserves at the end of March 2006	9.8
We owned the following types and numbers of houses at 31 March 2006
Houses	2,975
High-rise flats	1,207
Flats in tenement buildings	5,357
Other flats	4,005
Maisonettes	614
Total	14,158

The number of houses we own fell by 762, mostly due to our tenants buying their homes. There were 846 empty houses on 31 March 2006.

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How has our finance service performed?

Section	Measure	2003-2004	2004-2005	2005-2006
Treasury	Our loans fund interest rate	6.25%	5.76%	9.95%
	Average loans fund rate for Scotland	6.41%	6.14%	See Note
Payments to creditors (those we owe money to)	Value of invoices we have paid	£188.6m	£196.1m	£213.3m
	Invoices we have paid	246,600	269,400	236,900
	% paid within 32days	88.0%	85.0%	86.5%
	% paid within 32days (Scottish average)	82.9%	83.7%	See note
Payroll processing	Value of our payroll	£168.6m	£176.1m	£200.7m
	Pay we have processed	218,500	222,000	214,000
	% we processed correctly	99.0%	99.1%	99.5%
Employee numbers	Total employees in the Council	7,897	8.018	7,971
	Employees in the Finance and Information Technology Service	293	318	313

Note: The average figures for all Scottish Councils for 2005-2006 will not be available until later in 2007 when Audit Scotland releases its national survey.

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Council Tax

Council Tax	2003-2004	2004-2005	2005-2006
Renfrewshire's population	172,867	171,940	170,610
Properties in Council Tax band D	65,527	65,762	66,495
Council Tax paid in Renfrewshire each year	93.9%	94.2%	94.7%
People who pay Council tax in Scotland each year	91.7%	92.7%	See note
Council Tax by direct debits	319,709	331,412	350,112
Value of direct debits	£40.5m	£43.7m	£47.5m
% of direct debits we have collected	55.7%	57.2%	63.6%

Note: The amount of Council Tax we have collected is better than the Scottish average and has improved every year. We collected 94.7% of council tax in 2005-2006, compared to 94.2% in 2004-2005 and 93.9% in 2003-2004.

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Managing our money

	2003-2004	2004-2005	2005-2006
Annual accounts presented on time?	Yes	Yes	Yes
Figures certified as reliable? (independently checked by Audit Scotland)	Yes	Yes	Yes

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Capital Investment

Capital investment is the money we spend on buying and improving assets such as schools and housing. You will see the benefits from Capital investment over a long period of time. We spent £50.1million during 2005-2006, and the following table shows a summary of what we spent our Capital investment on and how we paid for it.

How we spent our budget	2005- 2006	Investment (£m)
Education Services		9.2
Improving schools	7.1
Computers and other equipment, school intruder alarms and adaptations for access	2.1
Housing Services		17.9
Improving roads and footpaths on Council estates	3.7
Replacing kitchens	3.4
replacing and renewing windows, wiring and heating systems	2.6
Demolishing houses and buying back ex-Council houses	1.9
Removing dry rot, woodworm and asbestos	1.1
Other improvements to housing	5.2
Environmental Services		2.4
Including improving parks, playing fields and recycling centres	2.4
Planning and Transport		5.5
Replacing vehicles	1.6
Other improvements, including making streets safer and preventing floods	3.9
Social Work		3.0
Care homes for elderly people	1.9
Respite unit for people with learning difficulties	1.1
Corporate		12.1
Refurbishing our main offices	8.5
Other improvements including improving our computer systems, depot buildings and money for our share of the M74 extension.	3.6
Total		50.1

The money came from	£m
Money from our cash balances	24.5
Government grants and other contributions	15.0
Selling our houses and other assets	6.0
Contributions from Council Tax	4.6
Total	50.1

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