Accounting statements
The format of the Accounts for Fire and Rescue Authorities is prescribed by the Chartered Institute of Public Finance and Accountancy (CIPFA) in their Code of Practice on Local Authority Accounting in the United Kingdom (the Code). The Code is updated annually and is based on International Financial Reporting Standards (IFRS).
The information contained within this Narrative Report is intended to be fair, balanced and concise. The Accounts and the Narrative Report are published on the Authority’s website at www.kent.fire-uk.org.
To provide further detail and more clarity for the reader, each of the main accounts are supported by a number of notes and these follow on from the main statements that are described below.
The main statements in these accounts comprise:
The Comprehensive Income and Expenditure Statement
This is in two sections, the first section shows the net surplus or deficit on the provision of services as a result of income received and expenditure incurred over the financial year. The second section shows any other changes in net worth not included in the first section. Examples here will include any surplus or deficit on the current value of property, plant and equipment and the remeasurement of the net defined benefit liability.
The Movement in Reserves Statement (MIRS)
This statement shows the in-year movement on the reserves held by the Authority. These reserves are divided into two types, usable and unusable, with only the former being able to be applied to fund expenditure. This Statement also shows the change in the General Fund balance and the discretionary transfers that are undertaken to or from earmarked reserves.
The Balance Sheet
This sets out the financial position of the Authority at the end of the financial year. The top section of the Balance Sheet provides details of assets and liabilities and the bottom section shows the amounts held in usable and unusable reserves.
The Cash Flow Statement
Summarises the inflows and outflows of cash during the year analysed between those arising as a result of the Authority’s operations, those arising from investing activity and those attributable to financing decisions.
The Firefighters’ Pension Fund Account
Details income and expenditure for the 1992, 2006, 2006 Modified and the 2015 Firefighters’ Pension Schemes.
A glossary of the main terms used in the Statements are detailed on pages 73-76.
The Authority’s main funding sources are Council Tax, Non-Domestic Rate income and various Government grants which are used to fund the Authority’s revenue budget. To ensure that the revenue budget is sustainable over the medium term, the Authority agreed to increase Council Tax by 1.97%, resulting in an annual increase in a Band D property of £1.53 making a Band D Council Tax £79.29 per annum. Local taxation (Council Tax and Non-Domestic Rate income), including the Authority’s share of the surplus on Collection Funds, increased the Authority’s funding for 2020/21 by £2,028k. Government Grants (Revenue Support Grant and Non-Domestic Rates Top-up Grant) were increased by September 2019 CPI providing an additional £239k of funding for 2020/21. From 2020/21 the Small Business Rate Relief Grant is presented as a funding source rather than an income budget so, although it is not a new grant, the change in presentation increases the net revenue budget by £1,240k. The Authority’s budget for 2020/21 was therefore increased to £74,258k, a £3,507k increase when compared to 2019/20.
As well as the pressures faced by the Authority on areas such as pay awards, inflationary prices growth and other commitments totalling £5,692k, an increase of £750k was required to the budgeted transfer to/from the General Reserve (from a £550k transfer from the reserve in 2019/20 to a £200k transfer to the reserve in 2020/21) to maintain the balance at approximately 5% of the net revenue budget, meaning savings of £2,935k were required to balance the 2020/21 revenue budget. Notably, £1,562k of the savings came from reducing the base revenue contribution set aside each year to fund large infrastructure expenditure. In addition savings of; £526k were identified by Budget Managers from within their devolved budget headings; £314k as a result of not allocating an inflationary uplift to areas of discretionary spend; £273k additional government grant income for small business rates relief and; £260k as a result of changes to pay budgets.
The revenue budget outturn for 2020/21 was an underspend of £2,837k. The summary of the revenue budget and the final outturn is shown in the table below:
Revenue Budget Outturn 2020/21
| Cost | Original budget £000 | Revised budget £000 | Outturn £000 | Variance £000 |
|---|---|---|---|---|
| Service costs | 71,657 | 70,195 | 60,400 | -9,795 |
| Direct pension costs | 1,889 | 1,889 | 2,141 | 252 |
| Capital financing costs | 3,382 | 3,382 | 3,195 | -187 |
| Transfers from (-) / to reserves | -2,670 | -1,208 | 5,685 | 6,893 |
| Total | 74,258 | 74,258 | 71,421 | -2,837 |
Where the money comes from
| Funded from | £000 |
|---|---|
| Revenue Support Grant | 6,422 |
| Non-Domestic Rates | 16,566 |
| Council Tax | 51,270 |
| Total | 74,258 |
A number of budget headings were underspent in the year. A summary of the most significant budget variances is detailed in the following table:
| Revenue budget variances | £000 |
|---|---|
| Pay, pensions and other employee costs | -2,234 |
| Bought in services and professional fees | -186 |
| Information Communication Technology | -116 |
| Printing, stationery and general office expenses | -81 |
| Protective Personal Equipment and Workwear | -52 |
| Income | -41 |
| Other net underspends | -127 |
| Net revenue budget underspend | -2,837 |
At the end of the year £985k was transferred to the Rolling Budget Reserve to fund commitments made in 2020/21, but where the associated costs will not be incurred until after 31 March 2021. During the year £281k was transferred from this reserve to fund expenditure committed in 2019/20 but not incurred until 2020/21, making the 2020/21 net movement on the Rolling Budget Reserve £704k.