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Unaudited

Statement of Accounts

2019/20

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Contents

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Narrative Report

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Statement of Responsibilities

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1414

Certification by Chair

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1515

Comprehensive Income and Expenditure Statement (CIES)

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1717

Notes to the Comprehensive Income and Expenditure Statement (CIES)

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1818

Movement in Reserves Statements (MiRS)

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1919

Notes to the Movement in Reserves Statement (MiRS)

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2020

Balance Sheet

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2222

Cash Flow Statement

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2323

Other Notes to the Core Financial Statements

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2525

Accounting Policies ............................................................................................................................. 25

Accounting Standards that have been Issued but not yet Adopted ............................ 25

Critical Judgements and Assumptions Made .......................................................................... 25

Events after the Reporting Period ............................................................................................... 26

Expenditure and Funding Analysis (EFA) ................................................................................. 27

Usable Reserves .................................................................................................................................... 29

Unusable Reserves ............................................................................................................................... 29

Earmarked Reserves ............................................................................................................................ 31

Property, Plant and Equipment (PPE) ....................................................................................... 32

1010

Capital Investment and Capital Financing ............................................................................... 34

1111

Financial Assets and Liabilities – Financial Instruments ................................................... 34

1212

Debtors ..................................................................................................................................................... 39

1313

Creditors .................................................................................................................................................. 39

1414

Grant Income and Contributions ................................................................................................. 39

1515

Leases ......................................................................................................................................................... 41

1616

Related Parties ....................................................................................................................................... 41

1717

Officers’ Remuneration ..................................................................................................................... 43

1818

Exit Packages ......................................................................................................................................... 44

1919

Defined Benefit Pension Schemes ............................................................................................... 44

2020

Members’ Allowances and Expenses ........................................................................................... 51

2121

External Audit Costs ........................................................................................................................... 51

2222

Inventories ............................................................................................................................................... 52

2323

Agency Services .................................................................................................................................... 52

Accounting Policies ............................................................................................................................................... 53

Independent Auditor’s Report

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6363

Glossary of Terms

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6565

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Narrative Report

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Authority Overview

The South Downs National Park (“the Park”) covers the chalk downland, heaths, woodlands and river

valleys of the South Downs and Western Weald within the three counties of Hampshire, West Sussex

and East Sussex. The South Downs National Park Authority (“the Authority”) was established in April

2010 and became fully operational on 1 April 2011.

The Authority is a public body, funded by grant allocations from the Department for Environment,

Food and Rural Affairs (DEFRA), and is run by a Committee of 27 Members. There are three

committees within the Authority responsible for Planning, Policy & Resources and Appointment &

Management.

The Authority is responsible for promoting the purposes and duty of the Park and the interests of the

people who live and work within it. The work of the Authority is rooted in its statutory purposes and

duty, and in its commitment to engage with local communities, partners and stakeholders. As a

National Park, all public bodies must have due regard to the two statutory purposes as specified in the

Environment Act 1995:

• to conserve and enhance the natural beauty, wildlife and cultural heritage of the area;

• to promote opportunities for the understanding and enjoyment of the special qualities of the Park

by the public.

In pursuit of the twin purposes the Authority has a duty to work in partnership to foster the economic

and social wellbeing of local communities within the National Park.

The 2019/20 financial statements cover the ninth operational year of the Authority and illustrate the

overall financial position of the Authority as at 31 March 2020. This year has seen the development and

implementation of the new Partnership Management Plan (PMP) 2020-2025 which sets a clear guiding

framework to which the Corporate Plan is aligned. The Corporate Plan sets out clear strategic

priorities and outcomes to meet the statutory purposes and duty of the Park. The Local Plan was

adopted in July 2019, which sets out the planning policy framework for the Park, has also been a

priority during 2019/20.

The Covid-19 pandemic will inevitably have financial implications for the Authority, however, it has not

had a material impact on the 2019/20 financial position. It is far more likely that there will be

implications in the 2020/21 financial year as the full effect of government measures and changes in

activity take effect. It will not be possible to quantify all exceptional costs, losses or any other financial

implications that the Authority will experience due to this unprecedented emergency situation.

Officers will monitor the financial position and report on these as part of the budget monitoring

process. Members will be advised of significant financial implications that are likely to materially impact

on the Authority’s financial position and medium term financial strategy.

Officers are continuing to assess the impacts of Covid-19 on the revenue budget and plan to bring

forward any budget revisions in the summer once there is more certainty over the emergence from

lockdown. In order to support the recovery from Covid-19 in pursuit of the Partnership Management

Plan objectives, it is proposed to allocate the remaining (£0.164m) below budget variance to a new

Recovery Fund. Funds allocated and projects approved by Theme Programme Boards using the

Recovery Fund will be identified separately and will be reported on separately to the Policy &

Resources Committee on a quarterly basis. The fund is expected to exist only for the financial year

2020/21, with any funds unallocated to projects returned to reserves at the end of the year

Further information can be found on the Authority’s website, www.southdowns.gov.uk.

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Authority Performance

In 2019/20, the Authority set an original gross revenue budget of £10.486m including a £0.136m

contribution to reserves, which was funded by £10.486m DEFRA National Park Grant. The DEFRA

grant allocation of £10.486m was a £0.177m increase on the previous financial year, an increase of

1.7%.

The 2019/20 budget included a permanent staffing establishment of 124.4 full-time equivalent (fte)

posts and also accommodated 9.5 fte temporary posts that were assigned to short term projects.

Volunteering time is also recognised as a valuable resource to the Authority and it was estimated that

in 2019/20 this would provide approximately 3,000 days with an estimated value of £0.180m.

The Authority has £2.128m of fixed assets (after depreciation) on its Balance Sheet as at 31 March

2020 following capital investment of £0.125m during 2019/20.

The 2019/20 budget was developed in accordance with the Authority’s agreed budget framework

alongside the Corporate Plan and the PMP. The budget was allocated to the following operating

segments to align operational activities to meet the Authority’s priorities and objectives;

• Planning which covers development management (including major planning applications) and

planning policy (including Local Plans, duty to cooperate and community led plans);

• Countryside and Policy Management which covers the performance and business planning support

and work to support the Authority’s PMP together with major partnerships and sustainable

communities funds and the rangers service and their work with communities and partners, visitor

public relations and volunteer coordination;

• Corporate Services which covers the cost of the Chief Executive and support to the Chair of the

Authority and senior managers. It also includes support services (e.g. premises, human resources,

IT, financial management, audit and legal), members services and the communications team;

• Strategic Investment Fund which provides funding to support major substantive partnership projects

and support for smaller scale projects that support outcome delivery.

The key budget priorities identified included a close focus on the Local Plan supported by proactive

communications and continued staff development as well as a more proactive approach to developing

alternative income opportunities.

Revenue Summary

For the 2019/20 financial year, the Authority reported an outturn variance of £0.306m below budget.

Decisions about resource allocation are taken by the Authority on the basis of budget reports analysed

across four service areas classed by the Authority as its operating segments.

The following table summarises, by operating segment, the spending on services, including variations

compared with the budget set by the Authority:

Revised

Budget Actual Variance

£'000

Planning 1,195 913 (282)

Countryside and policy management 3,089 3,041 (48)

Corporate services 4,197 4,150 (47)

Strategic investment fund 361 432 71

Total

8,842 8,536 (306)

National Park grant (10,486) (10,486) 0

Total

(1,644) (1,950) (306)

Spending on General Fund Services by Operating Segment

Segments

Page 5

Note: figures in brackets denote below budget variances or income received in excess of that budgeted.

The financial performance in 2019/20 indicates the Authority has delivered services within its overall

budget. Details of the overall variance are reported to the Authority’s Policy and Resources

Committee.

Revenue Income and Expenditure

In 2019/20, the Authority received revenue income of £16.981m; this was £2.106m higher than that

received in 2018/19. The main reason for the increase in income from 2018/19 is due to the increase

in S106 funding and income under the Community Infrastructure Levy (CIL) scheme. The following

chart shows the revenue income over the two financial years:

Revenue Income £'000

Detail on the government grants and other grants and contributions received by the Authority in

2019/20 can be found in note 14.

In 2019/20 the Authority spent £15.186m on services which was £1.852m more than that spent in

2018/19. The following chart shows the revenue expenditure over the two financial years:

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The overall 2019/20 revenue position will be reported to the Authority in July 2020 as the Policy &

Resources Committee has been temporarily suspended; the report can be found on the Authority’s

website

www.southdowns.gov.uk.

Capital Summary

A capital investment programme for the 2019/20 financial year totalling £0.171m was approved in

March 2019 for the National Park Signage project and purchase of vehicles and equipment. A number

of variations to the capital investment programme were approved during 2019/20 resulting in a revised

capital programme of £0.125m.

The total capital investment on these assets was £0.125m compared with the revised budget of

£0.125m. The capital investment of £0.125m was funded by direct revenue funding and capital

reserves.

Balance Sheet

As at 31 March 2020, the Authority held long term assets of £2.128m, current assets (including cash

and investments) of £15.487m, current liabilities of £4.896m and long term liabilities (net pension

liabilities) of £0.513m. The Authority did not borrow any funds. Furthermore, the Authority held

usable reserves of £10.676m as at 31 March 2020.

Reserves

Putting in place appropriate levels of general reserves is essential to enable the Authority to manage

risk effectively and to provide cover for potential and unforeseen contingencies.

The level of General Fund balance held is a professional judgement by the Authority based on local

circumstances including the overall budget size, risks, robustness of estimates, major initiatives being

undertaken, budget assumptions and the levels of other earmarked reserves and provisions.

The General Fund balance must last the lifetime of the Authority unless contributions are made from

future years’ revenue budgets and is based on approximately 5% of expected DEFRA grant and

planning income. Additional and ad-hoc grant income is not included due to the potential uncertainty

of this type of funding and that to set aside 5% of any additional income secured would have a

detrimental impact on the funds available to deliver outcomes. It is considered by the Chief Finance

Officer that a working balance of £0.595m for 2020/21 is therefore prudent and reasonable.

The variance of £0.306m below budget in 2019/20 has been consolidated into the Authority’s General

Fund balance which stands at £0.900m.

The Authority also holds earmarked reserves of £5.006m as at 31 March 2020, an increase of

£0.247m. Note 8 provides information on the earmarked reserves held by the Authority for specific

purposes.

Property, Plant and Equipment (PPE)

The Authority holds land and buildings (i.e. the South Downs Centre) and vehicles, plant, furniture and

equipment as PPE assets.

The value of the Authority’s PPE has increased in the financial year by £0.050m from the level reported

in 2018/19 to £2.128m in 2019/20. The following chart shows the value of the Authority’s PPE as at 31

March:

Page 7

PPE (Net Carrying Amount) £'000

The Authority has carried out capital investment on PPE of £0.125m during the financial year.

During 2019/20, the Authority’s valuers, Savills UK Ltd, carried out a valuation of the South Downs

Centre using current value methodology which showed no change in the valuation of £1.835m. On

revaluation, the in year depreciation charge of £0.045m was written out of the CIES.

Vehicle, plant, furniture and equipment assets have been depreciated by £0.075m during the financial

year. The Authority disposed of two vehicles in 2019/20 due to write-offs. The vehicles have been fully

depreciated.

Note 9 to the financial statements provides further information on PPE held by the Authority.

Pensions Liability

The Authority participates in the Local Government Pension Scheme (LGPS). West Sussex County

Council acts as the Scheme Administrator of the West Sussex Pension Fund and is responsible for the

management and administration of the Fund in line with the Local Government Pension Scheme

Regulations. The scheme is a funded defined benefit scheme, meaning that the Authority and employees

pay contributions into a Fund, calculated at a level intended to balance the pension liabilities with

investment assets. Hymans Robertson LLP, an independent firm of actuaries, assesses the position of

the Authority’s Pension Fund.

The Authority’s net liability for future pension payments, as estimated by the pension actuary, Hyman

Robertson LLP has decreased in the financial year by £2.366m from the level reported as at 31 March

2019 to £0.513m at 31 March 2020.

The overall deficit on the pension fund of £0.513m represents the difference between the value of the

Authority’s pension fund assets as at 31 March 2020 and the estimated present value of the future

pension payments (i.e. liabilities) to which it was committed at that date. The value of the Authority’s

pension fund assets has increased by £0.636m from the level reported as at 31 March 2019 to

£18.201m as at 31 March 2020. The value of the future pension payments liabilities has decreased by

£1.730m from the level reported as at 31 March 2019 to £18.714m as at 31 March 2020.

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The liabilities reflect the Authority’s long term underlying commitments to pay post-employment

benefits. These pension liabilities will be paid out over a period of many years, during which time the

assets will continue to generate returns towards funding the liabilities.

The application of actuarial assumptions and other experience adjustments due to the pension

liabilities has resulted in the pension liabilities decreasing by £4.432m of which £2.257m relates to

financial assumptions, £1.064m other experience adjustments and £1.111m relates to demographic

assumptions as detailed in the changes in the assumptions table in note 19. Effectively, due to

economic factors the financial assumptions made by the actuary at 31 March 2020 are more favourable

than those made at 31 March 2019.

Statutory arrangements for funding the pension deficit mean that the current financial position is

robust although future funding of pension liabilities is expected to add to the financial pressures facing

authorities. The deficit on the pension fund will need to be made good by increased contributions over

the working life of employees, as assessed by the pension actuary.

The Authority recognises a reserve for the estimated net pension liability. Therefore, amounts

included in the Authority’s financial statements in relation to post-employment benefits have no effect

on the General Fund balance. Note 19 to the financial statements provides further information on

pension costs.

Investments

The Authority’s treasury management function is provided through a service contract with Brighton &

Hove City Council.

At 31 March 2020 the Authority held investments including accrued interest of £11.985m of which:

• £2.020m was invested externally with Lloyds Bank plc, all of which is held as a cash equivalent;

• £3.515m was invested externally with Santander (UK) plc, all of which is held as a short term

investment;

• £6.450m was held as a cash equivalent investment in Brighton & Hove City Council under the

terms of the management agreement.

The carrying value of the short term investments is reduced by a £0.001m expected credit loss

provision to £11.984m, which has been made due to accounting for Financial Instruments under IFRS9.

The Authority’s Annual Investment Strategy (AIS) for 2019/20 was approved by the Authority in March

2019. The AIS gives priority to security and liquidity. Security is achieved by:

• selecting only those institutions that meet stringent credit rating criteria or, in the case of non-

rated UK building societies, have a substantial asset base; and,

• having limits on the amount invested with any one institution.

For the purpose of determining credit ratings the Authority uses independent credit rating agencies.

Rating criteria is only one factor taken into account in determining investment counterparties. Other

factors, such as articles in the financial press, are monitored and action taken where it is felt the risk

attached to a particular counterparty has or is likely to worsen. Action will include the suspension of a

counterparty in appropriate circumstances. Liquidity is achieved by limiting the maximum period for

investment.

The level of investments has increased during the financial year by £1.316m. The following chart shows

the level of investments made as at the 31 March 2020:

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During 2019/20, the Authority placed new short term investments of £21.501m of which £16.001m

relates to cash equivalents and has realised cash from the maturity of short term investments of

£20.198m of which £14.698m related to cash equivalents. Note 11 to the financial statements provides

further information on investments.

Debtors

At 31 March 2020, £3.443m was owed to the Authority by debtors over the short term (i.e. 12

months). The level of short term debtors has increased during the financial year by £1.792m mainly

due to Community Infrastructure Levies and S106 Developers’ receipts not yet paid at 31 March 2020.

The Authority does not have any long term debtors. The following charts show the level of debts

owed to the Authority at 31 March 2020:

Short Term Debtors £'000

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Creditors

At 31 March 2020, the Authority owed £4.896m to creditors; these amounts are owed over the short

term. The level of short term creditors has increased during the financial year by £0.034m. The

following chart shows the amounts owed by the Authority at 31 March 2020:

Short Term Creditors £'000

Performance Indicators

The Authority has developed a set of Key Performance Indicators (KPIs) to demonstrate delivery of

the Corporate Plan outcomes identified above. Performance reports are reviewed by the Senior

Management Team and the Policy & Resources Committee quarterly.

Each KPI is reported with a detailed narrative provided by the officers responsible for delivery. The

Authority’s Performance Management Framework sets out how performance drives improvement.

In addition to its own corporate reporting, the Authority contributes performance data to a set of

indicators agreed jointly by all National Parks. All the indicators have detailed methodology sheets

which set out clearly how they are calculated and assumptions made.

Progress against target or achievement of milestones is flagged in reports using a ‘red, amber, green’

traffic light system, for corporate indicators and project information. An annual review is produced

each year.

The current KPIs and PMP can be located on the Authority’s website

www.southdowns.gov.uk.

Authority Outlook and Strategic Approach

DEFRA have confirmed the National Park Authorities’ grant allocation for the 2020/21 financial year of

£10.486m, which represents the same level of funding as the 2019/20 financial year. The grant value

includes an allocation of £0.524 from a dedicated Biodiversity Fund which must be used to ‘carry out

activities that will benefit biodiversity’. Expenditure budgets have been identified within the proposed

2020/21 budget to meet the requirements of the Biodiversity Fund. The 2020/21 budget has been

developed in the context of priorities further informed by Member Budget Workshops and to align

with the Corporate Plan, and includes the establishment of Theme Programme Board that will deliver

programmes of work in pursuit of the PMP objectives. The Authority has continued to adopt a

prudent approach to medium term financial planning, with an established permanent staffing structure,

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and temporary posts for short term projects. This approach will ensure that the Authority does not

recruit to posts that become unaffordable in the longer term and will provide some flexibility in

resources to fund priorities identified in the PMP.

The Authority’s financial planning and resource allocation has taken into account the following

assumptions:

• To be a lean, efficient organisation.

• To work with others – stakeholder and partners.

• To use limited contributions to activities to encourage and lever greater contributions from others.

• The need for clear, SMART outcomes.

• Maintain flexibility (e.g. able to change quickly if circumstances alter).

The Authority’s Medium Term Financial Strategy (MTFS) will continue to seek flexibility within the

overall budget whilst continuing to fund short term and one-off projects, identify savings, maximise

potential income opportunities and provide flexibility for PMP priorities. The MTFS includes indicative

allocations for ongoing investment in projects and contributions to strategic priorities; this includes a

minimum contribution for Theme Programme Boards to meet PMP objectives.

The MTFS

covers a five year period between 2020/21 to 2024/25 to give a long term vision of the

budget in light of current planned activities. The revenue principles set out in the MTFS underpin the

approach to budget setting and support the Authority in maintaining financial stability over the period.

The MTFS reflects a number of initiatives and efficiency savings including:

• Applying an appropriate turnover rate to salary budgets to reduce the extent of in year

underspends as well as unlocking additional resources for the Authority.

• Maintaining annual allocations for key initiatives including £0.100m to support the Affordable

Housing options and £0.050m allocation for a Farm Pilots scheme.

• Proactive approach to maximising income opportunities including potential income from corporate

sponsorship and donations, as well as continued financial support for the South Downs National

Park Trust to maximise fundraising opportunities.

• Ongoing review of the performance and value for money provided under corporate contracts,

including payments to other Local Authorities for planning services.

• Maximising the opportunity to bid for external funding sources, in line with the Authority’s duty

and purpose.

• Allocations to Programme Theme Boards that will deliver programmes of work in pursuit of the

PMP objectives.

The Authority has established a systematic strategy, framework and processes for managing risk. A

corporate risk register is maintained, and reported to each meeting of the Policy & Resources

Committee and monitored by the Authority’s Operational Management Team on a monthly basis and

issues escalated to the Senior Management Team as required. This enables relevant risks to be

identified and evaluated, with consideration given to appropriate mitigation strategies. Risks to the

Authority’s MTFS are reviewed annually as part of the budget setting process. External risks include

reduction in government funding, reduction in income from planning fees and cost overruns.

The Authority regularly reviews its medium term cash flow requirements and sets an Annual

Investment Strategy which sets parameters within which the Authority’s cash balances and reserves

will be invested. The strategy concentrates on two key areas:

• capital security through investment in institutions with the highest credit rating, and;

• liquidity by limiting the maximum period of investment.

Cash flow requirements are reviewed regularly, and an investment deposit cycle has been introduced

to optimise return, whilst maintaining liquidity. The deposit cycle has been scheduled to ensure

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adequate cash is available when required, and the Authority also uses its facility to invest in short term

instruments to provide liquidity to match its daily cash flow requirements.

Explanation of the Financial Statements

The objectives of the Statement of Accounts (i.e. financial statements) are to provide information

about the financial position, financial performance and cash flows of the Authority that is useful to a

range of users for assessing the stewardship and accountability of the Authority’s elected members and

management of the resources entrusted to them and for making and evaluating economic decisions

about the allocation of those resources.

The financial statements are presented on an International Financial Reporting Standards (IFRS) basis

and have been prepared in accordance with the Code of Practice on Local Authority Accounting in the

United Kingdom 2019/20 (the Code), issued by the Chartered Institute of Public Finance and

Accountancy (CIPFA) and cover the period 1 April 2019 to 31 March 2020 (“the financial year”). The

Code specifies the format of the financial statements, disclosures and terminology that are appropriate

for national park authorities.

The Authority is required to present a complete set of financial statements (including comparative

information). The financial statements are set out on pages 17 to 52 and are presented as follows:

Comprehensive Income and Expenditure Statement (CIES)

The CIES shows the accounting cost in the financial year of providing services in accordance with

generally accepted accounting practices, rather than the amount to be funded from the National Park

Grant. The Grant covers expenditure in accordance with regulations; this may be different from the

accounting cost. The funding position is shown in both the Movement in Reserves Statement (MiRS)

and the Expenditure and Funding Analysis (EFA) at Note 5 to the financial statements. The analysis of

income and expenditure on the face of the CIES is specified by the Authority’s operating segments

which are based on the Authority’s internal management reporting structure.

Movement in Reserves Statement (MiRS)

The MiRS shows the movement during the financial year on the different reserves held by the

Authority, analysed into “usable reserves” (i.e. those that can be applied to fund expenditure) and

“unusable reserves”. The MiRS shows how the movements in year of the Authority’s reserves are

broken down between gains and losses incurred in accordance with generally accepted accounting

practices and the statutory adjustments required to return to the amounts chargeable to the National

Park Grant for the year. The net increase or decrease shows the statutory General Fund balance

movements in the year following those adjustments.

Balance Sheet

The Balance Sheet shows the value as at the end of the financial year of the assets and liabilities

recognised by the Authority. The net assets of the Authority (assets less liabilities) are matched by the

reserves held by the Authority.

Cash Flow Statement

The Cash Flow Statement shows the changes in cash and cash equivalents of the Authority during the

financial year. The statement shows how the Authority generates and uses cash and cash equivalents

by classifying cash flows as operating, investing and financing activities. The amount of net cash flows

arising from operating activities is a key indicator of the extent to which the operations of the

Authority are funded by way of grant income or from the recipients of services provided by the

Authority. Investing activities represent the extent to which cash outflows have been made for

resources which are intended to contribute to the Authority’s future service delivery. The Authority

does not have any financing activities.

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Notes to the Financial Statements

The notes to the financial statements comprise explanatory information.

The financial statements also include a Statement of Responsibilities which sets out the responsibilities

of the Authority and the Chief Finance Officer.

The Authority uses rounding to the nearest £’000 in presenting amounts in its financial statements;

some notes are rounded to the nearest £ to aid the presentation and understanding of the financial

statements. The Authority has abbreviated £million as the symbol ‘m’.

Further Information

These financial statements have been prepared by Brighton & Hove City Council in accordance with

the terms of the Financial Services contract.

Further information about the financial statements is available from Brighton & Hove City Council,

Financial Services, Bartholomew House, Bartholomew Square, Brighton. In addition, interested

members of the public have a statutory right to inspect the financial statements and their availability is

advertised on the South Downs National Park Authority’s website.

Nigel Manvell

CPFA

Chief Finance Officer

Page 14

Statement of Responsibilities

___________________________________________________________________________

The Authority’s Responsibilities

The Authority is required to:

(i) make arrangements for the proper administration of its financial affairs and to secure that one

of its officers has the responsibility for the administration of those affairs. In this Authority that

officer is the Chief Finance Officer;

(ii) manage its affairs to secure economic, efficient and effective use of resources and safeguard its

assets;

(iii) approve the Statement of Accounts.

The Chief Finance Officer’s Responsibilities

The Chief Finance Officer is responsible for the preparation of the Authority’s Statement of Accounts

in accordance with proper practices as set out in the CIPFA

Code of Practice on Local Authority

Accounting in the United Kingdom. The Chief Finance Officer is required to sign and date the

Statement of Accounts, stating that it presents a true and fair view of the financial position of the

Authority at the 31 March and its income and expenditure for the financial year.

In preparing this Statement of Accounts the Chief Finance Officer has:

(i) selected suitable accounting policies and then applied them consistently;

(ii) made judgements and estimates that were reasonable and prudent;

(iii) complied with the local authority Code.

The Chief Finance Officer has also:

(i) kept proper accounting records which were up to date;

(ii) taken reasonable steps for the prevention and detection of fraud and other irregularities.

I certify that the Statement of Accounts presents a true and fair view of the financial position of the

South Downs National Park Authority as at 31 March 2020 and its income and expenditure for the

financial year ended 31 March 2020.

Nigel Manvell CPFA

Chief Finance Officer (Section 151 Officer)

30 June 2020

Chartered Institute of Public Finance and Accountancy

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Certification by Chair

___________________________________________________________________________

I confirm that this Statement of Accounts was approved by the Policy & Resources Committee at a

meeting held on xx September 2020.

Signed on behalf of the South Downs National Park Authority

Ken Bodfish

Chair

Policy & Resources Committee

Date xx September 2020

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Core Financial Statements

2019/20

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Comprehensive Income and Expenditure

Statement (CIES)

__________________________________________________________________________

Gross

Expenditure

Gross

Income

Net

Expenditure

Gross

Expenditure

Gross

Income

Net

Expenditure

£'000

5,387 (3,676) 1,711 Planning 6,336 (5,418) 918

3,564 (709) 2,855 Countryside and policy management 3,824 (774) 3,050

4,117 (89) 4,028 Corporate services 4,494 (148) 4,346

228 0 228 Strategic investment fund 447 (15) 432

13,296

(4,474)

8,822

15,101

(6,355)

8,746

(92)

(140)

(54)

(55)

(10,309)

National Park grant

(10,486)

(10,309)

(10,486)

(1,541)

(1,795)

1,015

(3,539)

1,015

(3,539)

(526)

(5,334)

Remeasurements of the net defined benefit liability

Comprehensive Income and Expenditure Statement

Year Ended 31 March 2019

Note

Year Ended 31 March 2020

Cost of Services

Net interest on the net defined benefit pension liability

Interest receivable

Total Financing and Investment Income and Expenditure

Total Non-Specific Grant Income

(Surplus) / Deficit on the Provision of Services

Non-specific grant income

Other Comprehensive Income and Expenditure

Total Comprehensive Income and Expenditure

Financing and investment income and expenditure

Items that will not be reclassified to the (Surplus) / Deficit on the Provision of Services

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Notes to the Comprehensive Income and

Expenditure Statement (CIES)

__________________________________________________________________________

The Authority’s expenditure and income is subjectively analysed as follows:

2018/19 2019/20

Employee expenses 6,725 7,474

Other service expenses 6,557 7,637

Non-current asset charges 52 75

Total Expenditure 13,334 15,186

Fees, charges and other service income (4,036) (5,925)

Interest receivable (92) (140)

Government grants and contributions (10,747) (10,916)

Total Income (14,875) (16,981)

(Surplus) / Deficit on the Provision of Services (1,541) (1,795)

Expenditure and Income analysed by Nature

The fees, charges and other service income (i.e. income received from external customers) is analysed

further in the following table on an operating segment basis:

2018/19 2019/20

Planning (3,602) (5,361)

Countryside and policy management (345) (401)

Corporate services (89) (148)

Strategic Investment Fund 0 (15)

Total Income received from External Customers (4,036) (5,925)

Income received from External Customers on an Operating Segment Basis

Further details on the income received by the Authority, in the form of grants and contributions, from

government bodies is detailed in Note 14 to the financial statements.

Page 19

Movement in Reserves Statements (MiRS)

__________________________________________________________________________

Balance as at 1

April 2019

Total

Comprehensive

Income and

Expenditure

Adjustments

between

Accounting Basis

and Funding Basis

(Increase) /

Decrease in Year

Balance as at 31

March 2020

£'000

General fund balance (including earmarked

reserves)

(5,739) (1,795) 1,492 (303) (6,042)

Capital receipts reserve

(23)

Capital contributions unapplied (1,979) 0 (2,632) (2,632)

(4,611)

Total Usable Reserves

(7,741)

(1,795)

(1,140)

(2,935)

(10,676)

UNUSABLE RESERVES

Pensions reserve 2,879 (3,539) 1,173 (2,366) 513

Accumulated absences account

Total Held for Revenue Purposes

2,947

(3,539)

1,190

(2,349)

598

Unusable reserves held for capital

purposes

Capital adjustment account

(2,078)

(50)

(2,128)

Total Held for Capital Purposes

(2,078)

(50)

(2,128)

Total Unusable Reserves 869 (3,539) 1,140 (2,399) (1,530)

Total Reserves

(6,872)

(5,334)

(12,206)

General fund balance (including earmarked

reserves)

(5,249) (1,541) 1,051 (490) (5,739)

Capital receipts reserve

(23)

Capital contributions unapplied

(189)

(1,790)

(1,979)

Total Usable Reserves (5,461) (1,541) (739) (2,280) (7,741)

UNUSABLE RESERVES

Pensions reserve 1,053 1,015 811 1,826 2,879

Accumulated absences account

Total Held for Revenue Purposes 1,115 1,015 817 1,832 2,947

Capital adjustment account

(2,000)

(78)

(2,078)

Total Held for Capital Purposes

(2,000)

(78)

(2,078)

Total Unusable Reserves

(885)

1,015

739

1,754

869

Total Reserves (6,346) (526) 0 (526) (6,872)

Movement in Reserves Statement

Unusable reserves held for capital purposes

2018/19 Comparative Figures

2019/20

USABLE RESERVES

Unusable reserves held for revenue purposes

USABLE RESERVES

Unusable reserves held for revenue purposes

Page 20

Notes to the Movement in Reserves

Statement (MiRS)

___________________________________________________________________________

This note below provides more detail on the usable reserves and the adjustments made between the

accounting basis and funding basis under regulations. Note 8 provides more detail on the unusable

reserves.

The following analysis sets out the adjustments that are made to the total comprehensive income and

expenditure recognised by the Authority in the year in accordance with proper accounting practice to

arrive at the resources that are specified by statutory provisions as being available to the Authority to

meet future capital and revenue expenditure and sets out a description of the reserves that the

adjustments are made against.

General Fund

Balance

Capital

Receipts

Reserve

Capital

Contributions

Unapplied

Total

Adjustments

£'000

Pension costs (transferred to / (from) the pensions reserve) (1,173) 0 0 (1,173)

Employees' paid absences (transferred to the accumulated

absenses account)

(17) 0 0 (17)

Reversals of entries included in the CIES in relation to capital

expenditure (these items are charged to the capital

adjustment account)

(75) 0 0 (75)

Total Adjustments to Revenue Resources (1,265) 0 0 (1,265)

Capital expenditure financed from revenue balances (transfer

from the capital adjustment account)

75 0 0 75

Total Adjustments between Revenue and Capital

Resources

75 0 0 75

Use of earmarked reserves to finance capital expenditure 50 0 0 50

Reversal of entries included in the CIES in relation to capital

contributions unapplied

2,632 0 (2,632) 0

Total Adjustments to Capital Resources 2,682 0 (2,632) 50

Total Adjustments 1,492 0 (2,632) (1,140)

2019/20

Adjustments between Accounting Basis and Funding Basis under Regulations

Adjustments to the Revenue Resources

Amounts by which income and expenditure included in the CIES are different from revenue for the year calculated

in accordance with statutory requirements

Adjustments between Revenue and Capital Resources

Adjustments to the Captial Resources

Page 21

General Fund

Balance

Capital

Receipts

Reserve

Capital

Contributions

Unapplied

Total

Adjustments

£'000

Pension costs (transferred to / (from) the pensions reserve) (811) 0 0 (811)

Employees' paid absences (transferred to the accumulated

absenses account)

(6) 0 0 (6)

Reversals of entries included in the CIES in relation to capital

expenditure (these items are charged to the capital

adjustment account)

(52) 0 0 (52)

Total Adjustments to Revenue Resources (869) 0 0 (869)

Capital expenditure financed from revenue balances (transfer

from the capital adjustment account)

110 0 0 110

Total Adjustments between Revenue and Capital

Resources

110 0 0 110

Use of earmarked reserves to finance capital expenditure 20 0 0 20

Reversal of entries included in the CIES in relation to capital

contributions unapplied

1,790 0 (1,790) 0

Total Adjustments to Capital Resources 1,810 0 (1,790) 20

Total Adjustments 1,051 0 (1,790) (739)

2018/19

Adjustments between Accounting Basis and Funding Basis under Regulations

Adjustments to the Revenue Resources

Amounts by which income and expenditure included in the CIES are different from revenue for the year calculated

in accordance with statutory requirements

Adjustments between Revenue and Capital Resources

Adjustments to the Captial Resources

General Fund Balance

The General Fund balance is the statutory fund into which all the receipts of the Authority are

required to be paid and out of which all liabilities of the Authority are to be met, except to the extent

that statutory rules provide otherwise. These rules can also specify the financial year in which liabilities

and payments should impact on the General Fund Balance, which is not necessarily in accordance with

proper accounting practice. The General Fund Balance therefore summarises the resources that the

Authority is statutorily empowered to spend on its services or on capital investment (or the deficit of

resources that the Authority is required to recover) at the year end.

Capital Receipts Reserve

The capital receipts reserve holds the proceeds from the disposal of non-current assets, which are

restricted by statute from being used other than to fund new capital investment or to be set aside to

finance historical capital investment. The balance on the reserve shows the resources that have yet to

be applied for these purposes at the year end.

Capital Contributions Unapplied

The capital contributions unapplied account holds contributions received towards capital projects for

which the Authority has no conditions to repay and are yet to be applied to meet expenditure. The

account specifically holds contributions relating to the Community Infrastructure Levy (CIL).

Page 22

Balance Sheet

_________________________________________________________________________________

As at 31

March 2019

As at 31

March 2020

£'000 £'000

2,078

Property, plant and equipment

2,128

2,078 Long Term Assets 2,128

5,515

Short term investments

3,514

Inventories

1,651

11,12

Short term debtors

3,443

5,360

Cash and cash equivalents

8,522

12,535 Current Assets 15,487

(4,862)

11,13

Short term creditors

(4,896)

(4,862) Current Liabilities (4,896)

(2,879)

Other long term liabilities

(513)

(2,879) Long Term Liabilities (513)

6,872 Net Assets 12,206

(7,741)

Usable reserves

(10,676)

869

Unusable reserves

(1,530)

(6,872) Total Reserves (12,206)

Long Term Assets

Current Assets

Current Liabilities

Long Term Liabilities

Note

Balance Sheet

The unaudited Statement of Accounts was authorised for issue by the Chief Finance Officer on 30 June

2020.

Nigel Manvell CPFA

Chief Finance Officer (Section 151 Officer)

30 June 2020

Page 23

Cash Flow Statement

__________________________________________________________________________________

2018/19 2019/20

£'000 £'000

1,541 Net surplus / (deficit) on the provision of services 1,795

52 Non-current asset charges - depreciation and revaluation 75

746 Increase / (decrease) in creditors 34

(602) (Increase) / decrease in debtors (1,792)

(1) (Increase) / decrease in inventories 1

811

Movement in the pension liability (element charged to the surplus / (deficit) on

the provision of services)

1,173

(62) Contributions to / (from) provisions 0

(9) Other Adjustments 1

935

Adjustment to surplus / (deficit) on the provision of services for non-

cash movements

(508)

0 Proceeds from the disposal of non-current assets 0

Adjustment for items included in the net surplus / (deficit) on the

provision of services that are investing and financing activities

2,476 Net Cash Flows from Operating Activities 1,287

(130) Purchase of non-current assets (including the movement in capital creditors) (125)

(7,000) Purchase of short term investments (5,500)

3,500 Proceeds from short term investments 5,500

0 Proceeds from the sale of non-current assets 0

(3,630) Net Cash Flows from Investing Activities (125)

1,500 Reclassification of investments from short term investments to cash equivalents 2,000

346 Net Increase / (Decrease) in Cash and Cash Equivalents 3,162

47 Bank current accounts 207

4,967 Short term deposits 5,153

5,014 Cash and Cash Equivalents as at 1 April 5,360

207 Bank current accounts 52

5,153 Short term deposits 8,470

5,360 Cash and Cash Equivalents as at 31 March 8,522

Cash Flow Statement

Page 24

2018/19

2019/20

£’000 £’000

92 Interest received 140

Adjustments for differences between effective interest rates and actual interest

receivable (including movement in interest debtor)

95 Interest Received 142

95 Net Cash Flows from Operating Activities relating to Interest 142

Net Cash Flows from Operating Activities relating to Interest

Page 25

Other Notes to the Core Financial

Statements

1 Accounting Policies

The Authority has included its accounting policies in a separate section of the financial statements

which can be found on pages 55 to 62.

2 Accounting Standards that have been Issued but not yet

Adopted

Under the Code, the Authority is required to disclose details on the impact of an accounting change

required by a new accounting standard that has been issued but not yet adopted by the Code. The

new and updated standards introduced by the Code that will need to be adopted by the Authority in

2020/21 are:

• Amendments to IAS 28 Investments in Associates and Joint Ventures: Long-term Interests in

Associates and Joint Ventures. This is not expected to have an impact on the Authority’s

financial position as the Authority does not have investments in Associates or Joint Ventures.

• Annual Improvements to IFRS Standards 2015–2017 Cycle. This is not expected to have an

impact on the Authority’s financial position.

• Amendments to IAS 19 Employee Benefits: Plan Amendment, Curtailment or Settlement. This

is not expected to have an impact on the Authority’s financial position.

The implementation of IFRS 16 - Leases was due in 2020/21 (effective date 1 January 2020) but has

been deferred until 2021/22. The standard provides a single lessee accounting model, requiring lessees

to recognise assets and liabilities for all leases, unless the lease term is less than one year or the

underlying asset has a low value. Transition work is underway but currently the impact of IFRS 16

cannot be reasonably estimated.

3 Critical Judgements and Assumptions Made

In preparing the financial statements, the Authority has had to make judgements, estimates and

assumptions that affect the application of its policies and reported levels of assets, liabilities, income

and expenses. The estimates and associated assumptions have been based on current trends and other

relevant factors that are considered to be reasonable. These estimates and assumptions have been

used to inform the basis for judgements about the carrying values of assets and liabilities, where these

are not readily available from other sources. However, because balances cannot be determined with

certainty, actual results could be materially different from those assumptions and estimates made.

Estimates and underlying assumptions are regularly reviewed. Changes in accounting estimates are

adjustments of the carrying amount of an asset or a liability, or the amount of the periodic

consumption of an asset, that results from the assessment of the present status of and expected future

benefits and obligations associated with assets and liabilities. Changes in accounting estimates result

from new information or new developments, and accordingly are not corrections of errors.

The critical accounting judgements and assumptions made and key sources of estimation uncertainty

identified by the Authority which have a significant effect on the financial statements are:

•

••

•

Retirement Benefit Obligations

–The estimation of the net pension liability depends on a

number of complex judgements and estimates relating to the discount rate used, the rate at which

Page 26

salaries are projected to increase, changes in retirement ages, mortality rates and expected returns

on pension fund assets. A firm of actuaries is engaged to provide the Authority with expert advice

about the assumptions it should consider applying. Changes in these assumptions can have a

significant effect on the value of the Authority’s retirement benefit obligation. The key assumptions

made are set out in note 19;

•

••

•

Provisions

– the Authority is required to exercise judgement in assessing whether a potential

liability should be accounted for as a provision or contingent liability. In calculating the level of

provisions the Authority also exercises judgement; they are measured at the Authority’s best

estimate of the costs required to settle or discharge the obligation at the 31 March. At present the

Authority does not hold any provisions.

•

••

•

Property, Plant and Equipment

(PPE)

– assets are depreciated over useful lives that

are dependent on assumptions such as the level of repairs and maintenance that will be incurred in

relation to individual types of asset, the expected length of service potential of the asset and the

likelihood of the Authority’s usage of the asset. The outbreak of the Novel Coronavirus (COVID-

19) in March 2020, has impacted global financial markets. As at the 31 March 2020 the external

valuer considers that they can attach less weight to previous market evidence for comparison

purposes to fully inform opinions of value. They are faced with an unprecedented set of

circumstances on which to base a judgement. The valuation is therefore reported on the basis of

‘material valuation uncertainty’. 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 they recommend the valuation of this

property is kept under frequent review. The useful lives are set out in note 9;

•

••

•

Future Levels of Government Funding and Levels of Reserves

– DEFRA have

confirmed the National Park Authorities’ grant allocation for the 2020/21 financial year of

£10.486m, which represents the same level of funding as the 2019/20 financial year. As future

years’ grant allocations are uncertain, the Authority has considered the likelihood of potential

changes when setting the Medium Term Financial Strategy and reviewing the level of reserves. The

Authority has set aside amounts in its working balance and reserves which it considers to be

appropriate based on local circumstances including the overall budget size, risks, robustness of

budget estimates, major initiatives being undertaken, budget assumptions and other earmarked

reserves;

•

••

•

Classification of Leases

– the Authority has entered into lease arrangements in respect of

property and vehicles. The Authority has exercised judgement in the classification of leases (i.e.

operating or finance lease) using such factors as the length of the lease and rent levels. Details of

the Authority’s leases are set out in note 15;

•

••

•

Asset Componentisation

–

The Authority has based the componentisation of the South

Downs Centre asset using categories of typical buildings that the vast majority of this asset would

fall under. The Authority has exercised judgement on the main components that make up these

typical buildings based on professional advice from quantity surveyors employed by Brighton &

Hove City Council. The Authority has also exercised judgement in classifying its assets under each

typical building category and whether assets fall outside these categories and require individual

attention for asset componentisation purposes.

4 Events after the Reporting Period

These financial statements were authorised for issue by the Chief Finance Officer on 30 June 2020.

Events taking place after this date are not reflected in the financial statements or notes.

The Covid-19 pandemic will inevitably have financial implications for the Authority, however, it has not

had a material impact on the 2019/20 financial position. It is far more likely that there will be

Page 27

implications in the 2020/21 financial year as the full effect of government measures and changes in

activity take effect. It will not be possible to quantify all exceptional costs, losses or any other financial

implications that the Authority will experience due to this unprecedented emergency situation.

5 Expenditure and Funding Analysis (EFA)

The objective of the EFA is to demonstrate how the funding available to the Authority (i.e. government

grants) for the year has been used in providing services in comparison with those resources consumed

or earned by the Authority in accordance with generally accepted accounting practices. The EFA also

shows how this expenditure is allocated for decision making purposes between the Authority’s

departments. Income and expenditure accounted for under generally accepted accounting practices is

presented fully in the CIES. The analysis of income and expenditure on the face of the EFA is specified

by the Authority’s operating segments which are based on the Authority’s internal management

reporting structure.

The following table sets out the adjustments that are made to the total comprehensive income and

expenditure recognised by the Authority in the year in accordance with proper accounting practice to

arrive at the net expenditure chargeable to the General Fund balance (i.e. the resources that are

specified by statutory provisions as being available to the Authority to meet future capital and revenue

expenditure):

Net Expenditure chargeable

to the General Fund balance

Adjustments between

Funding & Accounting Basis

Net Expenditure in the

Comprehensive Income &

Expenditure Statement

Net Expenditure chargeable

to the General Fund balance

Adjustments between

Funding & Accounting Basis

Net Expenditure in the

Comprehensive Income &

Expenditure Statement

£'000

1,710 1 1,711 913 5 918

2,850

2,855

3,041

3,050

3,962

4,028

4,150

196

4,346

228 0 228 432 0 432

(721) 721 0 (985) 985 0

8,029

793

8,822

7,551

1,195

8,746

(10,309)

(10,486)

1,790 (1,844)

(54)

2,632 (2,687)

(55)

(490) (1,051) (1,541) (303) (1,492) (1,795)

(5,119) (5,739)

(620)

(303)

(5,739) (6,042)

Expenditure and Funding Analysis

Year Ended 31 March 2019

Year Ended 31 March 2020

Opening General Fund balance at 1 April (including earmarked reserves)

Less (surplus) / deficit on General Fund balance in year

Planning

Countryside and policy management

Corporate services

Adjustments between funding & accounting basis

for items within the operating segments

Cost of Services

National park grant

Other income and expenditure

Strategic investment fund

(Surplus) / Deficit on the Provision of

Services

Closing General Fund Balance at 31 March (including earmarked

reserves)

Page 28

2019/20

Adjustments

for Capital

Purposes

(note 1)

Net Change

for the

Pensions

Adjustment

(note 2)

Other

Statutory

Differences

(note 3)

Other (Non-

Statutory)

Adjustments

(note 4)

Total

Adjustments

£'000

Planning 0 0 5 0 5

Countryside and policy management 0 0 9 0 9

Corporate services (45) 98 3 140 196

Adjustments between funding & accounting

basis for items within the operating segments

(5) 990 0 0 985

Net Cost of Services (50) 1,088 17 140 1,195

Other income and expenditure (2,632) 85 0 (140) (2,687)

Difference between General Fund

(Surplus) / Deficit and Comprehensive

Income and Expenditure (Surplus) /

Deficit

(2,682) 1,173 17 0 (1,492)

Note to the Expenditure and Funding Analysis

2018/19

Adjustments

for Capital

Purposes

(note 1)

Net Change

for the

Pensions

Adjustment

(note 2)

Other

Statutory

Differences

(note 3)

Other (Non-

Statutory)

Adjustments

(note 4)

Total

Adjustments

£'000

Planning 0 0 1 0 1

Countryside and policy management 0 0 5 0 5

Corporate services (80) 53 1 92 66

Adjustments between funding & accounting

basis for items within the operating segments

1 720 0 0 721

Net Cost of Services (79) 773 7 92 793

Other income and expenditure (1,790) 38 0 (92) (1,844)

Difference between General Fund

(Surplus) / Deficit and Comprehensive

Income and Expenditure (Surplus) /

Deficit

(1,869) 811 7 0 (1,051)

Note to the Expenditure and Funding Analysis

Note 1 – Adjustments for Capital Purposes

These adjustments include:

• items charged to services in relation to non-current assets (depreciation and revaluation gains and

losses):

• adjustments for grants - revenue grants are adjusted from those receivable in year to those

receivable without conditions or for which conditions were satisfied throughout the year.

Note 2 – Net Change for the Pensions Adjustments

These adjustments relate to the removal of pension contributions and the addition of IAS 19 Employee

Benefits pension related expenditure and income:

Page 29

• for services (i.e. operating segments) this represents the removal of the employer pension

contributions made by the Authority as allowed by statute and the replacement with current

service costs and past service costs;

• for other income and expenditure this represents the net interest on the defined benefit liability

charged to the CIES.

Note 3 - Other Statutory Differences

This column includes other statutory adjustments between amounts debited / credited to the CIES and

amounts payable / receivable to be recognised under statute and includes adjustments to the General

Fund surplus / deficit for employees’ paid absences.

Note 4 - Other (Non-Statutory) Adjustments

Other non-statutory adjustments between amounts debited / credited to service segments which need

to be adjusted to comply with the presentational requirements in the CIES and includes adjustments

for surplus / deficit for interest receivable.

Further detail on these adjustments is provided in the note to the Movement in Reserves Statement.

6 Usable Reserves

Movements in the Authority’s usable reserves are detailed in the Movement in Reserves Statement.

7 Unusable Reserves

Capital Adjustment Account (CAA)

The CAA 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 CAA is debited with the cost of acquisition, construction

or enhancement as depreciation and revaluation losses are charged to the CIES. The account is

credited with the amounts set aside by the Authority as finance for costs of acquisition, construction

and enhancement. The following table shows the balances on the CAA at the beginning and end of the

financial year and the detailed movements during the financial year:

2018/19 2019/20

£'000 £’000

Balance as at 1 April (2,000) (2,078)

Charges for depreciation of non-current assets 131 120

Upward revaluations reversing previous revaluation losses on non-current

assets

(79) (45)

Use of the capital receipts reserve to finance new capital investment 0 0

Capital investment charged against the General Fund balance (110) (75)

Use of earmarked reserves to finance new capital investment (20) (50)

Total adjustments between accounting basis and funding basis under

regulations

(78) (50)

Balance as at 31 March (2,078) (2,128)

Adjustments between accounting basis and funding basis under regulations

Capital Adjustment Account

Page 30

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 Authority accounts for post-employment benefits in the CIES 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 Authority makes employer’s

contributions to pension funds or eventually pay any pensions for which it is directly responsible. The

debit balance on the pensions reserve therefore shows a shortfall in the benefits earned by past and

current employees and the resources the Authority 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. The following table shows the balances on the pensions reserve at the beginning and end of the

financial year and the detailed movements during the financial year:

2018/19 2019/20

£'000 £’000

Balance as at 1 April 1,053 2,879

Remeasurements of the net defined benefit liability 1,015 (3,539)

Total other comprehensive income and expenditure 1,015 (3,539)

Reversal of items relating to retirement benefits charged to the surplus / deficit

on the provision of services in the CIES

1,624 2,054

Employer's pensions contributions payable (813) (881)

Total adjustments between accounting basis and funding basis under

regulations

811 1,173

Balance as at 31 March 2,879 513

Pensions Reserve

Adjustments between accounting basis and funding basis under regulations

Other comprehensive income and expenditure

The reserve is normally at the same level as the pensions liability carried on the top half of the Balance

Sheet. Note 19 provides further information.

Accumulated Absences Account

The accumulated absences account absorbs the differences that would otherwise arise on the General

Fund balance from accruing for compensated absences earned but not taken during the financial year

(e.g. annual leave entitlement carried forward at 31 March). Statutory arrangements require that the

impact on the General Fund balance is neutralised by transfers to / from the accumulated absences

account. The following table shows the balances on the accumulated absences account at the beginning

and end of the financial year and the detailed movements during the financial year:

Page 31

2018/19 2019/20

£'000 £’000

Balance as at 1 April 62 68

Settlement / cancellation of accrual made at the end of the preceding financial

year

(62) (68)

Amounts accrued at the end of the current financial year 68 85

Total adjustments between accounting basis and funding basis under

regulations

6 17

Balance as at 31 March 68 85

Adjustments between accounting basis and funding basis under regulations

Accumulated Absences Account

8 Earmarked Reserves

The following table sets out the amounts set aside from the General Fund balance in earmarked

reserves to provide financing for future expenditure plans and the amounts posted back from

earmarked reserves to meet General Fund expenditure in 2019/20:

Balance at 1

April 2018

Transfers

To 2018/19

Transfers

From

2018/19

Balance at

31 March

2019

Transfers

To 2019/20

Transfers

From

2019/20

Balance at

31 March

2020

£'000 £'000 £'000 £'000 £'000 £'000 £'000

Carry forwards

reserve

(588) (690) 588 (690) (603) 690 (603)

Revenue grants

reserve

(251) (393) 251 (393) (408) 393 (408)

Planning reserve (580) (128) 0 (708) 0 0 (708)

Partnership

Management Plan

Reserve

(329) (224) 41 (512) 0 0 (512)

Strategic fund reserve (682) (458) 450 (690) (325) 345 (670)

South Downs Way

reserve

(20) 0 0 (20) 0 0 (20)

Volunteer ranger

service reserve

(29) 0 29 0 0 0 0

Affordable Housing

Reserve

0 (85) 0 (85) (61) 0 (146)

Repairs and renewals -

vehicles reserve

(34) (8) 20 (22) (60) 50 (32)

S106 receipts reserve (1,063) (11) 228 (846) (50) 167 (729)

Capital reserves

Estates management

reserve

(593) (200) 0 (793) (385) 0 (1,178)

Total (4,169) (2,197) 1,607 (4,759) (1,892) 1,645 (5,006)

Transfers to / from Earmarked Reserves

Revenue reserves

Page 32

The carry forwards reserve holds approved carry forward of budget to meet future specific costs.

The revenue grants reserve holds revenue grants received by the Authority that have no conditions

attached for which expenditure has not yet been incurred.

The planning reserve is a long term risk reserve covering potential costs resulting from planning

inquiries, changes to future delegation agreements and significant falls in planning income and support

for neighbourhood plans.

The partnership management plan reserve is held to fund outcomes indented in the Authority’s

Partnership Management Plan.

The strategic fund reserve provides funding for specific strategic projects.

The South Downs Way reserve and Volunteer Ranger Service reserve have been funded from reserves

held by other local authorities from the South Downs Joint Committee. These reserves will be used to

fund expenditure incurred on these areas in the future.

The Affordable Housing Reserve is held to fund actions identified in the Authority’s Affordable

Housing Strategy.

The repairs and renewals vehicle reserve is used to replace existing vehicles as they come to the end

of their useful live.

The S106 receipts reserve holds contributions made to the Authority by developers under a non-

statutory agreement. These receipts will be primarily used to develop infrastructure within the Park.

The capital reserves hold resources which are used to fund capital projects as part of the Authority's

capital investment programme.

9 Property, Plant and Equipment (PPE)

The Authority categorises its PPE into sub categories, namely other land and buildings and vehicles,

plant, furniture and equipment. The following table shows the gross carrying amount and the

accumulated depreciation at the beginning and end of the financial year and summarises the movement

in value over the financial year for each sub category of PPE:

Page 33

2019/20

Other Land &

Buildings

Vehicles, Plant,

Furniture & Equipment

Total PPE

£'000

Gross carrying amount 1,835 621 2,456

Accumulated depreciation 0 (378) (378)

Net Carrying Amount at 1 April 2019 1,835 243 2,078

Additions 0 125 125

Reversal of previous revaluation losses

Depreciation charge (45) (75) (120)

Net Carrying Amount at 31 March 2020 1,835 293 2,128

Gross carrying amount 1,835 692 2,527

Accumulated depreciation 0 (399) (399)

Net Carrying Amount at 31 March 2020 1,835 293 2,128

Non-Current Assets

Capital Additions

Asset Disposals

2018/19 Comparative Figures

Other Land & Buildings

Vehicles, Plant, Furniture

& Equipment

Total PPE

£'000

Gross carrying amount 1,800 506 2,306

Accumulated depreciation 0 (306) (306)

Net Carrying Amount at 1 April 2018 1,800 200 2,000

Additions 0 130 130

Reversal of previous revaluation losses

Depreciation charge (44) (87) (131)

Net Carrying Amount at 31 March 2019

1,835

243

2,078

Gross carrying amount 1,835 621 2,456

Accumulated depreciation 0 (378) (378)

Net Carrying Amount at 31 March 2019

1,835

243

2,078

Capital Additions

Asset Disposals

Non-Current Assets

Page 34

Valuations

The valuation of other land and buildings (i.e. the South Downs Centre) is based upon a valuation

report issued annually by the Authority’s valuers, Savills UK Ltd. The valuation is carried out as at 31

March 2020 in accordance with the methodologies and bases for estimation set out in the professional

standards of the Royal Institution of Chartered Surveyors (RICS). The Authority requires that all

valuers are RICS qualified.

Componentisation and Useful Lives

During 2019/20, the Authority componentised the South Downs Centre using information provided by

Brighton & Hove City Council’s quantity surveyors. The building is componentised into five

components: main asset building, roof, windows and external doors, mechanical installations and

electrical installations. The separate components have individual useful lives: 50 years for the main

asset building, 25 years for electrical installations and 20 years for the remaining components.

Asset lives for vehicles, plant, furniture and equipment are set at five years.

1010

10 Capital Investment and Capital Financing

The Authority incurred £0.125m of capital investment in 2019/20 which was fully financed in the

reporting period. The table below shows the total amount of capital investment together with the

resources that have been used to finance the assets.

2018/19 2019/20

£’000

Property, plant and equipment 130 125

Total Capital Investment 130 125

Capital receipts 0 0

Reserves (20) (50)

Revenue contributions (110) (75)

Total Financing (130) (125)

Capital investment

Sources of finance

Capital Investment and Capital Financing

1111

11 Financial Assets and Liabilities – Financial Instruments

The Authority's treasury management function is provided by Brighton & Hove City Council through a

service contract.

Categories of Financial Instruments

The following categories of financial instrument are carried in the Authority’s Balance Sheet:

Page 35

31 March 2019 31 March 2020

£’000 £’000

Amortised Cost 10,875

12,036

Total Investments 10,875 12,036

Amortised Cost

1,261

2,864

Total Debtors 1,261 2,864

Financial liabilities at amortised cost

(4,622)

(4,649)

Total Creditors (4,622) (4,649)

Short Term

Categories of Financial Instruments

Investments

Debtors

Creditors

The above table includes the following investments:

• investments with the Lloyds Bank plc totalling £2.020m (£3.512m 2018/19) all of which is held as a

cash equivalent;

• investments with the Santander (UK) plc totalling £3.515m (£3.517m 2018/19), of which all is held

as short term investment;

• an investment in Brighton & Hove City Council of £6.450m held as a cash equivalent (£3.641m

2018/19).

The carrying value of short term investments is reduced by a £0.001m expected credit loss provision

to £11.984m, which has been made due to accounting for Financial Instruments under IFRS9.

The Authority’s bank account was in credit by £0.052m as at 31 March 2020 (£0.207m in credit as at

31 March 2019)

and is included as part of the amortised investments value in the table above.

The Authority does not have any long term financial instruments.

Income, Expense, Gains and Losses

In 2019/20, there was a net gain of £0.135m (£0.087m 2018/19) on loans and receivables which has

been charged to the CIES; this includes a fee expense of £0.005m (£0.005m 2018/19) and interest

income of £0.140m (£0.092m 2018/19). The interest income has been generated through a

combination of external investments and balances invested in Brighton & Hove City Council.

Fair Value of Financial Assets and Liabilities carried at Amortised Cost

All financial liabilities and financial assets (represented by amortised cost and debtors and creditors)

are carried on the Balance Sheet at amortised cost. Their fair value can be assessed by calculating the

present value of the cash flows that take place over the remaining life of the financial instruments using

the following assumptions:

• where a financial instrument has a maturity of less than 12 months the fair value is taken to be the

principal outstanding;

• the fair value of creditors is taken to be the invoiced amount;

• the fair value of debtors is taken to be the billed amount.

The fair values calculated are as follows:

Page 36

Financial Liabilities

Carrying

Amount

Fair Value

Carrying

Amount

Fair Value

£’000 £’000 £’000 £’000

Creditors (4,622) (4,622) (4,649) (4,649)

Total Financial Liabilities (4,622) (4,622) (4,649) (4,649)

31 March 2019

31 March 2020

Financial Liabilities

All financial liabilities are short term at 31 March 2020; therefore the fair value of liabilities is equal to

the carrying amount.

Financial Assets

Carrying

Amount

Fair Value

Carrying

Amount

Fair Value

£’000 £’000 £’000 £’000

Loans and receivables 10,668 10,668 11,984 11,984

Cash at bank 207 207 52 52

Total Investments 10,875 10,875 12,036 12,036

Debtors 1,261 1,261 2,864 2,864

Total Financial Assets 12,136 12,136 14,900 14,900

31 March 2019

31 March 2020

Financial Assets

All financial assets are short term at 31 March 2020; therefore the fair value of investments is equal to

the carrying amount.

Nature and extent of risks arising from financial instruments and how the

Authority

manages those risks

The Authority’s activities expose it to a variety of financial risks. The key risks are:

• credit risk – the possibility that other parties might fail to pay amounts due to the Authority;

• liquidity risk – the possibility that the Authority might not have funds available to meet its

commitments to make payments;

• refinancing risk – the possibility that the Authority might be required to renew a financial

instrument on maturity at disadvantageous interest rates or terms;

• market risk – the possibility that financial loss might arise as a result of changes in such measures as

interest rate movements.

Overall procedures for managing risk

The Authority’s overall risk management procedures focus on the unpredictability of the financial

markets and implementing restrictions to minimise the losses resulting from this risk. The procedures

for risk management are set out through a legal framework in the Local Government Act 2003 and

associated regulations. These require the Authority to comply with the CIPFA Prudential Code, the

CIPFA Treasury Management in the Public Services Code of Practice and Investment Guidance issued

through the Act.

Overall these procedures require the Authority to manage risk in the following ways:

• by formally adopting the requirements of the Code of Practice;

• by approving annually in advance and for the following three years, prudential indicators to: limit the

Authority’s (a) overall borrowing, (b) maximum and minimum exposure to fixed and variable rates,

Page 37

annual exposure to investments maturing beyond a year;

• by approving an investment strategy for the forthcoming year setting out criteria for both investing

and selecting investment counterparties in compliance with Government guidance.

These items are reported within the annual Treasury Management Strategy (TMS), which outlines the

detailed approach to managing risk in relation to the Authority’s financial instrument exposure. The

strategy was approved by the Authority on 28 March 2019 and can be found on the Authority’s

website

www.southdowns.gov.uk. Actual performance is also reported annually to members.

The key issues within the strategy were:

• the Authority would not raise borrowing during the financial year and therefore no borrowing

limits or prudential indicators in relation to borrowing were set for 2019/20;

• investment would only be made in institutions with good credit quality.

These procedures and strategies are implemented through a management agreement with Brighton &

Hove City Council.

Credit Risk

Credit risk arises from deposits with banks and financial institutions, as well as credit exposures to the

Authority’s customers. Deposits are not made with banks and financial institutions unless they meet

the minimum requirements set out in the Authority's investment strategy. Additional selection criteria

are also applied before an investment is made.

The minimum criteria set out in the investment strategy for investment counterparties were:

• major banks and building societies to have a short term rating that indicates the highest credit

quality;

• money market funds to have a rating equal to "AAA" (triple A).

Investment counterparties also included other local authorities and government institutions. All

investments were subject to a maximum period dependent upon their credit rating.

The Authority uses the creditworthiness service provided by Link Asset Services. This service uses a

sophisticated modelling approach with credit ratings from all three rating agencies – Fitch, Moody’s and

Standard and Poor’s, forming the core element. However, it does not rely solely on the current credit

ratings of counterparties but also uses the following as overlays:

• credit watches and credit outlooks from credit rating agencies;

• CDS (Credit Default Swaps) spreads to give early warning of likely changes in credit ratings.

Customers for goods and services are assessed, taking into account their financial position, past

experience and other factors, with individual credit limits being set in accordance with parameters set

by the Authority.

During the financial year, the Authority did not hold collateral as security for any investment.

Amounts Arising from Expected Credit Losses

The loss allowance for financial assets carried at amortised cost bought forward as at 1 April 2019 was

£0.002m, and the loss allowance calculated as at 31 March 2020 was £0.001m. An increase of £0.001m

in expected credit loss for financial assets held at amortised cost was therefore recognised in 2019/20.

The Authority's financial assets are all due within 12 months, and no significant increase in risk has

been assessed. All the expected credit loss on all investments in financial institutions has therefore

been calculated on a 12 month expected loss basis, taking account of the credit rating of each

investment, the historic default experience for each credit rating and the time to maturity of each

investment.

Page 38

Collateral

During the Reporting period the council held no collateral as security.

Liquidity Risk

The Authority has projected that it will have sufficient funds to cover any day to day cash flow need.

There is therefore no significant risk that it will be unable to meet its commitments under financial

instruments.

The Authority manages its liquidity position through the risk management procedures mentioned

above (the setting and approval of prudential indicators and the approval of the treasury and

investment strategies), as well as through cash flow management procedures required by the Code of

Practice.

Refinancing and Maturity Risk

The Authority maintains an investment portfolio, with a proportion of the funds available at call. The

Authority is not exposed to refinancing and maturity risk as all financial instruments are held for less

than one year.

The maturity analysis of the financial assets (excluding debtors) invested in the financial year of

£12.036m (£10.875m in 2018/19) is less than one year.

Market Risk

Interest rate risk

The Authority is exposed to interest rate movements on its investments. Movements in interest rates

have a complex impact on the Authority, depending on how variable and fixed interest rates move

across differing financial instrument periods. For instance a rise in interest rates would have the

following effects:

• investments at variable rates - the interest income credited to the CIES will rise;

• investments at fixed rates - for long term investments the fair value of the assets will fall.

Changes in interest receivable on variable rate investments are posted to the surplus / deficit on the

provision of services and affect the Authority's General Fund balance.

The Authority has a number of strategies for managing interest rate risk. The annual TMS draws

together the Authority’s prudential indicators and its expected treasury operations, including an

expectation of interest rate movements. From this statement a prudential indicator is set which

provides maximum and minimum limits for fixed and variable interest rate exposure. Brighton & Hove

City Council's treasury management team monitors market and forecast interest rates within the

financial year to adjust exposures appropriately.

The Authority held no borrowing and £6.450m investments subject to variable interest rates at 31

March 2020. A 0.25% rise in interest rates would have the impact of increasing the interest receivable

on this investment during 2019/20 by £0.013m. There would be no impact of a 0.25% rise in interest

rates on fair value as investments are all for less than one year.

The impact of a 0.25% fall in interest rates would be as above but with the movements being reversed.

Price risk

The Authority does not invest in equity shares.

Foreign exchange risk

The Authority has no financial assets or liabilities denominated in foreign currencies; therefore, it has

no exposure to loss arising from movements in exchange rates.

Page 39

1212

12 Debtors

The following table shows an analysis of the Authority’s short term debtors:

31 March

2019

31 March

2020

£’000

Debtors system control 213 2,625

Accounts receivable debtors 1,042 231

Payments in advance 69 197

HMRC 143 168

Other Debtors 184 222

Total Short Term Debtors 1,651 3,443

Short Term Debtors

Of the £3.443m in the table above, material items include £1.636m for Community Infrastructure Levy

(CIL) receipts and £0.695m for S106 developers’ receipts due to the Authority and a £0.158m

payment in advance for an annual IT system contract.

£2.864m of short term debtors are classed as financial instruments and are included in note 11; those

debtors not included are statutory debtors, grant debtors and payments in advance.

1313

13 Creditors

The following table shows an analysis of the Authority’s short term creditors:

31 March

2019

31 March

2020

£’000

S106 Development Contributions (3,077) (3,307)

Creditors Control Account (372) (196)

Brighton & Hove City Council (70) (142)

HMRC (116) (119)

Other Creditors (1,227) (1,132)

Total Short Term Creditors (4,862) (4,896)

Short Term Creditors

£4.649m of short term creditors are classed as financial instruments and are included in note 11; those

creditors not included are statutory creditors and receipts in advance.

1414

14 Grant Income and Contributions

The Authority receives grants from central government and contributions for revenue purposes.

Government Revenue Grants

Grants received from central government can be either ring fenced for a specific purpose or non-ring

fenced. The table below shows the government grants received by the Authority and credited to the

CIES:

Page 40

2018/19 2019/20

£’000

Department for Environment, Food and Rural Affairs (10,309) (10,486)

Total (10,309) (10,486)

Ring fenced government grants credited to cost of services

Natural England (97) 0

Heritage Lottery Fund (247) (259)

Rural Payments Agency (20) (21)

Department for Communities and Local Government (74) (141)

Department for Environment, Food and Rural Affairs 0 (9)

Total (438) (430)

Total Government Revenue Grants (10,747) (10,916)

Non-ring fenced government grants credited to taxation and non-specific grant income

Government Revenue Grants

Non-Ring Fenced Grants

The non-ring fenced government grant received by the Authority from the Department for

Environment, Food and Rural Affairs of £10.486m is the National Park grant which can be used by the

Authority to finance revenue expenditure on any service.

Ring Fenced Government Grants

The significant ring fenced grants received by the Authority are:

• grants from the Heritage Lottery Fund totalling £0.259m are used to fund heathland restoration

projects within the Park;

• grants from Rural Payments Agency totalling £0.021m are used for farm cluster projects and

heathland restoration within the Park;

• grants from the Department for Communities and Local Government totalling £0.141m are used

to support neighbourhood planning, brownfield site register and promote custom self builds.

Revenue Contributions

The table below shows the revenue contributions received by the Authority:

2018/19 2019/20

£’000

Contributions from other agencies / external bodies (143) (142)

Contributions from other local authorities (81) (120)

Other contributions, donations and sponsorship (96) (170)

Contributions from developers and stakeholders (377) (1,233)

Total Revenue Contributions (697) (1,665)

Revenue Contributions

Revenue contributions credited to cost of services

Revenue contributions received by the Authority include:

• contributions from other agencies / external bodies include Rural Payments Agency (£0.041m) to

fund Egrets Way project; Woodland Trust (£0.028m) to fund forestry work; Southern Water

Page 41

(£0.019m) to protect and improve the quality of groundwater in the Brighton chalk block;

Hebrides Ltd (£0.018m) to fund heathlands restoration work; Peak District National Park

Authority (£0.018m) to support rural enterprise.

• contributions from other local authorities include Horsham District Council (£0.045m)

contribution to the Rural West Sussex Partnership; East Sussex County Council (£0.020m)

contribution to active access within the Park.

• other contributions, donation and sponsorships include South Downs National Park Trust

(£0.131m) contributions to various projects such as improvements to the South Downs Way.

• contributions from developers and stakeholders relates to Section 106 funding towards community

development across the Park.

1515

15 Leases

Authority as Lessee – Operating Leases

As lessee, the Authority does not have any finance leases; however, it leases office space and vehicles

under operating leases with lease periods of between one and five years. The office space relates to

the Authority’s area offices and is expected to be leased for the foreseeable future.

31 March

2019

31 March

2020

£’000

Not later than one year 39 43

Later than one year and not later than five years 122 72

Total Future Minimum Lease Payments 161 115

Future Minimum Lease Payments under Operating Leases (Lessee)

In 2019/20, the Authority made lease payments of £0.056m (£0.048m 2018/19) in respect of these

leases; the lease payments were charged to the relevant cost of service in the CIES.

1616

16 Related Parties

The Authority has the following material related party transactions:

Central Government

Central government has significant influence over the general operations of the Authority and provides

the statutory framework within which the Authority operates. Central government also provides the

majority of its funding in the form of grants and prescribes the terms of many of the transactions that

the Authority has with other parties. Details of the grants received from government departments in

2019/20 can be found in note 14.

Members

Members of the Authority have direct control over the Authority’s financial and operating policies.

The total of members’ allowances paid in 2019/20 is shown in note 20. During 2019/20, works and

services to the value of £4.298m (£2.901m 2018/19) were commissioned from entities, including local

authorities, in which members have declared an interest. Contracts were entered into in full

compliance with the Authority’s standing orders. Details of the entities that members are involved

with are recorded in the Register of Members’ Interests which is held by the Authority.

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Officers

Senior officers of the Authority, such as the Chief Executive and other chief officers have the authority

and responsibility for planning, directing and controlling the activities of the Authority, including the

oversight of these activities.

During 2019/20, Brighton & Hove City Council provided Chief Finance Officer (S151) and other

financial services to the Authority on a contractual basis to the value of £0.328m (£0.318m 2018/19).

As shown in Note 11, the Authority also had an investment in Brighton & Hove City Council of

£6.450m held as a cash equivalent as at 31 March 2020 (£3.641m 31 March 2019) in accordance with

the service contract and the Authority’s Annual Investment Strategy. Senior officers of Brighton &

Hove City Council were in a position to influence financial transactions of the Authority. The financial

services contract was secured through a formal tender process for an initial period 1 April 2012 to 31

March 2015 with the option to extend for a further two years; this option was exercised. The contract

was retendered in full in summer 2016 and Brighton & Hove City Council were successful in securing a

three year contract to provide financial services and Chief Finance Officer S151 services to the

Authority until 2019/20, which has been extended for a further one year. The contract is

independently monitored by the Authority’s Head of Business Services.

During 2019/20, Hampshire County Council provided Monitoring Officer services to the Authority on

a contractual basis to the value of £0.031m (£0.031m 2018/19). The Monitoring Officer contract was

secured through a formal tender process and is independently monitored by the Authority’s Head of

Business Services. Senior officers of Hampshire County Council were not in a position to influence

these financial transactions as they were paid in accordance with the agreed contract terms.

Entities Controlled or Significantly Influenced by the Authority

The South Downs National Park Trust was established by the Authority in April 2017 to raise funds to

benefit the National Park. The Trust is governed by an independent board of 9 trustees who oversee

its work, two of which are Members of the Authority. Not more than one or one third of the

Trustees, whichever is the higher number, shall be members of the Authority. There is currently a

Memorandum of Understanding and Grant Agreement in place for the Authority to provide an annual

grant to the Trust for the first three years of operations to the value of £0.040m per year. The South

Downs National Park Trust made contributions to the Authority of £0.131m during the 2019/20

financial year to fund various project costs. The creditors balance of the Authority as at 31 March 2020

includes £0.074m relating to the South Downs National Park Trust.

Page 43

1717

17 Officers’ Remuneration

In 2019/20 senior employee posts (the Chief Executive and the directors who make up the Senior Management Team of the Authority) and other

officer posts of the Authority were filled through permanent appointments and interim and agency appointments. The remuneration paid to the

Authority’s senior employees is detailed in the following tables:

Salary

(including Fees

& Allowances)

Total

Remuneration

excluding Pension

Contributions

Pension

Contributions

Total

Remuneration

including Pension

Contributions

£ £ £ £

Chief Executive

110,836

21,897

132,733

Director of Planning

98,869

19,613

118,482

Director of Countryside Policy and Management

83,221 83,221 16,448 99,669

Total 292,926 292,926 57,958 350,884

Senior Employee Remuneration - salary between £50,000 and £149,999

2019/20

Post Holder Information

Salary

(including Fees

& Allowances)

Total

Remuneration

excluding Pension

Contributions

Pension

Contributions

Total

Remuneration

including Pension

Contributions

£ £ £ £

Chief Executive 107,877 107,877 21,468 129,345

Director of Planning 93,686 93,686 18,643 112,329

Director of Countryside Policy and Management 81,033 81,033 16,125 97,158

Total 282,596 282,596 56,236 338,832

Senior Employee Remuneration - salary between £50,000 and £149,999

2018/19 Comparative Figures

Post Holder Information

Page 44

Other Employee Remuneration

The following table provides an analysis of the remuneration paid to other employees receiving more

than £50,000 remuneration (excluding employer’s pension contributions):

2018/19 2019/20

Employees

£50,000 - £54,999 7 8

£55,000 - £59,999 2 2

£60,000 - £64,999 0 1

Total

Remuneration Band

Other Officer Remuneration

The following table shows an analysis of the cost of non-senior employees:

Number of

Staff

Actual Cost

£'000

Number of

Staff

Actual Cost

£'000

Employed 155 4,258 159 4,492

Interim Staff 4 30 0 0

Total 159 4,288 159 4,492

2018/19 2019/20

Other Staff

Nature of Employment

Note: all costs include expenses and agency fees, interim staff includes all agency staff and consultants.

The figures included in the above table represent the number of staff not full time equivalent (FTE)

figures.

1818

18 Exit Packages

The Authority did not terminate any contracts of employees during 2019/20 or 2018/19.

1919

19 Defined Benefit Pension Schemes

The Authority makes contributions towards the cost of post-employment benefits as part of the terms

and conditions of employment of its employees. Although these benefits will not actually be payable

until employees retire, the Authority has to disclose the commitment in respect of the future payment

of these benefits at the time that the employees earn their future entitlement.

The Authority participates in the Local Government Pension Scheme (LGPS). West Sussex County

Council acts as the Scheme Administrator of the West Sussex Pension Fund and is responsible for the

management and administration of the Fund in line with the Local Government Pension Scheme

Regulations. Within the responsibilities of the Scheme Administrator is the requirement to liaise and

communicate with employing authorities that participate in the Fund, ensure adequate record keeping

in respect of each member of the Fund, to calculate and pay appropriate benefits to members and to

produce the required information to comply with disclosure requirements.

The scheme is a funded defined benefit scheme, meaning that the Authority and employees pay

contributions into a Fund, calculated at a level intended to balance the pension liabilities with

investment assets.

Hymans Robertson LLP, an independent firm of actuaries, assesses the position of the Authority’s

Pension Fund.

Page 45

The calculations and advice given by Hymans Robertson LLP in their actuarial report have been carried

out in accordance with the Pensions Technical Actuarial Standard adopted by the Financial Reporting

Council, which came into effect on 1 July 2017 (version 3).

Basis for Estimating Assets and Liabilities

The scheme has been estimated by the actuary based on the latest full valuation of the scheme as at 31

March 2019. Liabilities for the scheme have been assessed on an actuarial basis using the projected unit

credit method (i.e. an estimate of the pensions that will be payable in future years dependent on

assumptions about mortality rates, salary levels etc.).

Actuarial assumptions are used by the actuary to calculate the valuation of the scheme. Risks and

uncertainties are inherently associated with the assumptions that are adopted. The assumptions are in

effect projections of future investment returns and demographic experience many years into the future

and there is inevitably a great deal of uncertainty inherent in what constitutes the “best estimate” with

such projections as required by IAS 19. The actuary has interpreted “best estimate” to mean that the

proposed assumptions are “neutral” and has advised that there is an equal chance of actual experience

being better or worse than the assumptions used. The following table shows the principal assumptions

used by the actuary as at the 31 March:

31 March

2019

31 March

2020

Equity investments 2.5% 2.3%

Bonds 2.5% 2.3%

Property 2.5% 2.3%

Cash 2.5% 2.3%

• men 23.6 years 22.2 years

• women 25.0 years 24.2 years

• men 26.0 years 23.3 years

• women 27.8 years 25.9 years

Rate of inflation 2.4% 1.8%

Rate of increase in salaries 3.1% 2.2%

Rate of increase in pensions 2.4% 1.8%

Rate for discounting scheme liabilities 2.7% 2.3%

Expected total return on assets 2.7% 2.3%

Take up of option to convert annual pension in retirement grant * *

Longevity at 65 for future pensioners:

Basis for Estimating Assets and Liabilities

Long term expected rate of return on assets in the scheme

Mortality assumptions

Financial assumptions

Longevity at 65 for current pensioners:

* Pre April 2008 50% and post April 2008 75%

IAS 19 requires the discount rate to be set with reference to the yields on high quality corporate bonds

irrespective of the actual investment strategy of the Fund. As such, the figures prepared by the actuary

in their actuarial report are unlikely to reflect either the actual eventual cost of providing the benefits

or the likely level of contributions to fund the authority’s obligations to the Fund. Also, the net liability

position may change significantly due to relative changes in the equity and bond markets at the

reporting date.

Page 46

Sensitivity to Assumptions

The estimation of the defined benefit obligation is sensitive to the methods and assumptions used by

the actuary:

• the costs of a pension arrangement require estimates regarding future experience. The financial

assumptions used by the actuary are largely prescribed at any point and reflect market conditions

at the reporting date. Changes in market conditions that result in changes in the net discount rate

(essentially the difference between the discount rate and the assumed rates of increase of salaries,

deferred pension revaluation or pensions in payment) can have a significant effect on the value of

the liabilities reported. In order to quantify the impact of a change in the financial assumptions

used, the actuary has calculated and compared the value of the scheme liabilities as at 31 March

2020 on varying bases;

• a reduction in the net discount rate will increase the assessed value of liabilities as a higher value is

placed on benefits paid in the future. A rise in the net discount rate will have an opposite effect of

similar magnitude;

• there is also uncertainty around life expectancy of the UK population. The value of current and

future pension benefits will depend on how long they are assumed to be in payment. To quantify

the uncertainty around life expectancy, the actuary has calculated the difference in cost to the

Authority of a one year increase in life expectancy. For sensitivity purposes, this is assumed to be

an increase in the cost of benefits of broadly 3 to 5%. In practice the actual cost of a one year

increase in life expectancy will depend on the structure of the revised assumption (i.e. if

improvements to survival rates predominately apply at younger or older ages).

The following table shows the sensitivities regarding the principle assumptions that show the increase in

percentage terms and monetary values that the changes have on the scheme liabilities.

Change in assumptions at 31 March 2020

Approximate %

increase to

Employer

Liability

Approximate

monetary

amount

£'000

0.5% decrease in real discount rate 14% 2,633

0.5% increase in salary increase rate 1% 259

0.5% Increase in the pension increase rate 13% 2,356

The figures in the above table have been derived based on the membership profile of the Authority as

at the date of the most recent actuarial valuation. The approach taken by the actuary in preparing the

sensitivity analysis in the table above is consistent with that adopted in the previous reporting period.

Transactions relating to Post-Employment Benefits

The Authority recognises post-employment benefits in the surplus / deficit on the provision of services

in the CIES when they are earned by employees, rather than when the benefits are eventually paid as

pensions. However, the charge the Authority is required to make to its General Fund balance is based

on the cash payable during the financial year rather than the earned post-employment benefits which

are therefore reversed out of the General Fund balance to the pensions reserve and reported in the

MiRS. The following transactions have been made in the CIES and MiRS during the financial year in

relation to the scheme:

Page 47

2018/19 2019/20

£’000

Current service cost 1,533 1,872

Past service cost 53 97

Net interest expense 38 85

Total Post Employment Benefits charged to the Surplus / Deficit on

the Provision of Services

1,624 2,054

Return on scheme assets (excluding the amount included in the net interest

expense)

(592) 891

Changes in demographic assumptions

(1,111)

Changes in financial assumptions 1,644 (2,257)

Other experience adjustments

(1,064)

Adjustment re remeasurements of the pension scheme (37) 2

Adjustment re incorrect actuary's assumptions 0 0

Total Post Employment Benefits charged to the CIES

1,015

(3,539)

Employer's contributions payable to the scheme (813) (881)

Reversal of net charges made to the surplus / deficit for the provision of

services for post employment benefits

1,624 2,054

Net Adjustment to the Pension Reserve 1,826 (2,366)

Financing and Investment Income and Expenditure

Other Post Employment Benefits charged to the CIES

Remeasurement of the Net Defined Benefit Liability comprising:

Movement in Reserves Statement

Transactions relating to Post Employment Benefits in respect of the Local Government Pension Scheme

Comprehensive Income and Expenditure Statement (CIES)

Cost of Services

Service Cost Comprising:

Actual amount charged against the General Fund balance for pensions in the financial year

Note: the re-measurements of the scheme in 2019/20 were (£3.541m); this is different to the re-

measurements recorded in the financial statements of (£3.539m) due to rounding differences.

Assets and Liabilities in relation to Post-Employment Benefits

The amount included on the Balance Sheet arising from the Authority’s obligation in respect of the

scheme is shown in the following table:

2018/19 2019/20

£’000

Present value of the scheme liabilities (20,444) (18,714)

Fair value of scheme assets 17,565 18,201

Net Liability arising from Defined Benefit Obligation (2,879) (513)

Pension Assets and Liabilities recognised in the Balance Sheet

Pension Scheme Liabilities

The present value of scheme liabilities shows the underlying commitments that the Authority has in the

long run to pay post-employment (retirement) benefits. The total liability of £18.714m has a substantial

Page 48

impact on the net assets of the Authority as recorded on the Balance Sheet, resulting in a negative

overall balance of £0.513m. There are statutory arrangements in place for funding the pension deficit.

The Authority is only required to fund the defined benefits when the pensions are actually paid. The

actuary will assess the need to increase contributions over the remaining working life of employees (i.e.

before payments fall due) to make good the deficit on the Fund.

The following table shows a reconciliation of the movements in the present value of the scheme

liabilities:

2018/19 2019/20

£’000

Opening Balance at 1 April

(16,517)

(20,444)

Adjustment re incorrect actuary's assumptions 0 0

Opening Balance at 1 April (16,517) (20,444)

Current service cost (1,533) (1,872)

Interest cost (470) (538)

Contributions from scheme participants (294) (319)

Actuarial gain / (loss) arising on changes in demographic assumptions 0 1,111

Changes in financial assumptions

(1,644) 2,257

Other experience adjustments

1,064

Benefits paid 67 124

Past service cost

(53)

(97)

Balance at 31 March (20,444) (18,714)

Reconciliation of Present Value of the Pension Scheme Liabilities (Defined Benefit Obligation)

Remeasurements:

There has been a decrease in the overall scheme liabilities, based on the assumptions made by the actuary at 31

March 2020. The application of assumptions has resulted in a decrease of £1.730m relating to financial

assumptions. The following table shows the scheme liabilities in respect of active members, deferred members

and pensioner members:

Liability Split Liability Split

Weighted

Average

Duration

£'000 % Years

Active members

12,207

65.2%

n/a

Deferred members

3,936

21.0%

n/a

Pensioner members

2,571

13.8%

n/a

Total

18,714

100.0%

29.0

Active members

17,055

83.4%

28.3

Deferred members

2,328

11.4%

29.0

Pensioner members

1,061

5.2%

15.1

Total

20,444

100.0%

27.3

Scheme Liabilities in respect of Active, Deferred and Pensioner Members

2019/20

2018/19 Comparative Figures

Note: the figures in the above tables are for the funded liabilities only and do not include any unfunded pensioner

liabilities. The weighted average durations are as at the previous formal valuation as at 31 March 2019.

Page 49

Pension Scheme Assets

During 2019/20, there has been an increase in the return on the scheme assets by £0.636m. The

following table shows a reconciliation of the movements in the fair value of the scheme assets:

2018/19 2019/20

£’000

Opening Balance at 1 April 15,464

17,565

Adjustment re incorrect actuary's assumptions 0 0

Opening Balance at 1 April 15,464 17,565

Interest income 432 453

Return on scheme assets (excluding the amount included in the net interest

expense)

592 (891)

Contributions from employer 850 879

Contributions from employees 294 319

Benefits paid (67) (124)

Balance at 31 March 17,565 18,201

Reconciliation of the Movements in the Fair Value of the Pension Scheme Assets

Remeasurements:

The scheme assets are broken down into categories that accurately reflect the risks that are faced by

the scheme, splitting the assets into two types, those that have a quoted market price in an active

market and those that do not. The pension scheme assets comprised:

Quoted

Prices in

Active

Markets

Quoted

Prices not

in Active

Markets

Total

% of

Total

Assets

Quoted

Prices in

Active

Markets

Quoted

Prices not

in Active

Markets

Total

% of

Total

Assets

£'000

Consumer

1,711.0

0.0

1,711.0

10%

1,616.9 0.0

1,616.9

Manufacturing

1,009.5

0.0

1,009.5

1,248.6 0.0

1,248.6

Energy and utilities

534.7

0.0

534.7

442.5 0.0

442.5

Financial institutions

2,107.4

0.0

2,107.4

12%

2,025.0 0.0

2,025.0

11%

Health and care

845.4

0.0

845.4

1,221.4 0.0

1,221.4

Information technology

1,137.4

0.0

1,137.4

1,941.6 0.0

1,941.6

11%

Other

1,003.6

0.0

1,003.6

503.0 0.0

503.0

Total

8,349.0

0.0

8,349.0

48%

8,999.0

0.0

8,999.0

49%

UK government

498.4

0.0

498.4

413.2 0.0 413.2

Total

498.4

0.0

498.4

413.2

0.0

413.2

UK property

0.0

1,635.3

0.0 1,406.9 1,406.9

Overseas property

0.0

0.0 0.0 0.0

Total

0.0

1,635.3

0.0

1,406.9

Bonds

5,922.7

0.0

5,922.7

34%

6,026.2 0.0 6,026.2

33%

Other

187.4

0.0

187.4

217.5 0.0 217.5

Total

6,110.1

0.0

6,110.1

35%

6,243.7

0.0

6,243.7

34%

Private Equity

0.0

488.0

0.0 416.5 416.5

Cash and cash equivalents 484.2 0.0 484.2

721.7 0.0 721.7

Total Assets

15,441.7

2,123.3

17,565.0

100%

16,377.6

1,823.4

18,201.0

100%

Proportion of the Fair Value of the Scheme Assets by Category

2018/19 2019/20

Equity Securities

Debt Securities

Real Estate

Investment Funds and Unit Trusts

Page 50

Asset and Liability Modelling (ALM) Strategy

The Fund has the following objectives:

• reduce the risk of deficits emerging to protect against increases in the secondary (deficit

contribution) rate;

• generate sufficient returns to keep the cost of new benefits accruing reasonable. The future service

rate is difficult to manage through an investment strategy but the investment strategy must support

the Actuary’s funding assumptions;

• identify sources of income in order to generate cash as the Fund requires. The Fund is currently

cash flow positive but if cash-flow drops then the Fund does not want to be a forced seller of

assets to pay benefits.

The Panel have translated their objectives and beliefs into a suitable customised benchmark which is

based on advice from the Fund Actuary and Investment Adviser and which sets out the intended long

term weighting to various types of investment (or asset classes), such as equities, bonds and property

and reflects the Pension Fund’s investment strategy. The benchmark is set using Asset Liability

Modelling in order to understand the impact of different investment strategies on the chances of

“success” and corresponding downside risks. “Success” here is defined as maintaining a 2/3 or better

chance of being fully funded (on an on-going basis) over 20 years.

Risk is also constrained by diversification of managers and assets, scrutiny of monitoring of

performance, asset allocation and risk and investment restrictions within the Investment Manager

Agreements. The fund managers are required to implement appropriate risk management measures and

to operate in such a way that the probability of undershooting the performance target is kept within

acceptable limits.

Performance for all mandates is calculated by an independent performance measurement company and

is reported to the Pensions Panel quarterly. An extensive review of Fund performance is conducted

each July.

Impact on the Authority’s Cash Flows

The Fund strives to maintain reasonably stable employer contribution rates where appropriate and

possible.

The overall funding position for the Pension Fund is monitored each quarter. The next triennial

valuation is due to start on 31 March 2022, and complete by 31 March 2023.

The 2019 actuarial valuation takes into account changes to the benefit structure following the

introduction of LGPS 2014 as well as employer experience since the last valuation, changes to the

actuary’s assumptions and changes to asset values.

The contributions paid by the Authority are set by the Fund actuary at each triennial actuarial valuation

(the most recent being as at 31 March 2019), or at any other time as instructed to do so by the

administering authority. The contributions payable over the period to 31 March 2021 are set out in the

Rate and Adjustments certificate. The actuary has estimated the employer's contributions for the

period to 31 March 2021 will be approximately £0.836m.

The following table shows an analysis of the projected amount to be charged to the CIES for the

financial year to 31 March 2021:

Page 51

Assets

Liabilities

Net Liability

£'000 £'000 £'000

Projected current service cost

(1,407)

Total Service Cost

(1,407)

Interest income on scheme assets

430

Interest cost on scheme liabilities

(449)

Total Net Interest Cost

430

(449)

(19)

Total Charge to CIES

430

(1,856)

(1,426)

Projected Defined Benefit Cost for the Period Ended 31 March 2021

The weighted average duration (i.e. the weighted average time until payment of all expected future

discounted cash flows, determined based on membership and the financial and demographic

assumptions as at the most recent actuarial valuation) of the defined benefit obligation for scheme

members is 29 years.

Potential Future Liabilities

In 2015 the Government introduced reforms to public sector pensions, meaning most public sector

workers were moved into new pension schemes in 2015. In December 2018, the Court of Appeal

ruled that the ‘transitional protection’ offered to some members of the judges and fire fighters’

schemes as part of the reforms amounted to unlawful discrimination. The Government sought

permission to appeal from the Supreme Court, however this was not granted. As a result, each

pension scheme is expected to produce its own solution to meet the implications of the judgement,

including any impact on other public service schemes, and it is expected that this will not be developed

until 2020/21 or into 2021/22.

Quantifying the impact of the outcome for employer pension liabilities is very difficult because it will

depend on members’ future salary increases, length of service and retirement age. Salary increases in

particular can vary significantly from year to year and from member to member depending on factors

such as budget restraint, job performance and career progression. The Fund’s actuary has estimated

that the impact on the Authority’s pension liability would be immaterial, however, an approximate

impact of the McCloud judgement has been included as the Past Service Cost figure in the

Transactions relating to Post Employment Benefits in respect of the Local Government Pension

Scheme table on page 47 and the Reconciliation of the Present Value of the Pension Scheme Liabilities

table on page 48.

2020

20 Members’ Allowances and Expenses

During 2019/20, the Authority paid £0.097m (£0.097m 2018/19) of allowances to members; in

addition, members claimed £0.011m (£0.015m 2018/19) in expenses which were reimbursed by the

Authority. Details of allowances and expenses paid in 2019/20 are published on the Authority’s

website.

2121

21 External Audit Costs

In 2019/20, the Authority made payments of £0.014m (£0.011m 2018/19) to the external auditor in

respect of the audit of the financial statements.

Page 52

2222

22 Inventories

The following table shows the total carrying amount of inventories at the beginning and end of the

financial year and the movement during the financial year:

Balance at 31

March 2019

Purchases

Recognised as

an Expense

Balance at 31

March 2020

£'000

£’000

Inventories held for sale / distribution in the

ordinary course of operations

9 8 (9) 8

Total 9 8 (9) 8

Analysis of Movement in Inventories

2323

23 Agency Services

The Authority has the following significant agency arrangements:

Value Added Tax (VAT)

The Authority acts as an agent of Her Majesty’s Revenue and Customs (HMRC) for the collection of

VAT. The Authority has included a net debtor in its Balance Sheet of £0.172m (£0.142m 2018/19) for

the amount due from HMRC at the end of the financial year.

Payroll Taxes and National Insurance

The Authority acts as an agent of HMRC for the collection of income tax and national insurance on

behalf of employees. The Authority has included a net creditor in its Balance Sheet of £0.116m

(£0.116m 2018/19) for the amount due to HMRC at the end of the financial year.

Planning Service

There are 15 local authorities whose boundaries fall within the Park. During 2019/20, 5 of these local

authorities provided the majority of the planning service on behalf of the Authority under a legal

agreement signed between each local authority and the Park. The remaining ten local authorities

continue to opt out of this arrangement and applications within these boundaries were dealt with by

the Authority. The net payment to these 5 local authorities in 2019/20 amounted to £1.575m which

included £0.641m income received in relation to application fees.

Page 53

Accounting Policies

2019/20

Page 54

Accounting Policies Contents

___________________________________________________________________________

General ........................................................................................................................................................ 55

Prior Period Adjustments, Changes in Accounting Policies and Estimates and Errors............. 55

Accounting Concepts ............................................................................................................................... 55

Grants and Contributions ....................................................................................................................... 56

Revenue Recognition ................................................................................................................................ 56

Charges to Revenue for Property, Plant and Equipment (PPE) ...................................................... 56

Value Added Tax (VAT) .......................................................................................................................... 57

Cash and Cash Equivalents ..................................................................................................................... 57

9. Inventories ................................................................................................................................................. 57

10.

Employee Benefits ..................................................................................................................................... 57

11.

Financial Assets and Liabilities– Financial Instruments ...................................................................... 59

12.

Provisions .................................................................................................................................................... 59

13.

Reserves ...................................................................................................................................................... 60

14.

Overheads and Support Services .......................................................................................................... 60

15.

Property, Plant and Equipment (PPE) ................................................................................................... 60

16.

Leases ............................................................................................................................................................ 61

17.

Events after the Reporting Period ......................................................................................................... 62

Page 55

Accounting Policies

___________________________________________________________________________

1. General

The Statement of Accounts (i.e. financial statements) summarises the Authority’s transactions for the

reported financial year and its position at the end of the financial year. The Authority is required to

prepare an annual Statement of Accounts by the Accounts and Audit Regulations 2015, which require

the accounts to be prepared in accordance with proper accounting practices. These practices primarily

comprise the Code of Practice on Local Authority Accounting in the United Kingdom (the Code)

supported by International Financial Reporting Standards (IFRS).

The accounting convention adopted in the financial statements is principally historical cost, modified by

the revaluation of certain categories of non-current assets and financial instruments.

2. Prior Period Adjustments, Changes in Accounting Policies and

Estimates and Errors

Prior period adjustments may arise as a result of a change in accounting policies or to correct a

material error. Such errors include the effects of mathematical mistakes, mistakes in applying

accounting policies, oversights or misinterpretations of facts and fraud.

Changes in accounting estimates are accounted for prospectively (i.e. in the current and future financial

years affected by the change) and do not give rise to a prior period adjustment.

Changes in accounting policies are only made when required by proper accounting practices or the

change provides more reliable or relevant information about the effect of transactions, other events

and conditions on the Authority’s financial position or financial performance. Where a change is made,

it is applied retrospectively (unless stated otherwise) by adjusting opening balances and comparative

amounts for the prior period as if the new policy had always been applied.

Material errors discovered in prior period figures are corrected retrospectively by amending opening

balances and comparative amounts for the prior period.

3. Accounting Concepts

The Code specifies many of the accounting policies and estimation techniques to be adopted for

material items within the financial statements. In preparing information for the financial statements, the

Authority has regard to the underlying assumptions and qualitative characteristics:

• Relevance

– the financial statements are prepared with the objective of providing information

about the Authority’s financial performance and position that is useful for assessing the

stewardship public funds and for making financial decisions;

• Materiality – the concept of materiality has been utilised in preparing the financial statements

(i.e. if omitting or misstating information would affect the interpretation of the financial

statements and influence decisions that users make);

• Faithful Representation – the financial information included in the financial statements is

complete within the boundaries of materiality, free from material error and free from

deliberate or systematic bias;

• Comparability – the financial statements are prepared in accordance with the requirements

of the Code which establishes proper practice in relation to consistent financial reporting and

aids comparability with other national park authorities;

• Verifiability – the financial information included in the financial statements faithfully represents

the financial position, performance and cash flows of the Authority. The Authority includes

explanations and disclosures of the judgements, assumptions, methodology and other factors

and circumstances in preparing its financial statements;

Page 56

• Timeliness – the information included in the financial statements is available to decision

makers in time to be capable of influencing their decisions;

• Understandability – the financial statements are based on accounting concepts and

terminology which require reasonable knowledge of accounting and local government. Every

effort has been made to ensure that the financial information included in the financial

statements is presented clearly and concisely and notes and commentaries are provided that

explain and interpret the key elements of the financial statements for the user;

• Going Concern – the financial statements are prepared on the assumption that the functions

of the Authority will continue in operational existence for the foreseeable future. As National

Park Authorities cannot be created or dissolved without statutory prescription, the Authority

must prepare its financial statements on a going concern basis.

4. Grants and Contributions

Whether paid on account, by instalments or in arrears, grants and contributions are recognised as due

to the Authority when there is reasonable assurance that the Authority will comply with the

conditions attached to the payments and the grants or contributions will be received.

Amounts recognised as due to the Authority are not credited to the CIES until conditions attached to

the grant or contribution have been satisfied. Conditions are stipulations that specify that the future

economic benefits or service potential embodied in the asset acquired using the grant or condition are

required to be consumed by the recipient as specified, or future economic benefits or service potential

must be returned to the transferor.

Revenue grants or contributions received for which conditions have not been satisfied are carried on

the Balance Sheet as creditors. When conditions are satisfied, the grant or contribution is credited to

the relevant service (in respect of attributable revenue grants and contributions) or taxation and non-

specific grant income and expenditure (in respect of non-ring fenced revenue grants) within the CIES.

Revenue grants or contributions with no conditions attached are recognised as income within the CIES

at the point of receipt.

5. Revenue Recognition

Revenue is recognised in accordance with IFRS 15 - Revenue Recognition from Contracts with

Customers and IPSAS 23 Revenue from Non-Exchange Transactions (Taxes and Transfers). Prior to

this revenue was recognised under IAS 18 – Revenue. Under IFRS15, the principles of revenue

recognition are determining if the transaction is an exchange or non-exchange transaction. With non-

exchange transactions there is no or only nominal consideration in return. The obligating extent is

often determined by statutory prescription (e.g. council tax, VAT or a fine for breach of law) or may

be a donation or bequest. For exchange transactions, assets or services and liabilities of approximately

equal value are exchanged. There is a contract which creates right and obligations. Performance

obligations in the contract have to be measured and the transaction price allocated to these

obligations. Revenue is recognised when the performance obligations are satisfied. Examples include

sales, fees and charges for services provided by the Authority.

6. Charges to Revenue for Property, Plant and Equipment (PPE)

Services and support services are debited with the following amounts to record the cost of holding

non-current assets during the financial year:

depreciation attributable to the assets used by the relevant service;

revaluation losses on assets used by the service where there are no accumulated gains in the

revaluation reserve against which losses can be written off.

The Authority is not required to raise funds to fund depreciation and revaluation losses, therefore the

charges are transferred from the General Fund balance to the CAA through the MiRS.

Page 57

7. Value Added Tax (VAT)

The CIES excludes amounts relating to VAT and VAT payable is included as an expense only to the

extent that it is not receivable from Her Majesty’s Revenue and Customs (HMRC). VAT receivable is

excluded from income within the CIES.

The net amount due to / from HMRC in respect of VAT is included as a creditor / debtor on the

Balance Sheet.

8. Cash and Cash Equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty

on demand.

The Authority defines cash equivalents as highly liquid investments which are no longer than three

months and represent the investment of cash surpluses lent to cover cash shortages. They are readily

convertible to known amounts of cash with insignificant risk of change in value.

In terms of cash flow and treasury management, the Authority collectively manages its cash equivalents

and cash on the Balance Sheet. The Authority uses the indirect method to present its revenue

activities cash flows, whereby the surplus / deficit on the provision of services is adjusted for the

effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash

receipts or payments, and items of revenue or expense associated with investing cash flows.

9. Inventories

Inventories are measured at the lower of cost and net realisable value. The cost of inventories is

attributed to identified items of inventory. Where this is not possible, the Authority assigns the cost of

inventories using the first in, first out (FIFO).

When inventories are sold or distributed, the carrying amount of those inventories is recognised as an

expense in the year in which the related revenue is recognised.

10. Employee Benefits

Benefits Payable during Employment

Short term employee benefits are those due to be settled within 12 months of the end of the financial

year. They include such benefits as wages and salaries, paid annual leave and paid sick leave and non-

monetary benefits for current employees. They are recognised as an expense for services in the

financial year in which employees render service to the Authority. An accrual is made for the cost of

holiday entitlements (or any form of leave) earned by the employees but not taken before the end of

the financial year which employees can carry forward into the next financial year in which the

employee takes the benefit. The accrual is charged to services within the CIES but then reversed out

through the MiRS to the accumulated absences account so that holiday entitlements are charged to

revenue in the financial year in which the leave absence occurs.

Termination Benefits

When the Authority is demonstrably committed to the termination of the employment of an employee

or making an offer to encourage voluntary redundancy, the costs of termination benefits are charged

on an accruals basis to the respective service within the CIES, this is at the earlier of when the

Authority can no longer withdraw the offer of those benefits or when the Authority recognises costs

for a restructuring.

Where termination benefits involve the enhancement of pensions, statutory provisions require the

General Fund balance to be charged with the amount payable by the Authority to the pension fund or

pensioner in the financial year, not the amount calculated according to the relevant accounting

standards. In the MiRS, transfers are required to and from the pensions reserve to remove the

notional debits and credits for pension enhancement termination benefits and replace them with debits

for the cash paid to the pension fund and pensioners and any such amounts payable but unpaid at the

end of the financial year.

Page 58

Post Employment Benefits

Employees of the Authority are entitled to become members of the Local Government Pension

Scheme, administered by West Sussex County Council, according to the terms of their employment.

The scheme provides defined benefits to members (retirement lump sums and pensions), earned as

employees worked for the Authority.

The Local Government Pension Scheme

The Local Government Pension Scheme is accounted for as a defined benefit scheme.

The liabilities of the pension scheme attributable to the Authority are included on the Balance Sheet

on an actuarial basis. The basis of calculation is the projected unit method (i.e. an assessment of the

future payments that will be made in relation to retirement benefits earned to date by employees,

based on assumptions about mortality rates, employee turnover rates etc. and projections of earnings

for current employees).

Liabilities are discounted to their present value, using a discount rate (determined in reference to

market yields at the 31 March of high quality bonds).

The assets of the pension scheme attributable to the Authority are included on the Balance Sheet at

their fair value:

quoted securities – current bid price;

unquoted securities – professional estimate;

unitised securities – current bid price;

property – market value.

The change in the net pension liability of the Authority is analysed into the following components:

service cost comprising:

current service cost – the increase in liabilities as a result of years of service earned in the current

financial year – this cost is allocated within the CIES to the services for which the employees worked;

past service cost – the increase in liabilities as a result of a scheme amendment or curtailment whose

effect relates to years of service earned in earlier financial years – this cost is debited to non-

distributed costs within the CIES;

net interest on the net defined benefit liability (i.e. net interest expense for the Authority) – the change

during the financial year in the net defined benefit liability that arises from the passage of time

calculated by multiplying the net defined benefit liability by the discount rate, both as determined at the

start of the financial year taking into account any changes in the net defined benefit liability during the

financial year as a result of contribution and benefit payments – this is charged to financing and

investment income and expenditure within the CIES;

remeasurements comprising:

the return on plan assets – excluding amounts included in net interest on the net defined benefit

liability – these are charged to other comprehensive income and expenditure within the CIES and to

the pensions reserve;

actuarial gains and losses – changes in the net pensions liability that arise because events have not

coincided with assumptions made at the last actuarial valuation or because the actuaries have updated

their assumptions – these are charged to other comprehensive income and expenditure within the

CIES and to the pensions reserve;

contributions paid to the pension scheme – cash paid as employer’s contributions to the scheme in

settlement of liabilities – these are charged to services within the CIES.

In relation to retirement benefits, statutory provisions require the General Fund balance to be charged

with the amount payable by the Authority to the pension scheme or directly to pensioners in the

financial year, not the amount calculated according to the relevant accounting standards. Transfers are

made through the MiRS to and from the pensions reserve to remove the notional debits and credits

for retirement benefits and replace them with debits for the cash paid to the pension scheme and

pensioners and any such amounts payable but unpaid the end of the financial year. The negative balance

that arises on the pensions reserve thereby measures the beneficial impact to the General Fund

balance of being required to account for retirement benefits on the basis of cash flows rather than as

benefits earned by employees.

Page 59

Discretionary Benefits

The Authority also has restricted powers to make discretionary awards of retirement benefits in the

event of early retirements. Any liabilities estimated to arise as a result of an award to any employee

are accrued during the financial year of the decision to make the award and accounted for using the

same accounting policies as are applied to the Local Government Pension Scheme.

11. Financial Assets and Liabilities– Financial Instruments

Financial Liabilities

Financial liabilities are recognised on the Balance Sheet when the Authority becomes party to the

contractual provisions of a financial instrument and are initially measured at fair value and are carried

at their amortised cost.

Financial Assets

Financial Assets are classified based on a classification and measurement approach which reflects the

business model for holding the financial assets and their cash flow characteristics. There are three main

classes of financial assets measured at:

- amortised cost

- fair value through profit or loss (FVPL), and

- fair value through other comprehensive income (FVOCI).

The authority's business model is to hold investments to collect contractual cashflows. Financial assets

are therefore classified as amortised cost.

Financial assets measured at amortised cost are recognised on the Balance Sheet when the Authority

becomes party to the contractual provisions of a financial instrument and are initially measured at fair

value. They are subsequently measured at their amortised cost.

Annual credits for interest receivable are credited to financing and investment income and expenditure

within the CIES and are based on the carrying amount of the asset multiplied by the effective rate of

interest for the instrument; for most of the loans that the Authority has made, this means that the

amount presented on the Balance Sheet is the outstanding principal receivable (plus accrued interest)

and interest credited to the CIES is the amount receivable for the loan agreement in the financial year.

Any gains / losses that arise on derecognition of the asset are credited / debited to financing and

investment income and expenditure within the CIES.

Expected Credit Loss Model

The authority recognises expected credit losses on all its financial assets held at amortised cost on

either a 12 month or lifetime basis. Only lifetime losses are recognised for trade receivables (debtors)

held by the Authority.

Impairment losses are calculated to reflect the expectation that the future cash flows might not take

place because the borrower could default on their obligations. Credit risk plays a crucial part in

assessing losses. Where risk has significantly increased since an instrument was initially recognised,

losses are assessed on a lifetime basis. Where risk has not significantly increased, or remains low,

losses are assessed on the basis of 12-month expected losses.

12. Provisions

Provisions are made where an event has taken place whereby the Authority has a legal or constructive

obligation that probably requires settlement by a transfer of economic benefits or service potential to

settle the obligation and a reliable estimate can be made of the amount of the obligation. For example,

the Authority may be involved in a court case that could eventually result in the making of a settlement

or the payment of compensation.

Provisions are charged as an expense to the appropriate service within the CIES in the year that the

Authority becomes aware of the obligation, and are measured at the best estimate at the Balance

Sheet date of the expenditure required to settle the obligation, taking into account relevant risks and

uncertainties.

When payments are eventually made, they are charged to the provision carried on the Balance Sheet.

Estimated settlements are reviewed at the year end. Where it becomes less than probable that a

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transfer of economic benefits will now be required or a lower settlement than anticipated is made, the

provision is reversed and credited back to the relevant service within the CIES.

13. Reserves

The Authority sets aside specific amounts as reserves for future policy purposes or to cover general

contingencies and cash flow management.

When expenditure to be financed from a reserve is incurred, it is charged to the appropriate service

within the CIES. The reserve is then transferred back to the General Fund balance in the MiRS so that

there is no net charge against the General Fund for the expenditure.

The category of unusable reserves includes those reserves which are kept to manage the accounting

processes for non-current assets, financial instruments, and retirement and employee benefits and do

not represent usable resources for the Authority; these reserves are covered in the relevant

accounting policies and explained in the relevant notes.

The Authority carries out an annual review of the reserves to ensure they are still required and are set

at the appropriate level.

14. Overheads and Support Services

The costs of central and departmental overheads (i.e. management and administration costs) and

support services are charged to those services that benefit from the supply or service in accordance

with the Authority’s arrangements for accountability and financial performance.

15. Property, Plant and Equipment (PPE)

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 PPE.

Recognition

Expenditure on the acquisition, creation or enhancement of PPE 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 Authority and the cost of the item can be measured reliably. Expenditure that

maintains but does not add to an asset’s potential to deliver economic benefits or service potential (i.e.

repairs and maintenance) is charged as an expense to the relevant cost of service within the CIES as it

is incurred.

The Authority has a deminimis level of £5,000 for land and buildings and vehicles, plant and equipment;

items of expenditure below this deminimis level are charged to the relevant cost of services within the

CIES in the year it is incurred. The Authority has no deminimis level for enhancement expenditure and

therefore all enhancement expenditure is capitalised.

Measurement

PPE assets are initially measurement at cost comprising 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 the Authority, and the initial estimate of the costs of dismantling and removing the

item and restoring the site on which it is located.

The costs of assets acquired other than by purchase is deemed to be its fair value, unless the

acquisition does not have commercial substance (i.e. it will not lead to a variation in the cash flows of

the Authority).

Assets are then carried on the Balance Sheet using the following measurement bases:

non-property assets that have short useful lives or low values (or both) (i.e. vehicles, plant and

equipment) – depreciated historical cost is used as a proxy for current value;

land and building assets – current value determined as the amount that would be paid for the asset in

its existing use (existing use value – EUV)

Assets included on the Balance Sheet at current value are revalued annually by the Authority. The

Authority’s land and building asset became operational in 2014/15 at which time it was revalued

incurring a decrease in revaluation. As there is no historic revaluation gains a revaluation reserve has

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not been created and therefore decreases in valuations are charged to the CIES against the relevant

service as a revaluation loss. Revaluation losses are not permitted by statutory arrangements to have

an impact on the General Fund balance therefore they are reversed out of the General Fund balance in

the MiRS and posted to the CAA.

At the end of each financial year, assets are assessed as to whether there is any indication that an asset

may be impaired.

Depreciation

Depreciation is applied to all PPE assets, except for assets without a determinable finite useful life (i.e.

freehold land).

The depreciation charge is based on the depreciable amount allocated over the useful life of the asset,

using a straight line allocation method and is charged to the relevant service(s) within the CIES.

General Fund depreciation charges are not permitted by statutory arrangements to have an impact on

the General Fund balance therefore they are reversed out of the General Fund balance in the MiRS

and posted to the CAA.

The Authority does not charge depreciation in the year of acquisition but does charge a full year’s

depreciation in the year of disposal.

Disposals

When an asset is disposed of or decommissioned, the carrying amount of the asset on the Balance

Sheet is written off to other operating expenditure in the CIES as part of the gain or loss on disposal.

Receipts from disposals (if any) are credited to the same line in the CIES also as part of the gain or loss

on disposal (i.e. netted off against the carrying value of the asset at the time of disposal).

Capital receipts are required to be credited to the capital receipts reserve, and can then only be used

for new capital investment. Receipts are credited to the CIES and subsequently transferred to the

capital receipts reserve from the General Fund balance in the MiRS.

The written off value of disposals is not a charge against the General Fund balance, as the cost of PPE is

fully provided for under separate arrangements for capital financing. Amounts are transferred to the

CAA from the General Fund balance in the MiRS.

Asset Componentisation

The Authority only considers assets for componentisation in the financial year the assets are valued

and / or in the year following capital investment being incurred on the asset. As the Authority does not

depreciate assets in the year of acquisition, capital additions are not considered for componentisation

until the following financial year.

Componentisation is only applied to building elements of assets categorised as PPE and that are subject

to depreciation. Vehicles, plant and equipment assets are not componentised as they do not have

separately identifiable components of significant value or a significant difference in asset life.

16. Leases

The Authority classifies leases as either finance leases or operating leases based on the extent to which

risks and rewards incidental to ownership of a leased asset lie with the lessor or the lessee. A lease is

classified as a finance lease where the terms of the lease transfer substantially all the risks and rewards

incidental to ownership of the asset from the lessor to the lessee. All other leases are classified as

operating leases.

Where a lease covers both land and buildings, the land and buildings elements are considered

separately for classification. When the land has an indefinite economic life, the land element is normally

classified as an operating lease unless title is expected to pass to the lessee by the end of the lease

term.

When accounting for a lease of land and buildings, the minimum lease payments are allocated between

the land and the buildings elements in proportion to their relative fair values. Where the amount that

would initially be recognised for the land element is immaterial, the land and buildings are treated as a

single unit for lease classification.

The Authority only has leases, as lessee, which have been classified as operating leases.

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Lessee Operating Leases

Rentals paid under operating leases are charged to the CIES as an expense of the services benefiting

from use of the leased asset. Charges are made on a straight line basis over the life of the lease; even if

this does not match the pattern of payments (e.g. there is a rent free period at the commencement of

the lease).

17. Events after the Reporting Period

Events after the end of the financial year are those events, both favourable and unfavourable, that

occur between the end of the financial year and the date when the Statement of Accounts is

authorised for issue. Two types of events can be identified:

Adjusting events - those that provide evidence of conditions that existed at the end of the financial

year. In this instance, the Statement of Accounts is adjusted to reflect such events;

Non-adjusting events - those that are indicative of conditions that arose after the financial year end. In

this instance, the Statement of Accounts is not adjusted to reflect such events, but where a category of

events would have a material effect, disclosure is made in the notes of the nature of the events and

their estimated financial effect.

Events taking place after the date of authorisation for issue are not reflected in the Statement of

Accounts.

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Independent Auditor’s Report

2019/20

Page 64

Independent Auditor’s Report to the

Members of the South Downs National Park

Authority

These financial statements are awaiting an independent auditor’s report to Members of the South

Downs National Park Authority.

Page 65

31 July 2019

Glossary of Terms

2019/20

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Glossary

__________________________________________________________________________________

Accounting Policies

are the specific principles, bases, conventions, rules and practices applied by

the Authority in preparing and presenting its financial statements.

The

Accruals Basis

is the recognition of items as assets, liabilities, income and expenses when

they satisfy the definitions and recognition criteria. The accruals basis of accounting requires the non-

cash effects of transactions to be reflected in the financial statements for the financial year in which

those effects are experienced and not necessarily in the period in which any cash is received or paid.

The

Accumulated Absences Account

absorbs the differences that would otherwise arise on

the General Fund balance from accruing for compensated absences earned but not taken in the

financial year (e.g. annual leave entitlement carried forward at 31 March). Statutory arrangements

require that the impact on the General Fund balance is neutralised by transfers to or from the

accumulated absences account.

Actuarial Gains and Losses (Pensions)

are changes in the present value of the defined

benefit obligation resulting from:

• experience adjustments (the effects of differences between the previous actuarial assumptions and

what has actually occurred);

• the effects of changes in actuarial assumptions.

The

Amortised Cost of a Financial Asset or Financial Liability

is the amount at

which the financial asset or financial liability is measured at initial recognition minus principal

repayments, plus or minus the cumulative amortisation using the effective interest method (i.e. a

method of calculating the amortised cost of a financial asset or a financial liability and of allocating the

interest income or interest expense over the relevant period) of any difference between that initial

amount and the maturity amount, and minus any reduction (directly or through the use of an

allowance account) for impairment or uncollectability.

Asset

is a resource controlled by the Authority as a result of past events and from which future

economic or service potential is expected to flow to the Authority.

Audit of Financial Statements

is an examination by an independent expert of the

Authority’s financial affairs to check that the relevant legal obligations and codes of practice have been

followed.

The

Balance Sheet

shows the value of the assets and liabilities recognised by the Authority as at

the 31 March.

Benefits Payable during Employment

covers:

• short term employee benefits, such as wages and salaries, paid annual leave and paid sick leave, and

non-monetary benefits for current employees;

• benefits earned by current employees but payable 12 months or more after the end of the financial

year, such as long service leave or jubilee payments and long term disability benefits.

Budget

expresses the Authority’s service delivery plans and capital investment programmes in

monetary terms.

The

Capital Adjustment Account (CAA)

absorbs the timing differences arising from the

different arrangements for accounting for the consumption of PPE and for financing the acquisition,

construction or enhancement of those assets under statutory provisions.

Capital Investment

is expenditure on the acquisition of an asset that will be used to provide

services beyond the financial year or expenditure which adds to and not merely maintains the value of

existing PPE.

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The

Capital Investment Programme

is a financial summary of the capital projects that the

Authority intends to carry out over a specified period of time.

Capital Receipt

is the proceeds from the sale of an asset.

The

Capital Receipts Reserve

holds the proceeds from the disposal of non-current assets,

which are restricted by statute from being used other than to fund new capital investment to be set

aside to finance historical capital investment.

Capital Reserves

represent resources earmarked to fund capital schemes as part of the

Authority’s capital investment strategy.

The

Carrying Amount

is the amount at which an asset is recognised on the Balance Sheet after

deducting any accumulated depreciation.

Cash

comprises cash in hand and demand deposits.

Cash Equivalents

are short term, highly liquid investments that are readily convertible to known

amounts of cash and which are subject to an insignificant risk of changes in value.

Cash Flows

are the inflows and outflows of cash and cash equivalents.

The

Cash Flow Statement

shows the changes in cash and cash equivalents of the Authority

during the financial year.

The

Comprehensive Income and Expenditure Statement (CIES)

shows the

accounting cost in the financial year of providing services in accordance with generally accepted

accounting practices, rather than the amount to be funded from the National Park Grant.

Cost

is the amount of cash or cash equivalents paid or the fair value of the other consideration given

to acquire an asset at the time of acquisition or construction.

Creditors

are financial liabilities arising from the contractual obligation to pay cash in the future for

goods or services or other benefits that have been received or supplied and have been invoiced or

formally agreed with the supplier.

Current Asset

is an asset that is intended to be sold within the normal operating cycle; the

asset is held primarily for the purpose of trading or the Authority expects to realise the asset within

12 months after the reporting date.

Current Liability

is an amount which will become payable or could be called in within the next

financial year.

Current Service Cost (Pensions)

is the increase in the present value of a defined benefit

obligation resulting from employee service in the current period.

Current Value

is the amount that reflects the economic environment prevailing for the service or

function the asset is supporting.

Debtors

are financial assets not traded in an active market with fixed or determinable payments that

are contractual rights to receive cash or cash equivalents.

Defined Benefit Scheme (Pensions)

is a pension scheme where the benefits to

employees are based on their salaries, and where employers’ contributions have to be adjusted to

match estimates of future liabilities.

Depreciation

is a method of allocating the cost of a tangible asset over its useful life.

Employee Benefits

are all forms of consideration given by the Authority in exchange for service

rendered by employees.

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Employee Expenses

include total salaries, employers’ national insurance contributions,

employers’ pension contributions and indirect employee expenses including redundancy costs and

pension accounting adjustments.

Estimation Techniques

are the methods adopted to arrive at estimated monetary amounts,

corresponding to the measurement bases selected, for assets, liabilities, gains, losses and changes to

reserves.

Events after the Reporting Period

are those events, both favourable and unfavourable, that

occur between the end of the financial year and the date when the financial statements are authorised

for issue.

The

Expenditure and Funding Analysis (EFA)

shows how the available funding (i.e. the

National Park Grant) has been used in providing services in comparison with those resources

consumed or in accordance with generally accepted accounting practices. It also shows how this

expenditure is allocated for decision making purposes between the service directorates.

Exit Packages

are departure costs paid to former employees who negotiate a package as part of

their terms of leaving the Authority.

Expenses

are decreases in economic benefits or service potential during the financial year in the

form of outflows or consumption of assets or increases of liabilities that result in decreases in

reserves.

Fair Value

is the amount for which an asset could be exchanged, or a liability settled, between

knowledgeable, willing parties in an arm’s length transaction.

Fees, Charges and Other Service Income

include contributions received from other local

authorities and other bodies.

Financial Asset

is any asset that is:

• cash;

• an equity instrument of another entity;

• a contractual right to receive cash or another financial asset from another entity, or to exchange

financial assets or financial liabilities with another entity under conditions that are potentially

favourable to the Authority.

Financial Liability

is any liability that is a contractual obligation to deliver cash or another

financial asset to another entity, or to exchange financial assets or financial liabilities with another

entity under conditions that are potentially unfavourable to the Authority.

Financial Instrument

is any contract that gives rise to a financial asset of one entity and a

financial liability or equity instrument of another entity and includes trade payables and other payables,

bank deposits, trade receivables and loans receivable.

Financing Activities

are activities that result in changes in the size and composition of the

principal received from or repaid to external providers of finance.

The

General Fund

is the statutory fund into which all the receipts of the Authority are required

to be paid and out of which all liabilities of the Authority are to be met, except to the extent that

statutory rules might provide otherwise.

The

General Fund Balance

shows the resources that the Authority is statutorily empowered

to spend on its services or on capital investment (or the deficit of resources that the Authority is

required to recover) at the end of the financial year.

Going Concern

defines that the functions of the Authority will continue in operational existence

for the foreseeable future.

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Government Grants

are grants made by the Government towards either revenue or capital

investment to support the cost of the provision of the Authority’s services.

Grants and Contributions

are assistance in the form of transfers of resources to an Authority

in return for past or future compliance with certain conditions relating to the operation of activities.

Historical Cost

is the carrying amount of an asset at the date of acquisition and adjusted for

subsequent depreciation.

Income

is the gross inflow of economic benefits or service potential when those inflows or

enhancements of assets or decreases of liabilities result in an increase in reserves.

The

Interest Cost (Pensions)

is the expected increase in the present value of the scheme

liabilities because the benefits are one period closer to settlement.

Interest Income (Pensions)

is a component of the return on plan assets, and is determined by

multiplying the fair value of the plan assets by the discount rate.

International Accounting Standards (IAS)

are standards for the preparation and

presentation of financial statements.

International Financial Reporting Standards (IFRS)

advise the accounting treatment

and disclosure requirements of transactions so that the Authority’s accounts present fairly the financial

position of the Authority.

Inventories

are assets:

• in the form of materials or supplies to be consumed in the production process;

• in the form of materials or supplies to be consumed or distributed in the rendering of services;

• held for sale or distribution in the ordinary course of operations; or

• in the process of production for sale or distribution.

Investing Activities

are activities relating to the acquisition and disposal of PPE and other

investments not included in cash equivalents.

Lease

is an agreement whereby the lessor conveys to the lessee in return for a payment or series

of payments the right to use an asset for an agreed period of time.

Liability

is a present obligation of the Authority arising from past events, the settlement of which

is expected to result in an outflow from the Authority of resources embodying economic benefits or

service potential.

Loans and Receivables

are financial assets with fixed or determinable payments that are not

quoted in an active market, other than:

• those that the entity intends to sell immediately or in the near term (held for trading); or

• those for which the holder may not recover substantially all of its initial investment, other than

because of credit deterioration (available for sale).

Materiality -

omissions or misstatements of items are material if they could, individually or

collectively, influence the decisions or assessments of users made on the basis of the financial

statements. Materiality depends on the nature or size of the omission or misstatement judged in the

surrounding circumstances. The nature or size of the item, or a combination of both, could be the

determining factor.

The

Movement in Reserves Statement (MiRS)

shows the movement during the financial

year on the different reserves held by the Authority, analysed into usable reserves and unusable

reserves.

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The

Net Defined Benefit Liability (Obligation) (Pensions)

is the deficit, adjusted for

any effect of limiting a net defined benefit asset to the asset ceiling.

The

Net Interest on the Net Defined Benefit Liability (Pensions)

is the change

during the period in the net defined liability that arises from the passage of time.

The

Net Realisable Value

is the estimated selling price in the ordinary course of operations less

the estimated costs of completion and the estimated costs necessary to make the sale, exchange or

distribution.

Non-Ring Fenced Government Grants

are revenue grants distributed by central

government that do not relate to the performance of a specific service. The Authority is free to use all

of its non-ring fenced funding as it sees fit to support the delivery of local, regional and national

priorities in the Park’s area.

Operating Lease

is a type of lease, e.g. computer equipment, office equipment, furniture etc.

where the balance of risks and rewards of holding the asset remains with the lessor.

Operating Activities

are the activities of the Authority that are not investing or financing

activities.

Other Comprehensive Income and Expenditure

comprises items of expense and

income (including reclassification adjustments) that are not recognised in the surplus / deficit on the

provision of services as required or permitted by the Code. Examples include changes in the

remeasurement of the net defined benefit pension liability on a defined benefit scheme.

Other Service Expenses

include:

• premises expenses including all running costs, expenditure on goods, services and contractors

directly related to property;

• transport expenses including all costs connected with the provision, hire or use of transport;

• supplies and services covering all direct supplies and services expenditure incurred;

• third party payments including, for example, payments to third party providers of local authority

services and other bodies;

• support service charges including the recharge of management and administration costs and support

service costs (e.g. financial services, human resources, legal services and property services) to front

line services and internal recharges between services.

Past Service Cost (Pensions)

is the change in the present value of the defined benefit

obligation for employee service in prior periods, resulting from a scheme amendment (the introduction

of, or withdrawal of, or changes to, a defined benefit scheme) or a curtailment (a significant reduction

by the Authority in the number of employees covered by a scheme).

The

Pension Reserve

is a specific accounting mechanism used to reconcile the payments made

for the year to various statutory pension schemes in accordance with those schemes’ requirements

and the net charge in the Authority’s recognised liability under IAS 19 “Employee Benefits”, for the same

period.

Post Employment Benefits

are employee benefits (other than termination benefits and short

term employee benefits) that are payable after the completion of employment.

The

Present Value of a Defined Benefit Liability (Pensions)

is the present value,

without deducting any scheme assets, of expected future payments required to settle the liability

resulting from employee service in the current and prior periods.

Property, Plant and Equipment (PPE)

are tangible assets (i.e. assets with physical

substance) that are held for use in the production or supply of goods and services, for rental to others,

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or for administrative purposes, and which are expected to be used during more than one financial

year.

Provision

is a liability of uncertain timing or amount. The Authority recognises a provision where

an event has taken place that gives the Authority a present obligation (legal or constructive) that

requires settlement by either a transfer of economic benefits or service potential to settle the

obligation, and a reliable estimate can be made of the amount of the obligation.

Qualified Valuer

is a person conducting the valuations who holds a recognised and relevant

professional qualification and having sufficient current local and national knowledge of the particular

market, and the skills and understanding to undertake the valuation competently.

Related Party - p

arties are considered to be related if one party has the ability to control the

other party or exercise significant influence over the other party in making financial and operating

decisions or if the related party entity and another entity are subject to common control.

Related Party Transaction

is a transfer of resources or obligations between related parties,

regardless of whether a price is charged.

Reserves

are the residual interest in the assets of the Authority after deducting all its liabilities.

The

Residual Value

is the estimated amount that the Authority would currently obtain from the

disposal of an asset, after deducting the estimated costs of disposal, if the asset was already of the age

and in the condition expected at the end of its useful life.

Revenue

is the gross inflow of economic benefits or service potential during the financial year when

those inflows result in an increase in the Authority’s net assets.

Revenue Expenditure

is the day to day running costs relating to the financial year irrespective

of whether or not the amounts due have been paid. Examples are salaries, wages, materials, supplies

and services.

Ring Fenced Government Grants

are revenue grants distributed by central government

that relate to a specific service.

Scheme Amendment (Pensions)

occurs when the Authority introduces, or withdraws a

defined benefit scheme or changes the benefits payable under an existing defined benefit scheme.

Scheme Assets (Pensions)

comprise assets held by a long term employee benefit scheme.

Scheme Liabilities (Pensions)

comprise liabilities in relation to a long term employee benefit

scheme.

Short Term Paid Absences

are periods during which an employee does not provide services

to the Authority, but benefits continue to be paid.

Short Term Employee Benefits

are employee benefits (other than termination benefits) that

fall due wholly within 12 months after the end of the period in which the employees render the related

service.

The

Surplus or Deficit on the Provision of Services

is the total of income less expenses,

excluding the components of other comprehensive income and expenditure.

Tangible Asset

is an asset that has a physical form.

Termination Benefits

are employee benefits provided in exchange for the termination of an

employee’s employment as a result of either the Authority’s decision to terminate an employee’s

employment before the normal retirement date, or the Authority’s decision to accept an offer of

benefits in exchange for the termination of employment.

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Total Comprehensive Income and Expenditure

comprises all components of surplus /

deficit on the provision of services and of other comprehensive income and expenditure.

Unusable Reserves

are those reserves that the Authority is not able to use to provide services

and includes reserves that hold unrealised gains and losses where amounts would only become

available to provide services if the assets are sold and reserves that hold timing differences shown in

the MiRS as adjustments between accounting basis and funding basis under regulations.

Usable Reserves

are those reserves that may be used to provide services, subject to the need to

maintain a prudent level of reserves and any statutory limitations on their use.

The

Useful Life

is the period which an asset is expected to be available for use by the Authority.

Value Added Tax (VAT)

is an indirect tax levied on most business transactions and on many

goods and some services.

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South Downs Centre, North Street, Midhurst, West Sussex GU29 9DH

T: 0300 303 1053 E: info@southdowns.gov.uk www.southdowns.gov.uk

South Downs National Park Authority

Statement of Accounts 2019/20

A copy of this document can be found on the Authority’s website www.southdowns.gov.uk